Directors Report, Strategic Report and Consolidated Financial Statement 2014

Directors’ Report, Strategic Report and Consolidated Financial Statement for the Year Ended 31 March 2014

Severnside Housing Directors’ Report, Strategic Report and Consolidated Financial Statements For the year ended 31 March 2014

Severnside Housing Directors’ Report, Strategic Report and Consolidated Financial Statements Year ended 31st March 2014 Contents Company Information, Auditors, Advisers and Bankers

Page 3

Board Directors, Executive Directors, Advisors and Bankers

Page 4-7

Report of the Board

Page 8

Statement of Responsibilities of the Board

Page 15

Strategic Report (incorporating Operating and Financial Review)

Page 17

Independent Auditors report to the Directors of Severnside Housing

Page 27

Consolidated Income and Expenditure Account

Page 29

Consolidated Statement of Total Recognised Surpluses and Deficits

Page 30

Association Income and Expenditure Account

Page 31

Association Statement of Total Recognised Surpluses and Deficits

Page 32

Consolidated Balance Sheet

Page 33

Association Balance Sheet

Page 34

Consolidated Cash Flow Statement

Page 35

Notes to the Financial Statements

Page 36

2

Company Information, Auditors, Advisers and Bankers Registered office

Severnside Housing, Brassey Road, Old Potts Way, Shrewsbury, Shropshire, SY3 7FA

Severnside Housing

Registration number: 04025816 Homes and Communities Agency (HCA) Registration number:

LH4325

A Walters Electrical Contractors Limited

Registration number: 03141171

A Walters Electrical Limited

Registration number: 08331962

Shrewsbury Homes For All

Registration number: 07492338 Charity Registration number: 1141044

Severnside Community Association Limited

Registration number: 031977R

Shropshire Community Housing Limited

Registration number: 06474307

External Auditors

KPMG LLP One Snowhill, Snow Hill Queensway, Birmingham, B4 6GH

Internal Auditors

Service Matters, Garden Court, Harry Weston Road, Binley, Coventry, CV3 2SU

Solicitors

Anthony Collins, 134 Edmund Street, Birmingham, B3 2ES Trowers and Hamlins, Heron House, Albert Square, Manchester M2 5HD

Bankers

National Westminster Bank PLC, 8 Mardol Head, Shrewsbury, SY1 1HE

Funders

Nationwide Building Society Kings Park Road, Moulton Park, Northampton, NN3 6NW

3

Board Directors and Executive Directors

Severnside Housing Board Members and Executive Directors Board of Directors

Appointed

Paul Smith (Chair)

January 2013

Sarah Boden (Chief Executive)

November 2010

Gareth Evans

January 2014

Elaine Ganderton (Chair, Audit and Risk Committee)

July 2008

Alyson Lanning

November 2010

Andrew Parkes

November 2010

Peter Price

January 2014

Rory O’Byrne (Vice-Chair & Chair, Nominations and

January 2010

Resigned

Remuneration Committee)

Paul Williams

January 2013

Malcolm Price (Housing Portfolio holder – Shropshire Council September 2010 Nominee )

Retirements in 2013/14 Robin Pritchard

October 2006

September 2013

Matt James

September 2010

November 2013

Executive Directors

Appointed

Resigned

Sarah Boden

January 2006

Chief Executive Peter Donovan

October 2001

Resources Director

4

Sue Groom

July 2006

Neighbourhood and Community Services Director Ian Gardner

December 2009

Asset Management Director Company Secretary Irene Molyneux

January 2012

A Walters Electrical Contractors Limited Board Members and Executive Directors Board of Directors

Appointed

Mike Roughan (Chair)

December 2012

Paul Beaman

December 2012

Sarah Boden (Chief Executive)

December 2012

Peter Donovan (Resources Director)

December 2012

Elaine Ganderton

December 2012

Resigned

Retirements in 2013/14 Ian Gardner (Asset Management Director)

December 2012

November 2013

Managing Director Andy Walters

December 2012

Company Secretary Irene Molyneux

December 2012

A Walters Electrical Limited 5

Board Members and Executive Directors Board of Directors

Appointed

Robin Pritchard (Chair)

December 2012

Sarah Boden

December 2013

Peter Donovan

December 2012

Mike Roughan

May 2014

Paul Williams

December 2012

Resigned

Retirements in 2013/14 Ian Gardner

December 2012

December 2013

David Smith

December 2012

November 2013

Managing Director Andy Walters

December 2012

Company Secretary Irene Molyneux

December 2012

Shrewsbury Homes for All Charity Trustees at 31 March 2014 Board of Directors

Appointed

Christine Allen (Chair)

April 2011

Helen Claire Cracknell (Treasurer)

April 2011

Deborah Griffiths

March 2013

Sue Groom

March 2013

Amelia Hutchins

April 2011

Angus Marshall

May 2012

Resigned

6

Nelia Maggs

April 2011

Mark Macpherson-Lees

April 2011

Ann Walters

April 2011

Severnside Community Association Limited Board Members at 31 March 2014 Board of Directors

Appointed

Robin Pritchard

March 2013

Sarah Boden

March 2013

Alyson Lanning

May 2014

Rory O’Byrne

March 2013

Resigned

Company Secretary Irene Molyneux

March 2013

Severnside Community Housing Limited Board Members and Executive Directors at 31 March 2014 Board of Directors

Appointed

Robin Pritchard

February 2008

Resigned

Company Secretary Peter Donovan

February 2008

7

Report of the Board The Board presents its financial report and the Group audited financial statements for the year ending 31 March 2014.

Nature of Severnside’s business Severnside Housing (SH) is a Company Limited by guarantee formed through a transfer of social housing properties from Shrewsbury and Atcham Borough Council (SABC) in October 2001. Its principal activities are the management and development of affordable housing.

A Walters Electrical Contractors Limited is a wholly owned trading subsidiary of SH and provides electrical services to SH. A Walters Electrical Limited is a wholly owned trading subsidiary of SH and provides electrical services to private and commercial clients other than Severnside.

Shrewsbury Homes for All is a Registered Charity which is a wholly owned trading subsidiary of SH and provides homeless prevention and housing advice services.

Severnside Community Association Limited is an Industrial and Provident Society and exempt charity which is a wholly owned trading subsidiary of SH and manages grants, SH Community Chest funding and donations.

Severnside Community Housing Limited is a private limited company which is a wholly owned non-trading subsidiary of SH. Corporate Objectives SH Board revised its corporate objectives in early 2014 following consultation with customers, staff, and other stakeholders.

SH Corporate Objectives for 2013 -18 are:   

Customers – Providing excellent customer service Communities – Contributing to the development of sustainable, thriving communities Business – Being financially strong with knowledgeable commercial and caring staff

SH Vision is “Excellent Homes in thriving communities” SH Ambition is “To provide and maintain excellent homes, create opportunities and offer a range of services to build thriving local communities”

SH Values are: Integrity:

We will be honest, truthful and trustworthy with customers, partners and staff; 8

Accountable: We will be open, transparent and responsible in and for all our actions; Fair: We will act in an ethical manner, embracing and celebrating diversity and ensuring probity Respectful: We will treat customers, partners and staff with care and respect; Effective: We will deliver creative and innovative solutions Partnership: We will work with customers and partners in a professional, efficient and supportive way to achieve our objectives Severnside’s Principal Activities and Aims SH’s principal aims include:                 

To deliver excellent services customers want; To provide well maintained homes; To strengthen customer involvement and communication; To support the most vulnerable and isolated in our neighbourhoods; To help customers manage their finances and to understand and plan for the impact of welfare reform; To encourage and develop greater individual and community responsibility; To develop training skills and employment opportunities for Severnside Customers; To ensure we operate in a manner that respects our environment and reflects Severnside’s values; To develop health and wellbeing initiatives that benefit local communities and staff To maximise income; To develop high quality business performance; To develop and acquire more homes; To ensure excellent governance; To have skilled and motivated staff who are engaged with our business and customers; To positively promote all members of the Severnside Group; To demonstrate and continuously improve value for money; To grow the business of the Group.

Business Review Details of performance for the year and future plans are set out in the Strategic Review following the report of the Board.

Regulation SH is registered with and regulated by the Regulation Committee of the Homes and Communities Agency (HCA). For the year ending 31 March 2014, SH is required to comply with the HCA’s Regulatory Framework.

The HCA monitors and reports on compliance with the Regulatory Framework economic standards namely: 

Governance and Financial Viability 9

 

Rent Value for Money

The HCA published its regulatory judgement for Severnside in September 2013. This judgement confirmed that Severnside had maintained its compliance with the regulatory standards and gave Severnside grading’s of G1 and V1, the highest grades, for Governance and Financial Viability. In respect of the Financial Viability assessment it was stated that: – 

The provider meets the requirements set out in Governance and Financial Viability standard of the Regulatory Framework in relation to financial viability.

Customers are actively involved in decision making through the Resident Senate and Customer Panel and part of their role is scrutinising and assessing performance against the HCA Regulatory Framework consumer standards namely:    

Tenant Involvement and Empowerment Home Tenancy Neighbourhood and Community

Details of these assessments and performance are included in the Annual Report to Customers.

The Resident Senate is made up of two Board directors and six customers and meets formally on a quarterly basis and informally more frequently. The Senate also has responsibility for decision making, shaping service delivery and revising policy and procedures SH provides a customer learning programme delivered annually to increase the skills of its customers to help with employment opportunities, during 2013-14 the learning programme delivered over 50 courses to 360 customers and stakeholders.

We robustly monitor complaints. During the year we received 46 complaints of which two of these were escalated to stage 2 and both of these went on to stage 3. At stage 3, both complaints were partially upheld and, in accordance with Severnside’s customary practice, learning points were identified which Severnside is now implementing with a view to improving our service to customers.

NHF Code of Governance SH has adopted the principal recommendations of the National Housing Federation (NHF) Code of Governance and Code of Conduct. Severnside reviews compliance against these Codes each year and confirms that it is compliant.

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SH Employees SH is committed to investing in employees to ensure SH is an association people want to work for and feel valued. This is evidenced by our Investors in People Gold Standard. The association’s strength lies in the quality and commitment of all its employees to meet company objectives and customer expectations. Information is shared and staff are consulted through monthly briefings with the Chief Executive and at regular team meetings.

We recognise that the success of our business depends on the quality of our managers and staff. It is the policy of SH that training, career development and promotion opportunities be available to all employees.

In 2013/14 SH invested over ÂŁ110k in staff training, over 152 training courses were run internally and a suite of e-learning packages developed. A number of professional qualifications were funded by SH and external courses and seminars are attended by staff when appropriate.

SH has an apprentice programme and in 2013/14 employed 4 apprentices three of whom are now employed by Severnside.

SH is committed to supporting the 3 recognised Trade Unions that are represented within SH and regularly meet and consult with them via the Joint Negotiating Consultative Committee (JNCC). Employees are also encouraged to contribute to the running of the business through staff conferences, working groups, comprehensive service reviews, corporate briefing sessions, one to one meetings, and team meetings and by developing their personal competencies through training and development.

The Chief Executive and Executive Team are employed on separate terms to other staff, their notice periods being six months. They are entitled to other benefits such as the provision of a car allowance and health care insurance.

Pension All SH staff are given opportunity to participate in a Pension Scheme. The majority of SH Staff are members of the Shropshire Local Government Pension Scheme, a defined benefit (final salary) pension scheme which was closed to new entrants in March 2010. Effective from April 2010, all SH staff are entitled to join the Severnside Defined Benefit Scheme which in future will be the SH vehicle for pension auto-enrolment.

The Chief Executive and Executive Team are all members of the Shropshire Local Government Pension Scheme. They participate in the scheme on the same terms as all other eligible staff.

Corporate Governance The Board Directors and Executive Directors of SH are set out on pages 4-5. The Board currently has 10 Directors including the SH Chief Executive. The Board Directors are drawn from a wide background bringing together professional, commercial and local knowledge and experience.

11

Service contracts All Board Directors, including those on subsidiary Boards, are issued with a contract for services and the remuneration level is reviewed not less than every three years to ensure that payment levels are proportionate given SH’s size, complexity and resources and are in line with industry norms. The remuneration of Directors was reviewed in December 2012.

The fees paid to SH Directors are set out at pages 49-50.

Committees of the Board The Board is served by two specialist committees that scrutinise and oversee the following areas of activity: 

Audit & Risk: The Committee has three members and meets not less than four times a year. It is responsible for overseeing the effectiveness of the system of internal controls, agreeing the annual internal audit plan, monitoring its delivery and providing relevant reports to the Severnside Board, including reports on risk management arrangements.



Remuneration and Nominations: The Committee has three members and meets not less than twice a year. It is responsible for overseeing and providing guidance on nominations to the Severnside Board, its Committees and to subsidiary company Boards and recommending appropriate remuneration levels. The Committee also agrees the remuneration of senior staff, making recommendations to the Board in respect of the remuneration of the Chief Executive.

In 2013/14, the Nominations and Remuneration Committee led the open recruitment and appointment of a new Chair of the SH Board and two independent Directors.

Resident Senate The Resident Senate currently has 8 members (one vacancy) and its role is to scrutinise performance, decision making, shaping service deliver and revising policy and procedures.

The Resident Senate presents to the Board ‘Green Papers’ with recommendations for change and improvement. The Executive Team provides ‘Management Comment’ with regard to the recommendations that are made and to date, the Board has accepted all Senate recommendations for implementation.

Board Directors and Resident Senate receive regular training and are appraised annually, they have opportunities to network with others to ensure SH proactively adapts to the changing environment and delivers good services to all customers. The Board reviews the results of the individual and collective Board appraisal exercises and agrees and through the Nominations and Remuneration Committee oversees the implementation of an annual Governance Improvement Plan which is formulated to reflect the Board appraisal findings.

12

The Board’s 5 year Corporate Plan is delivered by the Chief Executive who is supported by the Resources Director, Neighbourhood and Community Services Director and the Asset Management Director.

Insurance policies indemnify Board Directors and officers against liability when acting on behalf of SH. Subsidiary Boards The SH Board is responsible for agreeing appointments to subsidiary Boards and has the right to remove Board Directors should the need arise.

Each A Walters subsidiary Board has five Directors comprising three non-executive and two executive Directors, namely the Chief Executive and Severnside Resources Director.

Shrewsbury Homes for All has 9 Trustees, SH has nominated two people to serve on the Board of Trustees of Shrewsbury Homes for All, the Neighbourhood and Community Service Director and the Head of Finance and Performance.

Severnside Community Association Limited has three Directors, including the Severnside Chief Executive.

Severnside Community Housing Limited has two Directors.

Equality and Diversity SH is committed to equal opportunities. SH has a detailed Equality and Diversity Action Plan.

Equality Management Reviews or impact assessments are completed on all group Strategies and Policies to ensure that they comply with the Equality Act 2010 and do not discriminate against or disadvantage any of the protected groups.

SH conducts regular training for Board, Staff and Customers and was awarded the West Midlands “Most Improved Employer 2014” by Stonewall.

Health and Safety Severnside is committed to maintaining the health and safety of its employees and the public at large. Our in house workforce (Severnside Housing Property Services) and our electrical contracting subsidiaries are accredited by the Contractors Health and Safety Assessment Scheme (CHAS) and SH has received a 4 star rating from the British Safety Council for the past two years.

Severnside ensures that its managers and contractors are aware of their health and safety responsibilities whilst undertaking work and our Health and Safety Team supports line managers and contract administrators on a daily basis.

Each year our Audit and Risk Committee receives a report on landlord’s statutory compliance and our Board receives an annual report on Health and Safety. Staff are involved 13

in safety issues through a formal Health and Safety Committee and through a newly formed Health and Safety Forum.

Risk Management The process for identifying, evaluating and managing the significant risks faced by Severnside is on-going and has been in place throughout the period commencing 1 April 2013 up to the date of approval of the report and financial statements.

As an integrated part of the agreed risk management framework, Severnside maintains a key risk register. The Chief Executive reports to the Board on the management of key risks not less than on a quarterly basis. Further information on SHs risk management arrangements can be found at page 24.

In 2013/14, in response to changes in the external environment and advisory comment to the housing sector from the sector regulator, the HCA, the SH Board reviewed its risk management arrangements to ensure that these remain compliant with best practice both inside and outside the housing sector. As a result of this review, the Audit and Risk Committee will be leading on the introduction of revised risk management arrangements in 2014/15.

Internal Controls Assurance The Board acknowledges its overall responsibility for establishing and maintaining the whole system of internal control and for reviewing its effectiveness.

The system of internal control is designed to manage, rather than eliminate, the risk of failure to achieve business objectives, and to provide reasonable assurance against material misstatement or loss.

The report of the Internal Auditors shows that the overall conclusion from their work is that they are able to provide adequate assurance that Severnside operates an effective internal control environment based on the areas they have audited in the year within the scope of those reviews.

Key elements of the control framework include:      

Board approved terms of reference and delegated authorities for Committees and to the Chief Executive.

Clearly defined management responsibilities for the identification, evaluation and control of significant risks.

Robust strategic and business planning processes, with detailed financial budgets and forecasts.

Formal recruitment, retention, training and development policies for all staff.

Established authorisation and appraisal procedures for significant new initiatives and commitments.

A sophisticated approach to treasury management which is subject to external review each year.

14

    

Regular reporting to the appropriate Committee on key business objectives, targets and outcomes.

Board approved whistle-blowing and anti-theft and anti-bribery and corruption policies.

Board approved fraud policies, covering prevention, detection and reporting, together with recoverability of assets.

Regular monitoring of loan covenants and requirements for new loan facilities.

Robust assurance framework to monitor corporate plan objectives

A fraud register is maintained and is reviewed by the Audit and Risk Committee on a quarterly basis.

The Board cannot delegate ultimate responsibility for the system of internal control but has delegated authority to the Audit and Risk Committee to regularly review the effectiveness of the system of internal control. The Board receives Audit and Risk Committee quarterly reports and meeting minutes. The Audit and Risk Committee has received the Executive team’s annual review of the effectiveness of the system of internal control for Severnside, and the annual report of the internal auditor, and has reported its findings to the Board.

Statement of directors’ responsibilities in respect of the Strategic Report, the Report of the Board and the financial statements The Board is responsible for preparing the Strategic Report, the Report of the Board and the financial statements in accordance with applicable law and regulations.

Company law requires the directors to prepare financial statements for each financial year.

Under that law they have elected to prepare the financial statements in accordance with UK Accounting Standards and applicable law (UK Generally Accepted Accounting Practice).

Under company law the Board must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Association and of the surplus or deficit for that period. In preparing these financial statements, the Board is required to:    

select suitable accounting policies and then apply them consistently; make judgements and estimates that are reasonable and prudent; state whether applicable UK Accounting Standards and the Statement of Recommended Practice 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 adequate accounting records that are sufficient to show and explain the Association’s transactions and disclose with reasonable accuracy at any time the financial position of the Association and enable them to ensure that the financial statements comply with the Companies Act 2006, the Housing and Regeneration Act 2008 and the Accounting Direction for Private Registered Providers of Social Housing 2012. They have general responsibility for taking such steps as are reasonably open to them 15

Strategic Report (incorporating Operating and Financial Review) Background Severnside is based on two sites in Shrewsbury, and is one of Shropshire’s largest social landlords, with 5,427 (2013: 5,410) homes in Shrewsbury, Broseley, Wellington, Telford and the surrounding rural areas.

Its principal activities are the management and development of affordable housing.

Severnside is actively developing new affordable homes to address housing needs in the local area, as well as investing in existing properties.

Severnside is a significant employer with 222 (2013: 228) FTE staff, including an in-house workforce of 67 (2013: 74) tradespeople who repair and maintain its properties; Severnside operates in both urban and rural environments.

The association is non-charitable and operates four key business streams:    

Housing for rent, primarily for those who are unable to rent or buy at open market rates; Supported housing and services for people who need additional housing-related support or additional care; and Low-cost home ownership, primarily shared ownership.

Market rent

As well as managing 5,427 properties, Severnside develops new affordable housing and is a founding member of the S3 Partnership providing access to grant funding under the Homes and Communities Agency (HCA) Affordable Homes Programme (AHP).

During the year, Severnside developed 7 (2013: 15) general needs and 1 (2013: 6) shared ownership properties at a total scheme cost of £0.82m (2013: £2.838m) with £0.17m (2013: £0.951m) grant. In addition Severnside purchased off the shelf, 24 (2013: 27) market rent and 11 (2013: 1) shared ownership properties at a total cost of £3.5m (2013: £3.478m).

However, Severnside’s focus remains its social housing activities and these are expected to continue to constitute over 98% of Severnside’s activities by turnover.

External Influences The Government’s benefit reforms have not yet had a material impact on our finances; most of our customers continue to pay their rent promptly, this is backed up by our arrears performance. However, further changes will come into operation over the next two years and we will continue to monitor the position very closely.

17

Business and financial review The Board is pleased to report for the year ending 31 March 2014 Severnside’s turnover was £25.250m (2013: £23.734m) and a surplus for the year of £1,143k (2013: £829k) in what has been a challenging year. We have continued to invest in both our existing housing stock and undertake a series of new developments, for both social and affordable rent, shared ownership and market rent.

Principal accounting policies, approved by SH Board are set out on pages 36 to 39 of the Financial Statements. There were no significant changes to accounting policies in the current year.

Severnside’s three year income and expenditure accounts and balance sheets are summarised below:Table 1 – Severnside (Association only) highlights, three year summary For the year ended 31 March

2014

2013

2012

£000’S

£000’S

£000’S

Income and Expenditure account Total Turnover

25,250

23,734

22,644

Operating Surplus

6,557

6,196

6,624

Surplus for the year transferred to

1,143

829

1,307

233

350

-

Housing properties, net of depreciation

125,163

118,979

113,472

Social housing grant and other grants

(11,226)

(10,242)

(9,984)

Other tangible assets

4,247

1,308

1,532

Net current liabilities

(3,207)

(2,732)

(601)

115,210

107,663

104,419

(105,853)

(99,853)

(97,603)

0

(32)

(32)

(7,285)

(11,537)

(9,134)

Net Assets/(Liabilities)

2,072

(3,759)

(2,350)

Revenue Reserves

9,357

7,778

6,784

Pension Reserves

(7,285)

(11,537)

(9,134)

Surplus/(Deficit)

2,072

(3,759)

(2,350)

reserves

Balance Sheet Intangible assets

Total assets less current liabilities Loan (due over one year) RCGF FRS17 Liability

18

Housing properties owned at year end

2014

2013

2012

Social Housing

5,372

5,373

5,365

Non Social Housing

55

37

8

No of development units completed

43

51

23

Statistics (Association only)

2014

2013

2012

Operating Surplus for the year as % turnover

26.0

26.1

29.3

Operating Surplus for the year as % income from

27.7

27.8

31.9

Rent arrears at year-end

ÂŁ561k

ÂŁ672k

ÂŁ652k

Rent arrears as % of turnover

0.72%

1.50%

1.70%

Rental income collection / rental income due

101.3%

100.1%

100.0%

Asset cover ratio*

1.51

1.47

1.41

Net operating cash flow / Total interest**

0.78

1.16

0.85

Emergency repairs within target (24 hours)

99.8%

99.7%

99.7%

Urgent repairs within target (7 days)

99.2%

99.1%

99.6%

Routine repairs within target (31 days)

98.5%

98.9%

98.7%

Decent homes compliant

100%

100%

100%

SAP (Standard Assessment Procedure) rating

72.27

67.21

66.70

Procurement efficiency savings achieved

4.8%

4.4%

3.3%

% of dwellings with gas safety certificate

100%

100%

100%

Overall satisfaction with services***

88%

88%

87%

% Customer satisfaction with neighbourhood

86%

86%

84%

% Staff satisfaction

n/a

77%

n/a

% working days lost due to sickness

5.0%

4.9%

4.4%

Social Housing lettings

*Calculated as total asset value / total loan value **Specific loan covenant stipulated by finance provider ***Results obtained from STAR survey (Survey of Tenants and Residents)

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Value for money (VFM) In a challenging economic environment, achieving improved VFM is key. Since April 2013 Severnside has carried out a robust self-assessment indicating how well we meet the Homes and Communities Agency (HCA) new standard on Value for Money and how wisely we spend the money our customers give us through their rents and service charges.

Our first self-assessment was well received by the Homes and Communities Agency who confirmed that Severnside had complied with the Value for Money Standard. In preparing our second self-assessment, the Board has discussed the Association’s progress against the objectives it set last year and has considered examples of good practice as highlighted by our external auditors. We have, as a consequence, made some changes to the content of our assessment to improve it.

New Corporate Plan Objective Although VFM has been implicit in previous Corporate Plans, this year the Board set a specific objective for Severnside ‘To demonstrate and continuously improve value for money’. This approach enshrines the Board’s commitment to securing and evidencing ongoing improvement in the way we carry out our activities. Our Corporate Plan and our Value for Money Self-Assessment which have been developed in consultation with our customers and staff are shared with them and are published on our website so that external stakeholders know what we are aiming to achieve, what we are doing well and where we need to improve.

VFM in Decision Making Severnside’s Corporate Plan sets out SH’s high level objectives for the next five years and guides staff at all levels of the organisation, as detailed on page 8-9. Related measures are used by the board to assess the achievement of objectives, a summary of the key objectives and the levels of achievement are summarised on page 18-19. In addition to our VFM strategy, SH has detailed strategies covering Asset Management, Development, Environmental Impact, Equality and Diversity, Human Resources, Information Technology, Neighbourhood Management, Procurement, Risk Management and Tax/Treasury Management and a range of policies which guide staff on a day to day basis.

Key decisions are taken by Severnside’s Board based on a written report from Executive Directors or the Chief Executive which set out the financial and other significant implications of the options the Board is being asked to consider. Information contained with the Data Warehouse provides helpful guidance with regard to the effective deployment of resources to address identified and emerging priorities. The Board has delegated non-key decisions to the Chief Executive and Executive Directors and the limits for these decisions are set out in our Scheme of Delegation, Financial Regulations and Standing Orders.

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For Procurement decisions, staff at all levels are required to abide by the Procurement Strategy and Procurement Policy which explains how price and quality are to be considered when goods and services are being purchased.

In addition to the above, SH has adopted a Project Management Framework to help staff identify costs and benefits of proposals which could involve the use of staffing and other resources.

Active Asset Management SH has considered the issue of Value for Money in relation to the maintenance of our housing stock through the use of external contractors and our own internal workforce. The Board has agreed a mixed economy of service provision which combines external specialist support with the resources of our own staff and those of our subsidiary companies. The Board reached this decision in 2013/14 after extensive benchmarking and soft market testing. It is believed that this delivery model is the most advantageous for SH for the foreseeable future.

SH assess the return on investment in new and existing housing on an on-going basis. All new build properties are rigorously assessed to confirm financial viability before purchase or construction and existing stock is assessed every five years through a comprehensive stock condition survey. SH has already taken steps to address the problem of lack of demand for some of its less popular sheltered housing schemes and is in the process of re-developing Chapel Close and Heaths Houses Sheltered Housing schemes. Where individual properties or groups of properties are considered not to be viable, SH also consider the sale of assets. In the past year SH has: 

    



Agreed to sell a single property and sewage treatment plant at Wallop, generating a capital receipt for new development and reducing our maintenance liabilities in an area where all other former Severnside / SABC properties have been sold under the Right to Buy; Identified two other properties for possible disposal during 2014/15; Agreed to redevelop a poorly utilised Sheltered Housing meeting room at New Park Close and linked Scheme Manager’s home to provide three bungalows; Started work to refurbish six flats at Connynger Crescent formerly leased to Shropshire Council as temporary accommodation, with the aim of bringing them back into use as permanent homes which have been improved; Purchased the freehold of our main offices at Brassey Road together with the linked offices on the site which are let to a long term commercial tenant, thereby reducing our premises costs; Converted a former Sheltered Housing Scheme Manager’s house that has been vacant for several years into an office for staff providing supported housing services to residents in the community including those contracted through our SUSTAIN arrangements with Shropshire Council; Gained planning permission to redevelop a less popular garage site at Bell Lane to provide four new homes.

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Performance Management and Scrutiny The costs of delivering all SH services are routinely benchmarked and reported to our Board and to our customers via our Residents Senate who scrutinise both cost and performance and provide a robust challenge to staff. SH actively involves residents in service or material specifications, procurement decisions and in evaluation of tenders.

The SH Executive Team review financial and operational performance, risk management and delivery of VFM with Heads of Service on a monthly basis through a ‘Business Review’ process. Operational performance is reported to the Board and to the Residents Senate on a quarterly basis.

Our VFM Achievements 

 



 

We continue to make significant on-going savings within the Asset Management Programme as a result of acquiring an electrical contractor and by negotiating a price freeze for 2014/15 for planned and responsive maintenance of electrical systems; Over 50% of Severnside’s Asset Management Programme is internally delivered via our own workforce whose costs have been externally benchmarked – resulting in VAT savings on labour costs; Following consultation with our customers in 2013/14 we are changing the specification for electrical items when properties are rewired and also the type of extractor fan that is fitted when existing fans break down. We predict savings of around £22,000 per year from 2014/15 due to these changes; We have increased the number of repairs carried out by appointment with customers from 60% in 2009/10 to 93.7% in 2013/14. Appointments are more convenient for our customers and avoid wasted time for both customers and repair staff; We have reduced the number of repairs completed as an emergency from 32.7% in 2009/10 to 18.5% in 2013/14. It is less efficient to complete a high proportion of repairs as emergencies; We have made savings of around £130,000 per year through a wide range of procurement exercises and have reinvested these into our development programme.

The Future In 2014/15 Severnside will continue to focus on Value for Money and in particular we will    

Review the costs of overheads across the organisation; Continue to explore greater use of subsidiaries and long term contracts as vehicles for making savings – particularly within the Asset Management function; Continue to make strenuous efforts to resolve long standing issues with voids – particularly the time and cost of letting to new tenants; Build on the solid platform of good performance and high levels of customer satisfaction and start to develop a more commercial approach to our direct labour 22



organisation, Severnside Housing Property Services (SHPS) with greater focus on productivity and the generation of external income; Continue to reduce rent arrears and investigate innovative ways of increasing rental income.

Severnside’s Value for Money Self-Assessment Copies of our updated self-assessment and our Value for Money Strategy are available on our website on the link below http://www.severnsidehousing.co.uk/main.cfm?type=VALUEFORMONEY

Highlights and Achievements SH has continued to invest significant time and energy into ensuring that SH is a wellmanaged business that is fit for the future. Achievements during the year include:       

           

SH awarded EFQM 4 star status by the British Quality Foundation; Established single point contact for IT support across SH & Shropshire Housing Group via the joint IT team “Unite”; Re-accreditation of Two Ticks Disability Symbol; 50 recruitment campaigns delivered and Networx Recruitment system introduced; HR Business Partners introduced to support directorates; New Occupational Health provider appointed saving £4k; Homes and Communities Agency (HCA) confirmed that SH governance arrangements are satisfactory with the issue of an updated Regulatory Judgement in August 2013 with a G1 rating for Governance and a V1 rating for Financial Viability; Comprehensive Tax strategy delivered; Out-performed budget and financial plan again in 2013-14 by £1.1m; Purchased existing Head Office site in Shrewsbury for £2.725m which will produce an annual saving of approximate £125k pa; Efficiency savings achieved in the year of 4.8%, therefore reducing management costs by £983k; 43 homes were built or purchased and SH secured £492k of additional Social Housing Grant funding; Our Asset Management Programme of £10.2m was delivered within 0.37% of budget; Severnside Housing Property Services were re accredited by CHAS; SH re-secured a 4 star rating from the British Safety Council for its Health and Safety arrangements; Our Home Standard ‘Local Offer’ was updated and published showing our performance against our repairs and improvement standards; We provided work experience for 12 young people; 67% of Severnside’s expenditure on goods and services was spent in Shropshire (up from 49% in 2011/12) or 53% in 2012/13; 100% of major procurement exercises involved residents in the selection of suppliers; 23

          

In advance of the introduction of the under-occupancy penalty linked to the Welfare Reform Act 2012 provisions our Neighbourhood and Community Services team visited 676 residents; Post under-occupancy penalty we achieved 94 mutual exchanges (winning a Midlands Excellence award from Homeswapper); 58 exemptions; 13 transfers and payment of £31,000 in discretionary housing payments for our customers; Provided Financial Inclusion / Into Work support to over 350 customers; Supported Housing Services passed the Commissioners’ inspection of our services to customers; Delivered strong rent collection results, with low end of year arrears of £561k which were better than predicted; Our allocations team reduced Ready to Let times from 17 to 5 days consistently throughout the year; Established a SH Data Warehouse, a data sharing initiative with the local authority and other key partners to create a fully functioning data warehouse; Through our Learning programme provided training to 360 residents; Extended Customer Services Team checking of rent accounts when customers call with the result that we collected £1,350,000 through this team; Our Digital Inclusion project, including our Learning Programme and the Digital Dens won the Midlands National Housing Federation ‘investing in people’ award and has gone on to be shortlisted for the national award in the same category; Awarded most improved organisation in the West Midlands by Stonewall following our submission to their Diversity Champions Top 100 index.

Risks and uncertainties Risks that may prevent SH achieving its objectives are considered and reviewed monthly by the Executive Team and regularly reviewed by the Board. The risks are recorded and assessed in terms of their impact and probability through the use of the SH risk matrix.

Major risks, presenting the greatest threats to Severnside, are reported to the Board quarterly together with action taken to manage the risks, including assessment of key controls and the outcome of the action. The major risks to successful achievement of business objectives going forward are considered below:-

Key risks Welfare Benefit Reform Act Welfare Benefit Reform Impact – Direct Payments (80) Welfare Benefit Reform Impact – Benefit cap (60) Welfare Benefit Reform – Universal Credit (80)

Action being taken        

Monitoring rental arrears and working closely with tenants to recover these on a timely basis Monitor direct benefit environment Deliver financial inclusion strategy Agreed HB service level agreements Anti-poverty strategy Monitoring regulatory and legislative changes Closer working with Credit Union Identify under occupied property 24

Increase in Pension Contributions



Full Pension Review in line with the Actuarial Review SC LGPS

      

Risk assessments Training Policy & Procedures Information to tenants Working groups BSC Audit Manuals



Appointment of dedicated Head of Development Creation of Development Pipeline Strategic review of Local Plan sites

Increase in pension contributions as a result of revised valuation above budget (60) Health & Safety Non-compliance with fire safety regulations (60) Breach of Health and Safety legislation (60) Non-compliance with working at height legislation (60) Non-compliance with Asbestos Regulations (60) Development Failure to deliver the Development Business Plan and Strategy (60)

 

Failure to deliver development schemes within budget and timetable (60)

Capital Structure and Treasury Management The following paragraphs highlight the key features of SH financial position as at 31 March 2014.

At 31 March 2014 SH managed 5,427 (2013: 5,410) housing properties. These properties are shown in the balance sheet at cost (after depreciation and Social Housing Grant received in respect of these properties) at £113.937m (2013: £108.737m). During the year there were 43 additions (2013: 51) to housing properties of £4.3m (2013: 6.32m) and 21 sales (2013: 12) producing a net surplus of £243k (2013: £205k) mainly under the right to buy scheme.

During the year, the properties were valued by professional valuers and as at 31 st March 2014 the valuation on an existing use for social housing basis was £175m.

During the year, the borrowings were increased by £6m, £1m drawn in April 2013, £2m drawn in August 2013 and £3m drawn in November 2013. At the year-end borrowings amounted to £105.853m with the following repayment profile: Maturity Within one year

2014 £’000 5,000

2013 £’000 0

25

Independent auditor’s report to the members of Severnside Housing We have audited the group and company financial statements of Severnside Housing for the year ended 31 March 2014 set out on pages 29-64. The financial reporting framework that has been applied in their preparation is applicable law and UK Accounting Standards (UK Generally Accepted Accounting Practice).

This report is made solely to the Association’s members, as a body, in accordance with section 128 of the Housing and Regeneration Act 2008 and Chapter 3 of Part 16 of the Companies Act 2006. 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 directors and auditor As explained more fully in the Statement of Responsibilities of the Board set out on page 15, the Board is responsible for the preparation of the financial statements and for being satisfied that they 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 Auditing Practices Board’s Ethical Standards for Auditors.

Scope of the audit of the financial statements A description of the scope of an audit of financial statements is provided on the Financial Reporting Council’s website at www.frc.org.uk/auditscopeukprivate.

Opinion on financial statements In our opinion the financial statements:  give a true and fair view of the state of affairs of the Group and the Association as at 31 March 2014 and of the Group’s and the Association’s surplus for the year then ended; 

have been properly prepared in accordance with UK Generally Accepted Accounting Practice; and



have been prepared in accordance with the Companies Act 2006, the Housing and Regeneration Act 2008 and the Accounting Direction for Private Registered Providers of Social Housing 2012.

Opinion on other matter prescribed by the Companies Act 2006 In our opinion the information given in the Strategic Report and the Report of the Board for the financial year for which the financial statements are prepared is consistent with the financial statements.

27

Consolidated Income and Expenditure Account For the year ended 31 March 2014 Notes

2014 £000’s

2013 £000’s

Turnover

2

25,895

23,734

Less: Operating costs

2

(18,858)

(17,538)

7,037

6,196

243

205

20

11

Operating surplus

Surplus on sale of housing properties

3

Interest receivable and other income Interest payable and similar charges

4

(5,205)

(5,162)

Other Financing Costs

5

(464)

(421)

(5,406)

(5,367)

1,631

829

Surplus on ordinary activities before taxation

Tax credit/ (charge) on deficit on ordinary activities

Surplus for the year

7

-

1,631

-

829

Due to 2014 being the first year that Group accounts are prepared, the comparative figures relate to those of the Association only.

The Group’s turnover and operating surplus all relate to continuing operations.

The notes, detailing items in the financial statements are included on pages 36 to 64.

Historical costs, surplus and deficits are identical to that shown in the financial statements.

29

Consolidated Statement of Total Recognised Surpluses and Deficits For the year ended 31 March 2014 Notes

Surplus for the financial year

Net gains/(loss) for actuarial pension fund liability Total surpluses and deficits recognised since last annual report

24

2014 £000’s

2013 £000’s

1,631

829

4,252

(2,238)

5,883

(1,409)

Due to 2014 being the first year that Group accounts are prepared, the comparative figures relate to those of the Association only.

30

Association Income and Expenditure Account For the year ended 31 March 2014 Notes

2014 £000’s

2013 £000’s

Turnover

2

25,250

23,734

Less: Operating costs

2

(18,693)

(17,538)

6,557

6,196

243

205

12

11

Operating surplus

Surplus on sale of housing properties

3

Interest receivable and other income Interest payable and similar charges

4

(5,205)

(5,162)

Other Financing Costs

5

(464)

(421)

(5,414)

(5,367)

1,143

829

Surplus on ordinary activities before taxation

Tax credit/ (charge) on deficit on ordinary activities

Surplus for the year

7

-

1,143

-

829

The Association’s turnover and operating surplus all relate to continuing operations.

The notes, detailing items in the financial statements are included on pages 36 to 64.

Historical costs, surplus and deficits are identical to that shown in the financial statements.

31

Association Statement of Total Recognised Surpluses and Deficits For the year ended 31 March 2014 Notes

Surplus for the financial year

Gains/(Loss) for Actuarial pension fund liability, net

Total surpluses and deficits recognised since last annual report

2014 £000’s

1,143

24

2013 £000’s

829

4,252

(2,238)

5,395

(1,409)

32

Consolidated Cash flow statement For the year ended 31 March 2014 Notes

2014 £000’s

2013 £000’s

Net cash inflow from operating activities

18

10,204

9,902

Returns on investments and servicing of finance

19

(5,185)

(5,151)

(40)

-

Taxation

Capital expenditure and financial investment

19

(11,394)

(8,507)

Acquisitions of subsidiaries

19

620

-

Net Cash outflow from Operating and Capital activities

(5,795)

(3,756)

2,250

Financing

19

6,000

Increase/(Decrease) in cash

21

205

(1,506)

Due to 2014 being the first year that Group accounts are prepared, the comparative figures relate to those of the Association only.

35

Notes to the financial statements 1a

Basis of accounting The financial statements have been prepared under the historical cost convention, in accordance with United Kingdom generally accepted accounting practice and the Statement of Recommended Practice: Accounting by Registered Social Housing Providers Update 2010 (SORP).

The financial statements are group statements and consolidate the results of Severnside Housing and its subsidiaries A. Walters Electrical Contractors Ltd (AWEC), A Walters Electrical Ltd (AWE), Shrewsbury Homes for All (SHFA) and Severnside Community Association (SCA).

AWEC was acquired on 31st December 2012, and AWE was incorporated on 14th December 2012. The trading results for the period 1st January 2013 to 31st March 2014 for these two companies have been included in the group accounts. Trading results are for the period from the date of acquisition of AWEC, and from the date of incorporation of AWE. The results for the initial period to 31st March 2013 were disclosed in last year’s Severnside Housing financial statements but were not consolidated until this accounting period.

AWEC & AWE are private companies limited by shares, their share capital is wholly-owned

by Severnside. SHFA is a company limited by guarantee and a charity registered with the Charities Commission. SCA is an England and Wales Industrial and Provident Society registered with the Financial Conduct Authority. Severnside has control of both SHFA and SCA via step in rights and power to appoint and remove Board members if appropriate.

Due to 2014 being the first year that Group accounts are prepared, the comparative figures relate to those of the Association only.

The directors have prepared trading and cash flow forecasts for the group. These forecasts show that the group has sufficient financial resources to meet its obligations as they fall due from the date that these financial statements were approved.

Accordingly, after considering the forecast, appropriate sensitivities, current trading and available facilities, the directors have a reasonable expectation that the group has adequate resources to continue in operational existence for the foreseeable future and have concluded that the going concern basis of preparation is appropriate to enable the group to continue trading for at least one year from the date of signing these financial statements.

1b

Accounting policies

The following accounting policies have been applied consistently in dealing with items which are considered material in relation to the group’s financial statements.

Turnover Turnover represents rental and service charge income and amounts invoiced in respect of the provision of other services.

36

Supporting People Supporting People income is recognised in the accounts and matched to expenditure as services are provided.

Goodwill Positive goodwill arising from the purchase of AWEC, and negative goodwill arising from the acquisition of SHFA represents the difference between the consideration paid and the fair value of the net assets acquired. All goodwill is being amortised in the income and expenditure account on a straight line basis with effect from 1st April 2013. The AWEC positive goodwill is being amortised over 3 years based on forecasted business plan profits of this company. The SHFA negative goodwill is amortised immediately in full on the basis that the acquisition represents a non-reciprocal transfer of the control of this entity.

Housing properties Housing properties are stated at cost less Social Housing Grant and any applicable depreciation. Completed housing properties have been split between their land and structure costs and a specific set of major components that require periodic replacement.

Shared ownership properties are, upon recognition, split between current assets and noncurrent assets on the basis of the 1st tranche value.

Refurbishment or replacement of such a component is capitalised and then depreciated over the estimated useful life of the component at the following rates: Properties (Structure) Kitchens Bathrooms Central Heating Doors Windows Electrical Rewire Solar Panels Lifts Roofs

50-120 years 20 years 30 years 15 years 30 years 30 years 30 years 30 years 30 years 70 years

Cost includes the cost of acquiring land and buildings, development costs and interest charges during the development period.

Direct costs relating to development activities are capitalised and all other works to existing properties are charged to income and expenditure.

Investment Investments are stated at cost less any provision for impairment.

37

Impairment Fixed Assets that are considered to be permanently impaired are written down to their recoverable amounts.

Social Housing Grant (SHG) Grants for capital expenditure are deducted from the cost of the fixed assets to which they relate as they become receivable. SHG may be recycled or repaid under certain circumstances, primarily following sale of a property but will normally be restricted to net proceeds of sale. Grants for revenue expenditure are credited to the income and expenditure account as they become receivable.

Taxation The charge for taxation is based on the surplus/deficit for the year and takes into account taxation deferred because of timing differences between the treatment of certain items for taxation and accounting purposes.

Deferred tax is 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.

Value Added Tax Severnside Housing is VAT registered but a large proportion of its income, rents, is exempt for VAT purposes and therefore gives rise to a partial exemption calculation. Expenditure is shown inclusive of VAT as VAT recovered is a minimal amount. Input tax recovered is deducted from operating costs.

Depreciation Depreciation is calculated to write off the cost of tangible fixed assets on a straight line basis over their estimated useful lives. The following depreciation rates have been used:

Properties Fixtures and fittings Fixtures and fittings (solar panels only) Plant & Equipment Computer equipment and software Motor vehicles

50 -120 years 33% per annum 30 years 33% per annum 33% per annum 33% per annum

Stocks Stocks are stated at the lower of cost and net realisable value.

38

Operating leases Rentals payable under operating leases are charged on a straight line basis over the term of the lease.

Interest and finance costs Interest and finance costs on borrowings, after deduction of interest on SHG received in advance, are capitalised to the extent that they are deemed to be financing the development programme. All other interest is charged to the income and expenditure account in the year in which it is incurred.

Pension costs Severnside participates in the Local Government Pension Scheme (LGPS). The scheme is a defined benefit pension scheme based on final pensionable salary. The assets of the scheme are held separately from those of the association in an independently administered fund.

Pension scheme assets are measured using market values. Pension scheme liabilities are measured using a projected unit method and discounted at the current rate of return on a high quality corporate bond of equivalent term and currency to the liability.

The pension scheme surplus (to the extent that it is recoverable) or deficit is recognised in full. The movement in the scheme surplus/deficit is split between operating charges, finance items and, in the statement of recognised gains and losses, actuarial gains and losses.

The pension reserve represents the impact of actuarial gains and/or losses, less tax, which have been accounted for in the statement of total recognised gains and losses.

There is an element of estimation uncertainty relating to the valuation of the scheme and Severnside places reliance on the work of actuaries for this disclosure.

Under the requirements of FRS17, the association discloses further information on assets and liabilities on a market value basis at the end of the accounting period.

Cash flow Under the requirements of FRS1 Severnside has prepared a cash flow statement on the basis of continuing operations.

Lessor accounting Payments received from the lessee are treated as rental revenue on the income and expenditure account and the association is accounting for the leased asset as a fixed asset on the balance sheet.

Transactions between Group Entities The Association is exempt from the requirement of Financial Reporting Standard 8 ‘Related Party Disclosures’ to disclose transactions between Group undertakings as all companies are controlled and managed by Governing Bodies and an Executive Board of Management of the Parent Company.

39

2

Turnover and operating costs – 2014 Group

Turnover

Operating costs

Operating surplus

£000’s

£000’s

£000’s

General Needs Housing Garages Supported Housing Shared Ownership

17,794 337 5,488 22

(13,277) (5) (2,487) (22)

4,517 332 3,001 -

Social housing lettings

23,641

(15,791)

7,850

1,097 29 228

(875) (24) (202)

222 5 26

1,354

(1,101)

253

24,995

(16,892)

8,103

50 205 519 89 37

(144) (1,679) (143) -

50 61 (1,160) (54) 37

900

(1,966)

(1,066)

25,895

(18,858)

7,037

Income and expenditure from lettings

Other Social Housing activities Supporting People Leaseholders Sale of first Tranche - LCHO

Total Social Housing Lettings Non Social Housing Lettings Shops Market Rent Commercial Sales Charitable Activity Donations Received Total Non Social Housing Lettings Total Turnover & Operating Costs

40

2

Turnover and operating costs – 2014 Association

Turnover

Operating costs

Operating surplus

£000’s

£000’s

£000’s

General Needs Housing Garages Supported Housing Shared Ownership

17,794 337 5,488 22

(14,935) (5) (2,487) (21)

2,859 332 3,001 1

Social housing lettings

23,641

(17,448)

6,193

1,097 29 228

(875) (24) (202)

222 5 26

1,354

(1,101)

253

24,995

(18,549)

6,446

50 205

(144)

50 61

255

(144)

111

25,250

(18,693)

6,557

Income and expenditure from lettings

Other Social Housing activities Supporting People Leaseholders Sale of first Tranche - LCHO

Total Social Housing Lettings Non Social Housing Lettings Shops Market Rent Total Non Social Housing Lettings Total Turnover & Operating Costs

41

2

Turnover and operating costs - 2013 Association Turnover

Operating costs

Operating surplus

£000’s

£000’s

£000’s

General Needs Housing Garages Supported Housing Shared Ownership

16,732 337 5,133 65

(13,697) (1) (2,728) (16)

3,035 336 2,405 49

Social housing lettings

22,267

(16,442)

5,825

1,109 28 286

(817) (23) (253)

292 5 33

1,423

(1,093)

330

23,690

(17,535)

6,155

44

(3)

41

44

(3)

23,734

(17,538)

Income and expenditure from lettings

Other Social Housing activities Supporting People Leaseholders Sale of first Tranche - LCHO

Total Social Housing Lettings Non Social Housing Lettings Shops Total Non Social Housing Lettings Total Turnover & Operating Costs

41

6,196

42

2(a).

Operating surplus/(deficit) on social housing lettings - 2014 Group & Association General Needs Housing

Garages

Supported Housing

Shared Ownership

Total 2014

£000’s

£000’s

£000’s

£000’s

£000’s

17,582

337

5,296

22

23,237

Income from lettings Rents receivable net of identifiable service charges Service Charge Income

130

-

140

-

270

17,712

337

5,436

22

23,507

Other Income

82

-

52

-

134

Turnover, net

17,794

337

5,488

22

23,641

Management

(7,048)

-

(177)

(3)

(7,228)

Routine Maintenance Planned Maintenance Bad Debts Depreciation - Properties

(3,045) (2,443) (60) (2,339)

(5) -

(632) (1,021) (5) (652)

(18)

(3,677) (3,464) (70) (3,009)

(14,935)

(5)

(2,487)

(21)

(17,448)

2,859

332

3,001

1

6,193

225

29

108

-

362

Net rental income

Operating costs Operating surplus/ (deficit)

Voids

Social Housing Operating Surplus for 2012/13 includes £45k relating to Market rented Properties

43

2(a).

Operating surplus/ (deficit) on social housing lettings – 2013 Association General Needs Housing

Garages

Supported Housing

Shared Ownership

Total 2013

£000’s

£000’s

£000’s

£000’s

£000’s

16,473

337

4,987

65

21,862

Income from lettings Rents receivable net of identifiable service charges Service Charge Income

137

-

146

-

283

16,610

337

5,133

65

22,145

Other Income

122

-

-

-

122

Turnover, net

16,732

337

5,133

65

22,267

Management

(6,687)

-

(169)

-

(6,856)

Routine Maintenance Planned Maintenance Bad Debts Depreciation - Properties

(2,614) (2,049) (60) (2,287)

(1) -

(616) (1,355) 5 (593)

(1) (15)

(3,230) (3,404) (57) (2,895)

(13,697)

(1)

(2,728)

(16)

(16,442)

3,035

336

2,405

49

5,825

263

25

122

-

410

Net rental income

Operating costs Operating surplus/ (deficit)

Voids

44

3.

Surplus on sale of Housing Properties Group & Association (2014), Association (2013) Costs

Transfer to Grant

Surplus 2014

Surplus 2013

£000s

£000s

£000s

£000s

£000s

RTB Properties

1,005

(329)

(531)

145

85

RTA Properties

-

-

-

-

86

Other Properties

6

(1)

-

5

1

95

(2)

-

93

33

1,106

(332)

(531)

243

205

Shared Ownership Total

4

Proceeds

Interest payable and similar charges Group & Association (2014), Association (2013) 2014 £000’s 5,089 116 5,205

2013 £000’s 5,006 156 5,162

2014 £000’s

2013 £000’s

Expected return on pension scheme assets

1,025

1,031

Interest on pension scheme liabilities

(1,489) (464)

(1,452) (421)

Bank loans, and other loans repayable Other Financing Costs & Interest

5

6

Other finance (costs)/income Group & Association (2014), Association (2013)

Surplus on ordinary activities before taxation Group

Surplus on ordinary activities for the year is stated after charging:  Depreciation on properties  Depreciation on other tangible fixed assets  Auditor’s remuneration: External Audit – Audit Services (*) External Audit – Other (*) Internal Audit – Audit Services  Operating lease charges

2014 £000’s

2013 £000’s

3,080 289

2,896 314

27 68 28 200

20 53 27 201 45

Note 6 (continued) Association

Surplus on ordinary activities for the year is stated after charging:  Depreciation on properties  Depreciation on other tangible fixed assets  Auditor’s remuneration: External Audit – Audit Services (*) External Audit – Other (*) Internal Audit – Audit Services  Operating lease charges

2014 £000’s

2013 £000’s

3,080 276

2,896 314

27 68 28 200

20 53 27 201

* Under SORP requirements the services provided by the external auditors have been stated excluding VAT. The parent company has borne the overall audit fee on behalf of all subsidiaries.

46

Notes (continued) 7

Taxation Group & Association (2014), Association (2013) (a) Analysis of charge for the year

Current tax on income for the year Tax (credit)/ charge on deficit on ordinary activities

2014 £000’s

2013 £000’s

-

-

(b) Factors affecting tax charge for period The tax assessed for the period is lower than the standard rate of corporation tax in the UK (23%). The differences are explained below.

2014 £000’s

2013 £000’s

Surplus on ordinary activities before tax

1,631

829

Current tax at 23% (2013: 24%) Expenses not deductible for tax purposes Income not deductible for tax purposes Capital allowances for period less than depreciation Amounts (charged)/credited directly to STRGL or otherwise transferred Chargeable Gains/(losses) Shared ownership sales income adjustment Depreciation on Ineligibles Other short term timing differences Other permanent differences Defined Benefit Scheme timing differences Surplus attributable to charitable activities Utilisation of Tax Losses Corporation tax charge for the period

375 96 (105) 1,083

199 97 (20) (85) (537) 30 688 (118) 577

(52) 666 46 27 (978) (4) (1,154) -

(831) -

47

Notes (continued) 7

Taxation Association (a) Analysis of charge for the year

Current tax on income for the year Tax (credit)/ charge on deficit on ordinary activities

2014 £000’s

2013 £000’s

-

-

(b) Factors affecting tax charge for period The tax assessed for the period is lower than the standard rate of corporation tax in the UK (23%). The differences are explained below.

2014 £000’s

2013 £000’s

Surplus on ordinary activities before tax

1,143

829

Current tax at 23% (2013: 24%) Expenses not deductible for tax purposes Income not deductible for tax purposes Capital allowances for period less than depreciation Amounts (charged)/credited directly to STRGL or otherwise transferred Chargeable Gains/(losses) Shared ownership sales income adjustment Depreciation on Ineligibles Other short term timing differences Other permanent differences Defined Benefit Scheme timing differences Group loss relief Utilisation of Tax Losses Corporation tax charge for the period

263 94 (104) 1,083

199 97 (20) (85) (537) 30 688 (118) 577

(52) 666 47 27 (978) 48 (1,094) -

(831) -

(c) Factors that may affect future tax charges Severnside has tax losses available to carry forward of approximately £11.7m (2013: £16.4m) which have not been recognised as deferred tax assets as the association does not expect to utilise them in the foreseeable future.

Severnside has a deferred tax asset of £1.5m (2013: £2.8m) in respect of the pension deficit for the period which has not been recognised as the association does not expect to realise sufficient taxable profits in the foreseeable future to utilise the asset. Further details are on Note 24.

Severnside also has a deferred tax asset of £79k (2013: £45k) in respect of other timing differences, which has not been recognised as they are not expected to be utilised in the foreseeable future. Further details are shown at Note 16.

48

Notes (continued) 8

Staff costs Group Staff costs including the directors:  Wages and salaries  Social security costs  Other pension costs

2014 £000’s

2013 £000’s

6,679 566 949 8,194 F.T.E. 2014

5,907 468 1,004 7,379 F.T.E 2013

135 20 67 20 242

133 21 74 228

2014 £000’s

2013 £000’s

6,148 511 917 7,576 F.T.E. 2014

5,907 468 1,004 7,379 F.T.E 2013

135 20 67 222

133 21 74 228

2014 £000’s

2013 £000’s

Number of persons (including the directors) employed during the year expressed as full time equivalents (37 hours per week):  Office staff – Severnside Housing non Property Services  Office staff – Property Services  Property Services staff  Other staff Total employees

Staff costs Association Staff costs including the directors:  Wages and salaries  Social security costs  Other pension costs

Number of persons (including the directors) employed during the year expressed as full time equivalents (37 hours per week):  Office staff – Severnside Housing non Property Services  Office staff – Property Services  Property Services staff Total employees Directors The directors are defined as the Board of Directors and executive officers.

The remuneration of the Executive Officers was:

Emoluments (including Benefits in Kind)

487

476 49

Pension Contributions Total The remuneration of the Non - Executive Officers was:

  

Wages and salaries Social security costs Other pension costs

The emoluments paid to the highest paid director disclosed

79

79

566

555

2014 £000’s

2013 £000’s

46 -

31 -

46

31

2014 £000’s

2013 £000’s

148

144

above (excluding pension contributions)

The Chief Executive is an ordinary member of the LGPS pension scheme. Contributions are paid in line with other members of its scheme and no enhanced or special terms apply. The Chief Executive is the highest paid director, and receives no additional remuneration for her service as an executive director on the board of Severnside Housing.

Staff who received remuneration (including benefits in kind) in excess of £60k are summarised in the following bands £60,000 - £69,999

2014 3

2013 3

£70,000 - £79,999

3

3

£120,000 - £129,999

1

2

£130,000 - £139,999

1

1

£140,000 - £149,999

1

-

£160,000 - £169,999

-

1

£170,000 - £179,999

1

-

Total higher paid staff

10

10

50

9

Positive Goodwill Group & Association (2014), Association (2013)

Cost At 1st April Purchased in the year At 31st March Amortisation At 1st April Amortised during the year At 31st March Total 31 March 2014 9(b)

2014 £000’s

2013 £000’s

350 350

350 350

(117) (117) 233

350

Negative Goodwill On the acquisition of SHFA on 1st April 2013, Severnside acquired net assets totalling £261k for nil consideration. The negative goodwill arising has been amortised immediately in full through the income and expenditure account on the basis that the acquisition represents a non-reciprocal transfer of the control of this entity.

51

10

Tangible fixed assets – Housing properties Group & Association Assets Under Construction £000’s

Cost At 1 April 2013 Additions: Properties Components Unsold LCHO (1st tranche) (moved to current assets) Disposals/Write-offs Components Disposals Completed in year At 31 March 2014 Depreciation At 1 April 2013 Charge for period Components Depreciation Depreciation on Disposal - Properties Depreciation on Disposal - Components At 31 March 2014 Housing Properties, Depreciated Cost

Properties held for letting £000’s

Total housing properties £000’s

1,503

135,287

136,790

2,910 (121)

3,998 2,871 -

6,908 2,871 (121)

(447) 3,845

(206) (598) 447 141,799

(206) (598) 145,644

-

(17,811) (506) (2,574) 24 386 (20,481)

(17,811) (506) (2,574) 24 386 (20,481)

3,845

121,318

125,163

Social Housing and Other Grants At 1 April 2013 Social Housing Grants receivable during the year

(728)

(10,242) (256)

(10,242) (984)

Completed in year At 31 March 2014

(728)

(10,498)

(11,226)

NBV at 31 March 2014

3,117

110,820

113,937

NBV at 31 March 2013

1,503

107,234

108,737

Properties held for rent include 55 Market Rent Properties and 28 New Built Shared Ownership Properties. Garages and the remaining 26 Shared Ownership Properties were transferred at nil cost.

Assets under construction comprise survey or development fees for capital works.

52

Notes (continued)

Housing properties units comprise:

General Needs Housing Affordable Rent Market Rent Housing For Older People Supported Housing Other Shared ownership

2014

2013

3,929 60 55 1,318 10 1 54 5,427

3,929 45 37 1,325 10 9 55 5,410

No interest has been capitalised for 2013/14 (2012/13 £nil) 11

Tangible fixed assets – other Group Land & Fixtures Buildings & fittings £000’s £000’s

Cost At 1 April 2013 Additions Acquisitions Disposals

1,021 2,836

Plant and Equipment £000’s

Motor Vehicles £000’s

IT

Total

£000’s

£000’s

-

678 130 1 -

46 2 (3)

37 60 42 (49)

2,300 210 3 (249)

4,082 3,236 48 (301)

At 31 March 2014

3,857

809

45

90

2,264

7,065

Depreciation At 1 April 2013 Current charge Disposals

(190) (32) -

(604) (12) -

(29) (11) 2

(37) (12) 42

(1,914) (222) 248

(2,774) (289) 292

At 31 March 2014

(222)

(616)

(38)

(7)

(1,888)

(2,771)

NBV 31 Mar 2014

3,635

193

7

83

376

4,294

NBV 31 Mar 2013

831

74

17

-

386

1,308

The value of non-depreciable land included within assets not for rent is £289k (2013: £74k).

This is held on a long-lease.

53

Tangible fixed assets – other Association Land & Fixtures Buildings & fittings £000’s £000’s

Plant and Equipment £000’s

Motor Vehicles £000’s

IT

Total

£000’s

£000’s

Cost At 1 April 2013 Additions Disposals

1,021 2,834 -

678 130 -

46 -

37 41 (36)

2,300 210 (244)

4,082 3,215 (280)

At 31 March 2014

3,855

808

46

42

2,266

7,017

Depreciation At 1 April 2013 Current charge Disposals

(190) (33) -

(604) (12) -

(29) (10) -

(37) 36

(1,914) (221) 244

(2,774) (276) 280

At 31 March 2014

(223)

(616)

(39)

(1)

(1,891)

(2,770)

NBV 31 Mar 2014

3,632

192

7

41

375

4,247

NBV 31 Mar 2013

831

74

17

-

386

1,308

The value of non-depreciable land included within assets not for rent is £289k (2013: £74k). This is held on a long-lease.

Included within land & buildings cost of additions is £1,417k (2013: nil) which is leased to a third party. The rental income which has been recognised in the financial statements is £53,266 (2013: nil).

12

Stocks Group 2014 £000’s Materials stocks Work in progress - Shared Ownership unsold – Completed properties - Shared Ownership Unsold – Work in progress

2013 £000’s

124

60

193 121 438

354 35 449

2014 £000’s

2013 £000’s

Association

Materials stocks Work in progress - Shared Ownership unsold – Completed properties - Shared Ownership Unsold – Work in progress

69

60

193 121 383

354 35 449 54

13

Debtors Group

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

Other debtors Less: provision for bad debts Prepayments

2014 £000’s 561 (369) 192 818 (89) 390 1,311

2013 £000’s 672 (337) 335 328 (85) 366 944

Association

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

Other debtors Less: provision for bad debts Prepayments

14

2014 £000’s 561 (369) 192 787 (89) 390 1,280

2013 £000’s 672 (337) 335 328 (85) 366 944

Creditors: amounts falling due within one year Group 2014 £000’s Trade Creditors Hire Purchase Other taxation and social security costs Other creditors Accruals Deferred income

1,595 6 163 63 1,555 1,677 5,059

2013 £000’s 1,893 150 54 1,365 1,205 4,667

Association 2014 £000’s Bank Overdraft Trade Creditors Other taxation and social security costs Other creditors

141 1,610 152 11

2013 £000’s 1,893 150 54 55

Accruals Deferred income

1,529 1,677 5,120

1,365 1,205 4,667

Provisions Provision for the phased closure of Heaths Houses 2014 £000’s Carrying amount at the beginning of the period Amounts Used Closing Balance 15

-

2013 £000’s 193 (193) -

Creditors: amounts falling due after one year Group

Housing Loan to be repaid Recycled Capital Grant and DPF Hire Purchase Total

2014 £000’s

2013 £000’s

105,853 1 105,854

99,853 32 99,885

2014 £000’s 105,853

2013 £000’s 99,853

-

32

105,853

99,885

Association

Housing Loan to be repaid Recycled Capital Grant and DPF Total

The housing loan facilities comprise £29,353k (2013: £23,353k) variable and £76,500k (2013: £76,500k) fixed loans, and are secured by specific charges on the freehold & leasehold housing properties. Interest is payable at rates between 0.48% (2013: 0.72%) and 5.50% (2013: 5.50%).

The loans are forecast to be repaid from 2016/17. a.

Recycled Capital Grant (including amounts due in less than one year) Balance as at 1 April 2013 Grant Recycled Balance as at 31 March 2014

32 (32)

32

-

32

56

16

Deferred taxation Group & Association The deferred tax liabilities/(assets) provided and unprovided in the accounts are as follows:

Accelerated capital allowances FRS17 Pension Deficit Other timing differences Tax losses carried forward

Provided 2014 £000’s -

Provided 2013 £000’s -

Unprovided 2014 £000’s (119)

-

-

1,457 79 2,514 3,931

Unprovided 2013 £000’s (19) 2,769 45 3,933 6,728

FRS 19 ‘Deferred tax’ has been adopted in these financial statements. Deferred tax assets have not been provided for in respect of tax losses and other timing differences as set out at Note 7.

In addition, no provision has been made in deferred tax (2013: £0k) for tax relating to capital disposals in the current and prior period where the gain is to be rolled over into replacement assets. It is not envisaged that any tax will become payable in respect of these gains in the foreseeable future.

17

Reconciliation of movement on reserves Group Revenue Reserve £000’s At 1 April 2013 Surplus for year FRS 17 Transfer Gains & losses, net At 31 March 2014

Pension Reserve £000’s

Total £000’s

7,778 1,631 438 9,847

(11,537) (438) 4,690 (7,285)

(3,759) 1,631 4,690 2,562

Revenue Reserve £000’s

Pension Reserve £000’s

Total £000’s

7,778 1,143 438 (2) 9,357

(11,537) (438) 4,690 (7,285)

Association

At 1 April 2013 Surplus for year FRS 17 Transfer Gains & losses, net At 31 March 2014

(3,759) 1,143 4,688 2,072

57

18

Reconciliation of operating profit to net cash inflow/ (outflow) from operating activities Group 2014 £000’s

2013 £000’s

7,037 3,226 (26) 194 (4) (321) 98 10,204

6,196 3,210 (256) 253 (3) 316 186 9,902

2014 £000’s

2013 £000’s

20 (5,205) (5,185)

11 (5,162) (5,151)

2014 £000’s (9,709) 568 984 (3,237) (11,394)

2013 £000’s (8,905) 779 1 258 (90) (350) (200) (8,507)

Financing

2014 £000’s

2013 £000’s

Increase in debt due after one year

6,000

2,250

Acquisitions

2014 £000’s

2013 £000’s

Operating Surplus Depreciation charges FRS 17 Charge Shared Ownership Costs Increase in stocks Increase in debtors Increase in creditors Net cash inflow from operating activities

19

Analysis of the management of liquid resources

Returns on investment and servicing of finance Interest received Interest paid

Capital expenditure and financial investment Purchase of housing properties Sales of housing properties Sale of Other Assets Capital grants, net Purchase of other fixed assets Purchase of Subsidiaries Investment in Subsidiaries

Subsidiary bank balances acquired

620

-

58

20

Analysis of the changes in net debt Group

Cash in hand, at bank (including investments) Cash on Short Term Deposit Debt due after one year Total

21

At 1 April 2013 £000’s

Cashflows £000’s

Acquisitions £000’s

242

(365)

418

295

100

(48)

200

252

(99,853)

(6,000)

-

(105,853)

(99,511)

(6,413)

618

(105,306)

Reconciliation of the movement in net debt Group

Net debt 1 April 2013 Increase/ (Decrease) in cash Increase in debt Change in net debt due to cash flow Net debt 31 March 2014

22

2014 £000’s

2013 £000’s

(99,511) 205

(95,755) (1,506)

(6,000) (5,795)

(2,250) (3,756)

(105,306)

(99,511)

2014 £000’s (10,242) (984)

2013 £000’s (9,984) (258)

(11,226)

(10,242)

2014 £000’s 99,853 6,000 105,853

2013 £000’s 97,603 2,250 99,853

Statement of grant movement Group

Balance at 1 April 2013 Received Recycled Balance at 31 March 2014

23

31 March 2014 £000’s

Analysis of changes in financing Group

Balance at 1 April 2013 Net cash inflow Balance at 31 March 2014

59

24

Pension Group & Association (2014), Association (2013) In accordance with Financial Reporting Standard No. 17 – Retirement Benefits (FRS 17), Severnside is required to disclose certain information regarding assets, liabilities, income and expenditure relating to pension schemes for its employees.

Severnside Housing participates in the Local Government Pension Scheme. The Local Government Pension Scheme is a defined benefit scheme based on final pensionable salary.

The most recent valuation of the Shropshire County Pension Fund (the fund) was carried out as at 31 March 2013 and has been updated by independent actuaries to take account of FRS17 requirements in order to assess the liabilities of the Fund as at 31 March 2014.

Liabilities are valued on an actuarial basis using the projected unit method which assesses future liabilities discounted to their present value.

The prior year figures presented in relation to the fund are revised figures according to IAS19 disclosure requirements.

Present Value of Funded defined benefit obligations

2014

2013

£000’s

£000’s

(33,476)

(35,766)

Fair Value of plan assets

26,191

24,229

Net liability in balance sheet

(7,285)

(11,537)

2014

2013

£000’s

£000’s

Movements in present value of defined benefit obligation

At 1st April Current Service cost Interest Cost Actuarial (losses)/gains Contributions by members Benefits Paid At 31st March

(35,766)

(29,878)

(959)

(795)

(1,489)

(1,453)

4,084

(4,081)

(274)

(287)

928

728

(33,476)

(35,766)

60

Movements in fair value of plan assets

At 1st April

2014

2013

£000’s

£000’s

24,229

20,744

1,025

1,031

Remeasurements

627

1,884

Administration expenses

(21)

(21)

Contributions by employer

985

1,032

Contributions by members

274

287

Benefits paid

(928)

(728)

At 31st March

26,191

24,229

2014

2013

£000’s

£000’s

959

795

21

21

464

422

1,444

1,238

Interest on plan assets

Expense recognised in the Income and Expenditure statement

Current service cost Administration expenses Net interest cost Total

61

The expense is recognised in the following line items in the Income and Expenditure Statement: 2014

2013

£000’s

£000’s

Operating Costs

980

817

Other Financing Costs

464

421

1,444

1,238

The amount recognised in the statement of total recognised surpluses and deficits in respect of remeasurements is (£4,252k) (2013: £2,238k).

The fair value of the plan assets and the return on those assets were as follows:-

Equities

2014

2013

£000’s

£000’s

14,306

13,895

Corporate Bonds

6,283

5,619

Property

1,040

700

641

972

3,921

3,043

26,191

24,229

Cash Alternatives Total The estimated Macaulay duration of liabilities is 20 years (2013: 16 years).

Principal financial assumptions (derived using a mature duration profile) at the year-end were as follows: 2014

2013

Rate of CPI inflation

2.40%

2.40%

Rate of increase in salaries

3.90%

3.90%

Rate of increase in pensions

2.40%

2.40%

Discount rate

4.50%

4.20%

In valuing the liabilities of the pension fund at £33,476k, mortality assumptions have been made as indicated below.

The assumptions relating to longevity underlying the pension liabilities at the balance sheet date are based on standard actuarial mortality tables. The assumptions are equivalent to expecting a 65-year old to live for a number of years as follows:

Current pensioner aged 65: 23.8 years (male), 26.1 years (female).

62



Future retiree upon reaching 65: 26 years (male), 29 years (female)

The history of the plans for the current and prior periods is as follows: Balance sheet

Present Value of Scheme Liabilities Fair Value of Scheme Assets

2013/14

2012/13

2011/12

2010/11

2009/10

(33,476)

(35,766)

(29,878)

(26,956)

(26,714)

26,191

24,229

20,744

19,655

17,181

The association expects to contribute approximately £900k to its defined benefit plans in the next financial year.

Pension Bond Severnside has entered into a Pension Guarantee Bond Agreement with Shropshire County Pension Fund and Nationwide Building Society, whereby Shropshire County Pension Fund may, if Severnside Housing fails to make appropriate pension scheme payments, seek recovery from Nationwide Building Society. The pension bond, not to exceed £5.240m, (2013: £5.240m) is based on actuarial assessments of the scheme’s liability.

25 Investments and subsidiary undertakings Severnside is the parent entity of all of the following subsidiary undertakings. All have been consolidated into the group accounts.

Name Andy Walters Electrical Contractors Ltd

Country of Registration/Status England and Wales Private Limited Company

Andy Walters Electrical Ltd

England and Wales Private Limited Company

Severnside Community Association Ltd

England and Wales Industrial and Provident Society registered with the Financial Conduct Authority (formerly the FSA).

Shrewsbury Homes for All

Company limited by guarantee and a charity registered with the Charities Commission.

Basis of Control

Principal Activity

Ownership of 2 £1 shares being 100% of the issued share capital Ownership of 1 £1 shares being 100% of the issued share capital Step in rights and power to appoint and remove Board members

Electrical contractors to deliver maintenance services to Severnside.

Step in rights and power to appoint and remove Board members

Electrical contractors.

To provide support to communities in need, including the provision of grants to assist individuals and groups to improve their environment and educational or employment opportunities.

To relieve those in need of assistance, people who are homeless, in housing need or who need help to avoid homelessness.

63

26

Capital commitments 2014 £000’s Capital expenditure authorised but not yet contracted for Capital expenditure contracted for but not provided for in the financial statements

2013 £000’s

13,165

14,655

9,808

3,730

22,973

18,385

The above commitments will be funded primarily through borrowings (£18.2m), which are available for draw-down under proposed loan arrangements, £4.2m capital receipts from the sale of shared ownership and outright sale properties, with the balance (£0.6m) funded

by Social Housing Grant.

27

Other capital commitments At 31 March Severnside was committed to making the following payments under noncancellable operating leases.

2014 £000’s

2013 £000’s

Operating leases which expire: Within 1 year Within 1 to 2 years Within 2 to 5 years Over 5 years

28

1 4 10 15

3 3

Related party transactions There have been no transactions with any related parties which are not included within the group financial statements.

29

Acquisitions On 1 April 2013 Severnside took over control of Shrewsbury Homes for All, acquiring net assets totalling £260,968 for nil consideration. The negative goodwill arising from this transaction has been amortised in full to the income and expenditure account during the year.

64

If you would like any more information about Severnside Housing, please contact us: Write to us Severnside Housing, Brassey Road, Old Potts Way, Shrewsbury, Shropshire SY3 7FA Ring us 01743 285000 or 0300 300 0059 Email us enquiries@severnsidehousing.co.uk Visit our website www.severnsidehousing.co.uk Find us on Facebook www.facebook.com/severnsidehousing

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Severnside Community Association LH4325. A company limited by guarantee. Company No. 04025816.

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