Best Practice Accounts PRP Group Limited An Exempt Charity ... · Best practice accounts – Page 7 Statement of the Board’s Responsibilities in Respect of the Accounts The Co-operative

Best Practice Accounts PRP Group Limited An Exempt Charity

Financial Statements For the Year Ended 31 March 2016

(Co-operative and Community Benefit Society) (with subsidiary, joint venture and associate)

(property, plant and equipment held at cost not valuation)

December 2015

Basis of preparation

Compliant with 2014 SORP for PRPs and 2015 Accounting Direction

Best practice accounts – Page 2

Contents

Board Report incorporating the Strategic Report and Value for Money statement 3 - 6

Directors Responsibilities 7

Report of the Independent Auditors 8

Consolidated Statement of Comprehensive Income 9

Consolidated Statement of Financial Position 10

Consolidated Statement of Changes in Reserves 11

Consolidated Statement of Cash Flows 12

Notes to the Financial Statements 13 - 46


Introduction The Statement of Recommended Practice 2014 (SORP) describes the objectives of the narrative reporting for every PRP as:

To provide information on the social landlord and insight into its main objectives and strategies and principal risks it

faces; and To complement, supplement and provide context for the related financial statements. Requirements The SORP requires the boards of social landlords with over 5,000 homes in management to publish a strategic report as part of the report from the board. A strategic report helps stakeholders to assess the performance of a business, providing a balanced and neutral assessment of the development and performance of the business during the financial year and setting out future plans, including risks and uncertainties to be faced. The SORP considers it good practice for a social landlord with 5,000 homes or fewer in management to include commentary in the report from the board on the performance of the business and this could take the form of a strategic report which should be commensurate with the size and complexity of the business. The Accounting Direction 2015 (AD) expands on the requirements of the narrative reporting to include:

The PRP’s development and performance during the financial year, including an assessment of the business model

used and key financial and non-financial indicators, Effects of material estimates and judgements upon reported performance, Principal risks and uncertainties facing the PRP, including factors arising from subsidiaries or joint ventures, Main trends and factors underlying the development, performance and position of the PRP (or Group); and which

are likely to affect it in the future. Groups and subsidiaries A social landlord with more than 5,000 homes that is a subsidiary within a group is exempt from including a strategic report within its own individual financial statements provided that:

It is consolidated into the financial statements of a parent social landlord, and A strategic report is prepared for the group and accompanies the consolidated financial statements. Content The strategic report should provide the information necessary for users of the financial statements to assess the following in relation to the social landlord: (a) its objectives and strategy for achieving those objectives, (b) its business model, (c) its development and performance throughout the financial year and position at the end of the financial year, (d) its future prospects, (e) the principal risks and uncertainties being faced, (f) financial and non-financial key performance indicators and (g) its governance. Principles The following principles should be followed in producing the strategic report:

The strategic report should be fair, balanced and understandable. The strategic report should be comprehensive and concise Where appropriate, information in the strategic report should have a forward looking orientation The strategic report should provide information that is entity-specific The strategic report should highlight relationships and interdependencies between information presented in different

parts of the financial statements and The structure and presentation of the strategic report should be reviewed annually to ensure it continues to meet its

objectives in an efficient and effective manner.

Strategic Report for the year ended 31 March 2016


Footnote: The SORP does not prescribe the form and content of the strategic report and the board should consider how best to use the guiding principles to structure the strategic report and its precise content. The content of the strategic report should be reviewed annually to ensure that it continues to be relevant in the current period. A social landlord must ensure it complies with applicable legislative requirements. For example, social landlords incorporated under the Companies Act 2006 must produce a strategic report if they are a medium or large company as defined by the Companies Act 2006 and registered charities need to refer to additional requirements of the charity SORP 2014



Internal Controls The SORP does not require a statement of internal control to be included within the annual report, although it is considered best practice to make reference to internal control within the annual report. Value for Money (VFM) The Accounting Direction 2015 requires that the PRP should undertake and publish within its narrative report an assessment of the performance of the PRP for the year which sets out to stakeholders how it is achieving value for money in delivering its purpose and objectives, in accordance with the regulator’s standard on value for money. The Regulatory Framework requires an annual self-assessment which sets out in a way that is transparent and accessible to stakeholders, how value for money is being achieved in delivering their purpose and objectives. The assessment shall:

Enable stakeholders to understand the return on assets measured against the organisation’s objectives, Set out the absolute and comparative costs of delivering specific services, Evidence the value for money gains that have been and will be made and how these have and will be realised over

time. Where the PRP publishes a separate, more detailed self-assessment than that included in the narrative report, this should be clearly signposted in order to ensure transparency for stakeholders. Approach to VFM Set out key elements of VFM culture/systems and methodologies

VFM strategy, Identify needs and expectation of residents and other customers/stakeholders, Framework for measuring and reporting VFM.

Also refer to additional information that is available on your website if applicable. Steps taken to deliver VFM Give specific examples such as:

Framework agreements with contractors and consultants, Reorganisation of office accommodation/staff, Use of materials and components in new development that reduce on-going maintenance costs. VFM achievements during the year Give specific examples covering areas such as return on assets, operating costs and customer satisfaction with comparison to prior years and peer group. Some PRP’s have included rent levels and operating ratios such as rent arrears and bad debts expense. Where appropriate, details should be given for different business areas e.g. general needs, supported housing, shared ownership, market rent and property sales. Public Benefit Entity As a public benefit entity, PRP Group has applied the public benefit entity ‘PBE’ prefixed paragraphs of FRS102. Information for Auditors The board members who held office at the date of approval of this board report confirm that, so far as they are each aware, there is no relevant audit information of which the association’s auditors are unaware; and each board member has taken all the steps that they ought to have taken as a board member to make themselves aware of any relevant audit information and to establish that the association’s auditors are aware of that information.



Statement of Compliance The board confirms that this Strategic Report has been prepared in accordance with the principles set out in Para 4.7 of the 2014 SORP for Registered Social Housing Providers. By Order of the Board: Signed: Date:



Statement of the Board’s Responsibilities in Respect of the Accounts The Co-operative and Community Benefit Societies Act 2014 and registered social housing legislation require the Board to prepare financial statements for each financial year which give a true and fair view of the state of affairs of the association and of the Income and Expenditure for the period of account. 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 accounting standards have been followed, subject to any material departures disclosed

and explained in the financial statements, and Prepare the financial statements on the going concern basis unless it is inappropriate to presume that the association

will continue in business. The Board is responsible for keeping proper accounting records which disclose with reasonable accuracy at any time the financial position of the association and enable it to ensure that the financial statements comply with the Co-operative and Community Benefit Society Act 2014, the Co-operative and Community Benefit Societies (Group Accounts) Regulations 1969, the Housing and Regeneration Act 2008 and the Accounting Direction for Private Registered Providers of Social Housing 2015. It has general responsibility for taking reasonable steps to safeguard the assets of the association and to prevent and detect fraud and other irregularities.



We have audited the financial statements of PRP Group Limited for the year ended 31 March 2016 on pages X to X. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice). This report is made solely to the Association’s members, as a body, in accordance with Section 87 of the Co-operative and Community Benefit Societies Act 2014. Our audit work has been undertaken so that we might state to the Association’s members those matters we are required to state to them in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Association and the Association’s members as a body, for our audit work, for this report, or for the opinions we have formed. Respective Responsibilities of the Board and the Auditor As explained more fully in the Statement of Board’s Responsibilities set out on page X, the Board is responsible for the preparation of the financial statements which give a true and fair view. Our responsibility is to audit and express an opinion on the financial statements in accordance with applicable law and International Standards on Auditing (UK and Ireland). Those standards require us to comply with the Financial Reporting Council’s (FRC’s) Ethical Standards for Auditors. Scope of the audit of the financial statements An audit involves obtaining evidence about the amounts and disclosures in the financial statements sufficient to give reasonable assurance that the financial statements are free from material misstatement, whether caused by fraud or error. This includes an assessment of: whether the accounting policies are appropriate to the Association’s circumstances and have been consistently applied and adequately disclosed; the reasonableness of significant accounting estimates made by the Board; and the overall presentation of the financial statements. In addition, we read all the financial and non-financial information in the Strategic Report to identify material inconsistencies with the audited financial statements. If we become aware of any apparent material misstatements or inconsistencies we consider the implications for our report. Opinion on financial statements In our opinion the financial statements:

Give a true and fair view of the state of the Group’s and Association’s affairs as at 31 March 2016 and of the

Group’s surplus/deficit for the year then ended; and Have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and Have been properly prepared in accordance with the Co-operative and Community Benefit Societies Act 2014, the

Co-operative and Community Benefit Societies (Group Accounts) Regulations 1969, the Housing and Regeneration Act 2008 and the Accounting Direction for Private Registered Providers of Social Housing 2015.

In our opinion the information given in the Strategic Report for the financial year for which the financial statements are prepared is consistent with the financial statements; Matters on which we are required to report by exception We have nothing to report in respect of the following matters where the Co-operative and Community Benefit Societies Act 2014 require us to report to you if, in our opinion:

Adequate accounting records have not been kept by the parent company, or returns adequate for our audit have

not been received from branches not visited by us, or The parent company financial statements are not in agreement with the accounting records and returns, or Certain disclosures of directors’ remuneration specified by law are not made, or We have not received all the information and explanations we require for our audit.

Statutory Auditor: ………………………………….. Date : ……………………………..

Address: ………………………………….. ………………………………….. ………………………………….. …………………………………..

Report of the Independent Auditors


Notes Year ended 31 Mar 2016

Year Ended 31 Mar 2015

Consolidated £’000

Association £’000



Turnover 2 Operating expenditure 2 Other income 2 ______ ______ ______ ______ Operating surplus/(deficit) Gain/loss on disposal of property, plant and equipment (fixed assets)

6

Share of operating surplus/(deficit) in joint venture

Share of operating surplus/(deficit) in associate Interest receivable Interest and financing costs 7 Movement in fair value of financial instruments Increase/decrease in valuation of investment properties

______ ______ ______ ______ Surplus/(deficit) before tax 8 Taxation 9 Surplus/(deficit) for the year after tax Actuarial (loss)/gain in respect of pension schemes

Change in fair value of hedged financial instrument

______ ______ ______ ______

Total comprehensive income for the year ______ ______ ______ ______ Total comprehensive income for the year attributable to:

Non-controlling interests Owners of the parent company ______ ______ ______ ______

The financial statements on pages x to x were approved and authorised for issue by the Board on ……………. and were signed on its behalf by:

Board Member: Board Member: Secretary: …………………………………

…………………………………

…………………………………

The consolidated and parent results relate wholly to continuing activities and the notes on pages x to x form an integral part of these accounts.

1

1 Recognise the decrease in profit and loss where a revaluation decrease exceeds the accumulated revaluation gains accumulated in equity in

respect of that asset. 2 If the PRP is a registered charity, the statements of comprehensive income should be signed on behalf of the Board by a trustee.

Statement of Comprehensive Income


Year ended 31 Mar 2016

Restated Year Ended 31 Mar 2015

Notes





Fixed assets Intangible assets and goodwill 13 Tangible fixed assets 14 Investment properties 15a Homebuy loans receivable 15b Investment in subsidiaries 16 Investment in joint ventures 16 Investment in associates 16 ______ ______ ______ ______ Current assets Stock 17 Trade and other debtors 18 Investments 19 Cash and cash equivalents 20 ______ ______ ______ ______ Less: Creditors: amounts falling due within one year

21

______ ______ ______ ______ Net current assets/(liabilities) ______ ______ ______ ______ Total assets less current liabilities ______ ______ ______ ______ Creditors: amounts falling due after more than one year

22

Provisions for liabilities Pension provision 27/13 Other provisions 27 Total net assets Reserves Non-equity share capital 28 Income and expenditure reserve Revaluation reserve Restricted [and/or endowment] reserve ______ ______ ______ ______ Total reserves ______ ______ ______ ______

The financial statements on pages x to x were approved and authorised for issue by the Board on …………… and were signed on its behalf by:

Board Member: Board Member: Secretary: …………………………………

…………………………………

…………………………………

The notes on pages x to x form an integral part of these accounts.

Statement of Financial Position


Income and expenditure

reserve £’000

Restricted

reserve £’000

Revaluation

reserve £’000

Total excluding

non-controlling

interest £’000

Non-

controlling interest

£’000

Total including

non-controlling

interest £’000

Restricted

fund £’000

Unrestricted

fund £’000

Balance as at 1 April 2014

Surplus/(deficit) from Statement of Comprehensive Income

Transfer from revaluation reserve to income and expenditure reserves

Transfer of restricted expenditure from unrestricted reserve ______ ______ ______ ______ ______ ______ ______ ______ Balance at 31 March 2015 Surplus/(deficit) from Statement of Comprehensive Income

Transfer from revaluation reserve to income and expenditure reserves

Transfer of restricted expenditure from unrestricted reserve

Prior period adjustment ______ ______ ______ ______ ______ ______ ______ ______ Balance at 31 March 2016 ______ ______ ______ ______ ______ ______ ______ ______

The notes on pages x to x form an integral part of these accounts.

Consolidated Statement of Changes in Reserves


Notes


£’000


£’000 Net cash generated from operating activities (see Note i)

Cash flow from investing activities Purchase of tangible fixed assets Proceeds from sale of tangible fixed assets Grants received Interest received ______ ______ Cash flow from financing activities Interest paid Interest element of finance lease rental payment Issue of ordinary shares New secured loans Repayment of borrowings Capital element of finance lease rental payments

Wthdrawal from deposits Net change in cash and cash equivalents ______ ______ Cash and cash equivalents at beginning of the year

Cash and cash equivalents at end of the year ______ ______ Note i


£’000


£’000 Cash flow from operating activities Surplus/(deficit) for the year Adjustments for non-cash items: Depreciation of tangible fixed assets Amortisation of intangible assets Decrease/(increase) in stock Decrease/(increase) in trade and other debtors Decrease/(increase) in trade and other creditors Increase/(decrease) in provisions Receipt of donated land/assets Pension costs less contributions payable Carrying amount of tangible fixed asset disposals

Share of operating surplus/deficit in joint venture Share of operating surplus/deficit in associates Adjustments for investing or financing activities:

Proceeds from the sale of tangible fixed assets Government grants utilised in the year Interest payable Interest received ______ ______ Net cash generated from operating activities ______ ______ The notes on pages x to x form an integral part of these accounts.

Consolidated Statement of Cash Flows


Legal Status PRP Group Limited is incorporated in England under the Co-operative and Community Benefit Societies Act 2014 [Companies Act 2006] and is registered with the Homes and Communities Agency as a Private Registered Provider of Social Housing. The registered office is 123 PRP Street, London PRP1 23G. The group comprises the following entities:

Name Incorporation Registered/Non-registered Housing Association 1

Co-operative and Community Benefit Societies Act 2014

Registered

Dev Co Ltd Companies Act 2006 Non-registered Social Enterprise Ltd IPS – 100% Non-registered JV1 LLP Limited Liability Act 2000 Non-registered JV2 Limited Companies Act 2006 Non-registered Associate 1 Limited Companies Act 2006 Non-registered

1. Principal Accounting Policies

Basis of Accounting The Group’s financial statements have been prepared in accordance with applicable United Kingdom Accounting Generally Accepted Accounting Practice (UK GAAP) and the Statement of Recommended Practice for registered housing providers: Housing SORP 2014. The Group is required under the Co-operative and Community Benefit Societies (Group Accounts) Regulations 1969 to prepare consolidated Group accounts. The financial statements comply with the Co-operative and Community Benefit Societies Act 2014, the Co-operative and Community Benefit Societies (Group Accounts) Regulations 1969, the Housing and Regeneration Act 2008 and the Accounting Direction for Private Registered Providers of Social Housing 2015. The accounts are prepared on the historical cost basis of accounting as modified by the revaluation of [housing properties/investments/financial instruments] and are presented in sterling £. The Group’s financial statements have been prepared in compliance with FRS102 as it applies for the first time to the financial statements of the Group for the year ended 31 March 2016. The Group transitioned from previous UK GAAP to FRS102 as at 1 April 2014. An explanation of how the transition to FRS102 has affected the reported financial position and performance, as well as the exemptions taken on transition, is given in note 36. Parent company disclosure exemptions In preparing the separate financial statements of the parent company, advantage has been taken of the following disclosure exemptions available in FRS102: No cash flow statement has been presented for the parent company, Disclosures in respect of the parent company’s financial instruments have not been presented as equivalent

disclosures have been provided in respect of the group as a whole, and No disclosure has been given for the aggregate remuneration of the key management personnel of the

parent company as their remuneration is included in the totals for the group as a whole. Basis of consolidation The consolidated financial statements incorporate the results of PRP Group Limited and all of its subsidiary undertakings as at 31 March 2016 using the [acquisition or merger] method of accounting as required. Where the acquisition method is used, the results of subsidiary undertakings are included from the date of acquisition, being the date the Group obtains control.

Notes to the financial statements for the year ended 31 March 2016


1. Principal Accounting Policies (continued)

Going concern The Group’s financial statements have been prepared on a going concern basis which assumes an ability to continue operating for the foreseeable future. Government’s announcements in July 2015 impacting on the future income of the Group have led to a reassessment of the Group’s business plan as well as an assessment of imminent or likely future breach in borrowing covenants. No significant concerns have been noted and we consider it appropriate to continue to prepare the financial statements on a going concern basis.

Judgements and key sources of estimation uncertainty The preparation of the financial statements requires management to make judgements, estimates and assumptions that affect the amounts reported for assets and liabilities as at the balance sheet date and the amounts reported for revenues and expenses during the year. However, the nature of estimation means that actual outcomes could differ from those estimates. The following judgements (apart from those involving estimates) have had the most significant effect on amounts recognised in the financial statements. a. Development expenditure. The Group capitalises development expenditure in accordance with the

accounting policy described on page x. Initial capitalisation of costs is based on management’s judgement that development scheme is confirmed, usually when Board approval has taken place including access to the appropriate funding. In determining whether a project is likely to cease, management monitors the development and considers if changes have occurred that result in impairment.

b. Categorisation of housing properties The Group has undertaken a detailed review of the intended use

of all housing properties. In determining the intended use, the Group has considered if the asset is held for social benefit or to earn commercial rentals. The Group has determined that market rented property and student accommodation are investment properties.

c. Impairment. The Group has identified a cash generating for impairment assessment purposes at a property

scheme level. Other key sources of estimation and assumptions: a. Tangible fixed assets. Other than investment properties, tangible fixed assets are depreciated over their

useful lives taking into account residual values, where appropriate. The actual lives of the assets and residual values are assessed annually and may vary depending on a number of factors. In re-assessing asset lives, factors such as technological innovation, product life cycles and maintenance programmes are taken into account. Residual value assessments consider issues such as future market conditions, the remaining life of the asset and projected disposal values.

b. Revaluation of investment properties. The Group carries its investment property at fair value, with changes in fair value being recognised in profit and loss. The Group engaged independent valuation specialists to determine fair value at the transition date, 31 March 2015 and 31 March 2016. The valuer used a valuation technique based on a discounted cash flow model. The determined fair value of the investment property is most sensitive to the estimated yield as well as the long term vacancy rate. The key assumptions used to determine the fair value of investment property are further explained in note 14a.

c. Goodwill and intangible assets. The Group establishes a reliable estimate of the useful life of goodwill

and intangible assets arising on business combinations. This estimate is based on a variety of factors such as the expected use of the acquired business, the expected usual life of the cash generating units to which the goodwill is attributed, any legal, regulatory or contractual provisions that can limit useful life and assumptions that market participants would consider in respect of similar businesses.




d. Pension and other post-employment benefits. The cost of defined benefit pension plans and other post-

employment benefits are determined using actuarial valuations. The actuarial valuation involves making assumptions about discount rates, future salary increases, mortality rates and future pension increases. Due to the complexity of the valuation, the underlying assumptions and the long term nature of these plans, such estimates are subject to significant uncertainty. In determining the appropriate discount rate, management considers the interest rates of corporate bonds in the respective currency with at least AA rating, with extrapolated maturities corresponding to the expected duration of the defined benefit obligation. The underlying bonds are further reviewed for quality, and those having excessive credit spreads are removed from the population bonds on which the discount rate is based, on the basis that they do not represent high quality bonds. The mortality rate is based on publicly available mortality tables for the specific sector. Future salary increases and pension increases are based on expected future inflation rates for the respective sector. Further details are given in note 12.

e. Impairment of non-financial assets. Reviews for impairment of housing properties are carried out when a trigger has occurred and any impairment loss in a cash generating unit is recognised by a charge to the Statement of Comprehensive Income. Impairment is recognised where the carrying value of a cash generating unit exceeds the higher of its net realisable value or its value in use. A cash generating unit is normally a group of properties at scheme level whose cash income can be separately identified.

During the year the government announced a change in rent policy which resulted in a material impact on the net income expected to be collected in the future for housing properties and the Group have assessed that this represents a trigger for impairment review.

Following a trigger for impairment, the Group perform impairment tests based on fair value less costs to sell or a value in use calculation. The fair value less costs to sell calculation is based on available data from sales transactions in an arm’s length transaction on similar cash generating units (properties) or observable market prices less incremental costs for disposing of the properties. The value in use calculation is based on either a depreciated replacement cost or a discounted cash flow model. The depreciated replacement cost is based on available data of the cost of constructing or acquiring replacement properties to provide the same level of service potential to the Association as the existing property. The cash flows are derived from the business plan for the next xx years and do not include restructuring activities that the Group is not yet permitted to or significant future investments that will enhance the asset’s performance of the cash generating unit being tested. The recoverable amount is most sensitive to the discount rate used for the discounted cash flow model as well as the expected future cash flows and the growth rate used for extrapolation purposes.

Following the assessment of impairment no impairment losses were identified in the reporting period.

Merger accounting Where merger accounting is used, the investment is recorded in the association’s balance sheet at the nominal value of the shares issued together with the fair value of any additional consideration paid. In the Group’s financial statements, merged subsidiary undertakings are treated as if they had already been a member of the group. The results of such a subsidiary are included for the whole period in the year it joins the group. The corresponding figures for the previous year include its results for that period, the assets and liabilities at the previous balance sheet date and the shares issued by the association as consideration as if they had always been in issue. Acquisition accounting ABC Limited has been included in the group financial statements using the purchase method of accounting. Accordingly the group statement of comprehensive income and statement of cash flows include the results and cash flows of ABC Limited for xx period from its acquisition on xx 201x. The purchase consideration has been allocated to the assets and liabilities on the basis of fair value at the date of acquisition. Business combinations Acquisitions of other entities in the social housing sector that are in substance a gift to PRP Group Limited are treated as non-reciprocal transfers where the substance of the transaction is gifting control of one entity to another. These are also known as non-exchange transfers. In this case the fair value of the gifted assets and liabilities are recognised as a gain or loss in the Statement of Comprehensive Income account in the year of the transaction.




Goodwill Goodwill arising on an acquisition of a subsidiary undertaking is the difference between the fair value of the consideration paid and the fair value of the assets and liabilities acquired. Subsequently goodwill is carried at cost less accumulated amortisation and impairment losses. Amortisation is calculated on the straight line basis over the estimated useful life. The Group establishes a reliable estimate of the useful life of goodwill arising on business combinations based on a variety of factors such as the expected use of the acquired business, the expected useful life of the cash generating units to which the goodwill is attributed, any legal, regulatory or contractual provisions that can limit useful life and assumptions that market participants would consider in respect of similar businesses. Joint Ventures and Associates An entity is treated as a joint venture where the group holds an interest and shares control under a contractual arrangement with one or more parties external to the group.

An entity is treated as an associated undertaking where the group has a participating interest and exercises

significant influence over its operating and financial policies. In the Group accounts, joint ventures are accounted for using the equity method. Under this method an equity

investment is initially recognised at the transaction price (including transaction costs) and is subsequently adjusted to reflect the investor’s share of the profit or loss, other comprehensive income and equity of the associate. The consolidated income and expenditure account indicates the group’s share of the joint venture’s turnover and includes the group’s share of the operating results, interest, pre-tax results and attributable taxation of such undertakings based on audited financial statements. In the consolidated balance sheet, the group’s share of the identifiable gross assets (including any amortised premium paid on acquisition) and its share of the gross liabilities attributable to its joint venture are shown separately.

Any premium on acquisition is dealt with under the goodwill policy. Turnover and revenue recognition Turnover represents rental income receivable, amortised capital grant, revenue grants from local authorities and

the Homes and Communities Agency, income from the sale of shared ownership and other properties developed for outright sale and other income and are recognised in relation to the period when the goods or services have been supplied.

Rental income is recognised when the property is available for let, net of voids. Income from property sales is

recognised on legal completion. Supporting People Income is recognised under the contractual arrangements.

Sales of properties developed for outright sale are included in Turnover and Cost of Sales. Support income and costs including Supporting People income and costs Supporting People (SP) contract income received from Administering Authorities is accounted for as SP income

in the Turnover as per note 2. The related support costs are matched against this income in the same note. Support charges included in the rent are included in the Statement of Comprehensive Income from social housing lettings note 3 and matched against the relevant costs.

Service charges Service charge income and costs are recognised on an accruals basis. The Group operates both fixed and variable

service charges on a scheme by scheme basis in full consultation with residents. Where variable service charges are used the charges will include an allowance for the surplus or deficit from prior years, with the surplus being returned to residents by a reduced charge and a deficit being recovered by a higher charge. Until these are returned or recovered they are held as creditors or debtors in the Statement of Financial Position.

Where periodic expenditure is required a provision may be built up over the years, in consultation with the

residents; until these costs are incurred this liability is held in the Statement of Financial Position within long term creditors.




Loan interest costs Loan interest costs are calculated using the effective interest method of the difference between the loan amount

at initial recognition and amount of maturity of the related loan. Loan finance issue costs These are amortised over the life of the related loan. Loans are stated in the Statement of Financial Position at

the amount of the net proceeds after issue, plus increases to account for any subsequent amounts amortised. Where loans are redeemed during the year, any redemption penalty and any connected loan finance issue costs are recognised in the Statement of Comprehensive Income account in the year in which the redemption took place.

Taxation The tax expense for the period comprises current and deferred tax. Tax is recognised in profit and loss, except

that a change attributable to an item of income or expense recognised as other comprehensive income or to an item recognised directly in equity is also recognised in other comprehensive income or directly in equity respectively.

The current income tax charge is calculated on the basis of tax rates and laws that have been enacted or

substantively enacted by the reporting date in the countries where the company’s subsidiaries operate and generate taxable income.

Deferred balances are recognised in respect of all timing differences that have originated but not reversed by the balance sheet date, except: The recognition of deferred tax assets is limited to the extent that it is probable that they will be recovered

against the reversal of deferred tax liabilities or other future taxable profits, Any deferred tax balances are reversed if and when all conditions for retaining associated tax allowances

have been met, and Where timing differences relate to interests in subsidiaries, associates and joint ventures and the Group can

control their reversal and such reversal is not considered probable in the foreseeable future.

Deferred tax balances are not recognised in respect of permanent differences except in respect of business combinations, when deferred tax is recognised on the differences between the fair values of assets acquired and the future tax deductions available for them and the differences between the fair value of liabilities acquired and the amount that will be assessed for tax. Deferred income tax is determined using tax rates and laws that have been enacted or substantively enacted by the reporting date. Value Added Tax The Group charges VAT on some of its income and is able to recover part of the VAT it incurs on expenditure. All amounts disclosed in the accounts are inclusive of VAT to the extent that it is suffered by the Group and not recoverable. Tangible fixed assets and depreciation Housing properties Tangible fixed assets are stated at cost, less accumulated depreciation. Donated land/assets or assets acquired at below market value from a government source, i.e. local authority, are included as a liability in the Statement of Financial Position at the fair value less consideration paid. Housing properties under construction are stated at cost and are not depreciated. These are reclassified as housing properties on practical completion of construction. Freehold land is not depreciated.




Where a housing property comprises two or more major components with substantially different useful economic lives (UELs), each component is accounted for separately and depreciated over its individual UEL. Expenditure relating to subsequent replacement or renewal of components is capitalised as incurred. The association depreciates freehold housing properties by component on a straight-line basis over the estimated UELs of the component categories. UELs for identified components are as follows:

Years

Boilers 10 Kitchens 20 Bathroom 30 Roofs 50 Windows 40 Structure 100

The association depreciates housing properties held on long term leases in the same manner as freehold properties, except where the unexpired lease term is shorter than the longest component life envisaged, in which case the unexpired term of the lease is adopted as the useful economic life of the relevant component category. Depreciation is charged on other tangible fixed assets on a straight-line basis over the expected economic useful lives which are as follows:

Years Plant & machinery 20 Furniture and equipment 10 Office equipment 5

Low cost home ownership properties The costs of low cost home ownership properties are split between current and fixed assets on the basis of the

first tranche portion. The first tranche portion is accounted for as a current asset and the sale proceeds shown in turnover. The remaining element of the shared ownership property is accounted for as a fixed asset and subsequent sales treated as sales of fixed assets.

Capitalisation of interest and administration costs Interest on loans financing development is capitalised up to the date of the completion of the scheme and only

when development activity is in progress. Administration costs relating to development activities are capitalised only to the extent that they are incremental

to the development process and directly attributable to bringing the property into their intended use. Property managed by agents Where the Group carries the majority of the financial risk on property managed by agents, income arising from the

property is included in the Statement of Comprehensive Income Account. Where the agency carries the majority of the financial risk, income includes only that which relates solely to the

Group. In both cases, the assets and associated liabilities are included in the Group’s Statement of Financial Position.




Leasing and hire purchase Where assets are financed by hire purchase contracts and leasing agreements that give rights approximating to

ownership (finance leases), they are treated as if they had been purchased outright. The amount capitalised is the present value of the minimum lease payments payable over the term of the lease. The corresponding leasing commitments are shown as obligations to the lessor in creditors. They are depreciated over the shorter of the lease term and their economic useful lives.

Lease payments are analysed between capital and interest components so that the interest element of the

payment is charged to profit and loss over the term of the lease and is calculated so that it represents a constant proportion of the balance of capital repayments outstanding. The capital part reduces the amounts payable to the lessor.

Other leases are treated as operating leases and payments are charged to the Statement of Comprehensive Income on a straight line basis over the term of the lease. Reverse premiums and similar incentives received on leases to enter into operating lease agreements are released to Statement of Comprehensive Income over the term of the lease. Investment property Investment property includes commercial and other properties not held for the social benefit of the Group. Investment property is measured at cost on initial recognition, which includes purchase cost and any directly attributable expenditure, and subsequently at fair value at the reporting date. Fair value is determined annually by external valuers and derived from the current market rents and investment property yields for comparable real estate, adjusted if necessary for any difference in the nature, location or condition of the specific asset. No depreciation is provided. Changes in fair value are recognised in the Statement of Comprehensive income. HomeBuy The Group operates this scheme by lending a percentage of the cost to home purchasers, secured on the property. The loans are interest free and repayable only on the sale of the property. On a sale, the fixed percentage of the proceeds is repaid. The loans are financed by an equal amount of SHG. On redemption: The SHG is recycled, The SHG is written off, if a loss occurs, The Group keeps any surplus. Homebuy loans are treated as concessionary loans and are initially recognised at the amount paid to the purchaser and reviewed annually for impairment. The associated Homebuy grant from the HCA is recognised as deferred income until the loan is redeemed. Valuation of investments Investments in subsidiaries are measured at cost less accumulated impairment. Where merger relief is applicable, the cost of the investment in a subsidiary undertaking is measured at the nominal value of the shares issued together with the fair value of any additional consideration paid. Investments in unlisted company shares, which have been classified as fixed asset investments as the Group intends to hold them on a continuing basis, are re-measured to market value at each balance sheet date. Gains and losses on re-measurement are recognised in profit or loss for the period. Investments in listed company shares, which have been classified as current asset investments, are re-measured to market value at each balance sheet date. Gains and losses on re-measurement are recognised in profit or loss for the period. Current asset investments Current asset investments include cash and cash equivalents invested for periods of more than 24 hours. They are recognised initially at cost and subsequently at fair value at the reporting date. Any change in valuation between reporting dates is recognised in the statement of comprehensive income.




Stock and properties held for sale Stock of materials Stocks are stated at the lower cost and net realisable value being the estimated selling price less costs to complete and sell. Cost is based on the cost of purchase on a first in, first out basis. Work in progress and finished goods include labour and attributable overheads. Properties developed for outright sale are included in current assets as they are intended to be sold, at the lower of cost or estimated selling price less costs to complete and sell. At each reporting date, stock and properties held for sale are assessed for impairment. If there is evidence of impairment, the carrying amount is reduced to its selling price less costs to complete and sell. The impairment loss is recognised immediately in Statement of Comprehensive Income. Short-term debtors and creditors Debtors and creditors with no stated interest rate and receivable or payable within one year are recorded at transaction price. Any losses arising from impairment are recognised in the income statement in other operating expenses. Non-government grants Grants received from non-government sources are recognised under the performance model. If there are no specific performance requirements the grants are recognised when received or receivable. Where grant is received with specific performance requirements it is recognised as a liability until the conditions are met and then it is recognised as Turnover. Social Housing and other government grants Where developments have been financed wholly or partly by social housing and other grants, the amount of the grant received has been included as deferred income and recognised in Turnover over the estimated useful life of the associated asset structure (not land), under the accruals model. SHG received for items of cost written off in the Statement of Comprehensive Income Account is included as part of Turnover. When Social Housing Grant (SHG) in respect of housing properties in the course of construction exceeds the total cost to date of those housing properties, the excess is shown as a current liability. SHG must be recycled by the Group under certain conditions, if a property is sold, or if another relevant event takes place. In these cases, the SHG can be used for projects approved by the Homes and Communities Agency and Greater London Authority. However, SHG may have to be repaid if certain conditions are not met. If grant is not required to be recycled or repaid, any unamortised grant is recognised as Turnover. In certain circumstances, SHG may be repayable, and, in that event, is a subordinated unsecured repayable debt. Non-monetary government grant On disposal assets for which non-monetary government grants are held as liabilities in the Statement of Financial Position, the unamortised amount in creditors is derecognised and recognised as income in the Statement of Comprehensive Income. Recycling of Capital Grant Where Social Housing Grant is recycled, as described above, the SHG is credited to a fund which appears as a creditor until used to fund the acquisition of new properties, where recycled grant is known to be repayable it is shown as a creditor within one year. Disposal Proceeds Fund (DPF) Receipts from the sale of SHG funded properties less the net book value of the property and the costs of disposal are credited to the DPF, this creditor is carried forward until it is used to fund the acquisition of new social housing. Holiday pay accrual A liability is recognised to the extent of any unused holiday pay entitlement which has accrued at the balance sheet date and carried forward to future periods. This is measured at the undiscounted salary cost of the future holiday entitlement so accrued at the balance sheet date.




Agreements to improve existing properties Where the PRP has entered into agreements to purchase property from a third party and subsequently enters into a sub-contracting agreement to carry out improvement works to the properties, the related assets and liabilities are shown at gross values unless the right of net settlement exists. Retirement benefits The cost of providing retirement pensions and related benefits is charged to management expenses over the periods benefiting from the employees’ services. The disclosures in the accounts follow the requirements of Section 28 of FRS 102 in relation to multi-employer funded schemes in which the Group has a participating interest. Contributions payable under an agreement with SHPS to fund past deficits are recognised as a liability in the Group’s financial statements calculated by the repayments known, discounted to the net present value at the year ended using a market rate discount factor of xx at 31 March 2014, xx at 31 March 2015 and xx at 31 March 2016. The unwinding of the discount is recognised as a finance cost in the Statements of Comprehensive Income in the period incurred. Revaluation Reserve The revaluation reserve represents the difference on transition between the fair value of social housing properties and other assets and the historical cost carrying value, where deemed cost transitional relief was taken. Financial Instruments Financial assets and financial liabilities are measured at transaction price initially, plus, in the case of a financial asset or financial liability not at fair value through profit or loss, transaction costs that are directly attributable to the acquisition or issue of the financial asset or financial liability. At the end of each reporting period, financial instruments are measured as follows, without any deduction for transaction costs the entity may incur on sale or other disposal: Debt instruments that meet the conditions in paragraph 11.8(b) of FRS 102 are measured at amortised cost using the effective interest method, except where the arrangement constitutes a financing transaction. In this case the debt instrument is measured at the present value of the future payments discounted at a market rate of interest for a similar debt. Commitments to receive or make a loan to another entity which meet the conditions in para 11.8(c) of FRS 102 are measured at cost less impairment. Investments in non-convertible preference shares and non-puttable ordinary shares or preference shares are measured at:

Fair value with changes in fair value recognised in profit or loss if the shares are publicly traded or their

value can otherwise be measured reliably, At cost less impairment for all other such investments.

Financial instruments held by the Group are classified as follows: Financial assets such as cash, current asset investments and receivables are classified as loans and

receivables and held at amortised cost using the effective interest method, Financial liabilities such as bonds and loans are held at amortised cost using the effective interest method, Loans to or from subsidiaries including those that are due on demand are held at amortised cost using the

effective interest method, Commitments to receive or make a loan to another entity which meet the conditions above are held at cost

less impairment, An investment in another entity’s equity instruments other than non-convertible preference shares and non-

puttable ordinary and preference shares are held at fair value, Derivatives such as interest rate swaps are classified as financial assets or financial liabilities at fair value.




Financial assets and financial liabilities at fair value are classified using the following fair value hierarchy: (a) The best evidence of fair value is a quoted price in an active market. (b) When quoted prices are unavailable, the price of a recent transaction for an identical asset, adjusted to reflect

any circumstances specific to the sale, such as a distress sale, if appropriate. (c) Where there is no active market or recent transactions then a valuation technique is used to estimate what

the transaction price would have been on the measurement date in an arm’s length exchange motivated by normal business considerations.

Hedging Interest rate swaps relate to fixing variable rate interest and are therefore designated as cash flow hedges. A cash flow hedge is a hedge of the exposure to variability in cash flows that is attributable to a particular risk associated with a recognised asset or liability or a highly probable transaction, which could affect profit or loss. They are measured at fair value at each reporting date. Gains and losses on cash flow hedges which are highly effective are recognised in other comprehensive income. Any ineffective portion of a gain or loss on cash flow hedges is recognised in profit or loss.

In order to apply hedge accounting, an economic relationship must exist between the hedged item and the hedging instrument. The Group must formally designate and document the hedging relationship at inception so that the risk being hedged, the hedged item and the hedging instrument are clearly identified, and the risk management objective and for undertaking the hedge. It is also required to determine and document the causes of hedge ineffectiveness.

In a cash flow hedge, if the hedged future cash flows are no longer expected to occur, the amount that has been accumulated in the cash flow hedge reserve is reclassified from the cash flow hedge reserve to profit or loss immediately.

If the hedged future cash flows are still expected to occur, the cumulative gain or loss in the cash flow reserve is accounted for as follows:

i. If a hedged forecast transaction subsequently results in the recognition of a non-financial asset or non-

financial liability, or a hedged forecast transaction for a non-financial asset or non-financial liability becomes a firm commitment for which fair value hedge accounting is applied, the Group will remove that amount from the cash flow hedge reserve and include it directly in the initial cost or other carrying amount of the asset or liability;

ii. For cash flow hedges other than those covered by (i), that amount will be reclassified from the cash flow hedge reserve to profit or loss in the same period or periods during which the hedged expected future cash flows affect profit or loss (for example, in the periods that interest income or interest expense is recognised or when a forecast sale occurs); and

ii. If the amount is a loss, and all or part of that loss is not expected to be recovered, the amount of the loss not expected to be recovered will be reclassified to profit or loss immediately.

Impairment of Financial Assets

Financial assets are assessed at each reporting date to determine whether there is any objective evidence that a financial asset or group of financial assets is impaired. If there is objective evidence of impairment, an impairment loss is recognised in profit or loss immediately.

The following financial instruments are assessed individually for impairment: (a) All equity instruments regardless of significance; and (b) Other financial assets that are individually significant.




Impairment of Financial Assets (continued)

Other financial instruments are assessed for impairment either individually or grouped on the basis of similar credit risk characteristics.

An impairment loss is measured as follows on the following instruments measured at cost or amortised cost: (a) For an instrument measured at amortised cost, the impairment loss is the difference between the asset’s

carrying amount and the present value of the estimated future cash flows discounted at the asset’s original effective interest rate.

(b) For an instrument measured at cost less impairment, the impairment loss is the difference between the asset’s carrying amount and the best estimate of the amount that the entity would receive for the asset if it were to be sold at the reporting date.

If, in a subsequent period, the amount of an impairment loss decreases and the decrease can be related objectively to an event occurring after the impairment was recognised, the previously recognised impairment loss is reversed either directly or by adjusting an allowance account. The reversal cannot result in a carrying amount (net of any allowance account) which exceeds what the carrying amount would have been had the impairment not previously been recognised. The amount of the reversal is recognised in profit or loss immediately.


Note: The following disclosure guidance in FRS102 Section 11 Basic Financial Instruments should be reviewed for relevance for each set of financial statements: 1.11.45 – Derecognition 2. 11.46 – Collateral 3. 11.47 – Defaults and breaches on loans payable 4. 11.48(c) – The amount of any impairment loss for each class of financial asset 5. 11.45A – Financial instruments at fair value through profit or loss that are not held as part of a trading portfolio and are not derivatives.


2(a). Turnover, cost of sales, operating expenditure and operating surplus

2016 Group

Turn-over £’000

Cost of sales £’000

Operating expendi-

ture £’000

Opera-

ting surplus £’000

Social housing lettings (notes 3a and 3b)

Other social housing activities2 First tranche low cost home ownership sales

Charges for support services Supporting people Other: e.g. Development services Managed associations Rechargeable work Activities other than social housing e.g. Lettings (Note 3c) Properties developed for outright sale Other3 ______ ______ ______ ______ Total

______

______

______

______ 2015

£’000

£’000

£’000

£’000 Social housing lettings (notes 3a and 3b)

Other social housing activities Current asset property sales Charges for support services Supporting people Other: e.g. Development services Managed associations Rechargeable work Activities other than social housing e.g. Lettings (Note 3c) Properties developed for outright sale Other ______ ______ ______ ______ Total

______

______

______

______

2 Material items of Social Housing activity should be separately identified, in particular surpluses on the disposal of properties. 3 Where material sums are involved, additional analysis should be provided.



2(b). Turnover, cost of sales, operating expenditure and operating surplus

2016 Association

Turn-over £’000

Cost of sales £’000

Operating expendi-

ture £’000

Opera-

ting surplus £’000

Social housing lettings (notes 3a and 3b)

Other social housing activities4 First tranche low cost home ownership sales

Charges for support services Supporting people Other: e.g. Development services Managed associations Rechargeable work Activities other than social housing e.g. Lettings (Note 3c) Properties developed for outright sale Other5 ______ ______ ______ ______ Total

______

______

______

______ 2015

£’000

£’000

£’000

£’000 Social housing lettings (notes 3a and 3b)

Other social housing activities Current asset property sales Charges for support services Supporting people Other: e.g. Development services Managed associations Rechargeable work Activities other than social housing e.g. Lettings (Note 3c) Properties developed for outright sale Other ______ ______ ______ ______ Total

______

______

______

______

4 Material items of Social Housing activity should be separately identified, in particular surpluses on the disposal of properties. 5 Where material sums are involved, additional analysis should be provided.



3(a). Turnover and operating expenditure

Group

General Housing

£’000

Supported Housing

and Housing for Older

People £’000

Low Cost

Home Owner

ship

£’000

Other6

£’000

Total 2016

£’000

Total 2015

£’000 Income Rent receivable net of identifiable service charge7

Service charge income Amortised government grants8 Government grants taken to income9 Other grants Other income from Social Housing Lettings ______ ______ ______ ______ ______ ______ Turnover from Social Housing Lettings ______ ______ ______ ______ ______ ______ Operating expenditure Management Service charge costs Routine maintenance Planned maintenance Major repairs expenditure Bad debts Depreciation of Housing Properties Impairment of Housing Properties Other Costs Operating expenditure on Social Housing Lettings

______ ______ ______ ______ ______ ______

______ ______ ______ ______ ______ ______ Operating Surplus/(Deficit) on Social Housing Lettings

______

______

______

______

______

______

Void losses (being rental income lost as a result of property not being let, although it is available for letting) ______ ______ ______ ______ ______ ______

6 Additional categories of social housing may be included where appropriate for the PRP for example key worker, care homes and temporary social housing. 7 Rent receivable should be computed net of any void losses 8 Accrual model FRS102 9 Performance model FRS102



3(b). Turnover and operating expenditure

Association

General Housing

£’000

Supported Housing

and Housing for Older

People £’000

Low Cost

Home Owner

ship

£’000

Other10

£’000

Total 2016

£’000

Total 2015

£’000 Income Rent receivable net of identifiable service charge11

Service charge income Amortised government grants12 Government grants taken to income13 Other grants Other income from Social Housing Lettings ______ ______ ______ ______ ______ ______ Turnover from Social Housing Lettings ______ ______ ______ ______ ______ ______ Operating expenditure Management Service charge costs Routine maintenance Planned maintenance Major repairs expenditure Bad debts Depreciation of Housing Properties Impairment of Housing Properties Other Costs Operating expenditure on Social Housing Lettings

______ ______ ______ ______ ______ ______

______ ______ ______ ______ ______ ______ Operating Surplus/(Deficit) on Social Housing Lettings

______

______

______

______

______

______

Void losses (being rental income lost as a result of property not being let, although it is available for letting) ______ ______ ______ ______ ______ ______

10 Additional categories of social housing may be included where appropriate for the PRP for example key worker, care homes and temporary social housing. 11 Rent receivable should be computed net of any void losses 12 Accrual model FRS102 13 Performance model FRS102



3(c). Turnover from activities other than social housing

2016 £’000

2015 £’000

Lettings Residential Care Homes Registered Nursing Homes Market Renting Student accommodation Other ______ ______

______

______

4. Accommodation owned, managed and in development

2016 No. of properties


Owned Managed Owned Managed Social Housing Under development at end of year: General needs housing social rent General needs housing affordable rent Supported housing Housing for older people Low-cost home ownership Under management at end of year: General needs housing Supported housing and housing for older people

Low-cost home ownership Residential Care Homes Registered Care Homes Key worker housing Temporary social housing Managed for other bodies ______ ______ ______ ______

______

______

______

______ Non-Social Housing Under management at end of year: Market rented Student accommodation Registered nursing homes Residential care homes ______ ______

______

______

5. Accommodation managed by others The PRP owns property managed by other bodies.



Supported housing and housing for older people

Residential care homes Registered nursing homes ______ ______

______

______



6. Gain/(loss) on disposal of property, plant and equipment (fixed assets)

Property Developed

for other PRPs £’000

Shared Ownership Staircasing

Sales £’000

Others

£’000

Total 2016

£’000

Total 2015

£’000 Proceeds of sales Less: Costs of sales ______ ______ ______ ______ ______ Surplus Capital grant recycled (Note 24) Disposal proceeds fund (Note 25) ______ ______ ______ ______ ______

______

______

______

______

______

7. Interest and financing costs

Group Association 2016

£’000 2015 £’000

2016 £’000

2015 £’000

Finance leases Deferred benefit pension charge On loans repayable within five years On loans wholly or partly repayable in more than five years

Costs associated with financing ______ ______ ______ ______ Less: interest capitalised on housing properties under construction

______

______

______

______

The weighted average interest on borrowings of x% (2015: x%) was used for calculating capitalised finance costs.

8. Surplus/(deficit) on ordinary activities

2016 £’000

2015 £’000

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

Auditors remuneration (excluding VAT): Audit of the group financial statements* Audit of subsidiaries Fees payable to the company’s auditor and its associates for other services to the group:

Taxation compliance services Service charge certification Operating lease rentals: - Other (describe) - Land and buildings - Office equipment Impairment losses of housing properties Depreciation of housing properties Depreciation of other fixed assets Surplus on sale of other fixed assets

* £xx (2015 - £xx) of this relates to the company. Included in other fees to auditors is £xx (2015: £xx) relating to the company.



9. Tax on Surplus/(deficit) on ordinary activities


£’000 2015 £’000

2016 £’000

2015 £’000

Current tax UK corporation tax on surplus for the year Adjustments in respect of prior years ______ ______ ______ ______

______

______

______

______ Deferred tax Net origination and reversal of timing differences

______ ______ ______ ______

______

______

______

______

The tax assessed in the year is lower than the standard rate of corporation tax in the United Kingdom at xx% (2015 xx). The differences are explained as follows:

Group Association Total tax reconciliation

2016 £’000

2015 £’000

2016 £’000

2015 £’000

Surplus on ordinary activities before tax ______

______

______

______

Theoretical tax at UK corporation tax rate x% (2015: x%)

- Tax on other comprehensive income items

- Depreciation of non-qualifying assets - Non-taxable gains on asset sales - Other non-deductible expenditure - Tax adjustments to tax charge in respect

of prior periods

______ ______ ______ ______

Total tax charge ______

______

______

______



10. Directors’ remuneration

2016 £’000

2015 £’000

The aggregate emoluments paid to or receivable by non-executive Directors and former non-executive directors

______ ______

The aggregate emoluments paid to or receivable by executive Directors and former executive directors

______ ______

The aggregate compensation paid to or receivable by Directors (key management personnel)

______ ______

The emoluments paid to the highest paid Director excluding pension contributions ______ ______

The aggregate amount of Directors or past Directors pensions, excluding amounts payable under a properly funded pension scheme

______ ______

The aggregate amount of any consideration payable to or receivable by third parties for making available the services of a Director

______ ______

The aggregate amount of any consideration payable to Directors for loss of office ______ ______

The Chief Executive is an ordinary member of the pension scheme. The pension scheme is a final salary scheme funded by annual contributions by the employer and employee. No enhanced or special terms apply. There are no additional pension arrangements. A contribution by the PRP of £x (2015: £x) was paid in addition to the personal contributions of the Chief Executive. Directors (key management personnel) are defined as members of the Board, the Chief Executive and any other person who is a member of the Senior Management Team or its equivalent.



11. Employee information Group Association 2016

No. 2015 No.

2016 No.

2015 No.

The average number of persons employed during the year expressed in full time equivalents (35 hours per week) was:

Office staff Wardens, caretakers and cleaners ______ ______ ______ ______ £’000 £’000 £’000 £’000 Staff costs (for the other persons) Wages and salaries Social Security costs Other pension costs ______ ______ ______ ______

______

______

______

______ Aggregate number of full time equivalent staff whose remuneration exceeded £60,000 in the period:

No.

£60,000 - £70,000 W £70,000 - £80,000 X £80,000 - £90,000 Y £90,000 - £100,000 etc Z

12. Pension obligations PRP Group Limited participates three schemes, the Social Housing Pension Scheme (SHPS), the Pensions Trust

Growth Plan (PTGP) and the ABC CC Local Government Pension Scheme (LGPS). All three schemes are multi-employer defined benefit schemes. The Scheme is funded and is contracted out of the state scheme.

Social Housing Pension Scheme and Pensions Trust Growth Plan SHPS deficit payment agreement The association has a contractual obligation under an agreement to pay additional deficit payments to SHPS of £x

per annum for 10 years to 20xy. In calculating the net present value of the liability included within provisions the association has used a discount

rate based on a market rate AA corporate bond for the same period as the contractual obligations.

Group Association £ £ £ £ At start of the year Additional liabilities in the year Interest for the year Released to expenditure in the year ______ ______ ______ ______

______

______

______

______

During the year ended 31 March 2016 the association received notification of changes to the additional deficit payment to SHPS, this resulted in an additional liability of £x at 31 March 2016.


Note: The detailed disclosure for SHPS and PTGP is not included due to the fact that they are updated annually and will be located from The Pensions Trust website in 2016. There are two versions of disclosure to choose from long form and short form.


12. Pension obligations (continued) Local Government Pension Scheme The LGPS is a funded defined-benefit scheme, with the assets held in separate funds administered by [ABC] Local

Authority. The total contributions made for the year ended 31 March 2016 were £x, of which employer’s contributions totalled £x and employees’ contributions totalled £x. The agreed contribution rates for future years are x% for employers and range from x% to x% for employees, depending on salary.

Principal Actuarial Assumptions

The following information is based upon a full actuarial valuation of the fund at 31 March 20xx updated to 31 March 2016 by a qualified independent actuary. At 31 March 2016 At 31 March 2015 x% x% Rate of increase in salaries x% x% Rate of increase for pensions in payment / inflation x% x% Discount rate for scheme liabilities x% x% Inflation assumption (CPI) x% x% Commutation of pensions to lump sums x% x% The current mortality assumptions include sufficient allowance for future improvements in mortality rates. The assumed life expectations on retirement age 65 are:

At 31 March 2016

Years At 31 March 2015

Years Retiring today Males x x Females x x Retiring in 20 years Males x x Females x x Analysis of the amount charged to operating costs in the Statement of Comprehensive Income

At 31 March 2016 £’000

At 31 March 2015 £’000

Employer service cost (net of employee contributions)

x x

Past service cost x x Total operating charge x x Analysis of pension finance income / (costs) Expected return on pension scheme assets x x Interest on pension liabilities x x Amounts charged/credited to financing costs x x Amount of gains and losses recognised in the Statement of Comprehensive Income

Actuarial gains(/losses) on pension scheme assets

x

x

Actuarial gains/(losses) on scheme liabilities x x Actuarial gain/(loss) recognised (x) x ______ ______



12. Pension obligations (continued) Local Government Pension Scheme (continued)

Movement in surplus/(deficit) during year

At 31 March 2016 £’000

At 31 March 2015 £’000

Surplus/(deficit) in scheme at 1 April X x Movement in year: X x Employer service cost (net of employee contributions)

X x

Employer contributions X x Past service cost X x Net interest/return on assets X x Remeasurements X x (Deficit)/Surplus in scheme at 31 March* (x) x ______ ______ Asset and Liability Reconciliation At 31 March 2016

£’000 At 31 March 2015

£’000 Reconciliation of liabilities Liabilities at start of period x X Service cost x X Interest cost x X Employee contributions x X Remeasurements x X Benefits paid x X Past Service cost x X Curtailments and settlements x X ______ ______ Reconciliation of assets Assets at start of period x x Return on plan assets x x Remeasurements x x Employer contributions x x Employee contributions x x Benefits paid x x Assets at end of period x x ______ ______ Actual return on plan scheme assets x x ______ ______

13. Intangible assets and goodwill Group Goodwill on

consideration £’000 Cost on valuation At start of year Additions On acquisition of subsidiary ______ At end of year

______ Amortisation At start of year Provision for year At end of year ______ Net book value ______ At 31 March 2016 At 31 March 2015 ______



14(a). Tangible fixed assets ----------------------- Housing Properties ------------------

------------------ Other fixed assets ------------------

Group

Social

Housing Properties for Letting Completed

£’000

Social

Housing Properties for letting under Construction

£’000

Low cost

home ownership Properties completed

£’000

Low cost home

ownership properties

under construction

£’000

Total Housing

Properties £’000

Freehold offices

£’000

Long Leasehold

Property £’000

Furniture and office

equipment £’000

Total fixed assets

£’000 Cost At start of the year Additions to properties acquired Works to existing properties Interest capitalised Schemes completed Disposals Transfers to/from investment property ______ ______ ______ ______ ______ ______ ______ ______ ______ At end of the year ______ ______ ______ ______ ______ ______ ______ ______ ______ Depreciation and impairment At start of the year Charge for the year Impairment losses Disposals At end of the year ______ ______ ______ ______ ______ ______ ______ ______ ______ Net book value at the end of the year ______ ______ ______ ______ ______ ______ ______ ______ ______ Housing Properties comprise: 2016

£’000 2015 £’000

Freeholds Long leaseholds ______ ______ Short leaseholds ______ ______ Cost of properties includes £xx (2015:.£xx) for direct administrative costs capitalised during the year 2016

£’000 2015 £’000

Works to existing properties in the year: Improvement works capitalised

Components capitalised ______ ______ Amounts charged to expenditure ______ ______ The aggregate amount of interest and finance costs included in the cost of housing properties The net book value of other fixed assets includes £x (2015: £x) in respect of assets held under finance leases.



14(b). Tangible fixed assets ----------------------- Housing Properties ------------------

------------------ Other fixed assets ------------------

Association

Social

Housing Properties for Letting Completed

£’000

Social Housing

Properties for letting

under Construction

£’000

Low cost

home ownership Properties completed

£’000

Low cost home

ownership properties

under construction

£’000

Total Housing

Properties £’000

Freehold offices

£’000

Long Leasehold

Property £’000

Furniture and office

equipment £’000

Total fixed assets

£’000 Cost At start of the year Additions to properties acquired Works to existing properties Interest capitalised Schemes completed Disposals Transfers to/from investment property ______ ______ ______ ______ ______ ______ ______ ______ ______ At end of the year ______ ______ ______ ______ ______ ______ ______ ______ ______ Depreciation and impairment At start of the year Charge for the year Impairment losses Disposals ______ ______ ______ ______ ______ ______ ______ ______ ______ At end of the year Net book value at the end of the year ______ ______ ______ ______ ______ ______ ______ ______ ______ Net book value

______ ______ ______ ______ ______ ______ ______ ______ ______

Housing Properties comprises: 2016 £’000

2015 £’000

Freehold land and buildings Long leasehold land and buildings Short leasehold land and buildings ______ ______ ______ ______ Cost of properties includes £xx (2015:.£xx) for direct administrative costs capitalised during the year 2016

£’000 2015 £’000

Works to existing properties in the year: Improvement works capitalised

Components capitalised Amounts charged to expenditure The aggregate amount of interest and finance costs included in the cost of housing properties The net book value of other fixed assets includes £x (2015: £x) in respect of assets held under finance leases for land and buildings £x (2015 £x) and furniture and office equipment £x (2015 £x)..



15(a). Investment properties held for letting Group Association

2016 £’000

2015 £’000

2016 £’000

2015 £’000

At start of year Additions Gain/(loss) from adjustment in value ______ ______ ______ ______ At end of year ______ ______ ______ ______

Investment properties were valued at 31 March 2016 by (name of valuer) professional qualified external valuers. The valuation of properties was undertaken in accordance with the Royal Institute of Chartered Surveyors Valuation Standards. In valuing the properties the following significant assumptions were used: Discount rate x% Annual inflation rate x% Level of long term rent increase x% At 31 March 2016 there were contractual obligations to purchase/construct/develop/repair/maintain investment property amounting to £x.

15(b). Homebuy loans Group Association

2016 £’000

2015 £’000

2016 £’000

2015 £’000

At start of year Loans issued in the year Provisions against non-recoverable loans ______ ______ ______ ______ At end of year ______ ______ ______ ______



16. Fixed asset investments

Group Companies The group comprises the following entities, all registered in England:

Name Incorporation

and ownership Regulated/ non-regulated

Nature of Business

Dev Co Ltd Company – 100% Non-regulated Build and Design Social Enterprise Ltd IPS – 100% Non-regulated Community Investment JV1 LLP LLP – 50% Non-regulated Property Development JV2 Ltd Company – 33% Non-regulated Training Associate Limited Company – 15% Non-regulated Non-registered

Group

Dev Co

Ltd £’000

Social Enterprise

Ltd £’000

Joint Venture JV1 LLP

£’000

Joint Venture JV2 Ltd £’000

Associated Undertaking Assoc Ltd

£’000 Cost At start of year Additions ______ ______ ______ ______ ______ At end of year ______ ______ ______ ______ ______ Share of retained profits At start of year Adjustment to opening balance Profit/(loss) for the year ______ ______ ______ ______ ______ At end of year ______ ______ ______ ______ ______ Net book value At 31 March 2016 ______ ______ ______ ______ ______ At 31 March 2015 ______ ______ ______ ______ ______ At 31 March 2016 the Group has the following interests in Joint Ventures and Associates:

2016 2015 £’000 £’000 Share of current assets Share of liabilities – due within one year Share of liabilities – due after more than one year ______ ______ Share of net assets ______ ______ Share of capital commitments ______ ______



16. Fixed asset investments (continued) Fixed asset investments Association

Associated undertaking

Ltd £’000 Cost At start of year Additions ______ At end of year ______ Share of retained profits At start of year Profit for the year ______ At end of year ______ Net Book Value At 31 March 2016

______

At 31 March 2015

______

17. Stock Group Association

2016 £’000

2015 £’000

2016 £’000

2015 £’000

Properties held for sale Development for other PRPs Shared ownership properties: Completed Work in progress Outright sale properties: Completed Work in progress ______ ______ ______ ______ ______ ______ ______ ______

18. Trade and other debtors Group Association

2016 £’000

2015 £’000

2016 £’000

2015 £’000

Rent arrears Less: provision for bad debts Less: Adjustment for net present value for arrears with repayment schedules

Social Housing Grant receivable Other debtors Prepayment and accrued income ______ ______ ______ ______ Debtors are all due within one year

______ ______ ______ ______



19. Investments

Group Association

2016 £’000

2015 £’000

2016 £’000

2015 £’000

Investments at valuation Listed on a recognised investment exchange

Unlisted investments ______ ______ ______ ______ ______ ______ ______ ______ Historic cost of investments ______ ______ ______ ______

The valuation of the unlisted investments is the Board’s best estimate of their fair value. Unlisted investments include £x held by counterparties as collateral for loans or financial instruments and are held separately to cash at bank.

20. Cash and cash equivalents

£’000 £’000 Money market investments Cash at bank ______ ______ ______ ______

In the above are balances totalling £x (2015: £x) which are charged to certain lenders and balances totalling £x (2015: £x) which are held in trust for shared ownership leaseholders.

21. Creditors: amounts falling due within one year

Group Association

2016 £’000

2015 £’000

2016 £’000

2015 £’000

Loans and overdrafts (Note 21b) Trade creditors Social Housing Grant received in advance

Amounts owed to group undertakings Rents and service charges paid in advance

Service charge balances held on behalf of leaseholders

Corporation tax Other taxation and social security payable

Accruals and deferred income SHPS pension agreement plan (Note 12) Deferred Capital Grant (Note 23) Recycled Capital Grant Fund (Note 24) Disposal proceeds fund (Note 25) Other creditors Obligations under finance leases (Note 25)

______ ______ ______ ______ ______ ______ ______ ______



22(a). Creditors: amounts falling due after more than one year

Group Association

2016 £’000

2015 £’000

2016 £’000

2015 £’000

Loans (Note 15b) Deferred Capital Grant (Note 23) Recycled capital grant fund (Note 24) SHPS pension agreement plan (Note 12) Disposal proceeds fund (Note 25) Obligations under finance leases (Note 26)

Leaseholder sinking funds ______ ______ ______ ______ ______ ______ ______ ______

22(b). Debt analysis


£’000 2015 £’000

2016 £’000

2015 £’000

Loans repayable by instalments: Within one year In one year or more but less than two years

In two years or more and less than five years

In five years or more Loans not repayable by instalments: Within one year In one year or more but less than two years


In five years or more Less: loan issue costs ______ ______ ______ ______ Total loans ______ ______ ______ ______

X type loans are secured by specific charges on the PRPs individual housing properties and Y type loans are secured by floating charges on all of the PRPs assets and fixed charges on individual properties. The loans are repayable monthly/quarterly at varying rates of interest and are due to be repaid in 20xx and 20xy.

The interest rate profile of the PRP at 31 March 2016 was:

Total £’000

Variable

Rate £’000

Fixed rate

£’000

Weighted Average

rate %

Weighted average

term Years

Instalment loans Non-instalments loans ______ ______ ______ ______ ______ ______ ______ ______ ______ ______



22(b). Debt analysis (continued) At 31 March 2016 the PRP has the following borrowing facilities: £’000 Undrawn committed facilities Undrawn facilities ______ ______

* This information is only required if the PRP has debt securities which are listed or publicly traded. However, these disclosures are good practice. During the year the PRP has entered into one ISDA swap on debt of £xm. The PRP has entered into ISDA swaps on debt totalling £xxm at the year end of all of which is to fix the interest rate at rates varying between x% and x% for periods from x to x years.

23. Deferred capital grant Group Association 2016

£’000 2015 £’000

2016 £’000

2015 £’000

At start of the year Grant received in the year Released to income in the year At the end of the year ______ ______ ______ ______ ______ ______ ______ ______

£’000 £’000 £’000 £’000 Amount due to be released < 1 year Amount due to be released > 1 year ______ ______ ______ ______ ______ ______ ______ ______

24. Recycled capital grant fund 2016

£’000 2015 £’000

At the start of the year Inputs: Grants recycled Interest accrued Transfers from other PRPs Recycling: New build Major repairs Transfers to other PRPs Repayment of grant to the HCA/GLA

______ ______

At the end of the year

______ ______

Amount three years or older where repayment may be required

______ ______



25. Disposal proceeds fund 2016

£’000 2015 £’000

At start of year: Funds recycled Net PRTB receipts

Certain proceeds of profit making PRPs Interest accrued Transfers from other PPRPs Use/allocation of funds:

New build

Major repairs and works to existing stock

Transfers to other PPRPs Other Repayment of funds to the HCA/GLA ______ ______ At end of year

______

______

Amounts three years old or older where repayment may be required

______ ______

26. Obligations under finance leases Group Association 2016

£’000 2015 £’000

2016 £’000

2015 £’000

In one year or more but less than two years


______ ______ ______ ______

In five years or more ______ ______ ______ ______

The obligations under finance leases are repayable by equal instalments. Finance leases relate to vehicles and office equipment and have options to purchase at the end of the lease. The lease agreements do not include any contingent rent or restrictions.

27. Provision for liabilities and charges Pension14

£’000 Other £’000

Group and Association At the start of the year Transfer from Statement of Comprehensive Income (increase in the provision of the year)

Released in the year Unused amounts reversed in the year Re-measurement changes ______ ______ At the end of the year ______ ______

14 The pension provision does not include the SHPS contractual agreement to fund the past service deficit which should be shown in creditors.



28. Non-equity share capital 2016

£’000 2015 £’000

Group and Association Allotted Issued and Fully Paid At the start of the year Issued during the year ______ ______ At the end of the year ______ ______

The par value of each share is £x. The shares do not have a right to any dividend or distribution in a winding-up, and are not redeemable. Each share has full voting rights. All shares are fully paid.

29. Capital commitments

2016 £’000

2015 £’000

Capital expenditure that has been contracted for but has not been provided for in the financial statements

Capital expenditure that has been authorised by the Board but has not yet been contracted for

______ ______ ______ ______ The PRP expects these commitments to be financed with:

Social Housing Grant Proceeds from the sales of properties Committed loan facilities ______ ______ ______ ______

The above figures include the full cost of shared ownership properties contracted for.

30. Other commitments

2016 £’000

2015 £’000

At the reporting date the Group and Association have financial commitments for xx (e.g. the lease of new office premises) which have not been provided for.

______ ______ ______ ______

31. Operating leases

The PRP holds properties and office equipment under non-cancellable operating leases. At the end of the year the PRP had commitments of future minimum lease payments as follows:-



31. Operating leases (continued)


£’000 2015 £’000

2016 £’000

2015 £’000

Land and buildings: In one year or more but less than two years


In five years or more Others: In one year or more but less than two years


In five years or more ______ ______ ______ ______

The lease agreements do not include any contingent rent or restrictions. Other operating leases for motor vehicles include purchase options. Leases for land and buildings include renewal periods after 5 years throughout the lease.

32. Contingent liability

33. Grant and financial assistance

£’000 £’000 The total accumulated government grant and financial assistance received or receivable at 31 March:

Held as deferred capital grant Recognised as income in statement of Comprehensive Income ______ ______

34. Related parties

PRP Group Limited is the Parent entity in the Group and ultimate controlling party. The Group has taken advantage of the exemption available under Section 33 FRS 102 not to disclose transactions with wholly owned subsidiary undertakings.

The following are related parties:

The Board has tenant members who hold tenancy agreements on normal terms and cannot use their position

to their advantage. Rent charged to the Tenant Board member was £x (2015: £x). There are no arrears on their tenancies at the reporting period end £x (2015: £Nil).

Directors’ loans (if not disclosed elsewhere). Transactions with key management personnel and their close family, (including compensation paid). Related party balances are not secured


Note: Include a brief description of the legal nature of the contingent liability not provided for and the amount or estimated amount of that liability. Include details of any uncertainties relating to the amount or timing or settling the liability together with any possibility of reimbursement.


34. Related parties (continued) Transactions with registered and non-registered elements of the business15 The Association provides management services, other services and loans to its subsidiaries. The Association also receives charges from its subsidiaries. The quantum and basis of those charges is set out below: Payable to association from subsidiaries and other group members: Management

charges Other charges Interest charges

2016 £’000

2015 £’000

2016 £’000

2015 £’000

2016 £’000

2015 £’000

Non-regulated entitites: JV1 LLP JV2 Ltd Assoc Ltd Regulated entities: HA1 ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______

Intra Group management fees Intra-group management fees are receivable by the association from subsidiaries to cover the running costs the association incurs on behalf of managing its subsidiaries and providing services. The Management fee is calculated on a service by service basis using varying methods of allocation. The costs are allocated as follows:

Service provided Basis of allocation Human resources, payroll, training Staff numbers Information and communication technology ICT users Management accounting Weighted average units and staff numbers Treasury services Net debt Purchase ledger, procurement Operating costs Communications and marketing Weighted average units and staff numbers Executive Weighted average units and staff numbers

Other intra-group charges Other intra-group charges are payable to the association from subsidiaries and relate to staff recharges.

In March 2016 x declared a gift aid payment to the Association (2015: £x).

15 PRPs will need to disclose relationships between parents and subsidiaries and regulated and non-regulated group or associated

bodies irrespective of whether or not there have been any transactions between those related parties.



34. Related parties (continued)

Intra-group interest charges Intra-group interest is charged by the association to its subsidiaries at an agreed commercial rate. At start of year Advanced/(received)

At end of year

£’000 £’000 £’000 Housing Association subsidiary 1 ______ ______ ______

Transactions with non-registered entities During the year PRP Group had intra-group transactions with Dev Co Ltd, a non-regulated entity, of £x (2015: £x) relating to development of housing properties. During the year Dev Co Ltd had intra-group transactions with PRP Group of £x (2015: £x) relating to marketing services.

35. Financial instruments The Group’s and Company’s financial instruments may be analysed as follows:

2016 £’000

2015 £’000

Financial assets (a) Financial assets measure at fair

value through profit and loss

(b) Financial assets that are debt instruments measure at amortised cost

(c) Financial assets that are equity instruments measured at cost less impairment

Financial liabilities

(a) Financial liabilities measured at amortised cost

(b) Derivative financial instruments designated as hedges of variable interest rate risk

(c) Financial liabilities measured at fair

value through profit or loss

(d) Loan commitments measure at cost less impairment

Financial assets measured at fair value through profit or loss comprise fixed asset investments in unlisted company shares and current asset investments in a trading portfolio of listed company shares. Financial assets measured at amortised cost comprise cash at bank and in hand, trade debtors, other debtors, accrued income (£xx (2015 - £xx)), amounts owed by joint ventures and association undertakings. Financial liabilities measured at amortised cost comprise convertible loan stock, irredeemable preference shares, bank loans and overdrafts, trade creditors and other creditors. Derivative financial instruments designated as hedges of variable interest rate risk comprise interest rate swaps. Financial liabilities measured at fair value through profit or loss comprise xxx



36. First time adoption of FRS 102 On adoption of FRS 102 the Group and Association have restated the comparatives, the impact on reserves is as follows: Group

Note

Reserves as at

transition date 1 Apr 2014

£’000

Surplus/(deficit)


£’000

Reserves

as at 31 Mar 2016

£’000 As previously stated under former UK GAAP

Prior year adjustment – correction of error

a ______ ______ ______

As restated under former UK GAAP Transitional adjustments16 Revaluation to deemed cost of housing properties

b

Increase in depreciation of housing properties

c

Increase in amortisation of grants relating to housing properties

d

Adjustment for non-government grant to reserves

e

Inclusion of holiday pay accrual f Inclusion of SHPS pension deficit payment liability

g

Change to measurement of net finance cost on defined benefit pension schemes

h

Fair value adjustment for investment properties

i

Fair value adjustment for financial instruments

j

Revaluation to fair value of fixed asset investments

k

______ ______ ______

As stated in accordance with FRS102 ______ ______ ______

16 Include all changes in accounting policies and the account change to the comparative period results, together with a brief

description of the nature of each change.



36. First time adoption of FRS 102 (continued)

Association

Note

Reserves as at

transition date 1 Apr 2014

£’000

Surplus/(deficit)


£’000

Reserves

as at 31 Mar 2016

£’000 As previously stated under former UK GAAP

Prior year adjustment – correction of error

a ______ ______ ______

As restated under former UK GAAP Transitional adjustments17 Revaluation to deemed cost of housing properties

b

Increase in depreciation of housing properties

c

Increase in amortisation of grants relating to housing properties

d

Adjustment for non-government grant to reserves

e

Inclusion of holiday pay accrual f Inclusion of SHPS pension deficit payment liability

g

Change to measurement of net finance cost on defined benefit pension schemes

h

Fair value adjustment for investment properties

i

Fair value adjustment for financial instruments

j

Revaluation to fair value of fixed asset investments

k

______ ______ ______

As stated in accordance with FRS102 ______ ______ ______

Explanation of changes to previously reported profit and equity:

a. An error was identified in the financial statements as previously issued for the year ended 31 March 2014. This is explained more fully in note x to these financial statements.

b. On transition to FRS102 the Board has elected to measure housing properties in the association at fair value at the date of transition. The effect is to increase reserves and the carrying amount of fixed assets in the association and group. The change has no effect on the surplus for the year ended 31 March 2016.

c. FRS102 requires that capital grant previously deducted from the cost of fixed assets, is treated as creditors where the fixed assets are carried at cost. The effect compared to current UK GAAP is an increase to the carrying cost of housing properties resulting in an increase in the depreciation at transition of £xx and a decrease in the surplus for the year ended 31 March 2015 of £xx.

d. FRS102 requires that government capital grant previously deducted from the carrying cost of housing

properties is treated as a deferred capital grant creditor and released to the statement of comprehensive income over the useful life of the associated assets. The effect compared to current UK GAAP is an increase in income recognised on transition of £xx, and £xx increase in surplus for the year ended 31 March 2015.

17 Include all changes in accounting policies and the account change to the comparative period results, together with a brief

description of the nature of each change.



36. First time adoption of FRS 102 (continued) e. FRS102 requires that grant received from non-government sources is recognised in the Statement of

Comprehensive Income when performance conditions are met. The effect compared to current UK GAAP is to increase reserves at transition by £xx and increase the surplus for the year ended 31 March 2015 by £xx.

f. FRS102 requires that the cost of unused entitlement and short term employee benefits is measured and

recognised in the reporting period. The effect is that unused holiday entitlement has now been recognised as an accrual at the reporting period date. This has resulted in a decrease of reserves at transition of £xx and a decrease in the surplus for the year ended 31 March 2016 of £xx.

g. FRS102 requires that a liability is recognised for the contributions that arise from an agreement to fund a

deficit in a multi-employer pension scheme. The effect is that a liability for the SHPS payment plan has been recognised at the present value of the contributions payable using the discount rate specified in note xx. This has resulted in a decrease in reserves of £xx at transition and a decrease in the surplus in the year ended 31 March 2015 of £xx.

h. FRS102 requires the recognition in profit or loss of a net interest cost (or income) on defined benefit pension

schemes. This is calculated by multiplying the net pension liability (or asset) by the market yields on high quality corporate bonds. The effect of this, when compared to previous UK GAAP, has been to reduce reported profits for the year ended 31 December 2012 because previous UK GAAP led to the recognition of finance income calculated by reference to the expected returns on the pension plan's specific assets be they equities, properties or bonds. The change has had no effect on reported equity as the measurement of the net defined pension scheme liability (or asset) has not changed. Instead, the decrease in reported profit is mirrored by an increase in actuarial gains which are presented within other comprehensive income.

i. FRS102 requires that changes in the fair value of investment properties are recognised in profit or loss for

the period. Under previous UK GAAP these changes were recognised outside of profit or loss and presented separately in a revaluation reserve. This change has increased reported profit for the year ended 31 March 2015 but has not affected the measurement of investment property on the balance sheet.

j. FRS102 requires that changes in the fair value of financial instruments are recognised in profit or loss for the

period. Under previous UK GAAP these changes were recognised outside of profit or loss and presented separately in a revaluation reserve. This change has increased reported surplus for the year ended 31 March 2015 but has not affected the measurement of investment property on the balance sheet.

k. FRS102 requires that property where commercial rentals are earned is carried at fair value at the reporting

date. The effect is that the value of the market rented properties has been recognised at transition £xx and the movement in the year to 31 March 2015 £xx.

Exemptions taken on transition to FRS102: (1) The Group has taken the exemption relating to Business Combinations and goodwill, (2) The election to measure property, plant and equipment (fixed assets), investment property and goodwill at

fair value deemed cost at the transition date, (3) To measure property, plant and equipment (fixed assets). Investment property and goodwill using a previous

GAAP revaluation as deemed cost at the variation date; and (4) The exemption allowed for Public Benefit entity combinations to the ‘acquisition’ of HA1 in 2012.


Formed more than 100 years ago, accountants and business advisors Beever and Struthers have a strong not-for-profit reputation based on the provision of high quality, tailored services to the UK social housing sector. The firm is one of the UK’s leading independent accountancy practices with offices in Manchester, London and Blackburn. Among its core strengths is a substantial not-for-profit division that ranks among the Top 5 providers of audit and assurance services with many of the leading UK housing associations amongst its clients. Beever and Struthers is a member of HLB International, a worldwide network of independent accounting firms and business advisors. Formed in 1969, HLB International is a global network of independent professional accounting firms and business advisers with member firms in more than 100 countries, employing almost 2,000 partners and about 14,500 staff in 500 offices and collectively generating $1.79bn in revenues. If you need any advice or assistance please contact us at any of the addresses below:

Manchester St George’s House

215-219 Chester Road Manchester

M15 4JE

e: [email protected]

London

15 Bunhill Row London

EC1Y 8LP


Blackburn

Central Buildings Richmond Terrace

Blackburn BB1 7AP


www.beeverstruthers.co.uk

Registered Auditors @ Beever and Struthers – March 2016

mailto:[email protected]



http://www.beeverstruthers.co.uk

Documents

Best Practice Accounts PRP Group Limited An Exempt Charity ... · Best practice accounts – Page 7 Statement of the Board’s Responsibilities in Respect of the Accounts The Co-operative