Page 1

annual accounts




Family Mosaic: an introduction 8F¯SFPOFPGUIFMBSHFTUIPVTJOHBTTPDJBUJPOTJO-POEPOBOE&TTFY8FQSPWJEF BGGPSEBCMFIPNFTUPSFOU BOECVZ BTXFMMBTTFSWJDFTUPQFPQMFPOMPXJODPNFBOE JOOFFEPGBEEJUJPOBMTVQQPSU GPSFYBNQMF BEVMUTXJUINFOUBMIFBMUIJTTVFT ZPVOH QFPQMFXIP¯WFMJWFEJODBSFBOEPMEFSQFPQMFXJUIGMPBUJOHTVQQPSUOFFET 8FIBWFPWFS IPNFTGPSSFOU8FTFSWFPWFS SFTJEFOUT "OEXFTVQQPSUPWFS QFPQMFXJUIBEEJUJPOBMTFSWJDFT 8F¯SFESJWFOCZPVSDVTUPNFST8FXBOUUPPGGFSUIFNNPSFJOWPMWFNFOUBOEDIPJDF 8FDBOEPUIJTUIBOLTUPPVSGJOBODJBMTUSFOHUI 5IJTNFBOTXFIBWFTVSQMVTUPSFJOWFTUJOUPPVSFYJTUJOHIPVTJOHTUPDL*UNFBOTXFDBOGJOBODFUIF DPOTUSVDUJPOPGOFXIPNFT*UNFBOTXFDBOIFMQQFPQMFNBLFUIFJSDPNNVOJUJFTMPDBMJUJFTPGDIPJDF *UNFBOTNBLJOHUIFNGFFMWBMVFEJOFWFSZUIJOHXFEPGPSUIFN

Gearing

Turnover 2010 2009 2009 2008 2008

£168m £142m £146m 0

34

68

102

136

2010 2009 2009 2008 2008 0

170

2010 2009 2009 2008 2008

£31m £26m £27m 8

16

24

32

60

80

100

1.0

1.5

2.0

2.5

5.7% 6.9% 8.3% 0

2

4

6

8

10

£33m £17m £26m 16

24

32

2010 2009 2009 2008 2008

29 45 69 0

40

20

40

60

80

100

Number of new homes

Borrowings 2010 2009 2009 2008 2008

0.5

Void turnaround time (days)

2010 2009 2009 2008 2008 8

100

2010 2009 2008

Net surplus

0

80

Arrears 18.7% 17.9% 18.7%

40

60

2.1 1.4 1.5 0.0

40

2010 2009 2009 2008 2008 20

40

2010 2009 2009 2008 2008

Operating surplus as % of turnover

0

20

Interest cover ratio

Operating surplus

0

40.9% 48.6% 46.0%

£569m £575m £510m

2010 2009 2009 2008 2008

762 675 586


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£12

Planned work – periodic decoration, gas servicing & other

£18

Investment works – improvements, replacements of kitchens,bathrooms, heating, roofs, windows & other

£31

Management Costs

£15

Financing (net)

£9

Other Services

£4


Family Mosaic Housing Consolidated financial statements for the year ended 31 March 2010

Contents 

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Financial Statements 2010 | 1


Chairman’s statement

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2 | Family Mosaic Housing


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Financial Statements 2010 | 3


Who runs Family Mosaic

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4 | Family Mosaic Housing


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6 | Family Mosaic Housing

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Financial Statements 2010 | 7


0QFSBUJOHBOEGJOBODJBMSFWJFX

22500

180000 160000

22000

140000 21500

120000 100000

21000

80000 20500

60000 40000

Income £000s

Units

2005/6

2006/7

2007/8

2008/9

2009/10 Units and Income

KPJOJOHPVS4VQQPSUFE)PVTJOH4FSWJDFXIJDIXBT BTTFTTFEBTBTUBSTFSWJDFUIFQSFWJPVTZFBS XJUI NPTUBSFBTPGPVSCVTJOFTTSVOOJOHBUTUBST8F XBOUUPDPOUJOVFUIJTBOENPWFCFZPOEUIFTUBS SBUJOHTZTUFNUPPVSPXOTUBSTUBOEBSET 5IFDPOEJUJPOPGPVSIPNFTJTHPPE XJUI DPNQMJBOUXJUIUIFHPWFSONFOU¯T%FDFOU)PNFT TUBOEBSE8FBSFXFMMQMBDFEUPNFFU DPNQMJBODFCZUIF%FDFNCFSEFBEMJOF ,FZJOEJDBUPST 5FOBOU4BUJTGBDUJPO 8FNFBTVSFUISFFDPNQPOFOUTPGTBUJTGBDUJPO Â…  0WFSBMM(FOFSBM/FFETTBUJTGBDUJPO Â…  3FQBJSTTBUJTGBDUJPO Â…  4VQQPSUFE)PVTJOHTBUJTGBDUJPO  &BDINPOUISFTJEFOUTBSFJOUFSWJFXFECZBO JOEFQFOEFOUTQFDJBMJTUBCPVUUIFRVBMJUZPGPVS IPVTJOHNBOBHFNFOUTFSWJDF5IFSFTVMUTGPSUIF DVSSFOUZFBSTIPXFEUIBUPWFSBMMTBUJTGBDUJPOGPS (FOFSBM/FFETUFOBOUTUBLFODVNVMBUJWFMZPWFSUIF ZFBSJT XIJDIJTBOJNQSPWFNFOUPGPWFS

8 | Family Mosaic Housing

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


Operating and financial review

four years, and shows a generally improving trend. The target for 2010 is 83%. Tenant Satisfaction %

2006

2007

2008

2009

2010

74%

77%

77%

80%

82%

Operating Surplus This measures our surplus before property disposals and interest. It is used to measure controllable performance at cost centre and department levels as well as for the organisation as a whole, and we would expect to see this increase over time. In 2010 the surplus increased as high planned repair spend last year came back to more normal levels and our cost controls meant that we improved efficiency overall. As a percentage of turnover our operating surplus is 18.7%. We compare this against the G15 group of fifteen leading London Housing Associations which in 2009 reported an average of 17.8%. Our medium term target for operating surplus is 20%.

Operating Surplus Actual (£000’s)

2006

2007

2008

2009

2010

£24,022

£21,569

£27,229

£25,537

£31,351

Current Arrears This measures the amounts of rent owed by current tenants compared to their annual rent charge. Our rent arrears reduced again in 2010 thanks to

improved processes and a coordinated approach to collection across the organisation. We are targeting further reductions in the future with a medium term target of 5% or less. In 2009 we were in the fourth quartile in the HouseMark G15 peer group benchmarking report.

Current Arrears %

2006

2007

2008

2009

2010

8.1%

8.3%

8.3%

6.9%

5.7%

Net Development Spend We target and measure Net Development Spend in the year, which is the total spent on new development, less grants received less proceeds on new build sales units. This is important because this sum predominantly drives the funding requirement of the business. The development team are tasked with managing within the parameters set, to ensure the business stays within banking covenants and the facilities available. During the year net spend decreased, and amounted to £15m (2009: £65m). Our spend was lower than expected because we had a record high level of capital grant receipts in the year. We benefited from the Homes and Communities Agency decision to fund 75% of grant at start on site and were able to complete land acquisitions and start on sites by the year end. We slowed down our programme due to uncertainty at the start of the year. That meant whilst we achieved a significant development spend and grant drawdown, we started some schemes later in the year and hence reduced our overall cash spend.

Financial Statements 2010 | 9


0QFSBUJOHBOEGJOBODJBMSFWJFX

$FOUSBM0WFSIFBE 8FNFBTVSFUIFDPTUPGDFOUSBMDPSQPSBUFTFSWJDFT XIJDIJODMVEFT)3 'JOBODF *5 'BDJMJUJFT  $PNNVOJDBUJPOT *OTVSBODFBOEPUIFS BTB PGUPUBMJODPNF5IJTHJWFTBNFBTVSFPGSFMBUJWF FGGJDJFODZ8FFYQFDUUPTFFUIJTSFEVDJOHPWFS UJNF IPXFWFSMBTUZFBSXFDPOUJOVFEUPJOWFTU JOTFSWJDFTBOETVQQPSUBOEUIJTNFBOUPVSDPTUT QFSDFOUBHFSFNBJOFETUBUJD0VSUBSHFUJTUPSFNBJO BUPSMFTTBOEUIJTXBTBDIJFWFE

DPTUCBTFBTQPTTJCMFDPNNFOTVSBUFXJUITFSWJDF RVBMJUZUPUFOBOUTBOEVTFST Management cost per unit per week

2006

2007

2008

2009

2010

£15.07

£14.49

£13.57

£14.20

£15.43

Central Overhead %

2006

2007

2008

2009

2010

10.5%

8.9%

8.8%

9.5%

9.5%

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

10 | Family Mosaic Housing

*EFBMMZXFXPVMEMJLFUPTFFUIJTDPTUSFEVDJOHPWFS UJNF TPDMFBSMZXFBSFTPNFXBZPGGBDIJFWJOHUIJT BNCJUJPVTHPBM)PXFWFS PVSNBOBHFNFOUDPTUQFS VOJUQFSXFFLXBTBNPOHUIFUISFFMPXFTUXJUIJO UIF(JO BTEJTDMPTFEJOUIFQVCMJTIFE BDDPVOUT XFMMVOEFSUIFBWFSBHFPGƒ 2VBMJUZ"TTFTTNFOU'SBNFXPSL $BSFBOE4VQQPSUTFSWJDFTBSFBTTFTTFE JOEFQFOEFOUMZCZJOTQFDUPST8FBSFHSBEFEGSPN " UIFIJHIFTUMFWFMTPGTFSWJDF UP% BGBJMJOH TFSWJDF XJUI$BTBOBDDFQUBCMFMFWFM%VSJOHUIF ZFBSXFIBETFSWJDFTSFWJFXFE   Actual Target

2010

2009

Grade A – 15%

82%

70%

Grade B – 60%

14%

26%

Grade C – 25%

4%

4%

5IJTSFQSFTFOUTBIJHIMFWFMPGTFSWJDFQSPWJTJPO PG XIJDIXFBSFQSPVE 0VS4VQQPSUFE)PVTJOHTFSWJDFTIBEBOPUIFSHPPE ZFBS JOBNPSFDPNQFUJUJWFNBSLFUXFHBJOFE OFUOFXCVTJOFTTPGƒNQB/FXCVTJOFTTXBT TFDVSFEJO)BNNFSTNJUI'VMIBN )BDLOFZBOE &TTFYJODMVEJOHBOFX'BNJMZ*OUFSWFOUJPO1SPKFDU XPSLJOHJOQBSUOFSTIJQXJUIUIF-PDBM"VUIPSJUZ 


0QFSBUJOHBOEGJOBODJBMSFWJFX

4PDJBM4FSWJDFTBOEUIF1PMJDF8FXFSFSFDPHOJTFE GPSPVSJOOPWBUJPOJO4VQQPSUJOH1FPQMFXJUIB51"4 BXBSEGPSPVSUSBJOFFTVQQPSUXPSLFSQSPHSBNNFBOE XFSFBMTPOPNJOBUFEGPSPVS:PVOH1FPQMF®$PNF %JOFXJUI.F¯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

IBWFCFFOJEFOUJGJFEGPSNPEFSOJTBUJPOXPSLT BOE ƒNIBTCFFOTFUBTJEFGPSUPDPNQMFUF UIFTFJNQSPWFNFOUXPSLT*OBEEJUJPO BZFBS TUPDLJOWFTUNFOUQSPKFDUJPOIBTCFFOQSPEVDFEGPS BEEJUJPOBMJOWFTUNFOUPGOFBSMZƒ QFSZFBS GPSUIFSFNBJOJOHQSPQFSUJFT 8FDPOUJOVFXPSLJOHDMPTFMZXJUIUIF-POEPO #PSPVHIPG)BNNFSTNJUIBOE'VMIBN0ME0BL¯T $PNNVOJUZBOE$IJMESFO¯T$FOUSFJTOPXGVMMZ PQFSBUJPOBMBOEHBJOJOHJOQPQVMBSJUZ QSPWJEJOHB XJEFSBOHFPGTFSWJDFTUPCPUIUFOBOUTBOESFTJEFOUT JOUIF#PSPVHI0GGJDJBMDIJMESFO¯TTUBUVTIBTCFFO BXBSEFEBOEBOOVBMGVOEJOHIBTCFFOTFDVSFEGSPN UIF-POEPO#PSPVHIPG)BNNFSTNJUIBOE'VMIBN VOUJM5IFDFOUSFJTOPXXPSLJOHUPXBSET 0'45&%JOTQFDUJPOBUUIFCFHJOOJOHPGOFYUZFBS

4VCTJEJBSJFT $IBSMUPO5SJBOHMFJTBNBKPSSFHFOFSBUJPOTDIFNF JOUIF-POEPO#PSPVHIPG(SFFOXJDI4JODFUIF TUPDLUSBOTGFSJOBMMFYJTUJOHIPNFTIBWFCFFO SFGVSCJTIFEBOENFFUUIFEFDFOUIPNFTTUBOEBSE  BOEOFXIPNFTIBWFCFFOCVJMU.BKPS JNQSPWFNFOUTIBWFCFFODPNQMFUFEUPUIFFYUFSOBM FOWJSPONFOUBOEUIFSFIBTCFFONVDIFNQIBTJT POJNQSPWJOHMPDBMTFSWJDFT*OBEEJUJPO$IBSMUPO 5SJBOHMFIBTEFWFMPQFEBOFYUFOTJWFBOEJOOPWBUJWF DPNNVOJUZEFWFMPQNFOUQSPHSBNNFPGGFSJOHBXJEF SBOHFPGPQQPSUVOJUJFTGPSMPDBMSFTJEFOUT

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

*OEFQFOEFOUDVTUPNFSTBUJTGBDUJPOTVSWFZT 45"564 XFSFDBSSJFEPVUJO BOE 5IFSFIBTCFFOBUSFOEPGTJHOJGJDBOUMZJNQSPWJOH TBUJTGBDUJPOJOBMMLFZBSFBTXBTOPFYDFQUJPO XJUIFYDFMMFOUSFTVMUTBUPWFSBMMTBUJTGBDUJPO EFNPOTUSBUJOHBSFUVSOPOZFBSTPGJOWFTUNFOU BOEBSFOFXFEQSJEFJOIPNFTBOEDPNNVOJUZ

0VSBCJMJUZUPSBJTFGJOBODF FJUIFSGSPNCBOLTPSJO UIFDBQJUBMNBSLFUT EPFTTFFNUPIBWFJNQSPWFE PWFSUIFDPVSTFPGUIFDVSSFOUGJOBODJBMZFBS CVUJT CZOPNFBOTDFSUBJO8FBSFGJOBODJBMMZTUSPOHBOE XFMMQMBDFEXJUIQPUFOUJBMGVOEFST8FDPOUJOVF UPNBOBHFSFMBUJPOTIJQTDBSFGVMMZUPNBJOUBJOPVS TUSFOHUIBTBMFOEJOHQSPQPTJUJPO

0ME0BL°TQMBOGPSJOWFTUNFOUJOJUTIPNFTXBT SFWJFXFEEVSJOHUIFZFBS"UPUBMPGQSPQFSUJFT

"TQBSUPGPVSEFWFMPQNFOUQSPHSBNNF XFEFWFMPQ VOJUTGPSTBMF FJUIFSBT4IBSFE0XOFSTIJQPSGPS

Financial Statements 2010 | 11


0QFSBUJOHBOEGJOBODJBMSFWJFX

0VUSJHIU4BMF5IFBCJMJUZGPSVTUPTFMMUIFTFVOJUT BUUIFSJHIUQSJDFJTBSJTLUPUIFCVTJOFTT8IJMTUXF IBWFEFNPOTUSBUFEPVSBCJMJUZUPEPTP XFDPOUJOVF UPNPOJUPSBOENBOBHFUIJTDMPTFMZ "DRVJTJUJPOPGMBOEBOEQSPQFSUJFTGPSEFWFMPQNFOU IBTSJTLT5IFSFBSFVODFSUBJOUJFTJOEFWFMPQNFOU  QBSUJDVMBSMZJOUIFQSFTFOUDMJNBUF XJUIUIFSJTL UIBUMBOEQVSDIBTFENBZCFPWFSWBMVFE DPTUT PWFSSVOPSTBMFTOPUBDIJFWFE"TBSFTVMUXFDBO GBDFXSJUFPGGTPGDPTUBOEXSJUFEPXOTJOWBMVF0VS TDIFNF BOENBOBHFNFOU BTTFTTNFOUQSPDFTTFT BSFBJNFEBUNJOJNJTJOHTVDIPDDVSSFODFT8FIBWF SFQSPDVSFEPVS3FQBJSBOE"TTFU.BOBHFNFOU TFSWJDFTEVSJOHUIFZFBSBOEBSFJNQMFNFOUJOHUIF OFXDPOUSBDUTJO5IJTSFQSFTFOUTBSJTL JOEFMJWFSZUFSNT JOCPUINBOBHJOHUIFCVEHFU BOENBJOUBJOJOHUIFRVBMJUZPGTFSWJDFT8FIBWF TJHOJGJDBOUSFTPVSDFTBOEBEFUBJMFEQMBOJOQMBDF UPNBOBHFUIJT

"UZFBSFOEWBSJBCMFJOUFSFTUSBUFMPBOTXFSF  PGPVSMPBOCPPL5IJTJTJOMJOFXJUI PVSQPMJDZ XIJDIJTUPIBWFBNBYJNVNPG GJYFE8FJODSFBTFEUIFWBSJBCMFFMFNFOUUIJT ZFBSJOPSEFSUPSFUBJONPSFGMFYJCJMJUZ BOEXF CFOFGJUFEGSPNMPXTIPSUUFSNJOUFSFTUSBUFT BTBSFTVMU 0VS(FBSJOHJT  NFBTVSFE BTIPVTJOHMPBOTOFUPGEFGFSSFEMPBOJTTVF DPTUTDPNQBSFEUPSFTFSWFTQMVTDBQJUBMHSBOUT 5IJTJTXJUIJOPVSGJOBODJBMDPWFOBOUTBOEGBJSMZ DPOTFSWBUJWFGPSUIFTFDUPS

4VQQPSUFE)PVTJOHJTGVOEFECZHSBOUTTVDIBT 4VQQPSUJOH1FPQMF5IFMFWFMPGHSBOUJTVOEFS QSFTTVSFGSPNDFOUSBMHPWFSONFOUDVUTBOEXFBSF NPOJUPSJOHEFWFMPQNFOUTJOUIJTSFTQFDU8FIBWF QSPEVDFEBSJTLQBQFSBOEIBWFTUSBUFHJFTJOQMBDF UPEFBMXJUIUIJTBOENBJOUBJOQSPGJUBCMFTFSWJDFT 'JOBODJBMSFWJFX 5IF"TTPDJBUJPOJTGJOBODFEQSFEPNJOBOUMZCZMPOH UFSNMPBOT DBQJUBMHSBOUTBOEJUTPXOSFTFSWFT 8FIBWFMPBOGBDJMJUJFTUPUBMMJOHƒN  ƒN XJUINBUVSJUZEBUFTSVOOJOHPVUUP  0VSNBKPSMFOEFSTBSF#BSDMBZT#BOL  -MPZET54# /BUJPOXJEFBOE"CCFZ"MMCBOLEFCUJT GVMMZTFDVSFEBHBJOTUIPVTJOHBTTFUT 8FIBWFB5SFBTVSZQPMJDZ XIJDITFUTPVUBNPOH PUIFSUIJOHTIPXOFXMPBOTDBOCFSBJTFE UIF QSPGJMJOHPGSFQBZNFOUT BOEUIFFYQPTVSFUP WBSJBCMFJOUFSFTUSBUFT

12 | Family Mosaic Housing

less than 1 year

0.1%

between 1 and 5 years

1.7%

between 5 and 10 years

11.4%

between 10 and 20 years

30.8%

more than 20 years

56.0%

Repayment analysis – drawn loans


0QFSBUJOHBOEGJOBODJBMSFWJFX

220%

DPOUSJCVUJPOTDIFNFTUJMMVOEFSUIF4)14VNCSFMMB &YJTUJOHTUBGGNFNCFSTXJMMCFNPWJOHGSPNUIF UIGJOBMTBMBSZTDIFNFUPBDBSFFSBWFSBHF FBSOJOHCBTFEGJOBMTBMBSZTDIFNF

200% 180%

"OVNCFSPGFNQMPZFFTBSFNFNCFSTPGUIF/)4 QFOTJPOTDIFNF8FQBZGJYFEDPOUSJCVUJPOTBOE UIF&YDIFRVFSGVOETUIFTDIFNF

160% 140%

8FBMTPIBWFBTNBMMOVNCFSPGFNQMPZFFTJOUIF -PDBM(PWFSONFOU1FOTJPO4DIFNFVOEFSXIJDI GVOEJOHEFGJDJUTPSTVSQMVTFTBSFSFDPHOJTFEJO PVSBDDPVOUT

120% 100% 2006

2007

2008

2009

2010

Interest cover excluding disposals  0VSCBOLMPBOTIBWFBWBSJFUZPGDPWFOBOU QSPWJTJPOTBOEEFGJOJUJPOTXIJDIBSFQBSUJDVMBSUP UIFMPBOJORVFTUJPO'JOBODJBMDPWFOBOUTJODMVEF JOUFSFTUDPWFSBOEHFBSJOHSBUJPT BOECPUIIBWF QFSGPSNFEXFMMXJUIJOUIFJOEJWJEVBMCBOL UBSHFUTTFU 1FOTJPODPTUT 5IF"TTPDJBUJPOQBSUJDJQBUFTJOUIF4PDJBM )PVTJOH1FOTJPO4DIFNF 4)14 5IJTJTBGJOBM TBMBSZTDIFNF PGGFSJOHHPPECFOFGJUTUPTUBGG 8FDPOUSJCVUFBUSBUFTTFUCZUIFBDUVBSJFTPGUIF TDIFNF"TUIJTJTBNVMUJFNQMPZFSTDIFNF XFEP OPUSFDPHOJTFBOZGVOEEFGJDJUTJOPVSBDDPVOUTª UIF*ODPNFBOE&YQFOEJUVSFDIBSHFSFQSFTFOUT POMZUIFFNQMPZFSDPOUSJCVUJPOTQBZBCMF5IF TDIFNFIBTBGVOEJOHEFGJDJUXIJDIJODSFBTFE GPMMPXJOHSFDFOUSFWBMVBUJPOTBOEUIJTJTFYQFDUFE UPJODSFBTFDPOUSJCVUJPOSBUFT%VSJOHUIFZFBS XFSFWJFXFEPVSQBSUJDJQBUJPOJOUIFGJOBMTBMBSZ TDIFNFBOEEFDJEFEUIBUGPSUIFGVUVSFXFXPVME OPUCFPGGFSJOHUIJTQBSUJDVMBSTDIFNFUPBOZOFX FNQMPZFFT5IFZXJMMIBWFBDDFTTUPBEFGJOFE

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®DBTDBEF¯CVMMFUJOTXIJDITIBSFUIF JTTVFTPGUIFEBZ TVDDFTTFTBOEJUFNTGSPNUIF .BOBHFNFOU5FBNBHFOEB (SPVQNFFUJOHT BO BOOVBMTUBGGDPOGFSFODFBOEPUIFSTPDJBMFWFOUT "UUSBDUJOHBOESFUBJOJOHHPPETUBGGJTLFZUPPVS TVDDFTT8FIBWF)3QPMJDJFTBOEQSBDUJDFTUIBU TVQQPSUUIJT*ODSFBTJOHMZXFBSFFNQMPZJOHHPPE RVBMJUZTUBGGGSPNPVUTJEFUIFIPVTJOHTFDUPS

Financial Statements 2010 | 13


0QFSBUJOHBOEGJOBODJBMSFWJFX

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

14 | Family Mosaic Housing


0QFSBUJOHBOEGJOBODJBMSFWJFX

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…  #PBSEBQQSPWFEUFSNTPGSFGFSFODFBOE EFMFHBUFEBVUIPSJUJFTGPSBMM$PNNJUUFFT …  DMFBSMZEFGJOFENBOBHFNFOUSFTQPOTJCJMJUZGPS UIFJEFOUJGJDBUJPO FWBMVBUJPOBOEDPOUSPMPG TJHOJGJDBOUSJTLT …  SPCVTUTUSBUFHJDBOECVTJOFTTQMBOOJOH QSPDFTTFT …  BOOVBMSFWJFXPGUIF(SPVQ¯TSJTLNBQCZUIF #PBSE XJUIVQEBUFTBUFBDI#PBSENFFUJOH …  EFUBJMFEGJOBODJBMCVEHFUTBOEGPSFDBTUTGPS TVCTFRVFOUZFBST …  GPSNBMSFDSVJUNFOU SFUFOUJPO USBJOJOHBOE EFWFMPQNFOUQPMJDJFT …  GPSNBMBVUIPSJTBUJPOBOEBQQSBJTBMQSPDFEVSFT GPSBMMTJHOJGJDBOUOFXJOJUJBUJWFTBOE DPNNJUNFOUT …  SFHVMBSSFQPSUJOHPGLFZQFSGPSNBODF JOEJDBUPSTUPBTTFTTQSPHSFTTUPXBSETUIF BDIJFWFNFOUPGLFZCVTJOFTTPCKFDUJWFT  UBSHFUTBOEPVUDPNFT …  #PBSEBQQSPWFEXIJTUMFCMPXJOHBOEBOUJ UIFGUBOEDPSSVQUJPOQPMJDJFT …  EFUBJMFEQPMJDJFTBOEQSPDFEVSFTJOFBDIBSFB PGUIF(SPVQ¯TXPSL …  BQSPHSBNNFPGJOUFSOBMBVEJUTFWFSZZFBS

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¯TBOOVBMSFWJFXPGUIF FGGFDUJWFOFTTPGUIFTZTUFNPGJOUFSOBMDPOUSPMGPS UIF"TTPDJBUJPOBOEJUTTVCTJEJBSJFT UPHFUIFSXJUI UIFBOOVBMSFQPSUPGUIFJOUFSOBMBVEJUPS BOEIBT SFQPSUFEJUTGJOEJOHTUPUIF#PBSE (PJOHDPODFSO "GUFSNBLJOHFORVJSJFTUIF#PBSEIBTBSFBTPOBCMF FYQFDUBUJPOUIBUUIF(SPVQIBTBEFRVBUFSFTPVSDFT UPDPOUJOVFJOPQFSBUJPOBMFYJTUFODFGPSUIF GPSFTFFBCMFGVUVSF'PSUIJTSFBTPO JUDPOUJOVFT UPBEPQUUIFHPJOHDPODFSOCBTJTJOUIFGJOBODJBM TUBUFNFOUT

Financial Statements 2010 | 15


0QFSBUJOHBOEGJOBODJBMSFWJFX

%JTDMPTVSFPGJOGPSNBUJPOUPBVEJUPST 5IF#PBSE.FNCFSTXIPIFMEPGGJDFBUUIFEBUF PGBQQSPWBMPGUIJT#PBSESFQPSUDPOGJSNUIBU TP GBSBTUIFZBSFFBDIBXBSF UIFSFJTOPSFMFWBOU BVEJUJOGPSNBUJPOPGXIJDIUIF"TTPDJBUJPO¯T BVEJUPSTBSFVOBXBSF BOEFBDI#PBSE.FNCFSIBT UBLFOBMMUIFTUFQTUIBUIFTIFPVHIUUPIBWFUBLFO BTB#PBSE.FNCFSUPNBLFIJNTFMGIFSTFMGBXBSF PGBOZSFMFWBOUBVEJUJOGPSNBUJPOBOEUPFTUBCMJTI UIBUUIF"TTPDJBUJPO¯TBVEJUPSTBSFBXBSFPG UIBUJOGPSNBUJPO "OOVBMHFOFSBMNFFUJOH 5IFBOOVBMHFOFSBMNFFUJOHXJMMCFIFME PO4FQUFNCFS "VEJUPST 8FXJMMCFSFUFOEFSJOHPVSFYUFSOBM TFSWJDFTEVSJOHUIFDPVSTFPGUIF ZFBSBOEXJMMBQQPJOUBVEJUPST CFGPSFUIFDPNNFODFNFOUPG UIFBVEJU

16 | Family Mosaic Housing

5IFGVUVSF 0VSNBJOPCKFDUJWFJOUIFTIPSUUFSNJTUPSBEJDBMMZ JNQSPWFPVS)PVTJOHBOE"TTFU.BOBHFNFOU TFSWJDFTBOEBDIJFWFBUISFFTUBSJOTQFDUJPOSBUJOH 0VSQMBOTBMTPJODMVEFBHSPXUIQSPHSBNNFUISPVHI EFWFMPQNFOUPGOFXIPNFT B®#JHCVU-PDBM¯ BQQSPBDIUPNBOBHJOHJOPVSDPSFCPSPVHIT  XIJDI JODMVEFTSBUJPOBMJTBUJPOPGTUPDLJOBSFBTXIFSF XFIBWFBTNBMMQSFTFODFCZUSBOTGFSSJOHVOJUTUP NPSFMPDBMBTTPDJBUJPOT BOEJOTUJMMJOHB®8F$BO¯ NFOUBMJUZUISPVHIPVUUIFPSHBOJTBUJPO8FXJMM BMTPCFMPPLJOHBUBOZTUPDLUSBOTGFSTPSNFSHFS PQQPSUVOJUJFTUIBUNBZBSJTF8FGFFMXFIBWFOPX CVJMUBOJOGSBTUSVDUVSFDBQBCMFPGUBLJOHNPSFPO


)PXXFCFIBWF

Statement of responsibilities of the Board 4UBUFNFOUPGUIF#PBSE°TSFTQPOTJCJMJUZ JOSFTQFDUPGUIF#PBSE°TSFQPSUBOEUIF GJOBODJBMTUBUFNFOUT 5IF#PBSEJTSFTQPOTJCMFGPSQSFQBSJOHUIF#PBSE¯T 3FQPSUBOEUIFGJOBODJBMTUBUFNFOUTJOBDDPSEBODF XJUIBQQMJDBCMFMBXBOESFHVMBUJPOT

BOEUIF"DDPVOUJOH3FRVJSFNFOUTGPS3FHJTUFSFE 4PDJBM-BOEMPSET(FOFSBM%FUFSNJOBUJPO5IF #PBSEIBTHFOFSBMSFTQPOTJCJMJUZGPSUBLJOHTVDI TUFQTBTBSFSFBTPOBCMZPQFOUPJUUPTBGFHVBSEUIF BTTFUTPGUIF"TTPDJBUJPOBOEUPQSFWFOUBOEEFUFDU GSBVEBOEPUIFSJSSFHVMBSJUJFT

*OEVTUSJBMBOE1SPWJEFOU4PDJFUZMBXSFRVJSFTUIF #PBSEUPQSFQBSFGJOBODJBMTUBUFNFOUTGPSFBDI GJOBODJBMZFBS6OEFSUIPTFSFHVMBUJPOTUIF#PBSE IBWFFMFDUFEUPQSFQBSFUIFGJOBODJBMTUBUFNFOUTJO BDDPSEBODFXJUI6,"DDPVOUJOH4UBOEBSET

5IF#PBSEJTSFTQPOTJCMFGPSUIFNBJOUFOBODF BOEJOUFHSJUZPGUIFDPSQPSBUFBOEGJOBODJBM JOGPSNBUJPOJODMVEFEPOUIF"TTPDJBUJPO¯TXFCTJUF -FHJTMBUJPOJOUIF6,HPWFSOJOHUIFQSFQBSBUJPOBOE EJTTFNJOBUJPOPGGJOBODJBMTUBUFNFOUTNBZEJGGFS GSPNMFHJTMBUJPOJOPUIFSKVSJTEJDUJPOT

5IFGJOBODJBMTUBUFNFOUTBSFSFRVJSFECZMBXUP HJWFBUSVFBOEGBJSWJFXPGUIFTUBUFPGBGGBJSTPG UIF"TTPDJBUJPOBOEPGUIFTVSQMVTPSEFGJDJUGPS UIBUQFSJPE

*BO1FBDPDL $IBJSPGUIF#PBSE +VMZ

*OQSFQBSJOHUIFTFGJOBODJBMTUBUFNFOUT UIF#PBSE JTSFRVJSFEUP Â…  TFMFDUTVJUBCMFBDDPVOUJOHQPMJDJFTBOEUIFO BQQMZUIFNDPOTJTUFOUMZ Â…  NBLFKVEHNFOUTBOEFTUJNBUFTUIBUBSF SFBTPOBCMFBOEQSVEFOU Â…  TUBUFXIFUIFSBQQMJDBCMF6,"DDPVOUJOH 4UBOEBSETBOEUIF4UBUFNFOUPG 3FDPNNFOEFE1SBDUJDFIBWFCFFOGPMMPXFE  TVCKFDUUPBOZNBUFSJBMEFQBSUVSFTEJTDMPTFE BOEFYQMBJOFEJOUIFGJOBODJBMTUBUFNFOUT Â…  QSFQBSFUIFGJOBODJBMTUBUFNFOUTPOUIF HPJOHDPODFSOCBTJTVOMFTTJUJTJOBQQSPQSJBUF UPQSFTVNFUIBUUIF"TTPDJBUJPOXJMMDPOUJOVF JOCVTJOFTT 5IF#PBSEJTSFTQPOTJCMFGPSLFFQJOHQSPQFS BDDPVOUJOHSFDPSETUIBUEJTDMPTFXJUISFBTPOBCMF BDDVSBDZBUBOZUJNFUIFGJOBODJBMQPTJUJPOPG UIF"TTPDJBUJPOBOEFOBCMFJUUPFOTVSFUIBUJUT GJOBODJBMTUBUFNFOUTDPNQMZXJUIUIF*OEVTUSJBM 1SPWJEFOU4PDJFUJFT"DUTUP UIF *OEVTUSJBMBOE1SPWJEFOU4PDJFUJFT (SPVQ "DDPVOUT 3FHVMBUJPOT UIF)PVTJOH"DU

Financial Statements 2010 | 17


)PXXFCFIBWF

Corporate governance $PSQPSBUFHPWFSOBODF 5IF#PBSEJTDPNNJUUFEUPIJHITUBOEBSET PGDPSQPSBUFHPWFSOBODFBOEIBTBEPQUFE UIF/BUJPOBM)PVTJOH'FEFSBUJPO¯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¯T BGGBJST 'JOBODFBOE%FWFMPQNFOU$PNNJUUFF 5IJT$PNNJUUFFDPOTJTUTPGBNBYJNVNPGUFO OPOFYFDVUJWFNFNCFST XJUI.JLF7FSSJFS 5SFBTVSFSBOE#PBSENFNCFS BT$IBJSBOENFFUT BUMFBTUUISFFUJNFTBZFBS 5IFQSJODJQBMGVODUJPOPGUIJT $PNNJUUFFJTUPBTTFTT NPOJUPS BOENBJOUBJOUIFGJOBODJBM WJBCJMJUZPGUIF(SPVQ  BOEPWFSTFFEFWFMPQNFOU BDUJWJUJFT

18 | Family Mosaic Housing

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¯TSFNVOFSBUJPOBOEBQQSBJTBM BOEUIF BQQPJOUNFOUPG.BOBHFNFOU5FBNBOE#PBSE NFNCFST .BOBHFNFOU5FBN 5IJTUFBNIBTFYFDVUJWFSFTQPOTJCJMJUZGPSUIFEBZ UPEBZSVOOJOHPGUIFCVTJOFTT BOEJUTNFNCFST BSFMJTUFEPOQBHF


Report of the independent auditors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¯T NFNCFST BTBCPEZ JOBDDPSEBODFXJUI 4DIFEVMFQBSBHSBQIUPUIF)PVTJOH"DU BOETFDUJPOPGUIF'SJFOEMZBOE*OEVTUSJBM BOE1SPWJEFOU4PDJFUJFT"DU0VSBVEJUXPSL IBTCFFOVOEFSUBLFOTPUIBUXFNJHIUTUBUFUP UIF"TTPDJBUJPO¯TNFNCFSTUIPTFNBUUFSTXF BSFSFRVJSFEUPTUBUFUPUIFNJOBOBVEJUPS¯T SFQPSUBOEGPSOPPUIFSQVSQPTF5PUIFGVMMFTU FYUFOUQFSNJUUFECZMBX XFEPOPUBDDFQUPS BTTVNFSFTQPOTJCJMJUZUPBOZPOFPUIFSUIBOUIF "TTPDJBUJPOBOEUIF"TTPDJBUJPO¯TNFNCFST BTB CPEZ GPSPVSBVEJUXPSL GPSUIJTSFQPSU PSGPSUIF PQJOJPOTXFIBWFGPSNFE 3FTQFDUJWFSFTQPOTJCJMJUJFTPG UIF#PBSEBOEBVEJUPST 5IFSFTQPOTJCJMJUZPGUIF"TTPDJBUJPO¯T#PBSEGPS UIFQSFQBSBUJPOPGUIF#PBSE¯TSFQPSU BOEUIF QSFQBSBUJPOPGGJOBODJBMTUBUFNFOUTJOBDDPSEBODF XJUIBQQMJDBCMF6OJUFE,JOHEPNMBXBOE6, BDDPVOUJOHTUBOEBSET 6,(FOFSBMMZ"DDFQUFE "DDPVOUJOH1SBDUJDF BSFTFUPVUJOUIF4UBUFNFOU PG#PBSE¯T3FTQPOTJCJMJUJFTPOQBHF 0VSSFTQPOTJCJMJUZJTUPBVEJUUIFGJOBODJBM TUBUFNFOUTJOBDDPSEBODFXJUISFMFWBOUMFHBM

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¯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¯TDJSDVNTUBODFT DPOTJTUFOUMZBQQMJFE BOEBEFRVBUFMZEJTDMPTFE

Financial Statements 2010 | 19


8FQMBOOFEBOEQFSGPSNFEPVSBVEJUTPBTUP PCUBJOBMMUIFJOGPSNBUJPOBOEFYQMBOBUJPOT XIJDIXFDPOTJEFSFEOFDFTTBSZJOPSEFS UPQSPWJEFVTXJUITVGGJDJFOUFWJEFODF UPHJWFSFBTPOBCMFBTTVSBODFUIBUUIF GJOBODJBMTUBUFNFOUTBSFGSFFGSPNNBUFSJBM NJTTUBUFNFOU XIFUIFSDBVTFECZGSBVEPS PUIFSJSSFHVMBSJUZPSFSSPS*OGPSNJOHPVS PQJOJPOXFBMTPFWBMVBUFEUIFPWFSBMMBEFRVBDZ PGUIFQSFTFOUBUJPOPGJOGPSNBUJPOJOUIF GJOBODJBMTUBUFNFOUT

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20 | Family Mosaic Housing


'JOBODJBMTUBUFNFOUTGPSUIFZFBSFOEFE.BSDI

Consolidated income and expenditure account Group 2010 £000 Turnover 

2009 £000

Association 2010 £000

2009 £000

167,847

142,382

159,759

142,535

(136,496)

(116,845)

(128,552)

(105,397)

Operating Surplus 

31,351

25,537

31,207

37,138

Surplus on property sales 

20,914

13,676

19,382

9,284

(19,426)

(22,017)

(17,405)

(20,977)

Surplus on ordinary activities before taxation 

32,839

17,196

33,184

25,445

Gift Aid

(1,400)

(550)

-

-

-

7

-

-

31,439

16,653

33,184

25,445

Operating Costs 

Net interest payable and similar charges 

Taxation on ordinary activities  Surplus on ordinary activities after taxation Turnover has been generated from continuing activities.

Statement of Recognised Surpluses and Deficits

Group 2010 £000

2009 £000

Association 2010 £000

2009 £000

Surplus for financial year

31,439

16,653

31,184

25,445

Actuarial loss on pension scheme 

(1,469)

(90)

(1,469)

(90)

Total Recognised Surpluses since last report

29,970

16,563

31,715

25,355

2010 £000 189,084

2009 £000 172,521

2010 £000 164,358

2009 £000 139,003

29,970

16,563

31,715

25,355

219,054

189,084

196,073

164,358

Reconciliation of Movements in the Association’s funds Opening funds as previously stated Total recognised surpluses relating to year Closing Total Funds

22 | Family Mosaic Housing


'JOBODJBMTUBUFNFOUTGPSUIFZFBSFOEFE.BSDI

Consolidated balance sheet Group 2010 £000 Tangible Fixed Assets: Housing properties – net cost 

Association 2010 £000

2009 £000

2009 £000

1,830,294

1,680,975

1,725,634

1,575,574

(1,089,452)

(983,657)

(1,043,066)

(936,493)

740,842

697,318

682,568

639,081

18,606

19,189

18,452

19,027

-

-

12,311

12,311

57

32

-

-

759,505

716,539

713,331

670,419

Properties for sale 

34,774

49,642

22,368

22,580

Debtors 

10,700

38,721

25,863

65,799

Cash at bank and in hand

33,951

4,917

33,176

4,275

79,425

93,280

81,407

92,654

(47,701)

(44,145)

(44,311)

(42,774)

31,724

49,135

37,096

49,880

Total Assets Less Current Liabilities

791,229

765,674

750,427

720,299

Creditors: Amounts falling due after more than one year

569,866

575,757

552,045

555,108

2,309

833

2,309

833

572,175

576,590

554,354

555,941

-

-

-

-

219,054

189,084

196,073

164,358

219,054

189,084

196,073

164,358

791,229

765,674

750,427

720,299

Social Housing Grant 

Other tangible fixed assets  Investment in subsidiary  Homebuy Loan - net

Current Assets:

Creditors: Amount falling due within one year  Net Current Assets

Provisions for Liabilities and Charges

Capital and Reserves: Non equity share capital Reserves

The notes on pages 26 to 56 form an integral part of these financial statements. The financial statements were approved by the Board on 20 July 2010 and signed on its behalf by:

Chairman

Treasurer

Company Secretary

Financial Statements 2010 | 23


'JOBODJBMTUBUFNFOUTGPSUIFZFBSFOEFE.BSDI

Consolidated cash flow statement Group 2010 £000 Net Cash Inflow From Operating Activities

2009 £000

65,940

40,996

758

3,021

Interest paid

(25,238)

(33,975)

Net cash outflow from returns on investments and servicing of finance

(24,480)

(30,954)

-

-

Gift Aid payment

(1,400)

(550)

Net cash outflow from taxation and gift aid

(1,400)

(550)

(186,041)

(160,669)

Purchase of other tangible fixed assets

(906)

(3,647)

Sales of housing properties and other fixed assets

51,387

23,045

Social Housing Grant

130,387

60,756

Net cash outflow from capital expenditure

(5,173)

(80,515)

Net cash inflow / (outflow) before financing

34,887

(71,023)

17,737

96,896

(23,590)

(33,673)

Net cash (outflow) / inflow from financing

(5,853)

63,223

INCREASE / (DECREASE) IN CASH IN THE PERIOD

29,034

(7,800)

Returns on investments and servicing of finance Interest received

Taxation and Gift Aid Corporation tax paid

Capital expenditure and financial investments Acquisition and construction of housing properties

Financing Housing loans received Annual repayments of housing loans

24 | Family Mosaic Housing


'JOBODJBMTUBUFNFOUTGPSUIFZFBSFOEFE.BSDI

Consolidated cash flow statement – continued Reconciliation of net cash flow to movement in net debt

Group 2010 £000

Increase / (Decrease) in cash and short term deposits

2009 £000

29,034

(16,279)

-

8,479

5,853

(63,223)

34,887

(71,023)

Net debt at beginning of year

(565,887)

(494,864)

Net debt at end of year

(531,000)

(565,887)

Decrease in overdraft Decrease / (Increase) in loans Movement in net debt

Reconciliation of operating surplus to net cash inflow from operating activities

Group 2010 £000

2009 £000

Operating surplus

31,351

25,537

Depreciation movements

10,456

8,898

2,337

2,373

Decrease in debtors

18,272

2,026

Increase in creditors

3,524

2,162

65,940

40,996

As at 1 Apr 2009 £000

Group Cash Flow £000

As at 31 Mar 2010 £000

4,917

29,034

33,951

(7,414)

6,757

(657)

(563,390)

(904)

(564,294)

(565,887)

34,887

(531,000)

Impairment movement

Net cash inflow from operating activities

Analysis of net debt

Cash and short term deposits Debt due within 1 year Debt due after 1 year

Financial Statements 2010 | 25


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-FHBMTUBUVT The Association is registered under the Industrial and Provident Societies Act 1965 to 2003 and is registered with the Tenant Services Authority as a social landlord.



"DDPVOUJOHQPMJDJFT The following accounting policies have been applied in dealing with items which are considered material in relation to the financial statements. #BTJTPGBDDPVOUJOH The financial statements are prepared under the historical cost convention and in accordance with applicable accounting standards, with special regard to the Statement of Recommended Practice: ‘Accounting by Registered Social Landlords 2008’ (the ‘SORP’), and comply with the Accounting Requirements for Registered Social Landlords General Determination 2006. #BTJTPGDPOTPMJEBUJPO The consolidated accounts incorporate the financial statements of Family Mosaic Housing and its subsidiaries. Please see note 28 for details of the subsidiaries. 5VSOPWFS Turnover comprises rental income receivable in the year, revenue grants, recharges to other Associations, first tranche proceeds from Shared Ownership and income from service charges. All income is recognised on a receivable basis. 1FOTJPODPTUT The expected cost of providing pensions is charged to the income and expenditure account in order to spread the cost over the service lives of employees in such a way that the pension cost is a substantially level percentage of current and expected future pensionable payroll.

26 | Family Mosaic Housing


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)PVTJOHQSPQFSUJFT Freehold housing properties are stated at cost with subsequent additions at cost. Cost includes the incidental costs of development, including interest capitalised up to the date of practical completion and directly attributable development costs. Shared Ownership properties are split proportionately between current and fixed assets based on the element relating to their expected first tranche sales. The first tranche proportion is classed as a current asset and related sales proceeds are included in turnover with the remainder classed as a fixed asset with any subsequent sale treated as a disposal of the fixed asset. In mixed tenure schemes which have included shared ownership, any subsidy expected from first tranche sales to pay for non shared ownership costs is credited to these costs. %FQSFDJBUJPOPGIPVTJOHQSPQFSUJFT Depreciation is charged so as to write down the value of freehold housing properties, other than freehold land, to their estimated residual value on a straight line basis over their remaining expected useful economic lives as follows: …  Housing properties – 120 years Properties held on long leases are depreciated over their estimated useful economic lives or the life of the lease if shorter. Impairment reviews are carried out on an annual basis in accordance with FRS 11. Where necessary appropriate write downs are made. Costs of responsive repairs and planned cyclical maintenance are recognised as costs when incurred. The policy in respect of expenditure to refurbish or replace major components is that all such work is assessed against life cycle costing principles. Any costs in respect of repairs with a life of less than 10 years are charged directly to the Income and Expenditure Account.

Financial Statements 2010 | 27


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"DDPVOUJOHQPMJDJFT«DPOUJOVFE Refurbishment or replacement of major components which have an estimated life in excess of 10 years are capitalised and depreciated over the useful life of the component as follows: …  building envelope and structure – 30 years …  bathrooms and kitchens – 15 years …  heating systems – 10 years 4PDJBM)PVTJOH(SBOU 4)(

Social housing grant (SHG) is receivable from The Homes and Communities Agency and is utilised to reduce the capital costs of housing properties, including land costs. SHG due from The Homes and Communities Agency or received in advance is included as a current asset or liability. SHG received in respect of revenue expenditure is credited to the income and expenditure account in the same period as the expenditure to which it relates. SHG is subordinated to the repayment of loans by agreement with The Homes and Communities Agency. SHG released on sale of a property may be repayable but is normally available to be recycled and is credited to a Recycled Capital Grant Fund or Disposal Proceeds Fund and included in the balance sheet in creditors. 0UIFSUBOHJCMFGJYFEBTTFUT Other fixed assets are included at cost to the Association less depreciation, which is provided on a straight line basis over the periods shown below: …  Freehold office premises – 50 years …  Leasehold office premises – remaining life of lease …  Other fixed assets – from 3 to 25 years  -FBTFT Rents payable under operating leases are charged to the income and expenditure account on a straight-line basis over the lease term. Rental income under operating leases is credited to the income and expenditure account as it falls due. "HFODJFT The transactions incurred directly by agencies managing the Association’s hostels are not consolidated in the financial statements. -PBOJTTVFDPTUT Costs in respect of raising loan finance are deferred and then amortised over the periods of the loans. %FCUPSTEVFBGUFSPOFZFBS The Association has entered into various agreements with local authorities, the substance of which results in the local authority undertaking to reimburse the Association for the interest it pays on loans financing the schemes concerned. Where this occurs, any interest deferred under the loan agreement is carried forward as an asset within debtors. 1SPWJTJPOTGPSMJBCJMJUJFTBOEDIBSHFT The Association makes provision for dilapidations to leasehold office accommodation where the lease has expired.

28 | Family Mosaic Housing


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"DDPVOUJOHQPMJDJFTDPOUJOVFE $ZDMJDBMNBJOUFOBODFBOEJOUFSOBMEFDPSBUJPOT The costs of cyclical maintenance and internal decorations in respect of housing properties are recognised when work is performed. 1SPQFSUJFTGPS4BMFBOETUPDL Shared Ownership first tranche sales, completed properties for outright sales and property under construction are valued at the lower of cost and net realisable value. Cost comprises land and building cost. Net realisable value is based on estimated sales price after allowing further costs of completion and disposal. The remainder of Shared Ownership sales cost is classed as a fixed asset. Shared Ownership first tranche sales proceeds form part of turnover and the cost of these sales include any subsidy used to fund the non shared ownership cost at the same mixed tenure scheme. 5FNQPSBSZ"DDPNNPEBUJPO Temporary Accommodation licences properties from local authorities. Expenditure on properties (including that on bringing properties up to a satisfactory standard initially) is written off over the agreed licence period. 7"5 Members of the Family Mosaic Housing Group are registered as a VAT group excluding Family Mosaic Thurrock Limited and Family Mosaic Housing Services Limited. A large proportion of Family Mosaic’s income comprises rental income, which is exempt for VAT purposes and gives rise to a partial exemption calculation. Expenditure is therefore shown inclusive of VAT. Recoverable VAT arising from partially exempt activities is credited to the income and expenditure account. 5BYBUJPO Family Mosaic Housing along with Old Oak and Charlton Triangle Homes have charitable status and therefore are not subject to Corporation Tax on surpluses derived from their charitable activities. All other subsidiaries are subject to Corporation Tax. These subsidiaries include Family Mosaic Home Ownership Limited, Family Mosaic Housing Services Limited, Family Mosaic Thurrock Limited and Family Mosaic Housing Development Company Limited. The charge for taxation is based on the surplus for the year and takes into account taxation deferred because of timing differences between the treatment of certain items for taxation and accounting purposes. Where possible taxable subsidiaries will make gift aid payments to Family Mosaic Housing to mitigate Corporation Tax. Deferred tax liabilities are recognised, without discounting, in respect of all timing differences between the treatment of certain items for taxation and accounting purposes which have arisen but not reversed by the balance sheet date, except as otherwise required by FRS 19. Deferred tax assets are only recognised if management believe they will crystallise in the foreseeable future.

Financial Statements 2010 | 29


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1BSUJDVMBSTPGUVSOPWFS DPTUPGTBMFT PQFSBUJOHDPTUTBOEPQFSBUJOHTVSQMVTFT EFGJDJUT

2010 Turnover

2010 Operating costs

£000

£000

2010 Operating Surplus/ (deficit) £000

2009 Turnover

2009 Operating costs

£000

£000

2009 Operating Surplus/ (deficit) £000

Group 134,109

105,090

29,019

125,023

101,600

23,423 

22,560

21,116

1,444

11,386

10,266

1,120

Leaseback schemes

2,165

260

1,905

2,131

235

1,896

Care Homes providing Nursing Care

3,892

3,630

262

2,778

2,692

86

358

1,729

(1,371)

257

1,433

(1,176)

Commercial Income / Other

1,106

720

386

275

-

275

Market Sales

3,657

3,951

(294)

532

619

(87)

167,847

136,496

31,351

142,382

116,845

25,537

Social housing lettings  Other social housing activities First tranche Shared Ownership sales

Other Non-social housing activities

Total

Association Social housing lettings 

127,481

101,590

25,891

117,939

90,702

27,237 

22,560

21,116

1,444

11,386

10,266

1,120

Leaseback schemes

2,165

260

1,905

2,131

236

1,895

Care Homes providing Nursing Care

3,892

3,630

262

2,778

2,692

86

Gift aid from subsidiaries

2,703

-

2,703

7,250

-

7,250

561

1,956

(1,395)

776

1,501

(725)

397

397

-

275

-

275

159,759

128,552

31,207

142,535

105,397

37,138

Other social housing activities First tranche Shared Ownership sales

Other Non-social housing activities Commercial Income Total

30 | Family Mosaic Housing


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B 1BSUJDVMBSTPGJODPNFBOEFYQFOEJUVSFGSPNTPDJBMIPVTJOHMFUUJOHT

Housing Accom

Supported Housing

£000

£000

Shared Ownership Accom £000

76,284

10,875

Service and Support income

3,651

Gross rental income

Group Temporary Accom

2010 Total

2009 Total

£000

Residential Care Homes £000

£000

£000

4,623

7,689

131

99,602

93,019

3,303

273

2,438

-

9,665

10,194

79,935

14,178

4,896

10,127

131

109,267

103,213

(713)

(585)

(10)

(442)

(7)

(1,757)

(2,707)

Net rental income

79,222

13,593

4,886

9,685

124

107,510

100,506

Supporting people income

-

24,763

-

-

-

24,763

22,184

Other revenue grants

7

-

-

-

1,829

1,836

2,333

Turnover from social housing lettings

79,229

38,356

4,886

9,685

1,953

134,109

125,023

5,529

23,544

32

500

1,619

31,224

28,230

Management

13,376

6,943

340

1,866

221

22,746

21,503

Routine maintenance

10,621

1,960

5

1,167

13

13,766

11,794

Planned maintenance

15,629

1,629

27

637

52

17,974

19,354

Bad debts

673

411

238

263

1

1,586

1,472

Property lease charges

797

213

-

5,490

36

6,536

9,307

Depreciation of housing properties

7,943

674

(374)

667

11

8,921

7,567

Impairment of housing properties

2,642

-

(305)

-

-

2,337

2,373

Operating costs on social housing lettings

57,210

35,374

(37)

10,590

1,953

105,090

101,600

Operating surplus/ (deficit) on social housing lettings

22,019

2,982

4,923

(905)

-

29,019

23,423

Rent receivable

Voids

Services

Financial Statements 2010 | 31


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C 1BSUJDVMBSTPGJODPNFBOEFYQFOEJUVSFGSPNTPDJBMIPVTJOHMFUUJOHT Housing Accom

Supported Housing

£000

£000

Shared Ownership Accom £000

72,006

10,875

Service and support Income

3,340

Gross rental income

Association Temporary Accom

2010 Total

2009 Total

£000

Residential Care Homes £000

£000

£000

2,520

7,689

131

93,221

86,827

3,303

269

2,438

-

9,350

9,236

75,346

14,178

2,789

10,127

131

102,571

96,063

Voids

(646)

(585)

(9)

(442)

(7)

(1,689)

(2,640)

Net rental income

74,700

13,593

2,780

9,685

124

100,882

93,423

Supporting people income

-

24,763

-

-

-

24,763

22,183

Other revenue grants

7

-

-

-

1,829

1,836

2,333

Turnover from social housing lettings

74,707

38,356

2,780

9,685

1,953

127,481

117,939

4,387

23,544

28

500

1,619

30,078

26,846

12,911

6,943

332

1,866

221

22,273

20,413

10,086

1,960

4

1,167

13

13,230

11,306

14,890

1,629

9

637

52

17,217

18,889

566

411

223

263

1

1,464

1,377

797

213

-

5,490

36

6,536

9,299

Depreciation of housing properties

7,477

674

(374)

667

11

8,455

7,185

Impairment of housing properties

2,642

-

(305)

-

-

2,337

2,373

-

-

-

-

-

-

(6,986)

Operating costs on social housing lettings

53,756

35,374

(83)

10,590

1,953

101,590

90,702

Operating surplus/ (deficit) on social housing lettings

20,951

2,982

2,863

(905)

-

25,891

27,237

Rent receivable

Services Management Routine maintenance Planned maintenance Bad debts Property lease charges

Impairment write back

32 | Family Mosaic Housing


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4VSQMVTPOQSPQFSUZTBMFT Sales Proceeds £000 Sales of properties Sale of properties to other RSLs Staircasing of shared ownership properties Total

Sale of properties to other RSLs Staircasing of shared ownership properties Total



2010 Surplus £000

2009 Surplus £000

9,451

2,452

6,999

13,019

18,148

6,047

12,101

-

3,317

1,503

1,814

657

30,916

10,002

20,914

13,676

Association Cost of 2010 Sales Surplus £000 £000

2009 Surplus £000

Sales Proceeds £000 Sales of properties

Group Cost of Sales £000

9,451

2,452

6,999

8,855

17,485

5,388

12,097

-

708

422

286

429

27,644

8,262

19,382

9,284

%JSFDUPSTFNPMVNFOUTBOEMPBOT The remuneration paid to the directors (who for the purposes of this note include the members of the Board and the Management Team) was as follows:

Total emoluments to directors and former directors (including salaries, fees, expense allowances chargeable to UK tax, and other benefits) Emoluments (excluding pension contributions) payable to the highest paid director Total expenses reimbursed not chargeable to income tax

2010 £000

2009 £000

1,007

1,009

164

165

16

19

No members of the Board (except the Chief Executive) received any emoluments. The Chief Executive is an ordinary member of the SHPS scheme. Contributions to this scheme are made as per the pension costs note.

Financial Statements 2010 | 33


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&NQMPZFFJOGPSNBUJPO Staff numbers

Group 2010

2009

Association 2010

2009

The average monthly number of employees (including Directors) employed in the year was:

1,584

1,404

1,562

1,378

Full Time Equivalents

1,206

1,077

1,186

1,053

Employee costs

Group 2010 £000

2009 £000

Association 2010 £000

2009 £000

Wages and salaries

39,745

36,107

39,072

35,025

Social security costs

3,224

2,759

3,162

2,675

Pension costs

1,306

1,281

1,279

1,251

668

524

668

523

44,943

40,671

44,181

39,474

Redundancy and compensation for loss of office



 /FUJOUFSFTUQBZBCMFBOETJNJMBSDIBSHFT Group 2010 £000 Interest receivable Interest payable on loans and overdrafts Other finance costs of pension scheme

Less: capitalised

Net interest payable

2009 £000

Association 2010 £000

2009 £000

758

3,021

2,194

2,674

25,170

33,932

24,271

31,783

69

43

69

43

25,239

33,975

24,340

31,826

(5,055)

(8,937)

(4,741)

(8,175)

20,184

25,038

19,599

23,651

19,426

22,017

17,405

20,977

Interest is capitalised at 5% per annum on the net costs of projects under construction.

34 | Family Mosaic Housing


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4VSQMVTPO0SEJOBSZBDUJWJUJFT Group 2010 £000

2009 £000

Association 2010 £000

2009 £000

Depreciation of tangible assets

1,489

1,526

1,473

1,519

Depreciation of housing properties

8,967

7,602

8,498

7,219

Operating lease charges

6,840

9,599

6,840

9,599

Audit of the financial statements

68

64

68

64

Audit of subsidiary financial statements

45

49

-

-

45

56

45

56

304

10

304

10

33

34

33

34

The surplus is stated after charging:

Auditors’ remuneration:

Other services: Tax Compliance Tax advice Sundry assurance

Financial Statements 2010 | 35


/PUFTUPUIFGJOBODJBMTUBUFNFOUTGPSUIFZFBSFOEFE.BSDI

 5BYBUJPOPOPSEJOBSZBDUJWJUJFT Family Mosaic Housing is an exempt charity and not therefore liable to Corporation Tax on charitable activities. Family Mosaic Home Ownership made an overall surplus of £3,037,103 before tax of which Gift Aid payments totalling £3,037,000 were made to Family Mosaic Housing and Maisie Sheed Housing Trust. Other non charitable subsidiaries in the Group made Gift Aid payments totalling £1,065,860 to Family Mosaic Housing and Maisie Sheed Housing Trust Group 2010 £000

2009 £000

Association 2010 £000

2009 £000

UK Corporation Tax charge

-

-

-

-

Removal of tax provision for 2007/8

-

(7)

-

-

Tax charge / (credit)

-

(7)

-

-

Factors affecting tax charge for the current period The tax charges for both periods are different to the standard rate of corporation tax of 28% (2009: 28%) The differences are explained below.

Surplus on activities before tax and after gift aid

32,839

16,646

33,184

25,445

(34,016)

(29,965)

(33,184)

(25,445)

(1,177)

(13,319)

-

-

(499)

(3,728)

-

-

Tax charge after restatement of prior year

-

1,571

-

-

Depreciation in excess of capital allowances

3

-

-

-

(113)

-

-

-

107

-

-

-

1,679

-

-

-

-

(2,157)

-

-

Less surpluses made by Group members with charitable status (Deficit) on ordinary activities after Gift Aid and before tax Tax charge at 28% (2009: 28%)

Surplus on property sales in excess of chargeable gain Unutilised charges on income/charges on income in relation to prior periods. Losses arising and utilized in the year or carried forward Corporation tax charge/(credit)

A deferred tax asset is only recognised on losses arising if management believe they will crystallise in the foreseeable future. As the loss arises from a gift aid payment, no deferred asset exists due to the fact that gift aid and losses can only be utilised in the current period.

36 | Family Mosaic Housing


/PUFTUPUIFGJOBODJBMTUBUFNFOUTGPSUIFZFBSFOEFE.BSDI

 )PVTJOHQSPQFSUJFT

COST

Social housing properties held for letting £000

Social housing properties under construction £000

Group Completed shared ownership housing properties £000

At 1 April 2009

1,359,963

215,982

119,294

32,490

1,727,729

109,330

(109,330)

45,288

(45,288)

-

Additions

33,214

83,567

-

74,315

191,096

Disposals

(8,668)

-

(22,166)

-

(30,834)

1,493,839

190,219

142,416

61,517

1,887,991

42,501

-

86

-

42,587

Charge for the year

8,967

-

-

-

8,967

Disposals

(361)

-

-

-

(361)

At 31 March 2010

51,107

-

86

-

51,193

At 1 April 2009

-

1,100

700

2,367

4,167

Charge for the year

-

3,742

-

331

4,073

Released

-

(1,100)

(636)

-

(1,736)

At 31 March 2010

-

3,742

64

2,698

6,504

828,794

94,052

51,238

9,573

983,657

Schemes completed in the year

50,020

(50,020)

21,903

(21,903)

-

Additions

18,585

79,744

-

15,179

113,508

Disposals

(6,934)

-

(779)

-

(7,713)

890,465

123,776

72,362

2,849

1,089,452

552,267

62,701

69,904

55,970

740,842

488,668

120,830

67,270

20,550

697,318

Schemes completed in the year

At 31 March 2010

Shared Ownership under construction

Total

£000

£000

DEPRECIATION At 1 April 2009

IMPAIRMENT

SOCIAL HOUSING GRANT At 1 April 2009

At 31 March 2010 NET BOOK VALUE At 31 March 2010 At 1 April 2009

Interest of £5,055,000 has been capitalised in the year to 31 March 2010 (2009: £8,937,000). Additions in housing properties during the year included £26,489,000 (2009: £24,917,000) in respect of improvement to existing property stock.

Financial Statements 2010 | 37


/PUFTUPUIFGJOBODJBMTUBUFNFOUTGPSUIFZFBSFOEFE.BSDI

 )PVTJOHQSPQFSUJFT«DPOUJOVFE

COST

Social housing properties held for letting £000

Social housing properties under construction £000

Association Completed shared ownership housing properties £000

At 1 April 2009

1,310,435

210,880

66,790

32,491

1,620,596

Schemes completed in the year

98,407

(98,407)

45,288

(45,288)

-

Additions

32,130

83,729

-

74,442

190,301

Disposals

(8,668)

-

(21,099)

-

(29,767)

1,432,304

196,202

90,979

61,645

1,781,130

40,769

-

86

-

40,855

Charge for the year

8,498

-

-

-

8,498

Disposals

(361)

-

-

-

(361)

48,906

-

86

-

48,992

As at 1 April 2009

-

1,100

700

2,367

4,167

Charge for the year

-

3,742

-

331

4,073

Released in Year

-

(1,100)

(636)

-

(1,736)

At 31 March 2010

-

3,742

64

2,698

6,504

809,098

95,047

22,774

9,574

936,493

Schemes completed in the year

50,020

(50,020)

21,903

(21,903)

-

Additions

18,585

79,744

-

15,178

113,507

Disposals

(6,934)

-

-

-

(6,934)

At 31 March 2010

870,769

124,771

44,677

2,849

1,043,066

At 31 March 2010

512,629

67,689

46,152

56,098

682,568

At 1 April 2009

460,568

114,733

43,230

20,550

639,081

At 31 March 2010

Shared Ownership under construction

Total

£000

£000

DEPRECIATION At 1 April 2009

At 31 March 2010 IMPAIRMENT

SOCIAL HOUSING GRANT At 1 April 2009

NET BOOK VALUE

Interest of £4,741,000 has been capitalised in the year to 31 March 2010 (2009: £8,175,000). The investment in housing properties during the year included £25,740,000 (2009: £24,142,000) in respect of improvement to the existing property stock.

38 | Family Mosaic Housing


/PUFTUPUIFGJOBODJBMTUBUFNFOUTGPSUIFZFBSFOEFE.BSDI

 "DDPNNPEBUJPOJONBOBHFNFOU

Group

Association

2010

2009

2010

2009

General needs

16,565

16,509

14,735

15,362

Supported housing

2,686

2,252

2,686

2,252

Shared ownership

2,113

1,885

1,141

915

662

965

662

965

54

41

54

41

22,080

21,652

19,278

19,535

59

60

59

60

22,139

21,712

19,337

19,595

Group Leasehold office premises £000

Other fixed assets £000

Total

£000

Social housing:

Temporary Accommodation Care Homes providing Nursing Care Total social housing Non-social housing: Care Homes providing Nursing Care Total units in management

 0UIFSUBOHJCMFGJYFEBTTFUT Freehold office premises £000 COST At 1 April 2009

16,006

911

12,762

29,679

49

-

857

906

16,055

911

13,619

30,585

At 1 April 2009

495

662

9,333

10,490

Charge for year

333

31

1,125

1,489

At 31 March 2010

828

693

10,458

11,979

At 31 March 2010

15,227

218

3,161

18,606

At 1 April 2009

15,511

249

3,429

19,189

Additions At 31 March 2010 DEPRECIATION

NET BOOK VALUE

Financial Statements 2010 | 39


/PUFTUPUIFGJOBODJBMTUBUFNFOUTGPSUIFZFBSFOEFE.BSDI

 0UIFSUBOHJCMFGJYFEBTTFUT«DPOUJOVFE Association Leasehold office premises £000

Other fixed assets £000

£000

16,006

910

12,406

29,322

49

-

849

898

16,055

910

13,255

30,220

At 1 April 2009

495

675

9,125

10,295

Charge for year

333

31

1,109

1,473

At 31 March 2010

828

706

10,234

11,768

At 31 March 2010

15,227

204

3,021

18,452

At 1 April 2009

15,511

235

3,281

19,027

Freehold office premises £000

Total

COST At 1 April 2009 Additions At 31 March 2010 DEPRECIATION

NET BOOK VALUE

 1SPQFSUJFTGPSTBMF 2009 £000

Association 2010 £000

2009 £000

5,205

7,299

5,205

7,299

Shared Ownership under construction

11,222

15,281

11,222

15,281

Open market properties for sale – Cost

37,134

48,107

6,016

-

(18,787)

(21,045)

(75)

-

34,774

49,642

22,368

22,580

First Tranche Shared Ownership

Open market properties for sale – Grant

40 | Family Mosaic Housing

Group 2010 £000


/PUFTUPUIFGJOBODJBMTUBUFNFOUTGPSUIFZFBSFOEFE.BSDI

 %FCUPST Group 2010 ÂŁ000

2009 ÂŁ000

Association 2010 ÂŁ000

2009 ÂŁ000

8,124

9,688

7,443

9,062

(3,394)

(3,709)

(3,004)

(3,546)

4,730

5,979

4,439

5,516

Trade debtors

2,301

3,116

1,915

3,116

Other debtors

1,508

2,004

1,467

1,378

Prepayments and accrued income

1,067

1,198

1,018

1,200

Grant receivable

1,094

25,719

1,094

25,719

-

-

15,930

28,165

10,700

38,016

25,863

65,094

-

705

-

705

10,700

38,721

25,863

65,799

a) Amounts due within one year Rental debtors Less: provision for bad debts

Amount owed by subsidiaries

b) Amounts due after more than one year Prepayments and accrued income Total Debtors  $SFEJUPST"NPVOUTGBMMJOHEVFXJUIJOPOFZFBS Group 2010 ÂŁ000

2009 ÂŁ000

Association 2010 ÂŁ000

2009 ÂŁ000

Housing loans

657

7,414

596

7,414

Bank overdraft

-

-

-

-

Recycled Social Housing Grant

3,160

1,753

896

1,753

Trade creditors

9,696

5,505

9,696

5,505

Other creditors

10,790

8,901

10,364

7,767

Accruals and deferred income

20,028

20,572

19,436

19,698

3,370

-

3,323

-

-

-

-

637

47,701

44,145

44,311

42,774

Disposal Proceeds Fund Amount owed to subsidiary undertaking

Housing loans are secured by fixed charges on the Association’s housing properties.

Financial Statements 2010 | 41


/PUFTUPUIFGJOBODJBMTUBUFNFOUTGPSUIFZFBSFOEFE.BSDI

 $SFEJUPST"NPVOUTGBMMJOHEVFBGUFSNPSFUIBOPOFZFBS Group 2010 ÂŁ000

2009 ÂŁ000

Association 2010 ÂŁ000

2009 ÂŁ000

Housing loans

568,727

567,561

551,988

550,759

Less: deferred loan issue costs

(4,433)

(4,171)

(4,218)

(3,943)

564,294

563,390

547,770

546,816

Recycled Social Housing Grant

4,159

7,393

3,103

3,545

Disposals proceeds fund

1,413

4,974

1,172

4,747

569,866

575,757

552,045

555,108

Between one and two years

931

818

786

818

Between two and five years

8,584

3,046

7,660

3,046

515,809

520,154

500,139

503,352

43,403

43,543

43,403

43,543

Housing loans repayable by instalments:

In five years or more Housing loans repayable other than by instalments

Housing loans are secured by fixed charges on the Association’s housing properties. Interest is payable at rates ranging from 1.30% to 12.84%. As at 31 March 2010 the Group had loan facilities of £797m.  3FDZDMFE(SBOU'VOE Group

Association

2010

2009

2010

2009

ÂŁ000

ÂŁ000

ÂŁ000

ÂŁ000

9,146

8,961

5,298

4,777

Grants Recycled

1,844

1,970

1,055

1,836

Interest Accrued

41

303

29

182

(3,652)

(2,088)

(3,689)

(1,497)

(60)

-

(60)

-

-

-

1,366

-

7,319

9,146

3,999

5,298

Opening Balance Inputs to Reserve:

New Build Major Repairs and works to existing stock Transfer from other Group companies Closing Balance

Part of the fund is repayable within one year and part is due after more than one year. Disclosure of the closing balance is shown in both notes 16 and 17.

42 | Family Mosaic Housing


/PUFTUPUIFGJOBODJBMTUBUFNFOUTGPSUIFZFBSFOEFE.BSDI

 %JTQPTBM1SPDFFET'VOE 2009 £000

Association 2010 £000

2009 £000

4,974

5,090

4,747

4,764

Grants Recycled

803

-

743

-

Interest Accrued

26

56

25

174

-

(172)

-

-

(1,020)

-

(1,020)

-

-

-

-

(191)

4,783

4,974

4,495

4,747

Opening Balance

Group 2010 £000

Inputs to Reserve:

Works to existing stock Purchase of properties for letting Transfers from other Group Company Closing balance

Part of the fund is repayable within one year and part is due after more than one year. Disclosure of the closing balance is shown in both notes 16 and 17.  1SPWJTJPOTGPSMJBCJMJUJFTBOEDIBSHFT Group and Association Pension Liability  £000 At 1 April 2009

833

Movement in year

1,476

At 31 March 2010

2,309

Financial Statements 2010 | 43


/PUFTUPUIFGJOBODJBMTUBUFNFOUTGPSUIFZFBSFOEFE.BSDI

 /POFRVJUZTIBSFDBQJUBM Group and Association Shares £ At 1 April 2009 and at 31 March 2010

,85

The shares are all issued and fully paid shares of £1 each. Each member of the Board is entitled to hold one share of £1 in the Association. The shares have limited rights. They carry no entitlement to dividend, they are not repayable and do not participate in a winding up. They carry a entitlement to vote at the Association’s Annual General Meeting and Special General Meetings.  3FTFSWFT The Association plans its financial affairs to ensure that each year revenue income exceeds revenue expenditure. This policy ensures that the Association has a margin of safety to manage unexpected expenditure or shortfalls in income. The annual surpluses ensure that Family Mosaic is able to meet its commitment to providers of private finance and to continue to provide social housing. Unlike commercial organisations, the Association’s rules prevent the distribution of reserves. Instead, these are applied to furthering our aims and objectives. In particular they are invested in improvements to our housing stock. As at 31 March 2010 the Association’s reserves were as follows: Group

Association

£000

£000

At 1 April 2009

189,084

164,358

Surplus for year

31,439

33,184

Actuarial loss on pension scheme liability

(1,469)

(1,469)

At 31 March 2010

219,054

196,073

Revenue Reserves

44 | Family Mosaic Housing


/PUFTUPUIFGJOBODJBMTUBUFNFOUTGPSUIFZFBSFOEFE.BSDI

 -FBTFDPNNJUNFOUT The total rental due under operating leases in the next 12 months is as follows: Group 2010 £000

2009 £000

Association 2010 £000

2009 £000

2,907

6,728

2,907

6,728

513

2,396

513

2,396

Over five years

1,008

455

1,008

455

Total

4,428

9,579

4,428

9,579

Leases which expire: Within one year Between two and five years

 $BQJUBMDPNNJUNFOUT Group 2010 £000

2009 £000

Association 2010 £000

2009 £000

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

274,958

159,669

274,227

152,907

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

115,141

234,306

115,141

234,306

The commitments will be met out of existing and new loan facilities, grants, and sales proceeds. The Group has grants of £159m (2009 £140m) to offset against these commitments, while the Association has £156m (2009 £139m).  1FOTJPOT 4PDJBM)PVTJOH1FOTJPO4DIFNF Family Mosaic Housing participates in the Social Housing Pension Scheme (SHPS). The Scheme is funded and is contracted out of the state scheme. It is not possible in the normal course of events to identify on a consistent and reasonable basis the share of underlying assets and liabilities belonging to individual participating employers. This is because the Scheme is a multi-employer Scheme where the Scheme assets are co-mingled for investment purposes, and benefits are paid from total Scheme assets. Accordingly, due to the nature of the Scheme, the accounting charge for the period under FRS17 represents the employer contribution payable. The trustee commissions an actuarial valuation of the Scheme every three years. The main purpose of the valuation is to determine the financial position of the Scheme in order to address the level of future contributions required so that the Scheme can meet its pension obligations as they fall due.

Financial Statements 2010 | 45


/PUFTUPUIFGJOBODJBMTUBUFNFOUTGPSUIFZFBSFOEFE.BSDI

 1FOTJPOT«DPOUJOVFE The last formal valuation of the Scheme was performed as at 30 September 2008 by a professionally qualified actuary using the projected unit method. The market value of the Scheme’s assets at the valuation date was £1,527 million. The valuation revealed a shortfall of assets compared with the value of liabilities of £663 million, equivalent to a past service funding level of 69.7%. The scheme actuary has prepared an actuarial report that provides an approximate update on the funding position of the Scheme as at 30 September 2009. Such a report is required by legislation for years in which a full actuarial valuation is not carried out. The funding update revealed an increase in the assets of the Scheme to £1,723 million and indicated an increase in the shortfall of assets compared to liabilities to approximately £738 million, equivalent to a past service funding level of 70%. The next triennial formal valuation of the Scheme is due as at 30 September 2011. The results of the valuation will be available in the autumn of 2012. 1FOTJPOT5SVTU«(SPXUI1MBO Family Mosaic Housing also participates in the Pensions Trust’s Growth Plan (the Plan). The Plan is funded and is not contracted out of the state scheme. The Plan is a multi-employer pension plan. Contributions paid into the Plan up to and including September 2001 were converted to defined amounts of pension payable from Normal Retirement Date. From October 2001 contributions were invested in personal funds which have a capital guarantee and which are converted to pension on retirement, either within the Plan or by the purchase of an annuity. The rules of the Plan allow for the declaration of bonuses and / or investment credits if this is within the financial capacity of the Plan assessed on a prudent basis. Bonuses / investment credits are not guaranteed and are declared at the discretion of the Plan’s Trustee. The Trustee commissions an actuarial valuation of the Plan every three years. The purpose of the actuarial valuation is to determine the funding position of the Plan by comparing the assets with the past service liabilities as at the valuation date. Asset values are calculated by reference to market levels. Accrued past service liabilities are valued by discounting expected future benefit payments using a discount rate calculated by reference to the expected future investment returns. The rules of the Plan give the Trustee the power to require employers to pay additional contributions in order to ensure that the statutory funding objective under the Pensions Act 2004 is met. The statutory funding objective is that a pension scheme should have sufficient assets to meet its past service liabilities, known as Technical Provisions. If the actuarial valuation reveals a deficit, the Trustee will agree a recovery plan to eliminate the deficit over a specified period of time either by way of additional contributions from employers, investment returns or a combination of these. The rules of the Plan state that the proportion of obligatory contributions to be borne by the Member and the Member’s Employer shall be determined by agreement between them. Such agreement shall require the Employer to pay part of such contributions and may provide that the Employer shall pay the whole of them.

46 | Family Mosaic Housing


/PUFTUPUIFGJOBODJBMTUBUFNFOUTGPSUIFZFBSFOEFE.BSDI

 1FOTJPOT«DPOUJOVFE Family Mosaic Housing paid contributions at the rate of nil% during the accounting period. Members paid contributions at a rate they determine under additional voluntary conditions. As at the balance sheet date there were two active members of the Plan employed by Family Mosaic Housing. Family Mosaic Housing continues to offer membership of the plan to its employees. It is not possible in the normal course of events to identify on a reasonable and consistent basis the share of underlying assets and liabilities belonging to individual participating employers. The Plan is a multi-employer plan where the scheme assets are co-mingled for investment purposes, and benefits are paid from the total plan assets. According, due to the nature of the Plan, the accounting charge for the period under FRS17 represents the employer contribution payable. The valuation results at 30 September 2008 have now been completed and have been formalised. The valuation of the scheme was performed by a professionally qualified actuary using the Projected Unit Method. The market value of the Plan assets at the valuation date was £742 million and the Plan’s Technical Provisions (i.e past service liabilities) were £771 million. The valuation therefore revealed a shortfall of assets compared with the value of liabilities of £29 million, equivalent to a funding level of 96%. The financial assumptions underlying the valuation as at 30 September 2008 were as follows: % p.a. - Investment return pre retirement 7.6 - Investment return post retirement Activities/Deferreds 5.1 Pensioners 5.6 - Bonuses on accrued benefits 0.0 - Rate of price inflation 3.2 In determining the investment return assumptions the Trustee considered advice from the Scheme Actuary relating to the probability of achieving particular levels of investment return. The Trustee has incorporated an element of prudence into the pre and post retirement investment return assumptions such that there is a 60% expectation that the return will be in excess of that assumed and a 40% chance that the return will be lower than that assumed over the next 10 years. The scheme actuary has proposed a funding position update as at 30 September 2009. The market value of the Plan’s assets at that date was £765m and the Plan’s technical provision (i.e. past service liabilities) was £820 million. The valuation therefore revealed a shortfall of assets compared with the value of liabilities of £55m, equivalent to a funding level of 93%. If an actuarial valuation reveals a shortfall of assets compared to liabilities the Trustee must prepare a recovery plan setting out the steps to be taken to make up the shortfall. In view of the small funding deficit and the level of prudence implicit in the assumptions used to calculate the Plan liabilities the Trustee has prepared a recovery plan on the basis that no additional contributions from participating

Financial Statements 2010 | 47


/PUFTUPUIFGJOBODJBMTUBUFNFOUTGPSUIFZFBSFOEFE.BSDI

 1FOTJPOT«DPOUJOVFE employers are required at this point in time. In reaching this decision the Trustee has taken actuarial advice and has been advised that the shortfall of £29 million (as at 30 September 2008) will be cleared within 10 years if the investment returns from assets are in line with the ‘best estimate’ assumptions.’Best estimate’ means that there is a 50% expectation that the return will be in excess of that assumed and a 50% expectation that the return will be lower than that assumed over the next 10 years. These ‘best estimate’ assumptions are 8.4% per annum pre retirement, 5.1% per annum post retirement (actives and deferreds) and 5.6% per annum post retirement (pensioners). A copy of the recovery plan must be sent to the Pensions Regulator. The Regulator has the power under Part 3 of the Pensions Act 2004 to issue scheme funding directions where it believes that the actuarial valuation assumptions and/or recovery plan are inappropriate. For example the Regulator could require that the Trustee strengthens the actuarial assumptions (which would increase the scheme liabilities and hence impact on the recovery plan) or impose a schedule of contributions on the Plan (which would effectively amend the terms of the recovery plan). A copy of the recovery plan in respect of the September 2008 valuation was forwarded to the Pensions Regulator on 18 December 2009. The next full actuarial valuation will be carried out as at 30 September 2011. Following a change in legislation in September 2005 there is a potential debt on the employer that could be levied by the Trustee of the Plan. The Trustee’s current policy is that it only applies to employers with pre October 2001 liabilities in the Plan. The debt is due in the event of the employer ceasing to participate in the Plan or the Plan winding up. The debt for the Plan as a whole is calculated by comparing the liabilities for the Plan (calculated on a buyout basis i.e. the cost of securing benefits by purchasing annuity policies from an insurer, plus an allowance for expenses) with the assets of the Plan. If the liabilities exceed assets there is a buy-out debt. The leaving employer’s share of the buy-out debt is the proportion of the Plan’s pre October 2001 liability attributable to employment with the leaving employer compared to the total amount of the Plan’s pre October 2001 liabilities (relating to employment with all the currently participating employers). The leaving employer’s debt therefore includes a share of any ‘orphan’ liabilities in respect of previously participating employers. The amount of the debt therefore depends on many factors including total Plan liabilities, Plan investment performance, the liabilities in respect of current and former employees of the employer, financial conditions at the time of the cessation event and the insurance buy-out market. The amounts of debt can therefore be volatile over time. Family Mosaic Housing has been notified by the Pensions Trust of the estimated employer debt on withdrawal from the Plan based on the financial position of the Plan as at 30 September 2009. As of this date the estimated employer debt at 30 September 2009 was £0.2m. -PDBM(PWFSONFOU1FOTJPO4DIFNF Family Mosaic Housing also is one of a number of employers that participates in the Local Government Pension Scheme. There are 45 active members, 10 deferred members and 8 pensioners in the main scheme plus 5 active members in a new scheme that commenced on 1 June 2009 following a new supporting people contract gain where staff were subject to a TUPE transfer. The Local Government Pension Scheme is a defined benefit scheme based on final pensionable salary.

48 | Family Mosaic Housing


/PUFTUPUIFGJOBODJBMTUBUFNFOUTGPSUIFZFBSFOEFE.BSDI

 1FOTJPOT«DPOUJOVFE This scheme is closed to new members of staff. Family Mosaic Housing’s contribution rate over the accounting period was 21.7% of Pensionable Pay. The fund is valued every three years and the most recent actuarial valuation was carried out as at 31 March 2007. Liabilities are valued on an actuarial basis using the projected unit method which assesses the future liabilities discounted to their present value. The principal assumption used by the actuaries for FRS17 purposes were: 31 March 2010

31 March 2009

31 March 2008

% p.a.

Real%

% p.a.

Real%

% p.a.

Real%

Price Increases

3.9

-

3.0

-

3.7

-

Salary Increases

5.4

1.5

4.5

1.5

5.2

1.5

Pension Increase

3.9

-

3.0

-

3.7

-

Discount Rate

5.5

1.5

6.7

3.6

6.8

3.0

Financial Statements 2010 | 49


/PUFTUPUIFGJOBODJBMTUBUFNFOUTGPSUIFZFBSFOEFE.BSDI

 1FOTJPOT«DPOUJOVFE "TTFUT The return on the Fund on a bid value basis for the year to 31 March 2010 is estimated to be 32% for the main scheme and 26% for the supporting people scheme. The estimated asset allocation for Family Mosaic Housing as at 31 March 2010 is as follows: Employer Asset Share – Bid Value – Main Scheme 31 March 2010

31 March 2009

£000

%

£000

%

2,386

57

1,225

50

586

14

346

14

-

-

182

7

Cash

42

1

74

3

Other

1,172

28

629

26

Total

4,186

100

2,456

100

Equities Gilts Other Bonds

Employer Asset share – Bid Value – Supporting People Scheme 31 March 2010 £000

%

Equities

155

57

Gilts

38

14

Cash

3

1

Other

76

28

Total

4,186

100

50 | Family Mosaic Housing


/PUFTUPUIFGJOBODJBMTUBUFNFOUTGPSUIFZFBSFOEFE.BSDI

 1FOTJPOT«DPOUJOVFE The expected return on assets was as follows. Asset Class

1 April 2010 % p.a

1 April 2009 % p.a.

1 April 2008 % p.a.

Equities

7.5

7.0

7.6

Gilts

4.5

4.0

4.6

Bonds

5.5

6.5

6.8

Property

5.5

6.5

6.6

Cash

3.0

3.0

6.0

Assets and liabilities on the balance sheet of Family Mosaic Housing are analysed as follows for the Main Scheme: Net Pension Asset as at

31 March 2010 £000

31 March 2009 £000

31 March 2008 £000

Present Value of Funded Obligation

6,446

3,277

3,327

Fair Value of Scheme Assets (bid value)

4,186

2,456

2,619

Net liability

2,260

821

708

16

12

13

Unrecognised Past Service Cost

-

-

-

Net Liability in Balance Sheet

2,276

833

721

Present value of unfunded obligation

The balance sheet amounts for the previous four years were as follows: Amounts for the current and previous four periods

Defined Benefit Obligation Scheme Assets (Deficit) Experience adjustments on scheme liabilities Experience adjustments on scheme assets

31 March 2010 £000

31 March 2009 £000

31 March 2008 £000

31 March 2007 £000

31 March 2006 £000

(6,462)

(3,289)

(3,340)

(3,581)

-

4,186

2,456

2,619

2,108

-

(2,276)

(833)

(721)

(1,473)

-

-

-

(311)

-

-

736

(441)

329

-

-

Financial Statements 2010 | 51


/PUFTUPUIFGJOBODJBMTUBUFNFOUTGPSUIFZFBSFOEFE.BSDI

 1FOTJPOT«DPOUJOVFE Assets and liabilities on the balance sheet of Family Mosaic in respect of the Supporting People Scheme are as follows: Net Pension Asset as at

31 March 2010 £000

Present Value of Funded obligation

305

Fair Value of scheme assets (bid value)

272

Net liability

33

Present value of unfunded obligation

-

Unrecognised post service cost

-

Net liability in Balance Sheet

33

Amounts for the current period

Defined Benefit Obligation

31 March 2010 £000 (305)

Scheme Assets

272

(Deficit)

(33)

Experience adjustments or scheme liabilities Experience adjustments scheme assets

52 | Family Mosaic Housing

43


/PUFTUPUIFGJOBODJBMTUBUFNFOUTGPSUIFZFBSFOEFE.BSDI

 1FOTJPOT«DPOUJOVFE Amounts recognised in Income and Expenditure in respect of the Main Scheme are: Year to 31 March 2010 £000 91

Year to 31 March 2009 £000 137

245

228

(175)

(185)

Past service cost

-

9

Gains on curtailments and settlements

-

57

Total

161

246

Actual Return on scheme assets

912

(256)

736

(441)

-

-

Scheme liabilities

(2,166)

372

Actual loss in pension scheme

(1,430)

(69)

-

(21)

(1,430)

(90)

Current Service Cost Interest on obligation Expected return on Scheme assets

The actuarial losses / gains recognised are as follows: Actual return less expected return on pension scheme assets Experience loss Changes in assumptions underlying the present value of the

Decrease in irrecoverable surplus from membership fall and other factors. Actuarial loss recognised

Financial Statements 2010 | 53


/PUFTUPUIFGJOBODJBMTUBUFNFOUTGPSUIFZFBSFOEFE.BSDI

 1FOTJPOTÂŤDPOUJOVFE Amounts recognised in Income and Expenditure in respect of Supporting People Scheme: Year to 31 March 2010 ÂŁ000 Current Service Cost

14

Interest on obligation

11

Expected return on Scheme assets

(12)

Total

13

Actual Return on scheme assets

55

The actuarial losses / gains recognised are as follows: Actual return less expected return on pension scheme assets Experience loss

43 -

Changes in assumptions underlying the present value of the Scheme liabilities

(82)

Actual (loss) in pension scheme

(39)

Decrease in irrecoverable surplus from Membership fall and other factors. Actuarial (loss) recognised

 /)41FOTJPO We have 71 staff who are members of the NHS Pension Scheme. Staff pay between 5% and 6.5% in contributions and we as the Employer pay 14%. The NHS Pension Scheme does not have a real pension fund, but as a statutory scheme, benefits are fully guaranteed by the Government. Contributions from both members and Employers are paid to the Exchequer which meets the cost of scheme benefits. The Exchequer also pays for the cost of increasing benefits each year by the rate of inflation. This extra cost is not met by contributions from scheme members and Employers.

54 | Family Mosaic Housing

(39)


/PUFTUPUIFGJOBODJBMTUBUFNFOUTGPSUIFZFBSFOEFE.BSDI

 $POUJOHFOUMJBCJMJUJFT At 31 March 2010 there were £nil of contingent liabilities in respect of claims arising in the ordinary course of business (2009: £nil).  3FMBUFEQBSUZUSBOTBDUJPOT One member of the Board is an employee of the London Borough of Hackney, a local authority having nomination rights over tenancies for certain Group properties. All transactions with the council are on normal commercial terms and no advantage is provided by this position. Tenants who are members of the Board have tenancies which are on normal commercial terms and as such their position does not afford them any additional benefits compared with other tenants.  4VCTJEJBSZVOEFSUBLJOHT Group

Association

2010 £000

2009 £000

2010 £000

2009 £000

Investment in shares

-

-

11

11

Loan to Charlton Triangle Homes

-

-

12,300

12,300

-

-

12,311

12,311

Family Mosaic Housing exerts dominant influence over the affairs of: 'BNJMZ.PTBJD)PNF0XOFSTIJQ This is a not-for-profit Association formed in 1989 under the Industrial and Provident Societies Act. It specialises in shared ownership and key worker housing. The appointment and dismissal of all Board Members is controlled by Family Mosaic Housing. $IBSMUPO5SJBOHMF)PNFT This is a company registered under the Companies Act and also with the Charity Commission and the Tenant Services Authority. The Association took the transfer of 1,246 properties from the London Borough of Greenwich on 29th March 1999 and has undertaken a substantial programme of repairs, improvement and upgrade of the properties transferred. At the current date over 1,000 properties have been refurbished and 173 new homes have been built. Family Mosaic Housing exercises control through nominees on the Board. 0ME0BL)PVTJOH"TTPDJBUJPO This is a company registered under the Companies Act, the Charity Commission and the Tenant Services Authority. The Association was established initially to manage 669 properties transferred to Family Housing Association on the 17th March 1999. The properties which were transferred were subject to refurbishment over a five year period. The original programme of works has now been completed and the properties are to remain in the ownership of Family Mosaic, though further works will be done on properties where tenants declined to have work done under the original programme. Family Mosaic Housing exercises control through nominees on the Board.

Financial Statements 2010 | 55


/PUFTUPUIFGJOBODJBMTUBUFNFOUTGPSUIFZFBSFOEFE.BSDI

 4VCTJEJBSZVOEFSUBLJOHT«DPOUJOVFE 4FSWJDF$IBSHF.BOBHFNFOU$PNQBOJFT Family Mosaic Housing has a majority shareholding in three small companies which exist to administer service charges on three estates where there are owner-occupiers in addition to Family Mosaic tenants. …  Harris Lodge Residents Company Ltd (Private Company limited by share guarantee with no share capital) …  Oxley Close (Number Two) Residents Company Ltd (Family Mosaic Housing own 91% of the share capital) …  Maple Lodge Residents Company Ltd (Family Mosaic Housing own 94% of the share capital) 'BNJMZ.PTBJD)PVTJOH%FWFMPQNFOU$PNQBOZ-UE A development trading company limited by shares (£10,000 share capital). (MPCF)PNF%FWFMPQNFOUT-JNJUFE A development trading company limited by shares (£500,000 share capital). The company discontinued trading in 2009. 'BNJMZ.PTBJD5IVSSPDL-JNJUFE A development company limited by guarantee (no shares). 'BNJMZ.PTBJD)PVTJOH4FSWJDFT-JNJUFE A trading company limited by shares (£1,000 share capital).  *ODPSQPSBUJPO The Association is registered with the Tenant Services Authority and prepares its financial statements under the Accounting Requirements for Registered Social Landlords General Determination 2006. It is incorporated under the Industrial and Provident Societies Act 1965 and registered in England.

56 | Family Mosaic Housing


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Financial Statements 2010 | 57


About the images The images in this year’s accounts are original artworks by Christopher Corr.

Cover Our patch – London.

Opposite page 1 Ridley Road Market, Hackney.

Page 5 City Road Basin, a planned development, creating a new community.

Page 21 Elephant and Castle, two developments including the highest residential building in London.

Concept and design by Matthew Grenier & Andrew Kingham

58 | Family Mosaic Housing


Family Mosaic: an introduction 8F¯SFPOFPGUIFMBSHFTUIPVTJOHBTTPDJBUJPOTJO-POEPOBOE&TTFY8FQSPWJEF BGGPSEBCMFIPNFTUPSFOU BOECVZ BTXFMMBTTFSWJDFTUPQFPQMFPOMPXJODPNFBOE JOOFFEPGBEEJUJPOBMTVQQPSU GPSFYBNQMF BEVMUTXJUINFOUBMIFBMUIJTTVFT ZPVOH QFPQMFXIP¯WFMJWFEJODBSFBOEPMEFSQFPQMFXJUIGMPBUJOHTVQQPSUOFFET 8FIBWFPWFS IPNFTGPSSFOU8FTFSWFPWFS SFTJEFOUT "OEXFTVQQPSUPWFS QFPQMFXJUIBEEJUJPOBMTFSWJDFT 8F¯SFESJWFOCZPVSDVTUPNFST8FXBOUUPPGGFSUIFNNPSFJOWPMWFNFOUBOEDIPJDF 8FDBOEPUIJTUIBOLTUPPVSGJOBODJBMTUSFOHUI 5IJTNFBOTXFIBWFTVSQMVTUPSFJOWFTUJOUPPVSFYJTUJOHIPVTJOHTUPDL*UNFBOTXFDBOGJOBODFUIF DPOTUSVDUJPOPGOFXIPNFT*UNFBOTXFDBOIFMQQFPQMFNBLFUIFJSDPNNVOJUJFTMPDBMJUJFTPGDIPJDF *UNFBOTNBLJOHUIFNGFFMWBMVFEJOFWFSZUIJOHXFEPGPSUIFN

Gearing

Turnover 2010 2009 2009 2008 2008

£168m £142m £146m 0

34

68

102

136

2010 2009 2009 2008 2008 0

170

2010 2009 2009 2008 2008

£31m £26m £27m 8

16

24

32

60

80

100

1.0

1.5

2.0

2.5

5.7% 6.9% 8.3% 0

2

4

6

8

10

£33m £17m £26m 16

24

32

2010 2009 2009 2008 2008

29 45 69 0

40

20

40

60

80

100

Number of new homes

Borrowings 2010 2009 2009 2008 2008

0.5

Void turnaround time (days)

2010 2009 2009 2008 2008 8

100

2010 2009 2008

Net surplus

0

80

Arrears 18.7% 17.9% 18.7%

40

60

2.1 1.4 1.5 0.0

40

2010 2009 2009 2008 2008 20

40

2010 2009 2009 2008 2008

Operating surplus as % of turnover

0

20

Interest cover ratio

Operating surplus

0

40.9% 48.6% 46.0%

£569m £575m £510m

2010 2009 2009 2008 2008

762 675 586


annual accounts



Family Mosaic Accounts 2010  

Family Mosaic's annual financial accounts, 2010