Monmouthshire Housing Association's Annual Accounts 2015/16 by Monmouthshire Housing Association

Monmouthshire Housing Association Limited

Annual Report & Financial Statements

2015/16

Annual Accounts 2015-16

Contents 4 8 14 42 46 50

Members, Executives & Advisors Strategic Report Board Report Statement of Board Membersâ&#x20AC;&#x2122; Responsibilities Statement of Internal Control

Independent Auditor Report to the Members of Monmouthshire Housing Association Limited

Group & Association Statement of Total Comprehensive Income

58 62 66 70

Group & Association Statement of Financial Position

Group & Association Statement of Changes in Reserves Statement of Cash Flows Notes to the Financial Statements

Monmouthshire Housing Association

Other Formats

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Annual Accounts 2015-16

Members, Executives & Advisors

Monmouthshire Housing Association

Annual Accounts 2015-16

The following people served on the Board during the year: Tenant Members

Ken Bucknall (Appointed September 2015)

Pip Williams

David Gregory Judith Langmead (Retired July 2015) (Retired July 2015)

Gary Witcombe

John Barrow (Appointed September 2015)

Council Members

Peter Clarke

Ann Webb

Sue White

Monmouthshire Housing Association

Alan Wintle

Independent Members

Andrew Martyn- Barry Gallagher Johns (Chair)

Lynnette Glover

Andy Jones

Executive Officers

John Keegan Chief Executive

Ian Atkinson Steve Higginson (Resigned May Director of Resources & 2015) Director of Deputy Chief Property Services Executive

David Morris Director of Housing & Communities

Karen Tarbox Director of Property Services (Appointed August 2015)

Registered Office Nant Y Pia House, Mamhilad Technology Park, Mamhilad, Monmouthshire, NP4 0JJ

Independent Auditor Mazars LLP, 45 Church Street, Birmingham, B3 2RT

Principal Solicitors Trowers and Hamlin, 3 Bunhill Row, London, EC1Y 8YZ

Principal Bankers Barclays Bank Plc, 57 Frogmore Street, Abergavenny, NP7 5AT Annual Accounts 2015-16

Strategic Report

Monmouthshire Housing Association

Annual Accounts 2015-16

Strategic Report The Monmouthshire Housing Vision & Objectives Association Group consists of the The significant development of the MHA parent, Monmouthshire Housing business and its progress towards completion of its objectives are outlined in support of its Association Limited, which is vision for 2016/20 which is: an RSL regulated by the Welsh By 2020 MHA will be the top performing Government, and registered social enterprise in Wales providing quality as a charitable social landlord homes and services, transforming people’s lives and giving them the confidence and under the Co-operative and support to realise their ambitions. We will Community Benefit Societies create an environment where people can Act 2014, and Capsel Limited have a brilliant quality of life, in areas where they aspire to live and work. which is a non-charitable To achieve the vision we have agreed the subsidiary incorporated under following objectives that can be summarised the Companies Act. by the acronym LEEP which stands for Landlord, Economic, Environmental and People targets.

Landlord – as a housing association, we will seek to optimise every opportunity to develop the types of homes and communities where people want to live. We will directly support 500 tenants a year, where necessary, in order to improve their quality of life. By 2020, we will build 540 houses using our own resources. We aim to be in the upper quartile across all performance indicators. Economic – by 2020, we aim to increase our turnover from diversified activities by £4m and increase the workforce to 270 employees. We will also endeavour to achieve efficiencies of 10% by the use of technology and ensuring that the principles of value for money are embedded throughout the Group. We seek to maintain our financial strength and achieve the maximum score from the regulator.

Monmouthshire Housing Association

Environmental – we will seek to further reduce our CO2 footprint by 10% by 2020 (using 2014 as a starting point). We will target our vehicles and Purchase low energy equipment using local supply chains in order to further reduce fuel consumption by 10%. We will also Spend a further £1m improving the external environment on our estates increasing tenant satisfaction with their neighbourhoods. People – by 2020, we will create 200 work placements in order to help people into work, including 100 of our tenants. In addition, the Association will target training its own workforce and tenants by spending £1m on transforming lives and ambitions.

Welsh Government continue to provide an annual dowry of £2.6m which is vital to the funding of our planned repairs programme and the financial health of the organisation.

Performance in the Year The Association’s turnover in the year increased by 2.3% compared to March 2015 and its underlying profitability remains strong. Growth in properties and fixed assets continues. Our rents increased by 2.6% in accordance with the guidelines of Welsh Government and the bad debts are less than 0.5%.

Future Prospects Risk and uncertainty

Finances & the Business Model

The Association’s register of key risks is reviewed annually by the Board and quarterly by the Audit Committee. In addition it The Association has an existing loan facility is included in all Board papers in order with Barclays Bank of £45m, of which £19.4m to provide a context for discussions. At has been drawn (43% of the facility). This present, the main items of risk have been has helped to fund the achievement of the identified as welfare reform, the availability Welsh Housing Quality Standard in 2012 and of land, the Supporting People contract, contribute to the funding of our development the redevelopment of older persons’ programme. The Association will continue accommodation and future possible changes to invest heavily in its planned improvement to government rent guidelines and policy. programme and a budget of £6m has The Association has been planning for the been earmarked for the financial year to arrival of welfare reform for a number of years March 2017. The current business plan was and developed a number of projects and approved by Barclays in the summer of 2016 and encompasses a substantial development working groups to understand and minimise the impact on the organisation. To date, the programme. financial effect has been limited due to slower Our gearing remains strong at 49% which is than anticipated roll out but there are now well below the Welsh housing association a number of Universal Credit claims in the average of 63% (as at March 2015). county. Staff have been working closely with other agencies to help the flow of information The Association has recently acquired an and benefit entitlement. upgraded version of its financial forecasting model. This enables the organisation to stress test the finances by changing single or multiple variables. This has been demonstrated to the Board and a number of scenarios discussed and modelled.

One of the objectives set out in the Welfare Reform Project Plan was to undertake a Housing Benefit direct payment pilot. As a result, MHA implemented a 12 month direct payment pilot commencing in January 2015. This was in readiness for the implementation

Annual Accounts 2015-16

of Universal Credit in September 2015 and has helped to prepare MHA and our tenants for its introduction. In total 132 tenants (new and existing) received their Housing Benefit directly as part of the pilot.

Analysis of Figures and Indicators

Governance The Association complies with Community Housing Cymru’s Code of Governance which is used by the Welsh Government’s Regulatory Team as a tool to monitor associations’ governance. Feedback from the regulator was very positive and highlighted that there were no areas of concern. However, a request for continuous monitoring was made with assurances given by the Association that a process has been adopted to ensure that this happens.

In the main body of the Annual Report is a table of the key performance indicators which are discussed by the Board. These show strong performance in the management of rent arrears at 0.84% of rent receivable (target: 1.8%) The regulatory feedback identified that: and rent collection 99% of rent (target: 98.7%). • Information was readily available to customers There is some improvement required in the area of void properties where the Association • There was a positive relationship and lost 1.6% of rent receivable (target: 1.2%) challenge from the Board and took on average 34 days to repair a void • No equality issues property rather than the 20 days which was the • Tenant engagement is robust but not target. The Association has created a directorcompletely representative led working party to understand the issues • MHA is reviewing its Code of Governance causing these targets to be missed. Part of the • There were no concerns around risk increase in turnaround time was due to the management introduction of a ‘gold standard’ process which • The current development programme and meant the void received a greater level and stock management did not cause concerns standard of work than previously was the case. • There was low satisfaction amongst In terms of finance, the Association continues leaseholders, but recognised that the to perform well with an increase in reserves Association was making efforts to engage from £14.7m to £15.8m even after an with these customers increased pension deficit. The gearing is well below the Welsh average and the organisation managed to develop new properties and fund its planned repairs programme during 2015/16 without additional borrowing. Cash balances increased by £204k from £1m to £1.2m.

An internal audit during the year on Governance and Internal Regulation produced the conclusion that the Board could take substantial assurance from existing governance arrangements.

Monmouthshire Housing Association

The Future The Association has a significant development programme scheduled for the next five years along with the further development of our trading subsidiary (Capsel Limited) to enable the undertaking of commercial works for the benefit of the Association. This will help MHA to combat the impact of the major welfare reforms being introduced. Board members continue to monitor the impact of welfare reforms on the Association and the actions we have taken thus far to mitigate the impact of the changes being brought in. In 2015 we carried out a pilot project with some of our tenants to evaluate the impact of the Universal Credit reforms that will be brought in over the next three years.

We continue to benchmark our services against other RSLs in Wales and England and will seek to identify efficiency opportunities from any sector to bring into MHAâ&#x20AC;&#x2122;s own work processes. We have produced a Corporate Plan covering the next five years. Within that are a number of tasks we have outlined to achieve our vision by 2020.

The Strategic report was approved by the Board on 21st September 2016. Signed by: Stephen Higginson Position:

Deputy Chief Executive

The Association continues to review its rents and service charges and will be consulting with tenants and other stakeholders in 2016/17. Capsel Limited continues to increase its turnover and its plans for the next two years will see its turnover and profitability further increase. The Association and its trading subsidiary will continue to strive for excellence and will seek to achieve accreditations which will support our commitment to providing good quality, efficient services. The redevelopment of two further sheltered schemes sites remains a top priority and resources have been set aside to deal with these in a structured manner. The demolition and redevelopment of Trevor Bowen Court in Monmouth began in 2013/14 and was completed in the 2015/16 financial year. This development has set the standard for subsequent redevelopments of the MHA schemes at Brookside in Caldicot and St Cadocs in Raglan. MHA will be starting work on these sites in 2016/17.

Annual Accounts 2015-16

Board Report

Monmouthshire Housing Association

Annual Accounts 2015-16

Board Report The financial year 2015/16 saw Maintenance the Monmouthshire Housing Planned Maintenance Association Group, made up Since the completion of our Welsh Housing Quality Standard programme in 2012/13, of Monmouthshire Housing the focus on planned maintenance work has Association Limited (MHA) and changed from internal work to improving the its trading subsidiary Capsel quality and appearance of the exteriors of our properties. Limited, continue to maintain During the year our Direct Services and improve its financial and external contractors carried strength. The year also saw MHA Organisation out external maintenance to over 500 homes achieve a number of significant which included: accreditations and positive • External decoration of 117 properties completed by our subsidiary company reviews of its business which are Capsel Limited. detailed in this report. • Decoration of internal communal areas for 164 flats and 7 communal lounges. • Upgrade work to paths, gates, hardstandings, fencing and boundary walls for around 300 properties. • Replacement roof covering to 140 homes. • Installation of photovoltaic panels on 44 properties.

Upgrading work to boundary walls, fences, gates and paths in Abergavenny

Monmouthshire Housing Association

Before - Internal decoration to reading room at Radstock Court

External decoration at St Andrews Crescent, Abergavenny

After â&#x20AC;&#x201C; Internal decoration and new furniture in the reading room at Radstock Court

Upgrading work to boundary walls, fences, gates and paths in Monmouth Our own Direct Services Organisation has continued to upgrade and refurbish the interiors of properties. This occurred mainly where tenants have previously opted out of the work but then either changed their mind or vacated the property. During the year over 85 properties in total were upgraded with work that included the refurbishment of 44 kitchens and 50 bathrooms. In addition, our own heating engineers replaced over 90 central heating boilers together with associated central heating upgrades.

External decoration at Green Court, Caldicot

During 2015/16 our Direct Services Organisation also built extensions on another five existing bedsit bungalows at Poplars Close, Mardy and The Avenue, Govilon converting them into one bedroom bungalows.

Annual Accounts 2015-16

We also carried out a garage/carport programme which included: • The demolition of 2 redundant garages to provide additional car parking. • The refurbishment of 56 existing garages and carports. • The demolition and renewal of 54 dilapidated garages.

Rear extensions to bedsit bungalows under construction

Garage refurbishment at Blethyn Close

Rear extensions to converted bedsit bungalows at Poplars Close

Replacement garages at Holmfield Drive

Monmouthshire Housing Association

During the year we invited tenants having internal work carried out on their homes to complete a “Your Views” tenant satisfaction survey form. Of the 84 forms handed out 31 were returned, representing an overall return rate of 37%. The average satisfaction rating was 99%, the target being 98%. The following are some of the comments received on the “Your Views” forms.

DSO Performance

“We were very satisfied with the whole project. The response to the enclosed questionnaire have been answered very honestly. We have been completely satisfied with the work carried out, contractors were polite and informative, and very professional. Their attention to Health and Safety issues were of a high standard. Thank you very much for care taken.”

Core services include the following:

Mrs M, Raglan “Always very pleased with all contacts and employees of MHA. Always friendly and helpful service.” Mr & Mrs B, Raglan “All MHA staff were very polite and got on with the job. All work done to very high standard.” Mr L, Wyesham

The Direct Services Organisation (DSO) provides the in-house repairs and maintenance service to the tenants of MHA. We also compete for external contracts with current clients including Bristol Charities, Monmouthshire County Council, Torfaen County Borough Council and Abbeyfields Society Wales. Responsive repairs including heating: 14,200 repairs completed, average repair cost £148.85, over 94% of repairs completed first time. Voids: Gold Standard introduced in trial areas to improve re-lets - full decoration, gardens tidied, carpets in flats and no outstanding repairs. The average void cost has increased as a result to £3,910. 267 voids completed in the year, a reduction of 10% on the previous year. Heating Services: responsive repairs, annual servicing, boiler replacements and heating system installations. Gas, solid fuel, oil, electric and air-source heat pump installations. Commercial communal heating systems serviced in three schemes. 91 new boilers installed. An average of over 99.5% of properties with a gas-fired boiler serviced within target. Disabled Adaptations: DSO installation of level access showers, stairlifts, ramps and improved access. Safety at Home installations of grab rails and other minor adaptations. Budget of £250,000 fully committed in the financial year. 64 adaptation projects completed for MHA tenants. Electrical Services: responsive repairs, electrical upgrades, periodic testing, PAT testing. Programme of carbon monoxide detector installations. Solar PV installation programme and maintenance. Fire alarm installation. Sheltered scheme lighting upgrades to low energy LED systems.

Annual Accounts 2015-16

Planned Maintenance: programme of kitchen and bathroom refurbishments on both void and tenanted properties. 46 properties re-roofed with new tiles, felt and battens. Five bedsit bungalows converted to provide one-bedroom accommodation. Refurbishment of purchased properties for intermediate and market rent. Existing garages demolished and construction of replacement garages. New Build: The DSO (through Capsel Limited) submitted a tender against private contractors for the construction of two semidetached houses on land at Mynydd Bach, Shirenewton. The completed project will provide new homes for local tenants. The project management, cost control, health and safety and quality control is being carried out by the DSO staff. The Facilities & Compliance Team are providing audit services. DSO trades staff have undertaken the majority of the building works including first and second fix carpentry, electrical installations, heating and plumbing installations, plastering, decorating, roofing, external walls and kitchen installations. The DSO has managed subcontractors for the groundworks, floor slab, external services, timber frame erection, roads and paths and landscaping. It was completed in May 2016. External contracts for other clients: • Bristol Charities – responsive repairs and cyclical maintenance • Monmouthshire County Council – disabled adaptations for private owners • Torfaen County Borough Council – disabled adaptations for private owners • Abbeyfields Society Wales – responsive repairs and disabled adaptations

Development During 2015/16 Monmouthshire Housing Association completed five developments, delivering a total of 49 affordable housing units for social rent and 12 homes at Bowen Gardens for open market sales, to crosssubsidise the building of Trevor Bowen House. These affordable housing schemes included: • Trevor Bowen House, Monmouth: 14 x 1-bedroom flats and 6 x 2-bedroom flats. • Majors Barn, Abergavenny: 4 x 1-bedroom flats and 2 x 2-bedroom flats. • Thornwell Road, Caldicot: 6 x 1-bedroom flats, 7 x 2-bedroom flats and 3 x 3-bedroom flats. • Sandy Lane, Caldicot: 1 x 2-bedroom adapted bungalow. • St Davids, Abergavenny: 4 x 1-bedroom flats and 2 x 2-bedroom flats. Feasibility planning, pre-contract and construction work for another seven schemes, totalling an additional 58 new homes commenced during 2015/16, with target completion dates for 2016/17. Exploratory and feasibility work for other sites has also been carried out in 2015/16 and some of these will come forward for development in 2016/17, subject to land purchases and planning permission. Contract values on development work for 2015/16 totalled £6,071,325 (final accounts). The Association has set itself a challenging target of building over 500 new homes by 2020. Based on the experience gained within the Association and its successes to date, MHA has expanded its Development Team and has identified a number of development opportunities that will help the Association realise this objective. Opposite are some ‘before’ and ‘after’ photographs of a few of the schemes mentioned above.

Monmouthshire Housing Association

Thornwell Road, Chepstow

St Davids Road, Abergavenny

BEFORE AFTER

Trevor Bowen House, Monmouth MHA has also worked closely with Monmouthshire County Council to build accommodation designed to meet the specific needs of the incoming tenant. The 2-bedroom bungalow at Sandy Lane is one example. Pre-contract work on a further two bungalows commenced in 2015/16 with target completion dates in 2016.

BEFORE AFTER

Sandy Lane, Caldicot

Annual Accounts 2015-16

Housing & Communities Neighbourhood Services During the year we saw the beginning of the Housing and Communities directorate restructure which was completed in late May 2016. This restructure will ensure that we maintain our position as one of the top performing landlords in Wales, and help us prepare for the impact of Welfare Reform and the additional support we will be providing to our tenants. Teams within the directorate now have greater clarity in their roles and this will enhance our service provision to tenants at a time when their own circumstances are under pressure from the current external environment.

The results from this consultation, as well as challenge workshops with staff and researching good practice, has resulted in a number of recommendations to improve the service. Some examples include: extending the payment options tenants have, bolstering our pre-tenancy work and reviewing all of our written communications. The new service will also include a new Income Recovery Team and will be launched in the summer of 2016.

The Gold Standard

Following feedback from tenants, MHA has piloted a new standard within some of its empty properties, known as the Gold Standard. This new standard means the properties are re-decorated, carpeted and all repairs and improvement works completed, Valuable Partnerships enabling the tenant to move into a fresh, new In the last year, MHA has developed its first “In One Place” scheme, which has enabled five home with minimal expense. vulnerable adults to live independently within The pilot has been a great success and we the community. This innovative scheme is have received extremely positive feedback part of the wider “In One Place” programme, from tenants who have moved into these which brings together the housing, health homes. As a result of this, we have decided and social care sectors to work together to to roll-out this new standard to all of our ensure the best outcome for adults who have properties, so new tenants can expect a blank mental health or learning difficulties. canvas and for those tenants moving into flats As well as enabling people to live independently, the programme also helps our colleagues in the health service to target their resources towards adults who need more intensive support. The scheme was officially launched on the 1st March and we have had very positive feedback from the tenants and care staff.

Improving Services MHA has completed a comprehensive review of its rent management service it provides to tenants. As part of this review we consulted with approximately 10% of our tenants, using a variety of means including: telephone surveys, workshops, online questionnaires and interviews by an independent agency.

this will also include carpets.

Equality Impact Assessments We continued to carry out Equality Impact Assessments on large scale reviews of key service areas. The reviews help us to ensure that we do not unintentionally discriminate or disadvantage service users. The last one we carried out was on our Rent Arrears Management Review this year. It produced a number of actions that have been implemented. We are developing strongly in this area and have delivered a best practice presentation to the Welsh Housing Equality Network, run by Tai Pawb, this year. Other social landlords have also approached us for advice on carrying out Equality Impact Assessments.

Monmouthshire Housing Association

Annual Accounts 2015-16

Tenancy Management We carried out a thorough and robust review of our tenancy management service area last year. This year we evaluated the outcomes from the review and have made further improvements to help staff deliver our tenancy management services.

Safeguarding We are improving our use of “concern cards” – electronic forms that trade operatives can use to raise the alarm when they are in someone’s home and worried about a tenant’s wellbeing. We also continue to make child and vulnerable adult safeguarding referrals where necessary. We remain committed to supporting a multi-agency approach to help protect children and vulnerable adults.

Impact of Welfare Reform and our Universal Credit Pilot One of the objectives set out in the Welfare Reform Project Plan was to undertake a Housing Benefit direct payment pilot. As a result, MHA implemented a 12 month direct payment pilot commencing in January 2015. This was in readiness for the implementation of Universal Credit in September 2015 and has helped to prepare MHA and our tenants for its introduction. In total 132 tenants, both new and existing, received their Housing Benefit directly as part of the pilot. We have had positive feedback from some of our tenants on the pilot stating they feel more confident about managing the changes ahead and feel more financially responsible. These tenants will continue to stay on direct payments in readiness for Universal Credit. As part of our digital inclusion incentive 20 tenants received tablets to help them pay their rent online and look for work. The learning obtained in the last year has been invaluable and produced several recommendations that will ensure we provide the best possible support to our tenants who will go on to claim Universal Credit.

David was one of the first people in Monmouthshire to apply to move onto the government’s new Universal Credit system:

“I’ve worked all my life. I was a builder for many years. I’ve been a roofer and even a pub landlord. When I was informed I’d be moving to Universal Credit, which is managed online, I had concerns as I’d never really used digital technology. MHA were able to give me a tablet and Cally (MHA Neighbourhood Officer) has helped me learn how to get to grips with it. I use it to look for full time work and it’s helped me massively in getting ready for Universal Credit.” David was able to adapt easily to this change, as he had signed up to MHA’s Direct Payment Pilot. Cally has supported him with getting his initial claim set up with DWP, helping him get online and providing budgeting advice. We are currently supporting 18 Universal Credit claimants who now receive their Housing Benefit direct.

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0345 677 2277

www.monmouthshirehousing.co.uk

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Monmouthshire Homesearch Monmouthshire Homesearch is a choicebased lettings allocations scheme administered by MHA on behalf of Monmouthshire County Council, Melin Homes, Charter Housing, Derwen and United Welsh. Over the past year, the Homesearch Team have registered 1,655 applicants for housing and let 312 properties for MHA.

Homesearch launched a smartphone app during April 2016 that applicants can use to bid for new properties and view feedback on previous bids. Within its first week of use, Homesearch received over 33% of bids on properties via the app, highlighting our applicants and tenants acceptance of moving to different digital ways of communicating with us.

The allocations policy has been reviewed due to recent changes to legislation and the need to continuously improve the service. Changes are due to be implemented later on this year. Properties are now advertised on any day of the week, rather than fortnightly as they were previously, in order to help reduce void times and to improve the service we offer to customers. Customers have adapted well to the changes and initial feedback has been very positive.

Annual Accounts 2015-16

Financial Inclusion

Money Wise Stats MHA’s inclusion services offer proactive help and support to tenants to alleviate short term and long term poverty issues. The Money Wise service deals with immediate poverty issues such as offering advice in relation to debt, benefit, food and fuel poverty. This past year the team have been busy supporting over 500 tenants. The Money Wise service worked with 352 new tenants in 2015 -2016.

Money Wise Benefits Advice savings for MHA tenants: £19,942.80 through claiming Working Tax Credit

£14,673.40 through claiming Disability Living Allowance

£44,300.38 through claiming Attendance Allowance

£16,036.80 through claiming Carers Allowance

£12,504.53 through claiming Discretionary Housing Payments

£58,496.80 through claiming Employment Support Allowance

£129,229.42 through claiming Housing Benefit

£18,226 through claiming Income Support

£2,850 through claiming Discretionary Assistance Fund

£18,020.60 through claiming Job Seeker Allowance

£49,256.49 through claiming Personal Independence Payments

£28,808 through claiming Pension Credit

Total amount saved:

£412,345.22

Money Wise Energy and Utility Advice savings for MHA tenants: £12k £10k

£10,250.33

Total a m

£19,5 unt saved: 20.83

£8k £6k £4k £2k £0k

£3,917.60 £2,202 Through helping tenants switch to water meters

£1,890.90 Through helping tenants benefit from Welsh Water’s Help U fund

Through helping tenants with enrolment on the Welsh Water Assist scheme

Monmouthshire Housing Association

£1,260 Through Warm Home Discount savings

Through switching energy suppliers

Case Study 1: Debt Support Mrs X first came to our attention when she replied to one of our text messages sent to all tenants with arrears of over £1,000. The messages were sent as part of a campaign to help tenants with debt problems.

Wise service helped the tenant submit a “mandatory reconsideration,” which was a request to look again at the case. The tenant received the same outcome and was turned down for the benefit. The Money Wise service then made an appeal to the tribunal against the decision. The appeal was attended by a Money Wise representative and Mr R’s case was heard. As a result maximum points were awarded for qualifying for ESA. The tenant also received a large back payment.

The tenant’s partner had left her and her finances were in a poor state. The tenant had been visited by bailiffs who were pursuing another debt of over £8,000. Mrs X was very The tenant’s situation has significantly depressed and had no money to live on as she improved. He now has access to a regular had always relied on her partner for money. income with his rent paid. Money Wise dealt with the case sensitively, ensuring emotional support was in place. With the permission of Mrs X, her family were involved and they are now supporting her. Money Wise helped Mrs X apply for Employment Support Allowance and helped her son understand his Universal Credit claim. Food bank vouchers were issued and the tenant became the first recipient of MHA’s Hardship Fund, which is for tenants in severe financial distress. Arrangements were made to pay back the large debt and further bailiff action was avoided. The tenant’s situation is now considerably better.

Case Study 2: Helping a Tenant with Employment Support Allowance Mr R had made a claim for Employment Support Allowance (ESA), which includes a medical assessment as part of the process. The tenant failed the medical assessment and was awarded nil points. The Money

Case Study 3: Helping a Tenant with Disability Living Allowance DLA is a benefit for people with disabilities. It has two elements – care and mobility. Mrs A was in receipt of the care element of DLA when she approached MHA’s Money Wise service for advice. Mrs A’s mobility had deteriorated in recent years. The Money Wise team decided to help Mrs A apply for the mobility element. The initial application was turned down. The Money Wise service then started the appeal process, initially via mandatory reconsideration and then by appeal to the tribunal. The Money Wise team submitted robust supporting evidence to the tribunal and the tenant received a letter to say that she had been awarded the mobility rate. The tenant is now using the extra money towards a mobility car, which will help her get out and about and improve her quality of life.

Annual Accounts 2015-16

29 27

Inclusion Services

Work & Skills Wise Stats

MHAâ&#x20AC;&#x2122;s inclusion services offer proactive help and support to tenants to alleviate short-term and long-term poverty issues. The Work & Skills Wise service addresses long-term poverty and aims to help tenants find and retain employment. Work & Skills Wise worked with 152 MHA tenants in 2015 -2016 and achieved the following outcomes:

152

Tenants engaged with Work & Skills Wise

Tenants have undertaken courses this year - All courses are accredited and range from level one basic skills to college courses

Young people were supported into employment

MHA tenants supported into volunteering/work placements

Bursaries were awarded in this financial year, total amount was ÂŁ853.43 funded by MHA and a total of ÂŁ3,765.00 was gained through external bursaries via JCP and others

7 Tenants have enrolled and completed the MHA accredited Job Seeking Skills Programme

1 Tenant enrolled on a University course

Monmouthshire Housing Association

Case Study: Kate’s Story MHA tenant Kate has just finished the first year of her Youth and Community Work degree at the University of South Wales and is looking forward to starting her second year. “I’m really enjoying the course – I’m meeting new people, developing specialist knowledge of a subject I love and I feel excited about my future.” A few years ago Kate would never have dreamed she would be at a busy university, attending lectures, learning, and enjoying the social side of university life. “I’ve struggled with mental health issues for years. When I first met Cath (MHA Community Project Officer) I found it really difficult to even leave the house, let alone be in a busy place.

Kate completed a Youth and Community Work Foundation Course before finding and applying for her degree. However, it hasn’t been plain sailing. Kate admits she has struggled at times, with anxiety, depression, the stress of exams and initially being denied a university place after her first application. “I can’t deny there have been some real low points along the way. But Cath has always been there for me when I’ve felt down or anxious. After applying and being accepted into university second time around, Cath helped me complete my finance and support forms so I was fully prepared. I simply wouldn’t have got here without her.”

“I’m now looking to the future and following my dream. I’m volunteering at a local youth club and after I’ve finished my degree I know “Cath initially suggested I attend a youth work I’ll have the skills and training needed to find full-time work with decent pay. I’m 42 now taster day in Abergavenny, after I told her it and I wish I’d continued with my education was an area of work I was interested in. The when I was younger, but it’s never too late to taster day truly sparked something in me – retrain, go to university or change your path.” after that I was determined to push myself, I felt motivated again.” Annual Accounts 2015-16

Community Investment Projects We understand the importance of investing in our communities. Our main focus is on improving health and wellbeing amongst our tenants. We do this in a number of ways, for example by running specific projects, and arranging events and activities. We also support existing community groups and/or will help tenants and residents set up a group, event or activity. We work very closely with many partners and agencies to get the very best of service for people.

Rock School

Jamie Oliver’s Home Cooking Course

Year 7 and 8 pupils have been taking part in Jamie Oliver’s BTEC level 1 Home Cooking accreditation. Children learned new cooking skills to make healthy meals and learned about working in hospitality and catering. Jamie Oliver’s Home Cooking Course - Adults We have been working in the heart of the Abergavenny community with adults who are keen to learn new and healthy recipes. They have been improving their culinary skills and having fun while learning. Participants can gain a BTEC level 1 Home Cooking accredited certificate.

Coffee & Computers

In August 2015 we ran the Summer Rock School with Changing Minds and Rock Academy Wales. Everyone involved enjoyed being a part of the sessions so we decided to do more work around wellbeing and confidence with more young people across the county. Further funding by Big Lotteries Awards for All programme allowed us to expand the project in October 2015.

Tenants and residents of Raglan who attend Coffee and Computers are now undertaking a qualification. They will learn computer basics including Facebook, internet and email gaining a Level 1 award in Essential Skills in Work and Life.

Monmouthshire Housing Association

First Aid for Families

Walking to Wellness

We ran a First Aid for Families course in conjunction with Monmouth Flying Start. This taught essential skills on how to deal with emergency situations such as burns, choking and bleeding and techniques such as CPR and the recovery position for babies and children.

This project links with the Fit4Life walking group and explores the beautiful surroundings of Monmouth. Trained walk leaders make sure the routes are suitable for all abilities and this is a chance to socialise, improve fitness and discover what goes on tenantsâ&#x20AC;&#x2122; doorsteps.

We hope to extend this across the county and also give tenants the chance to complete the TQUK Level 3 award in Emergency Paediatric First Aid.

Family Art with Pippins

Lifestyles & Smiles

Working together with Flying Start and Aneurin Bevan Health Board we provided intensive bespoke support to parents living in Caldicot. The programme promotes healthy eating and physical activity. Families received 12 weeks of intensive support from a qualified sports and nutrition instructor.

Pippins Art is a fun family activity where you can create your own canvas for the home, its great fun, lowers stress and anxiety. There is also the opportunity to work towards a Bronze Award ASDAN.

Annual Accounts 2015-16

Ziggies

Dads Can

Through themed play parents and children have been learning together through a love of stories, arts and crafts. We run fun interactive after school clubs across Monmouthshire where parents can learn fun, exciting ways to learn and play together.

The Dads Can project continues to provide confidential support and advice to young dads in Monmouthshire and in November 2015 the project extended into Newport. The project offers free support to dads in the form of employment and educational opportunities to boost their confidence as well as providing free fun ‘dads only’ and family activities. To date over 100 young dads have engaged in the project, from receiving face to face support to chatting through our Dads Can Facebook page.

Making a Difference Awards

Once dads get in contact, they can access a range of benefits such as free rugby tickets, cinema tickets and special discounts for selected restaurants. “I recently became a young dad and people forget it’s just as frightening for us in the beginning”. Geraint Rhys Jones, Newport Gwent Dragons. In September we held our annual Making A Difference Awards ceremony at the Glen Yr Afon Hotel, Usk. It is a chance for us to thank those in the community who work hard in making them great places to live. This year was a great success with over 100 people attending.

Follow Dads Can on Facebook and Twitter, visit www.dads-can.co.uk or contact the team on 01495 761092.

Monmouthshire Housing Association

Facilities & Compliance Team

Photovoltaic (PV) Solar Panels

Health Safety & Environmental We have concentrated on making our processes more robust to achieve best practice. The BS 18001 (Health & Safety), ISO14001 & Green Dragon (environmental) standards evaluate our approach and management of Health, Safety and Environmental in the workplace and how we aim to control the risks effectively. During 2015/16 financial year Monmouthshire Housing Group have: • Included new build construction activities within our integrated Health, Safety & Environmental accreditations. • Been recertified for BS 18001 accreditation. • Been recertified to Green Dragon level 5. • Passed the six monthly surveillance ISO14001 environmental audit. • Significantly improved landfill waste reduction and exceeded our corporate environmental target of 50% - we have surpassed this target and achieved 65%. • MHA Group DSO van fleet – to reduce fuel consumption by 5%. We have surpassed this target and achieved 9.74%. • The fire safety management system is monitored closely and fire safety across the estate continues to improve. The sheltered scheme “stay safe” evacuation procedure was introduced and implemented. A series of question and answer sessions were carried out at each scheme to ensure tenants are fully aware and comfortable with the procedure. The presentations went well and all attendees were given the opportunity to ask questions to clarify their understanding. Planned drills have been conducted to test the process.

A prompt and effective PV maintenance service is in place to ensure our systems are working to their optimum to ensure tenants benefit from the free electricity generated.

Pool Car

Monmouthshire Housing Association Group has undertaken a test drive of a variety of hybrid cars and as a result will be introducing a Toyota Auris hybrid pool car to the Group. The main aims will be to boost the Group’s green credentials and to project a professional image within the local community.

Annual Accounts 2015-16

Governance

First Minister of Wales Carwyn Jones met MHA tenants living in an innovative After receiving its award of a ‘Low Risk’ new housing scheme in Abergavenny in engagement from Welsh Government in January. The In One Place Programme is a 2012/13, MHA has continued to maintain its pioneering collaboration between public position amongst the highest performing and services, health, housing and social care. lowest risk social landlords in Wales. Our latest The new accommodation in Abergavenny regulatory assessment has been completed brings together MHA, Monmouthshire by Welsh Government and the initial draft County Council and the Aneurin Bevan shows that we continue to be relatively low University Health Board, and offers supported risk. housing for people moving from residential accommodation to more independent living. MHA always remains open to challenge and continues to work alongside its tenants in The First Minister met staff from seeking out opportunities to further improve Monmouthshire County Council, the Health satisfaction levels and services provided. Board, Liberty Care and staff and tenants from MHA continues to apply Community Housing Cymru’s Charter Code of Governance and has a Board that is balanced, diverse and effective, which leads and controls the organisation and complies with its legal requirements. All major decisions for MHA are made by the Board, which is made up of three constituencies of equal size: tenant members, independent members and Council nominees. It is the Board’s role to select, evaluate and approve appropriate compensation for the Group’s Chief Executive, evaluate the Chief Executive’s performance, evaluate the policies, strategies and updates given by the Senior Management Team, to make recommendations, approve the Group’s financial statements, and recommend or strongly discourage proposed directions for growth of the organisation. In addition, the system of sub-groups for Finance and Governance, Audit, Operations and Remuneration remains and these subgroups have the time to delve deeply into the subject matter and make recommendations to the full Board. The composition of the subgroups contains representation from each of the constituent members of the Board.

MHA and spoke about the importance of housing schemes, such as In One Place, that deliver vital services to those in need.

Carwyn Jones: “The last thing we want to see is people in an institutionalised setting when they can be living in independent accommodation. In a small country like Wales we can break down the barriers between the different practitioners. We need more of these developments around Wales to make sure that we deliver vital services to the people who are most in need.” MHA Chief Executive John Keegan said: “I am really happy that Carwyn Jones has visited us. It has been a really close and successful relationship between the housing association, the Welsh Government and Health. He’s just been to see the residents; they are over the moon – it’s what makes the job worthwhile. We hope to do a lot more of this type of work in the future.”

Monmouthshire Housing Association

First Minister visits MHA tenants

Financial Viability

Corporate

For 2015/16 MHA received the following regulatory judgment from the Welsh Government in terms of Financial Viability:

MHA complies with the requirements of the Welsh Language (Wales) Measure 2011 and has an approved Welsh Language Strategy which is regularly monitored and our progress against the strategy is reported to, and approved by the Welsh Language Commissioner. MHA is awaiting the regulatory framework in respect of the Welsh Language and how it is to be applied to the sector in Wales. MHA has successfully run several training programmes of Welsh language courses for its staff in recent years and will continue to offer support in the learning of the Welsh Language throughout 2016/17.

Overall conclusion: Our judgement of the Groupâ&#x20AC;&#x2122;s financial viability remains unchanged from last year. As at 30 June 2016 the judgement is: Pass. The Group has adequate resources to meet its current and forecasted future business and financial commitments.

Value for Money At MHA we have a Value for Money (VFM) policy which underpins all that we do and all decisions made are considered in light of information outlining the VFM implications. The policy is scheduled for review in 2016/17 and further information on VFM will be presented to our Board later this year.

Annual Accounts 2015-16

Staff Survey

Recruitment & Learning

The high levels of staff engagement we have has placed us, for a second year running, in the Sunday Times Top 100 Not for Profit companies. This improves on our position from the previous year and achieved a 1 Star status in the Best Companies Staff Survey which is recognised as being a “Very Good” organisation.

We have implemented a new online recruitment application system which has modernised and simplified the process for our applicants and managers. In addition we have introduced an online learning system for employees and board members to utilise key personal development activities at times that are convenient to their work schedule. The system can also be used by tenants who are part of our employability scheme.

In 2015/16 MHA again spent over £100,000 on training its staff and board members which equates to almost 1,000 training days, the majority of which was incurred in our two largest directorates, Housing and Communities and Property Services. This highlights our commitment to ensure our staff have the appropriate skills and knowledge to deliver high quality services to our customers. Reassessment for the Corporate Health Standard Gold and Platinum Awards Two assessors visited MHA in January 2016 to ensure we were upholding the standards for the Gold Award which concerns how we support the health and wellbeing of our staff, and the Platinum Award which is about our Corporate Social Responsibilities regarding the wellbeing of our communities.

A number of strategies were updated and revised in the year alongside the further development of our financial accounting and performance monitoring systems. These all contribute to the significant development of the MHA business and its progress towards completion of its objectives outlined in support of its vision for 2016/20 which is defined in the Strategic Report.

Time To Change Employers’ Pledge John Keegan signed the Time To Change Pledge in March to build on the supportive stance MHA has towards mental health issues both in the work environment and in our communities.

“We were highly impressed with the range and quality of the initiatives and projects that have been maintained for both levels of award and particularly with the way in which the health and wellbeing of the staff has become integrated into the culture and the very fabric of the Housing Association. This was noticeable at the assessment visits but has become even more remarkable with the passage of time. Some of the projects we learned about that related to the Platinum Award were innovative, creative and demonstrated the ongoing commitment to corporate social responsibility” – the Assessors.

Monmouthshire Housing Association

John with the signed pledge

Annual Accounts 2015-16

Board Performance Indicators Ref

Description: 2012

2013

2014

2015

2016

Actual

Target Actual

Target

PI.NH.001

% rent loss due to void

1.11%

0.84%

1.12%

1.1%

1.23%

1.2%

1.6%

1.2%

PI.NH.012. YTD

% rent arrears current

1.36%

1.9%

1.38%

1.8%

1.54%

2.5%

0.48%

1.8%

0.84%*

1.8%

PI.LC.037

Annual Staff Turnover

8.8

7.4

11.8

PI.LC.050

% Repairs completed Right First Time

83.43% 87%

95.37% 90%

94.9%

92%

93.86%

94%

PI.LC.054A

Loan Covenant

-81.47% 75.75%

PI.LC.055

Overall Sickness Level

4.5

4.6

2.93

4.3

3.66

3.6

4.25

3.6

3.77

3.3

PI.NH.002

Re-let time (days) Standard lets

35.83

20.89

25.46

23.13

34.14

PI.NH.006. YTD

% rent collected

97.02% 98.5%

PI.LC.035. YTD

% properties 99.3% with Landlord Gas Certificate

TS.CST.006 Overall 87% Satisfaction with Services from MHA

2012

97.14% 98.5%

96.44% 98.5%

100.45% 98.6%

99.02%

98.7%

99.2%

99.3%

99.21% 100%

99.81%

100%

99.39%

100%

86%

90%

87%

91.6%

88%

Monmouthshire Housing Association

*PI.NH.012a - Quarter 4 is performing below target with the year end figures showing arrears is 0.84%, this equates to £144,094.90 arrears. The low result was expected due to rent account calculations where the majority of accounts are set to be paying a week in advance at the end of financial year, therefore more accounts are in credit at the end of 2015/16. Due to MHA using the Housemark definition to calculate the % arrears, all credits offset any arrears. For general needs properties there were £512,585.43 arrears and £113,175.87 credits. In OAP/ Sheltered accommodation there were £95,880.27 arrears and £41,372.87 credits. There was also 2 week’s HB owed totalling £309,822.06. **PI.NH.009 - The annual performance is well below target but this is a result of offering convenient appointments to tenants which can inevitably fall outside the 5 day target for repair completion. When carrying out tenant consultation via the Better Build Steering Group or Better Build Group they have made it clear that the most important repair performance measures to them are achieving repairs right first time and attending to appointments when promised.

Annual Accounts 2015-16

Tenant Performance Indicators Ref

Description:

2012

2013

2014

2015

2016

Annual Figure

Target Annual Figure

Target

PI.LC.010

ASB Cases Resolved

72.46%

60%

88.72%

65%

85.98%

80%

98.93%

90%

97.85%

98%

PI.NH.012. YTD

Rent Owed by Current Tenants (% rent arrears â&#x20AC;&#x201C; current)

1.36%

1.9%

1.38%

1.8%

1.54%

2.5%

0.48%

1.8%

0.84*

1.8%

PI.LC.050

% Repairs completed Right First Time

83.43%

87%

95.37%

90%

94.9%

92%

93.86%

94%

PI.NH.008

Emergency repairs completed in target

98.94%

96%

99.58%

97%

98.77%

98%

99.79%

98%

99.07%

98%

PI.NH.009

Urgent repairs completed in target

94.76%

96%

95.47%

97%

88.6%

97%

92.59%

97%

76.6%** 98%

PI.NH.011

% tenant satisfied with repair work

93.23%

94%

93.4%

95%

91.62%

96%

93.43%

97%

92.77%

97%

PI.LC.009

No. of new ASB 74.22 cases per 1000 tenancies

120

85.52

100

61.99

54.88

SS.LC.001

Average time taken for Repairs Hotline to be answered

15 secs

19 secs

15 secs

18 secs

26 secs

15 secs

22 secs

20 secs

SS.LC.005

Average time taken for a call to be answered

15 secs

20 secs

PI.LC.001

Offers Refused

26.71%

15%

30.9%

20%

22.8%

20%

23.03%

18%

17.57%

18%

PI.LC.051

Repairs Appointments Kept

78.85%

92%

94.62%

92%

94.14%

94%

95.64%

95%

The Board are responsible for preparing the Annual Report and the financial statements in accordance with applicable law and regulations.

2016

Monmouthshire Housing Association

Annual Accounts 2015-16

Statement of Board Membersâ&#x20AC;&#x2122; Responsibilities

Monmouthshire Housing Association

Annual Accounts 2015-16

Statement of Board Members’ Responsibilities Housing Association legislation requires the Board to prepare financial statements for each financial year. Under that legislation the Board have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under Housing Association legislation 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 Group and the Association and of the surplus or deficit of the Group and Association for that period. In preparing these financial statements, the Board are required to: • Select suitable accounting policies and then apply them consistently; • Make judgments and accounting estimates that are reasonable and prudent; • State whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements; and • Prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Group and Association will continue in business. The Board are responsible for keeping adequate accounting records that are sufficient to show and explain the Group and Association’s transactions and disclose with reasonable accuracy at any time the financial position of the Group and Association and enable them to ensure that the financial statements comply with Housing Association

legislation, the Co-operative and Community Benefit Societies Act 2014 and the Accounting Requirements for Registered Social Landlords General Determination (Wales) 2015. They are also responsible for safeguarding the assets of the Group and Association and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. The Board are responsible for the maintenance and integrity of the corporate and financial information included on the Association’s website. Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

Disclosure of information to the auditor Each of the Board members at the date of approval of this report has confirmed that: As far as the Board members are aware, there is no relevant audit information of which the Group’s auditor is unaware; and The Board members have taken all the steps that they ought to have taken as Board members in order to make themselves aware of any relevant audit information and to establish that the Group’s auditor is aware of that information.

Monmouthshire Housing Association

Annual Accounts 2015-16

Statement of Internal Control

Monmouthshire Housing Association

Annual Accounts 2015-16

Statement of Internal Control In accordance with the terms of reference and the best practice referred to in the Welsh Government’s Housing Association Circular RSL 02/10 Internal controls and reporting, the Deputy Chief Executive on behalf of the Audit Committee presents an annual report to the Board covering the period from 1 April 2015 to 31 March 2016. The purpose of this report is to record an assessment of the adequacy and effectiveness of the Association’s system of internal control during this period. The Association’s systems are designed to manage rather than eliminate the risk of failure to achieve business objectives, and can only provide reasonable, and not absolute, assurance against material misstatement or loss, regarding the safeguarding of assets, the maintenance of proper accounting records, the reliability of financial information and the management of risks, any of which could adversely affect the Association’s ability to achieve its Business Plan objectives. The following mechanisms constitute the key elements of the framework designed and implemented by management to provide effective internal control:

e) Defined business and strategic planning processes including the preparation of annual budgets, rolling five year business plans, a 30 year financial forecasting model and the production and review of monthly management accounts. These are supported by specific operational/ directorate action plans and a process for the monitoring of results against budgets; f) A comprehensive process for assessing and managing strategic and operational risks, including an annual risk review process; g) Performance management information and control systems, with regular reporting of financial results and other performance indicators against budgets and other appropriate internal and external targets; h) A Board approved treasury policy and annual treasury strategy, which is reported against as part of the management accounting information; i) An Anti-Fraud, Theft and Corruption policy; j) An established programme of internal audit activities derived from an assessment of key business risks;

a) Standing orders and financial regulations setting out clearly the system of delegation;

k) An established programme of external audit activities from an assessment of the key financial risks;

b) Clearly defined corporate and divisional management responsibilities and reporting structures ensuring that experienced and suitably qualified staff take responsibility for important business decisions;

l) The Audit Committee review and monitor reports from management, from Internal Audit and from External Audit to provide reasonable assurance that control procedures are in place and being followed;

c) Careful staff recruitment, appropriate training and individual performance monitoring systems ;

m) Monitoring of the control system by the Audit Committee, the Internal Auditors and management.

d) Procedure manuals for staff ;

Monmouthshire Housing Association

Risk Management Framework

The Group has a Risk Management Strategy The Company Secretary maintains the register which was in effect for the period in question. of detected frauds. There are no frauds to A new Risk Management Policy has been report in the period covered by this report. written which clearly outlines MHA’s approach to risk management and defines roles and Adequacy and responsibilities throughout the organisation. The Corporate Risk Register is regularly reviewed by managers and the Senior Management Team and presented at each Audit Committee. A Corporate Risk Dashboard summarising the main risks and movements in trends is presented and discussed at every Board and Committee meeting. The Association continues to maintain or put in place a number of procedures designed to mitigate risks facing the Association. These include specific delegated authorities to managers and staff, insurances, performance management reporting, contract procurement processes and an annual self-certification of risks and how they are controlled by the Senior Management Team. As part of the Corporate Planning Cycle the Board reviewed their appetite for risk. The appetite statement was communicated to SMT, managers and staff and the Corporate Objectives were set in line with the reviewed appetite.

Effectiveness of the Associations Internal Control System

The Deputy Chief Executive has reviewed the adequacy and effectiveness of the Association’s internal financial control and risk management system for the period 1st April 2015 to the date the annual accounts for 2015/16 were approved.

The Board Report, Statement of Members’ Responsibilities and the Statement of Internal Control were approved by the Board on 21st September 2016. Signed by: Stephen Higginson Position:

Deputy Chief Executive

The Association now has a Risk & Business Assurance Manager in post who will help to strengthen the Group’s approach to risk management.

Annual Accounts 2015-16

Independent Auditorâ&#x20AC;&#x2122;s Report

Monmouthshire Housing Association

Annual Accounts 2015-16

Independent Auditor’s Report to the Members of Monmouthshire Housing Association Limited We have audited the financial statements of Monmouthshire Housing Association Limited for the year ended 31st March 2016 which comprise the Group and parent Association’s Statement of Total Comprehensive Income, the Group and parent Association’s Statements of Financial Position, the Group and parent Association’s Statements of Changes in Reserves, the Group and parent Association’s Statement of Cash Flows and the related notes. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), including Financial Reporting Standard 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland)”.

Respective Responsibilities of the Board and the Auditor As explained more fully in the Statement of Board’s Responsibilities set out on page 42, 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 (APB’s) Ethical Standards for Auditors. This report is made solely to the parent Association’s members, as a body, in accordance with Part 7 of the Co-operative and Community Benefit Societies Act 2014 and Chapter 4 of Part 2 of the Housing and Regeneration Act 2008. Our audit work has been undertaken so that we might state to the parent 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 parent Association’s members as a body for our audit work, for this report, or for the opinions we have formed. We have reviewed the Board’s statement on the parent Association’s compliance with the Welsh Government circular RSL 02/10 ‘Internal Controls and Reporting’. We are not required to express an opinion on the effectiveness of the parent Association’s system of internal control.

Monmouthshire Housing Association

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 the financial statements In our opinion the financial statements: • Give a true and fair view of the state of the Group’s and parent Association’s affairs as at 31 March 2016 and of the Group’s and parent Association’s surplus for the year then ended; • Have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice including Financial reporting Standard 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland”; and • Have been properly prepared in accordance with the requirements of the Co-operative and Community Benefit Societies Act 2014, the Housing and Regeneration Act 2008, and the Accounting Requirements for Registered Social Landlords General Determination (Wales) 2015.

Matters on Which we are Required to Report by Exception We have nothing to report in respect of the following matters where the Co-operative and Community Benefit Societies Act 2014 requires us to report to you if, in our opinion; • The parent Association has not kept proper books of account; or • A satisfactory system of control over transactions has not been maintained; or • The financial statements are not in agreement with the books of account; or • We have not received all the information and explanations we need for our audit. Mazars LLP Chartered Accountants and Statutory Auditor 45 Church Street Birmingham B3 2RT

Opinion on the other matter prescribed by the Welsh Government circular RSL 02/10 ‘Internal controls and reporting’ With respect to the Board’s statement on internal control, in our opinion, the Board has provided the disclosures required by the Welsh Government circular RSL 02/10 ‘Internal controls and reporting’ and the statement is not inconsistent with the information of which we are aware from our audit work on the financial statements.

Annual Accounts 2015-16

Group & Association Statement of Total Comprehensive Income

Monmouthshire Housing Association

Annual Accounts 2015-16

Group & Association Statement of Total Comprehensive Income For the year ended 31 March 2016

Note

2015 £’000

Association 2016 2015 £’000 £’000

Turnover

20,663

19,281

Operating expenditure

(18,571) ---------2,092

(15,635) ---------3,646

Gain on disposal of property, plant and equipment

1,192

516

1,192

701

Interest receivable

111

Interest and financing costs

(879) ---------2,410

(866) ---------3,302

(879) ---------2,214

(866) ---------3,450

Taxation

Surplus for the year

(38) ---------2,372

---------3,302

(38) ---------2,176

---------3,450

Actuarial loss in respect of pension schemes

(1,049) ---------1,323 ======

(2,800) ---------502 ======

(1,049) ---------1,127 ======

(2,800) ---------650 ======

Surplus before tax

Total comprehensive income for the year

Group 2016 £’000

Monmouthshire Housing Association

19,535

19,091

(17,745) (15,530) ------------------1,790 3,561

Annual Accounts 2015-16

Statement of Financial Position

Monmouthshire Housing Association

Annual Accounts 2015-16

Statement of Financial Position Registered number: 30087R

As at 31 March 2016 Note Fixed assets Intangible assets Housing properties Other property, plant and equipment Total fixed assets Current assets Inventories Debtors Cash Current liabilities Creditors: amounts falling due within one year

Total reserves

52,638 4,286 ---------56,924

14 15

137 2,479 1,237

1,320 1,945 1,083

137 5,648 1,205

1,320 3,354 1,001

(4,139)

(4,245)

(3,721)

(3,952)

---------(286) ---------63,177

---------103 ---------57,027

---------3,269 ---------63,175

---------1,723 ---------57,121

(41,304)

(38,465)

(41,404)

(38,465)

18 19

(409) (5,526) ---------15,938 ======

(3,947) ---------14,615 ======

(409) (5,526) ---------15,836 ======

(3,947) ---------14,709 ======

20 19

(5,526) 21,464 ---------15,938 ======

(3,947) 18,562 ---------14,615 ======

(5,526) 21,362 ---------15,836 ======

(3,947) 18,656 ---------14,709 ======

The notes on pages 70 to 114 form part of these financial statements.

84 55,615 51,110 4,207 4,288 ------------------59,906 55,398

84 59,172 4,207 ---------63,463

Net assets Capital and Reserves Share capital Pensions reserve Revenue reserve

2015 £’000

Association 2016 2015 £’000 £’000

11 12 13

Net current (liabilities) / assets Total assets less net current assets Non-current liabilities Creditors: amount falling due after more than one year Provision for liabilities and charges Pension fund

Group 2016 £’000

Monmouthshire Housing Association

The financial statements of Monmouthshire Housing Association Limited Group were approved by the Board and signed on its behalf by: ………………………………………………………… …………………………………………………………

Board member Board member

………………………………………………………… Company Secretary

21st September 2016

Annual Accounts 2015-16

Group & Association Statement of Changes in Reserves

Monmouthshire Housing Association

Annual Accounts 2015-16

Group Statement of Changes in Reserves Income and expenditure reserve £’000

Pension reserve

Total

£’000

As at 1st April 2014

15,019

(906)

14,113

Surplus for the year

3,302

241

(241)

---------18,562 ======

(2,800) ---------(3,947) ======

(2,800) ---------14,615 ======

Income and expenditure reserve £’000

Pension reserve

Total

£’000

As at 1st April 2015

18,562

(3,947)

14,615

Surplus for the year

2,372

530

(530)

---------21,464 ======

(1,049) ---------(5,526) ======

(1,049) ---------15,938 ======

Transfer between reserves Actuarial loss in respect of pension schemes As at 31st March 2015

Transfer between reserves Actuarial loss in respect of pension schemes As at 31st March 2016

The income and expenditure reserve represents the accumulated surplus of the Group. The pension reserve is the deficit within the defined benefit pension scheme.

Monmouthshire Housing Association

Association Statement of Changes in Reserves Income and expenditure reserve £’000

Pension reserve

Total

£’000

As at 1st April 2014

14,965

(906)

14,059

Surplus for the year

3,450

241

(241)

---------18,656 ======

(2,800) ---------(3,947) ======

(2,800) ---------14,709 ======

Income and expenditure reserve £’000

Pension reserve

Total

£’000

18,656 (3,947)

14,709

Transfer between reserves Actuarial loss in respect of pension schemes As at 31st March 2015

As at 1st April 2015 Surplus for the year Transfer between reserves Actuarial loss in respect of pension schemes As at 31st March 2016

2,176

530

(530)

---------21,362 ======

(1,049) ---------(5,526) ======

(1,049) ---------15,836 ======

The income and expenditure reserve represents the accumulated surplus of the Association. The pension reserve is the deficit within the defined benefit pension scheme.

Annual Accounts 2015-16

Statement of Cash Flows

Monmouthshire Housing Association

Annual Accounts 2015-16

Statement of Cash Flows For the year ended 31st March 2016

Group 2016 £’000

2015 £’000

Association 2016 2015 £’000 £’000

3,160

4,619

3,110

4,661

(9,419)

(11,183)

(9,373)

(11,183)

Proceeds from sale of property, plant and equipment

2,549

707

2,549

707

Grant received

4,738

4,637

4,738

4,637

6 --------(2,126)

6 -------(5,833)

60 --------(2,026)

54 -------(5,785)

(880)

(867)

(880)

(867)

2,000

-------(880) -------154

-------1,133 -------(81)

-------(880) -------204

-------1,133 -------9

==== 1,083 ------1,237 -------

==== 1,164 ------1,083 -------

==== 1,001 ------1,205 -------

==== 992 ------1,001 -------

Note Net cash generated from operating activities

Cash flows from investing activities Purchase of property, plant and equipment

Interest received Net cash flows from investing activities Cash flows from financing activities Interest paid New loans

Net cash flows from financing activities Net increase/(decrease) in cash and cash equivalents Cash and cash equivalents at beginning of the year Cash and cash equivalents at end of the year

Monmouthshire Housing Association

FREE CASH FLOW FOR THE YEAR ENDED 31 MARCH 2016: Group 2016 £’000

2015 £’000

Association 2016 2015 £’000 £’000

3,160

4,619

3,110

4,661

(880)

(867)

(880)

(867)

(3,895)

(6,384)

(3,895)

(6,384)

Component replacements

(149)

(155)

(149)

(155)

Purchase of other replacement fixed assets

2,600

------842

------(181)

-----846

-----(91)

------842

------(181)

------846

------(91)

====

Net cash generated from operating activities Interest paid Interest received

Adjustments for reinvestment in existing properties

Free cash generated/(consumed before loan repayments)

Free cash generated / (consumed) after loan repayments

Annual Accounts 2015-16

Notes to the Financial Statements

Monmouthshire Housing Association

Annual Accounts 2015-16

Notes to the Financial Statements General information

Statement of Compliance

Monmouthshire Housing Association Limited (the ’Association’) is a registered society under the Co-operative and Community Benefit Societies Act 2014, incorporated and domiciled in the United Kingdom. The address of the registered office is Nant Y Pia House, Mamhilad Technology Park, Mamhilad, Pontypool, Monmouthshire, NP4 0JJ.

This is the first year the Group has prepared its financial statements in accordance with FRS 102, accordingly the financial information as at 1 April 2014 (being the date of transition) and for the year ended 31 March 2015 have been restated for material adjustments on adoption of FRS 102 in the current year. For more information see note 27.

The main activities of the Association and its subsidiaries are the provision of affordable homes for rent for people in housing need.

Basis of Consolidation

General information and basis of accounting The financial statements have been prepared under the historical cost convention, modified to include certain items at fair value, in accordance with Financial Reporting Standard 102 (FRS 102) issued by the Financial Reporting Council and comply with the Statement of Recommended Practice for registered social housing providers 2014 (SORP), the Housing and Regeneration Act 2008 and the Accounting Requirements for Registered Social Landlords General Determination (Wales) 2015. Monmouthshire Housing Association Group is a public benefit entity, as defined in FRS 102, and applies the relevant paragraph prefixed ‘PBE’ in FRS 102.

The Group financial statements consolidate the financial statements of the Association and its subsidiary undertaking drawn up to 31 March each year. All intra-group transactions, balances, income and expenses are eliminated on consolidation.

Monmouthshire Housing Association

Property, plant & equipment - housing properties Housing properties, held at cost less depreciation, were transferred from Monmouthshire County Council at no cost and were subject to a nil valuation based on an independent report using the basis of existing use value for social housing. Housing properties are stated at cost less accumulated depreciation and accumulated impairment losses. Cost includes the cost of acquiring land and buildings and directly attributable development costs. Capitalisation ceases when substantially all the activities that are necessary to get the asset ready for use are complete. Depreciation is charged so as to write down the net book value of housing properties to their estimated residual value, on a straight line basis, over their useful economic lives. Freehold land is not depreciated. Houses Flats New build

150 years

110 years

Purchased

100 years

80 years

Major components of housing properties, which have significantly different patterns of consumption of economic benefits, are treated as separate assets and depreciated over their expected useful economic lives at the following annual rates: Structure

80 â&#x20AC;&#x201C; 150 years

Roofs 50 Years Doors and Windows

30 Years

Kitchens

15 Years

Bathrooms 25 Years Heating Systems

15 Years

Other works 20 Years Photovoltaic panels

22 Years

Properties held on long leases are depreciated over their estimated useful economic lives or the lease duration if shorter.

Improvements Where there are improvements to housing properties that are expected to provide incremental future benefits, these are capitalised and added to the carrying amount of the property. Any works to housing properties which do not replace a component or result in an incremental future benefit are charged as expenditure in the Statement of Comprehensive Income.

Leaseholders Where the rights and obligations for improving a housing property reside with the leaseholder or tenant, any works to improve such properties incurred by the Association is recharged to the leaseholder and recognised in surplus or deficit in the Statement of Comprehensive Income along with the corresponding income from the leaseholder or tenant.

Annual Accounts 2015-16

Non-housing property, plant and equipment

Impairment of social housing properties

Non-housing property, plant and equipment is stated at historic cost less accumulated depreciation and any provision for impairment.

Properties held for their social benefit are not held solely for the cash inflows they generate and are held for their service potential.

Depreciation is provided on all non-housing property, plant and equipment, other than investment properties and freehold land, at rates calculated to write off the cost or valuation, less estimated residual value, of each asset on a straight-line basis over its expected useful life, as follows:

Other fixed assets Head Office (building & furniture)

5 â&#x20AC;&#x201C; 100 Years

Computer equipment

3 â&#x20AC;&#x201C; 10 Years

Intangible assets Software purchased and developed, or developed in house, is an intangible asset. Cost is measured initially at acquisition cost or costs incurred to develop the asset. Development expenditure incurred on an individual project is capitalised only if specific criteria are met including that the asset created will probably generate future economic benefits. These assets will be amortised over 3 - 5 years.

An assessment is made at each reporting date as to whether an indicator of impairment exists. If such an indicator exists, an impairment assessment is carried out and an estimate of the recoverable amount of the asset is made. Where the carrying amount of the asset exceeds its recoverable amount, an impairment loss is recognised in surplus or deficit in the Statement of Comprehensive Income. The recoverable amount of an asset is the higher of its value in use and fair value less costs to sell. Where assets are held for their service potential, value in use is determined by the present value of the assetâ&#x20AC;&#x2122;s remaining service potential plus the net amount expected to be received from its disposal. Depreciated replacement cost is taken as a suitable measurement model. An impairment loss is reversed if the reasons for the impairment loss have ceased to apply and included in surplus or deficit in the Statement of Comprehensive Income.

Monmouthshire Housing Association

Social Housing Grant and other Government Grants Where grants are received from government agencies such as the Welsh Government, local authorities, devolved government agencies, health authorities and the European Commission which meet the definition of government grants they are recognised when there is reasonable assurance that the conditions attached to them will be complied with and that the grant will be received. Government grants are recognised using the accrual model and are classified either as a grant relating to revenue or a grant relating to assets. Grants relating to revenue are recognised in income on a systematic basis over the period in which related costs for which the grant is intended to compensate are recognised. Where a grant is receivable as compensation for expenses or losses already incurred or for the purpose of giving immediate financial support, with no future related costs, it is recognised as revenue in the period in which it becomes receivable. Grants relating to assets are recognised in income on a systematic basis over the expected useful life of the asset. Grants received for housing properties are recognised in income over the expected useful life of the housing property structure. Where a grant is received specifically for components of a housing property, the grant is recognised in income over the expected useful life of the component. Grants received from non-government sources are recognised as revenue using the performance model.

Donation or acquisition of land or other asset at below market value Where a donation of land and/or other assets is received or land and/or other assets are acquired at below market value from a government source, this is accounted for as a non-monetary government grant. The difference between the fair value of the asset donated or acquired and the consideration paid for the asset is recognised as a government grant and included in the Statement of Financial Position as a liability. Where a donation of land and/or other assets is received or acquisitions of land and/or other assets at below their market value from a third party that does not meet the definition of a government source, the transaction is recognised as an asset in the Statement of Financial Position at fair value, taking account of any restrictions on the use of the asset and income equivalent to the difference between any amounts paid or payable for the asset and the fair value of the asset is recognised in surplus and deficit in the Statement of Comprehensive Income as a donation when future performance-related conditions are met.

Leased assets At inception the Group assesses agreements that transfer the right to use assets. The assessment considers whether the arrangement is, or contains, a lease based on the substance of the arrangement.

Annual Accounts 2015-16

Finance leased assets

Interest payable

Leases of assets that transfer substantially all the risks and rewards incidental to ownership are classified as finance leases.

Borrowing costs are interest and other costs incurred in connection with the borrowing of funds. Borrowing costs are calculated using the effective interest rate, which is the rate that exactly discounts estimated future cash payments or receipts through the expected life of a financial instrument and is determined on the basis of the carrying amount of the financial liability at initial recognition. Under the effective interest method, the amortised cost of a financial liability is the present value of future cash payments discounted at the effective interest rate and the interest expense in a period equals the carrying amount of the financial liability at the beginning of a period multiplied by the effective interest rate for the period.

Finance leases are capitalised at commencement of the lease as assets at the fair value of the leased asset or, if lower, the present value of the minimum lease payments calculated using the interest rate implicit in the lease. Assets are depreciated over the shorter of the lease term and the estimated useful life of the asset. Assets are assessed for impairment at each reporting date. The capital element of lease obligations is recorded as a liability on inception of the arrangement. Lease payments are apportioned between capital repayment and finance charge, using the effective interest rate method, to produce a constant rate of charge on the balance of the capital repayments outstanding.

Operating leased assets Leases that do not transfer all the risks and rewards of ownership are classified as operating leases. Payments under operating leases are charged to surplus or deficit in the Statement of Comprehensive Income on a straight-line basis over the period of the lease. Properties for outright sale Properties developed for outright sale and land held for sale are measured at the lower of cost and estimated selling price less costs to complete and sell. Cost includes materials, direct labour and an attributable proportion of overheads based on normal levels of activity.

Taxation Current tax is provided at amounts expected to be paid (or recovered) using the tax rates and laws that have been enacted or substantively enacted by the Statement of Financial Position date. Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the Statement of Financial Position date where transactions or events that result in an obligation to pay more tax in the future or a right to pay less tax in the future have occurred at the Statement of Financial Position date. Timing differences are differences between the Groupâ&#x20AC;&#x2122;s taxable surpluses and its results as stated in the financial statements that arise from the inclusion of gains and losses in tax assessments in periods different from those in which they are recognised in the financial statements. Unrelieved tax losses and other deferred tax assets are recognised only to the extent that, on the basis of all available evidence, it can

Monmouthshire Housing Association

be regarded as more likely than not that there will be suitable taxable profits from which the future reversal of the underlying timing differences can be deducted. Deferred tax is measured using the tax rates and laws that have been enacted or substantively enacted by the Statement of Financial Position date that are expected to apply to the reversal of the timing difference. Deferred tax relating to property, plant and equipment measured using the revaluation model and investment property is measured using the tax rates and allowances that apply to sale of the asset.

Pensions Multi-employer defined benefit pension scheme â&#x20AC;&#x201C; Social Housing Pension Scheme The Group participates in an industry wide multi-employer defined benefit pension scheme where the scheme assets and liabilities cannot be separately identified for each employer. This is accounted for as a defined contribution scheme as there is insufficient information available to account for the scheme as defined benefit. For this multi-employer scheme, there is a contractual agreement between the scheme and the Group that determines how the deficit will be funded and a liability is recognised in the Statement of Financial Position and the resulting expense in surplus or deficit in the Statement of Comprehensive Income for the present value of the contributions payable that arise from the agreement to the extent that they relate to the deficit.

Local Government Pension Scheme The Group participates in a local government pension scheme which is a multi-employer scheme where it is possible for individual employers as admitted bodies to identify

their share of the assets and liabilities of the pension scheme. For this scheme, the amounts charged to operating surplus are the costs arising from employee services rendered during the period and the cost of plan introductions, benefit changes, settlements and curtailments. They are included as part of staff costs. The net interest cost on the net defined benefit liability is charged to revenue and included within finance costs. Re-measurement comprising actuarial gains and losses and the return on scheme assets (excluding amounts included in net interest on the net defined benefit liability) are recognised immediately in other comprehensive income. Defined benefit schemes are funded with the assets of the scheme, held separately from those of the Group, in separate trustee administered funds. Pension scheme assets are measured at fair value and liabilities are measured on an actuarial basis using the projected unit credit method. The actuarial valuations are obtained at least triennially and are updated at each Statement of Financial Position date.

Turnover Turnover represents rent and service charges receivable (net of rent and service charge losses from voids) and disposal proceeds of current assets, such as properties developed for outright sale or shared ownership, first tranche sales at completion together with revenue grants from local authorities and the Welsh Government and charitable fees and donations. Service charge income is recognised when expenditure is incurred as this is considered to be the point at which the service has been performed and the revenue recognition criteria met.

Annual Accounts 2015-16

Financial assets carried at Provisions Provision is made for home loss payments amortised cost Financial assets comprise rent and service charge arrears, other debtors, prepayments and cash and cash equivalents. Where the effect of discounting is material, financial assets are measured at amortised cost using the effective interest method. A financial asset is derecognised when the contractual rights to cash flows expire, or when the financial asset and all substantial risks and reward are transferred.

Financial liabilities carried at amortised cost These financial liabilities include trade and other payables and interest bearing loans and borrowings. Non-current debt instruments which meet the necessary conditions in FRS 102, are initially recognised at the transaction value adjusted for any directly attributable transaction cost and subsequently measured at amortised cost using the effective interest method, with interest-related charges recognised as an expense in finance costs in the Statement of Comprehensive Income. Discounting is omitted where the effect of discounting is immaterial. A financial liability is derecognised only when the contractual obligation is extinguished, that is, when the obligation is discharged, cancelled or expires.

Cash and cash equivalents Cash and cash equivalents comprise cash in hand and demand deposits, together with other short term, highly liquid investments that are readily convertible into known amounts of cash and are subject to an insignificant risk of changes in value.

to tenants prior to the forthcoming demolition and redevelopment of a number of properties. These provisions require managementâ&#x20AC;&#x2122;s best estimate of the costs that will be incurred based on legislative and contractual requirements. In addition, the timing of the cash flows and the discount rates used to establish net present value of the obligations require managementâ&#x20AC;&#x2122;s judgement.

Significant management judgements and key sources of estimation uncertainty The preparation of the financial statements requires management to make judgements, estimates and assumptions that affect the application of policies and reported amounts of assets and liabilities, income and expenses. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making the judgments about carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised and in any future periods affected. The following are management judgements in applying the accounting policies of the Group that have the most significant effect on the amounts recognised in the financial statements.

Monmouthshire Housing Association

Impairment of social housing properties The Group have to make an assessment as to whether an indicator of impairment exists. In making the judgement, management considered the detailed criteria set out in the SORP.

Estimation uncertainty The Group makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, seldom equal the related actual results. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are addressed below.

Defined benefit pension scheme The Group has obligations to pay pension benefits to certain employees. The cost of these benefits and the present value of the obligation depend on a number of factors, including; life expectancy, salary increases, asset valuations and the discount rate on corporate bonds. Management estimates these factors in determining the net pension obligation in the balance sheet. The assumptions reflect historical experience and current trends.

Annual Accounts 2015-16

NOTE 3 PARTICULARS OF TURNOVER, OPERATING COSTS AND OPERATING SURPLUS - GROUP 2016 Turnover Operating expenditure £’000 £’000 Social housing lettings Non social housing activities Total

Surplus £’000

2015 Turnover Operating expenditure £’000 £’000

Surplus £’000

19,535

(17,745)

1,790

19,091

(15,530)

3,561

1,128

(826)

302

190

(105)

---------20,663 ======

---------(18,571) ======

---------2,092 ======

---------19,281 ======

---------(15,635) ======

---------3,646 ======

PARTICULARS OF TURNOVER, OPERATING COSTS AND OPERATING SURPLUS - ASSOCIATION 2016 Turnover Operating expenditure £’000 £’000 Social housing lettings Non social housing activities Total

Surplus £’000

2015 Turnover Operating expenditure £’000 £’000

Surplus £’000

19,535

(17,745)

1,790

19,091

(15,530)

3,561

---------19,535 ======

---------(17,745) ======

---------1,790 ======

---------19,091 ======

---------(15,530) ======

---------3,561 ======

Monmouthshire Housing Association

PARTICULARS OF INCOME AND EXPENDITURE FROM SOCIAL HOUSING LETTINGS - GROUP AND ASSOCIATION

Rents receivable Service charge income Income from support services Amortised government grant Other income

Expenditure Service charge costs Management Routine maintenance Major repairs expenditure Depreciation of housing properties Other costs

Operating surplus social housing lettings

Void losses

General Needs £’000

Supported Housing £’000

2016 Total £’000

2015 Total

16,909 165 1,110 1,020 ---------19,204

331 ---------331

16,909 165 331 1,110 1,020 ---------19,535

16,783 230 358 955 765 ---------19,091

(247) (6,030) (6,525) (817) (2,804) (993) ---------(17,416) ---------1,788 ======

(329) ---------(329) ---------2 ======

(247) (6,359) (6,525) (817) (2,804) (993) ---------(17,745) ---------1,790 ======

(346) (5,501) (5,813) (685) (2,720) (465) ---------(15,530) ---------3,561 ======

315

261

Annual Accounts 2015-16

£’000

NOTE 4 - SURPLUS ON DISPOSAL OF PROPERTY, PLANT AND EQUIPMENT Group 2016 £’000 Housing properties – sales proceeds Cost of sales Surplus

Association 2016 2015 £’000 £’000

2015 £’000

2,816

522

5,017

707

(1,624) ---------1,192 ======

(6) ---------516 =====

(3,825) ---------1,192 =====

(6) --------701 =====

The surplus arose due to the sale of 4 Right to Buy properties (£426k), 2 strategic sales (£493k) and the sale of properties for ownership (£1.9m). The sale proceeds also include £2.2m of PV panels sold to the subsidiary, Capsel Limited. The cost of sales is equal to the sales proceeds.

NOTE 5 - INTEREST AND FINANCE COSTS Group 2016 2015 £’000 £’000 Bank loans and overdrafts

879 ------879 ====

Total

866 -----866 ====

Association 2016 2015 £’000 £’000 879 ------879 ====

866 ------866 ====

NOTE 6 - OTHER FINANCE INCOME Group 2016 £’000 Bank interest receivable Other interest receivable

2015 £’000

Association 2016 2015 £’000 £’000

----5 ===

----6 ===

106 ----111 ===

48 ----54 ===

Monmouthshire Housing Association

NOTE 7 - SURPLUS FOR THE YEAR Surplus for the year is stated after charging/(crediting) Group

Association

2016

2015

2016

2015

£’000

2,998

2,811

3,011

2,811

Amortised government grant

(1,110)

(955)

(1,110)

(955)

Gain on disposal of fixed assets

(1,192)

(701)

(1,192)

(701)

17 1

13 1

17 1

13 1

23 ===

22 ===

23 ===

22 ===

Depreciation of property, plant and equipment

Audit fees: Statutory audit Taxation compliance Operating lease rentals

Annual Accounts 2015-16

NOTE 8 - EMPLOYEE INFORMATION Group 2016 2015 number number The average number of staff (including directors) employed during the year was:

Full time equivalents Direct labour organization including admin Head office staff Total

Staff costs for the above persons

Wages and salaries Social security costs Pension costs Total

Association 2016 2015 number number

226

229

217

219

202

194

193

191

79 123 -------202 ====

78 116 ------194 ====

76 117 ------193 ====

76 115 ------191 ====

2016 £’000

2015 £’000

2016 £’000

2015 £’000

6,192 409 610 --------7,211 =====

5,728 383 599 --------6,710 =====

5,973 392 610 ---------6,975 =====

5,653 376 599 ---------6,628 =====

2016 number

2015 number

193

191

===

The average full time equivalent number of employees was:

The basis of the calculation of the full time equivalents was the total combined hours worked by full time and part time employees divided by the total full time hours. This was calculated each month and the average over the year taken.

Monmouthshire Housing Association

The number of directors who received emoluments (excluding pension contributions) in the following range was: Group 2016 2015 number number Salary band (ÂŁ) 50,000 -59,999 60,000-69,999 70,000-79,999 80,000-89,999 90,000-99,999 100,000-110,000

1 1 1

2 1 1

Association 2016 2015 number number 1 1 1

2 1 1

During the year 2015/16, the Director of Property Services left in May to join another Housing Association and he was replaced by the new director in August 2015. In addition, the Director of Housing and Communities worked part time until January when he returned to full time employment.

Annual Accounts 2015-16

NOTE 9 - DIRECTORS REMUNERATION AND TRANSACTIONS Key management personnel Group At March At March 2016 2015 £’000 £’000 Salaries Social security costs Pension costs

302 33 41 -----376 ===

Total

320 35 43 -----398 ===

Association At March At March 2016 2015 £’000 £’000 320 33 41 -----394 ===

320 35 43 -----398 ===

Board members receive no remuneration and are paid travel expenses at the existing HMRC approved rate per mile of 45 pence. Directors are defined as members of the Board, the Chief Executive and any other person who is a member of the executive management team.

Remuneration of the highest paid director, excluding pension contributions:

At 31st March 2016 £’000

At 31st March 2015 £’000

109

101

The Chief Executive is an ordinary member of the pension scheme. No additional contributions to any pension scheme have been made and there were no special or enhanced terms which applied. The employer’s contribution to the pension scheme on behalf of the Chief Executive in the year was £14k (2015: £14k).

Monmouthshire Housing Association

NOTE 10 - TAX ON SURPLUS ON ORDINARY ACTIVITIES The tax charge comprises:

Current tax on surplus on ordinary activities

2016 £’000

2015 £’000

2016 £’000

2015 £’000

38 ===

===

38 ===

===

The standard rate of tax applied to the reported surplus is 20% (2015 – 21%). The differences between the total tax charge shown above and the amount calculated by applying the standard rate of UK corporation tax to the surplus is as follows:

Surplus before tax Surplus on taxable activities Tax on ordinary activities at standard rate of UK corporation tax (20%) Effects of: Utilisation of tax losses not previously recognised Capital allowances in excess of depreciation Adjustment in respect of previous periods Group relief Total charge for the period

2016 £’000

2015 £’000

2016 £’000

2015 £’000

2,410

3,302

2,176

3,450

290 59

(21) -----38 ====

-------====

(21) ------38 ====

------====

Annual Accounts 2015-16

NOTE 11 - INTANGIBLE FIXED ASSETS – GROUP AND ASSOCIATION Computer software £’000

£’000

84 ---------84 ======

------====

---------======

Net book value at 31st March 2016

84 ====

84 ======

Net book value at 31st March 2015

COST As at 1st April 2015 Additions – externally purchased Disposals

AMORTISATION As at 1st April 2015 Additions Eliminated on disposal As at 31st March 2016

Monmouthshire Housing Association

Total

NOTE 12 - TANGIBLE FIXED ASSETS – HOUSING PROPERTIES - GROUP

Cost or valuation At beginning of year Completed properties acquired Components capitalised Disposals At March 2016 Depreciation At April 2015 Charge for the year Eliminated on disposals

Net book value At March 2016 At March 2015

Completed properties £’000

Under construction £’000

Total £’000

60,159 6,265 3,895 (231) ---------70,088 =====

3,869 (627) ---------3,242 ======

64,028 5,638 3,895 (231) -------73,330 =====

(11,390) (2,768) ---------(14,158) ======

-------=====

(11,390) (2,768) -------(14,158) ======

55,930 ====== 48,769 ======

3,242 ====== 3,869 ======

59,172 ====== 52,638 ======

Completed properties £’000

Under construction £’000

Total £’000

58,489 6,265 3,895 (2,247) --------66,402 =====

3,869 (627) -------3,242 =====

62,358 5,638 3,895 (2,247) --------69,644 =====

(11,248) (2,781) ---------(14,029) ======

-------=====

(11,248) (2,781) ----------(14,029) ======

52,373 ====== 47,241 ======

3,242 ===== 3,869 =====

55,615 ===== 51,110 =====

TANGIBLE FIXED ASSETS – HOUSING PROPERTIES – ASSOCIATION

Cost or valuation At beginning of year Completed properties acquired Components capitalised Disposals At March 2016 Depreciation At April 2015 Charge for the year Eliminated on disposals

Net book value At March 2016 At March 2015

Annual Accounts 2015-16

Freehold land and buildings with an Existing Use Value – Social Housing of £91.7m (2015-£92.6m) have been pledged to secure borrowings of the Association. The Association is not allowed to pledge these assets as security for other borrowings or sell them to another entity. Work to existing properties includes costs charged by contractors, external consultants, and related in-house supervision and administration costs which have been capitalised. Capitalisation of own costs totalled £1.49m (2015-£0.86m). This represents the element of the Association’s planned replacement programme which is undertaken by the Association’s workforce. The balance of the programme is undertaken by contractors. 2016 £’000

2015 £’000

Capitalised: replacement of components

3,895

5,637

Charged to Statement of Comprehensive Income

4,462

3,958

Analysis of works to existing properties:

Monmouthshire Housing Association

NOTE 13 - PROPERTY, PLANT AND EQUIPMENT - OTHER GROUP

Cost or valuation At 1st April 2015 Additions At March 2016 Depreciation At 1st April 2015 Charge for the year At March 2016 Net book value At March 2016 At March 2015

ASSOCIATION

Cost or valuation At 1st April 2015 Additions At March 2016 Depreciation At 1st April 2015 Charge for the year At March 2016 Net book value At March 2016 At March 2015

Freehold property £’000

Fixtures and Fittings £’000

Total £’000

4,455 10 ------4,465 ====

760 139 ------899 ====

5,215 149 ------5,364 ====

(350) (56) ------(406) ====

(577) (174) ------(751) ====

(927) (230) -------(1,157) =====

4,059 ==== 4,105 ====

148 ==== 183 ====

4,207 ===== 4,288 ====

Freehold property £’000

Fixtures and Fittings £’000

Total £’000

4,455 10 ------4,465 ====

760 139 -----899 ====

5,215 149 ------5,364 ====

(350) (56) -----(406) ====

(577) (174) -----(751) ====

(927) (230) -------(1,157) =====

4,059 ===== 4,105 =====

149 ==== 183 ====

4,207 ==== 4,288 ====

Annual Accounts 2015-16

NOTE 14 - INVENTORIES Group 2016 2015 £’000 £’000 Properties under construction held for sale Raw materials and consumables Total

1,190

137 ------137 ====

130 ------1,320 ====

137 ------137 ====

130 -------1,320 ====

Inventories are valued at the lower of cost or net realisable value.

Association 2016 2015 £’000 £’000

Monmouthshire Housing Association

NOTE 15 - DEBTORS Group 2016 £’000

Amounts falling due within one year Rent arrears Provision for bad debts

911 (320) ------591 75 1,330 110 320 --------2,437 =====

Net rental debtors Loans to employees Inter company debtor Other debtors HMRC – VAT refund Prepayments and accrued income Total

2015 £’000 867 (302) -----565 83 144 333 779 ---------1,904 =====

Association 2016 2015 £’000 £’000 911 (320) -------591 75 242 1,087 110 320 --------2,425 =====

867 (302) ------565 83 413 346 333 185 --------1,925 =====

The Association has made a number of car loans to employees. The loans are for a period up to 5 years and the interest charged is a fixed rate of 6.1% APR – which is above the HMRC official rate.

Amounts falling due after more than one year Other debtors (car loans) Finance lease Total falling due after more than one year Total debtors

Group 2016 £’000 42 --------42 --------2,479 =====

2015 £’000 41 --------41 --------1,945 =====

Annual Accounts 2015-16

Association 2016 2015 £’000 £’000 42 3,181 --------3,223 --------5,648 =====

41 1,388 --------1,429 --------3,354 =====

NOTE 16 - CREDITORS - AMOUNTS FALLING DUE WITHIN ONE YEAR Group 2016 £’000 Rents in advance Other creditors Accrued interest Accruals SHG in advance Taxation and national Insurance Retentions Contractors – planned improvements Pensions Government grants Total

227 651 210 712 366 154 733 1 1,085 --------4,139 =====

2015 £’000 237 1,791 211 296 673 110 107 820 --------4,245 =====

Association 2016 £’000 227 322 210 643 366 154 733 1 1,065 --------3,721 =====

2015 £’000 237 1,498 211 296 673 110 107 820 --------3,952 =====

NOTE 17 - CREDITORS - AMOUNTS FALLING DUE AFTER MORE THAN ONE YEAR Group 2016 £’000 Housing loans Welsh Government dowry grant Other government grants Social Housing Pension scheme Other creditors Total

19,400 15,355 6,424 69 56 -------41,304 =====

2015 £’000 19,400 13,820 5,080 ------38,465 =====

Association 2016 £’000 19,400 15,355 6,424 69 156 -------41,404 =====

2015 £’000 19,400 13,820 5,080 --------38,465 =====

The loans are secured on those freehold properties which were transferred from the council in January 2008. Interest is payable at 4.54% (2015 – 4.75%). The total accumulated amount of capital grant received or receivable at the balance sheet date is £33m.

Monmouthshire Housing Association

Housing loans Due within: Between one and two years Between two and five years In five years or more At March 2016 Welsh Government dowry grant Between one and two years Between two and five years In five years or more At March 2016 Other government grants Between one and two years Between two and five years In five years or more At March 2016 Social Housing Pension Scheme Between one and two years Between two and five years In five years or more At March 2016 Other creditors Between one and two years Between two and five years In five years or more At March 2016

Total creditors after one year

Group 2016 £’000

2015 £’000

Association 2016 £’000

2015 £’000

19,400 --------19,400

1,065 3,195 11,095 ---------15,355 =====

935 2,805 10,080 --------13,820 =====

1,065 3,195 11,095 --------15,355 =====

935 2,805 10,080 --------13,820 =====

121 364 5,939 --------6,424 =====

97 290 4,693 -------5,080 =====

121 364 5,870 --------6,424 =====

97 290 4,693 ---------5,080 =====

7 22 40 -----69 ===

----====

7 22 40 ----69 ===

----===

10 29 17 --------56 ====

10 29 126 ------165 ====

10 29 117 -------156 ====

10 29 126 --------165 ====

---------41,304 =====

---------38,465 =====

---------41,404 =====

---------38,465 =====

Annual Accounts 2015-16

NOTE 18 - PROVISIONS – GROUP AND ASSOCIATION

Provision for home loss and decanting

2016 £’000 409 ====

2015 £’000 ====

Prior to the year end, the Association’s Board agreed to demolish a number of properties, a complex for older persons and three blocks of flats, in 2016. Each tenant will be entitled to a statutory home loss payment of £5,300 plus an addition payment of £2,000 towards removal and disturbance costs. The payments will be made over the next two years.

NOTE 19 - DEFINED BENEFIT SCHEMES SCHEME: LOCAL GOVERNMENT PENSION SCHEME Monmouthshire Housing Association is an admitted member of the Greater Gwent (Torfaen) Pension Fund, which is part of the Local Government Pension Scheme (LGPS) – a funded defined benefit scheme based on final salary. The Association’s contributions in the year were 13.3% of pensionable salary (2015 – 13.3%) The schemes are funded schemes. The most recent actuarial valuations of scheme assets and the present value of the defined benefit obligation were carried out at 31st March 2016 by Douglas Green of Hymans Robertson LLP, a fellow of the Institute and Faculty of Actuaries. The present value of the defined benefit obligations, the related current service costs and the past service costs were measured using the projected unit credit method. The key assumptions used are:

2016 2015 % p.a.

% p.a.

Pension increase rate 2.2% 2.1% Salary increase rate* 3.7% 3.6% Discount rate 3.5% 3.4%

Salary rate increases are assumed to be 1% p.a. until March 2016 reverting to the long term assumption shown thereafter.

Monmouthshire Housing Association

MORTALITY Life expectancy is based on the SAPA year of birth tables with improvements in line with the CMI2012 model assuming the rate of improvement will converge to a long term rate of 1.5%. Mortality loading were applied to the SAPS tables based on membership class. Based on these assumptions, the average future life expectancies at age 65 are summarised below: Males Females Current pensioners 23.0 years 25.4 years Future pensioners* 25.2 years 27.8 years *Figures assume members age 45 as at the last formal valuation date.

HISTORIC MORTALITY Life expectancies for the prior period are based on the SAPS tables. Mortality loadings were applied to the SAPS tables based on the membership class. The allowance for future improvements are shown below: Period ended Prospective pensioners Pensioners 31st March 2016

CMI 2012 tables with a 1.5% p.a. rate of long term improvements

CMI 2012 tables with a 1.5% p.a. rate of long term improvements.

Note that the mortality assumptions are identical to those used in the previous period.

Annual Accounts 2015-16

Period ended 31st March 2016

Assets (£000)

18,850 -

Fair value of plan assets

Present value of funded liabilities

--------

Present value of unfunded liabilities Opening position as at 31st March 2015 Service cost

Obligations (£000) (22,797) ---------

Net (liability) / Asset £000 18,850 (22,797) ----------

18,850

(22,797)

(3,947)

Current service cost

(953)

Past service cost

(4)

Effect of settlements Total service cost Net interest

(957)

654

(795)

654 ----654

(795) --------(1,752)

(141) --------(1,098)

Plan participants’ contributions

268

(268)

Employer contributions

568

Interest income on plan assets Interest cost on defined benefit obligation Impact of asset ceiling on net interest Total net interest Total defined benefit cost recognised in surplus Cash flows

Contributions in respect of unfunded benefits Benefits paid Unfunded benefits paid Effect of business combinations and disposals Expected closing position Total re-measurements recognised in the I&E Fair value of plan assets Present value of funded liabilities Present value of unfunded liabilities** Closing position as at 31st March 2016

568

(69)

-------20,271 (1,179) 19,092

--------(24,748) (130) -

-------(4,477) (1,049) 19,092

(24,618)

(24,681)

-------19,092 =====

--------(24,618) =====

-------(5,526) =====

Changes in the fair value of plan assets, defined obligation and net liability for the year ended 31 March 2016. *Current service cost includes an allowance for administration expenses of 0.4% of payroll **For the unfunded liabilities as at 31 March 2016, it is assumed that all unfunded pensions are payable for the remainder of the member’s life. It is further assumed that 90% of pensioners are married (or cohabiting) at death and that their spouse (cohabitee)

Monmouthshire Housing Association

Information about the defined benefit obligation

Active members Deferred members Pensioner members -------TOTAL

Liability split (ÂŁ000) as at 31st March 2016

Liability split % as at 31st March 2016

18,264 1,139 5,215 -------24,618 =====

74.2% 4.6% 21.2% -------100%

Weighted average duration at previous formal valuation 23.9 28.5 13.9 -------21.7

Please note that the above figures are for the funded obligations only and do not include any unfunded pensioner liabilities. The durations are as they stood at previous formal valuation as at 31st March 2013.

Annual Accounts 2015-16

Changes in the fair value of plan assets, defined obligation and net liability for the year ended 31st March 2015. Period ended 31st March 2015

Assets

Fair value of plan assets

£’000

Obligations Net (liability) / asset £’000 £’000

16,425

Present value of funded liabilities

(17,331)

-------

----------

---------

16,425

(17,331)

(906)

Current service cost*

(695)

Past service cost

(90)

Effect of settlements Total service cost Net interest

(785)

751

(795)

751 ----751

(795) -------(1,580)

(44) ------(829)

Plan participants’ contributions

262

(262)

Employer contributions

588

(392)

392

--------

----------

--------

17,634

(18,781)

(1,147)

Changes in demographic assumptions

Changes in financial assumptions

(4,016)

Other experience

1,216

1,216 18,850

(4,016) -

(2,800) 18,850

(22,797)

Opening position as at 31 March 2014 st

Service cost

Interest income on plan assets Interest cost on defined benefit obligation Impact of asset ceiling on net interest Total net interest Total defined benefit cost recognised in surplus Cash flows

Contributions in respect of unfunded benefits Benefits paid

Expected closing position Re-measurements

Return on assets excluding amounts included in net interest Total re-measurements recognised in the I & E Fair value of plan assets Present value of funded liabilities Present value of unfunded liabilities**

-------------st 18,850 (22,797) Closing position as at 31 March 2016 ===== ====== *Current service cost includes an allowance for administration expenses of 0.4% of payroll.

100

Monmouthshire Housing Association

-------(3,947) =====

SCHEME: THE PENSIONS TRUST – SOCIAL HOUSING PENSION SCHEME The Association participates in the scheme, a multi-employer scheme which provides benefits to some 500 non-associated employers. The scheme is a defined benefit scheme in the UK. It is not possible for the Association to obtain sufficient information to enable it to account for the scheme as a defined benefit scheme. Therefore it accounts for the scheme as a defined contribution scheme. The scheme is subject to the funding legislation outlined in the Pensions Act 2004 which came into force on December 2005. This, together with documents issued by the Pensions Regulator and Technical Actuarial Standards issued by the Financial Reporting Council, set out the framework for funding defined benefit occupational pension schemes in the UK. The scheme is classified as a ‘last-man standing arrangement.’ Therefore the Association is potentially liable for other participating employers’ obligations if those employers are unable to meet their share of the scheme deficit following withdrawal from the scheme. Participating employers are legally required to meet their share of the scheme deficit on an annuity purchase basis on withdrawal from the scheme. A full actuarial valuation for the scheme was carried out with an effective date of 30th September 2014. This actuarial valuation was certified on 23 November 2015 and showed assets of £3,123m, liabilities of £4,446m and a deficit of £1,323m. To eliminate this funding shortfall, the trustees and the participating employers have agreed that additional contributions will be paid, in combination from all employers, to the scheme as follows: DEFICIT CONTRIBUTIONS Tier 1 – From 1st April 2016 to 30st September 2020: £40.6m per annum Tier 2 – From 1st April 2016 to 30st September 2023: £28.6m (payable monthly and increasing by 4.7% each year on 1st April) Tier 3 – From 1st April 2016 to 30st September 2026: £32.7m (payable monthly and increasing by 3.0% each year on 1st April) Tier 4 – From 1st April 2016 to 30st September 2026: £31.7m (payable monthly and increasing by 3.0% each year on 1st April) Note that the scheme’s previous valuation was carried out with an effective date of 30 September 2011; this valuation was certified on 17th December 2012 and showed assets of £2,062m, liabilities of £3,097m and a deficit of £1,035m. To eliminate this funding shortfall, payments consisted of the Tier 1, 2 & 3 deficit contributions. Where the scheme is in deficit and where the Association has agreed to a deficit funding arrangement, the company recognises a liability for this obligation. The amount recognised is the net present value of the deficit reduction contributions payable under the agreement that relates to the deficit. The present value is calculated using the discount rate detailed in these disclosures. The unwinding of the discount rate is recognised as a finance cost.

Annual Accounts 2015-16

101

RECONCILIATION OF OPENING AND CLOSING PROVISIONS

Provision at the start the period Unwinding of the discount factor (interest expense) Deficit contribution made Re-measurements – impact of any change in assumptions Re-measurements – amendments to contribution schedule Provision at end of period Statement of Comprehensive Income impact

Interest expense Re-measurements – impact of any change in assumptions Re-measurements – amendments to contribution schedule

Assumptions Rate of discount

31st March 2016 % per annum 2.06

Period ending 31st March 2016 (£’s) 29,395 541 (2,437) (561) 49,866 ---------76,804

Period ending 31st March 2015 (£’s) 29,155 842 (2,366) 1,764 ---------29,395

Period ending 31st March 2016 (£s) 541 (561) 49,866

Period ending 31 March 2015 (£s) 842 1,764 -

31st March 2015 % per annum 1.92

31st March 2014 % per annum 3.02

The discount rates shown above are the equivalent single discount rates which, when used to discount the future recovery plan contributions due, would give the same results as using a full AA corporate bond yield curve to discount the same recovery plan contributions.

102

Monmouthshire Housing Association

DEFICIT CONTRIBUTIONS SCHEDULE The following schedule details the deficit contributions agreed between the company and the scheme at each year end period: Year ending

31-Mar-16 31-Mar-15 31-Mar-14 (£) (£) (£)

Year 1 7,063 2,437 2,366 Year 2 7,275 2,510 2,437 Year 3 7,493 2,586 2,510 Year 4 7,718 2,663 2,586 Year 5 7,950 2,743 2,663 Year 6 8,188 2,825 2,743 Year 7 8,434 2,910 2,825 Year 8 8,687 2,998 2,910 Year 9 8,948 3,087 2,998 Year 10 9,216 3,180 3,087 Year 11 4,746 3,276 3,180 Year 12 - 1,687 3,276 Year 13 - - 1,687 Year 14 - - Year 15 - - Year 16 - - Year 17 - - Year 18 - - Year 19 - - Year 20 - - -

Annual Accounts 2015-16

103

NOTE 20 - SHARE CAPITAL – GROUP AND ASSOCIATION

At 1st April 2015 Issued during the year Shares cancelled during the year At 31st March 2016

2016 £

2015 £

85 9 (1) ----93 ===

79 6 ----85 ===

Shareholders pay £1 (also their par value) for a share and have voting rights but no entitlement to dividends or return of monies in respect of shares surrendered or a share in the assets in the event of the Association being wound up.

NOTE 21 - STATEMENT OF CASH FLOWS Group

Association 2016 2015

2016

2015

£’000

2,410

3,302

2,176

3,450

3,225 1,183 (2,195) (802) 409 530 2,265

2,811 (1,199) 82 2,823 241 6

3,011 1,183 (2,020) (525) 409 530 2,265

2,811 (1,199) 82 2,765 241 6

(4,738) 879 (6)

(4,307) 866 (6)

(4,738) 879 (60)

(4,307) 866 (54)

3,160 ===== 1,237 =====

4,619 ===== 1,083 =====

3,110 ===== 1,205 =====

4,661 ===== 1,001 =====

Cash flow for operating activities: Surplus for the year before taxation Adjustment for non cash items Depreciation of property and equipment Decrease/(increase) in inventories Decrease / (increase) in debtors Increase /(decrease) in creditors Increase / (decrease) in provisions Pension costs less contributions paid Carrying amount of disposals Adjustments for investing or finance activities: Government grants utilised Interest payable Interest received Cash generated by operations Cash and cash equivalents

104

Monmouthshire Housing Association

NOTE 22 - FINANCIAL COMMITMENTS Capital commitments are as follows:

Contracted for but not provided for Approved by the Directors but not contracted for

2016 £’000

2015 £’000

2016 £’000

2015 £’000

580 7,400

4,504 196

580 7,400

4,504 196

The expenditure will be funded by a combination of Social Housing Grant and an existing loan facility of £45 million, of which the Association has drawn £19.4 million as at 31st March 2016. Total future minimum lease payments under non-cancellable operating leases are as follows: 2016 £’000

2015 £’000

2016 £’000

2015 £’000

23 41 ----64 ===

21 35 ----56 ===

23 41 ----64 ===

21 35 ----56 ===

Payments due: within one year between one and five years after five years

NOTE 23 - HOUSING STOCK Owned and managed General needs housing accommodation Housing accommodation at an affordable rent Housing accommodation at intermediate rent Supported housing accommodation Housing accommodation let at market rent Total

Annual Accounts 2015-16

2016

2015

3,539 6 6 15 ------3,566 ====

3,551 19 2 ------3,572 ====

105

NOTE 24 - RELATED PARTY TRANSACTIONS Monmouthshire Housing Association’s board consists of 12 members consisting of an equal number of councillors, tenants and independent nominees. No board member can use their position to their advantage and they are only reimbursed with travel expenses at the appropriate HMRC rate. At the year end, the aggregate rent balance for tenant board members was an arrears balance of £19. Capsel Limited is a non-charitable company which is 100% owned by Monmouthshire Housing Association Limited and any staff time and costs are recharged from the parent company. The recharge varies from 2% to 100% dependent on the level of involvement. For the year ending 31st March 2016, the total recharge was £74k (2015 - £42k). Capsel Limited has two finances leases with the parent to fund the purchase of photovoltaic panels. These leases are at commercial interest rates and the interest payments to March 2016 were £103k (2015 - £42k). During the year, Capsel Limited undertook £733k of work for Monmouthshire Housing Association Limited and the year end inter group balances were: • Owed by Monmouthshire Housing Association Limited to Capsel Limited - nil • Owed by Capsel Limited to Monmouthshire Housing Association Limited - £3.57 million

NOTE 25 - ULTIMATE CONTROLLING PARTY The ultimate controlling party of the Monmouthshire Housing Association Group is the Board. The Group prepares publicly available Annual Financial Statements; copies of which are available upon request from the registered office.

NOTE 26 - INVESTMENTS Capsel Limited is a company registered in the UK and is 100% owned by Monmouthshire Housing Association Limited. The primary activities of Capsel Limited are construction and repair of properties, renewable energy and property management.

106

Monmouthshire Housing Association

NOTE 27 - FRS 102 This is the first year that the Group has presented its financial statements under Financial Reporting Standard 102 (FRS 102) issued by the Financial Reporting Council. The following disclosures are required in the year of transition. The last financial statements under previous GAAP were for the year ended March 2015 and the date of transition to FRS 102 was therefore 1 April 2014. As a consequence of adopting FRS 102, a number of accounting policies have changed to comply with the standard.

Annual Accounts 2015-16

107

108

Monmouthshire Housing Association

(5,832)

13,787

(906)

Pensions reserve

13,787

(21,300)

2,960

(17,400)

14,693

Total equity

(18,306)

(906)

(2,994)

2,960

(2,994)

35,087

4,548

992

3,435

2,960

30,539

121

2,960

4,315

Revenue reserve

Share capital

Equity

Net assets

Total liabilities

Loans and borrowings

Deferred income

Pensions

Non-current liabilities

Trade and other payables

Current liabilities

Liabilities

Total assets

Cash

Trade and other receivables

Inventories

Current assets

Property, plant and equipment

(18,542)

Depreciation

Grants

50,598

£’000

Housing Properties

Fixed Assets

Assets

Grants released to I&E

Previous UK GAAP

(15,582)

15,582

£’000

Grants reclassified

5,817

£’000

Depreciation adjustment

(8,437)

£’000

Depreciation adjustment

(28)

£’000

Pension adjustment

(40)

£’000

Holiday pay accrual

(73)

£’000

Fixed assets

RECONCILIATION OF NET ASSETS AND RESERVES AT 1 APRIL 2014 FOR THE ASSOCIATION – DATE OF TRANSITION TO FRS 102

14,059

(906)

14,965

14,059

(36,950)

(33,888)

(17,400)

(15,582)

(906)

(3,062)

51,009

4,548

992

3,435

121

46,461

4,388

(8,452)

50,525

£’000

FRS 102

Annual Accounts 2015-16

109

(7,669)

4,025

35,888

(11,248)

Total equity

14,399

(3,947)

Pensions reserve

(18,286)

Revenue reserve

Share capital

Equity

14,339

(27,223)

Total liabilities

Net assets

(23,347)

Loans and borrowings

Deferred income

4,025

(3,876)

Pensions

Non-current liabilities

(3,876)

(19,065)

7,669

(19,065)

(11,248)

7,669

19,065

(11,248)

£’000

Depreciation adjustment

Current liabilities

4,025

7,669

£’000

Depreciation adjustment

19,065

£’000

Grants reclassified

Trade and other payables

Liabilities

41,562

1,001

5,674

Cash

Total assets

3,353

1,320

Trade and other receivables

4,185

4.025

Inventories

Current assets

Property, plant and equipment

(23,090)

Depreciation

Grants

62,462

£’000

Housing Properties

Fixed Assets

Assets

Grants released to I&E

Previous UK GAAP

RECONCILIATION OF NET ASSETS AND RESERVES AT 1 APRIL 2015 FOR THE ASSOCIATION

(28)

£’000

Pension adjustment

(48)

£’000

Holiday pay accrual £’000

Fixed assets

14,709

(3,947)

18,656

14,709

(46,364)

(42,412)

(23,347)

(19,065)

(3,952)

61,073

5,674

1,001

3,353

1,320

55,339

4,185

(11,248)

62,462

£’000

FRS 102

110

Monmouthshire Housing Association (906) 13,841

Pensions reserve

Total equity

14,747

13,841

(21,262)

2,960

(17,400)

2,960

(18,306)

(906)

(2,956)

Revenue reserve

Share capital

Equity

Net assets

Total liabilities

Loans and borrowings

Deferred income

Pensions

Non current liabilities

Trade and other payables

Current liabilities

Liabilities

35,103

3,069

Total assets

1,164

1,784

Cash

2,960

32,034

121

2,960

£’000

4,315

(18,452)

5,903

52,164

£’000

Grants released to I & E

Trade and other receivables

Inventories

Current assets

Property, plant and equipment

Grants

Depreciation

Housing Properties

Fixed Assets

Assets

Previous UK GAAP

(15,582)

15,582

£’000

Grants reclassified

5,817

£’000

Depreciation adjustment

(8,437)

£’000

Depreciation adjustment

(28)

£’000

Pension adjustment

RECONCILIATION OF NET ASSETS AND RESERVES AT 1 APRIL 2014 FOR THE GROUP – DATE OF TRANSITION TO FRS 102

(40)

£’000

Holiday pay accrual

14,113

(906)

15,019

14,113

(36,192)

(33,888)

(17,400)

(15,582)

(906)

(3,024)

51,025

3,069

1,164

1,784

121

47,956

4,315

(8,523)

52,164

£’000

FRS 102

Annual Accounts 2015-16

111

(3,947) 14,245

Pensions reserve

Total equity

18,192

Revenue reserve

Share capital

Equity

14,245

(27,516)

Total liabilities

Net assets

(23,447)

???

4,169

Loans and borrowings

Deferred income

Pensions

Non current liabilities

Trade and other payables

Current liabilities

Liabilities

41,761

1,083 4,348

Cash

Total assets

1,945

4,025

1,320

Trade and other receivables

4,025

37,413

Inventories

Current assets

4,025

4,286

(23,090)

Property, plant and equipment

Grants

64,028 (7,811)

£’000

Depreciation

£’000

Grants released to I & E

Housing Properties

Fixed Assets

Assets

Previous UK GAAP

(19,065)

19,065

£’000

Grants reclassified

7,669

£’000

Depreciation adjustment

RECONCILIATION OF NET ASSETS AND RESERVES AT 1 APRIL 2015 FOR THE GROUP

(11,248)

£’000

Depreciation adjustment

(28)

£’000

Pension adjustment

(48)

£’000

Holiday pay accrual

14,615

(3,947)

18,562

14,615

(46,657)

(23,447)

(19,065)

(4,245)

61,272

4,348

1,083

1,945

1,320

56,924

4,286

(11,390)

64,028

£’000

FRS 102

RECONCILIATION OF STATEMENT OF TOTAL COMPREHENSIVE INCOME For the year ending 31st March 2015 - Association

UK GAAP Grants previously released to reported I&E £’000 £’000

Turnover Operating expenditure

Operating surplus

Gain / (loss) on disposal

Interest receivable

Interest and financing costs

Surplus for the year

Actuarial loss in respect of pensions

Total I & E for the year

112

Reverse depreciation

Revised depreciation

FRS 102

£’000

18,136 (14,673) ----------

955 ----------

1,837 ----------

(2,694) ----------

19,091 (15,530) ----------

3,463

955

1,837

(2,694)

3,561

701

(866) ----------

----------

(866) ----------

3,352

955

1,837

(2,694)

3,450

(2,800)

------

--------

---------

-------

552 ====

955 ====

1,837 =====

(2,694) =====

650 ====

Monmouthshire Housing Association

RECONCILIATION OF STATEMENT OF TOTAL COMPREHENSIVE INCOME For the year ending 31st March 2015 - Group

UK GAAP Grants released Reverse Revised previously to I & E depreciation depreciation reported £’000 £’000 £’000 £’000

Turnover Operating expenditure

Operating surplus

Gain / (loss) on disposal

Interest receivable

Interest and financing costs

Surplus for the year

Actuarial loss in respect of pensions

Total I & E for the year

FRS 102 £’000

18,326 (14,778) ----------

955 ----------

1,837 ----------

(2,694) ----------

19,281 (15,635) ----------

3,548

955

1,837

(2,694)

3,646

516

(866) ----------

----------

(866) ----------

3,204

955

1,837

(2,694)

3,302

(2,800)

955

(2,800)

----------

404 ======

955 ======

1,837 ======

(2,694) ======

502 ======

Annual Accounts 2015-16

113

NOTES TO THE RECONCILIATION FRS 102 requires that capital grant, previously deducted from the cost of fixed assets, is treated as creditors where the fixed assets are carried at cost. The effect compared to current UK GAAP is an increase to the carrying cost of housing properties of £15.9m, an increase in the depreciation at transition of £2.6m and a decrease in the surplus for the year end 31st March 2015 of £857k. FRS 102 requires that government capital grant, previously deducted from the carrying cost of housing properties, is treated as a deferred capital grant creditor and released to the income statement over the useful life of the associated assets. The effect compared to current UK GAAP is an increase in income recognised on transition of £2.93m and an increase of £0.95m in the surplus for the year end 31st March 2015. FRS 102 requires that grant received from nongovernment sources is recognised in the income statement when performance conditions are met. The effect compared to current UK GAAP is to increase reserves at transition by £26k and increase the surplus for the year ended 31st March 2015 by £10k. FRS 102 requires that a liability is recognised for the contributions that arise from an agreement to fund a deficit in a multi-employer pension scheme. The effect is that a liability for the SHPS payment plan has been recognised at the present value of the contributions payable using the discount rate specified in note 19. This has resulted in a decrease in reserves of £28k at transition and a decrease in the surplus for the year end 31st March 2015 of £48k. FRS 102 requires the recognition in the income statement of a net interest cost (or income) on defined benefit pension schemes. This is calculated by multiplying the net pension liability (or asset) by the market yields on high quality corporate bonds. The effect of this, when compared to previous UK GAAP, has been to reduce reported profits for the year end 31st March 2015 because previous UK GAAP led to the recognition of finance income calculated by reference to the expected returns on the pension plan’s specific assets, be they equities, properties or bonds. The change has had no effect on reported equity as the measurement of the net defined pension scheme liability (or asset) has not changed. Instead, the decrease (or increase) in reported profit is mirrored by an increase in actuarial gains (or losses) which are presented within the Statement of Comprehensive Income.

114

The subsidiary’s accounts are prepared in accordance with FRS 102 and do not require any transition adjustments.

NOTE 28 - FINANCIAL INSTRUMENTS The carrying values of the Group’s financial assets and liabilities are summarised by category below: Group 2016

2015

£’000

591

565

1,237 651 --------

1,083 297 --------

2,479

1,945

=====

19,400 21,835

19,400 19,065

4,070 ------

4,245 -------

45,443

42,710

=====

Financial assets Measured at undiscounted amount receivable Rent arrears and other debtors (see note 15) Cash Other debtors

Financial liabilities Measured at amortised cost Loans payable (note 16) Deferred income (note 16) Measured at undiscounted amount payable Trade and other creditors

The Group’s income, expense, gains and losses in respect of financial instruments were £nil (2015-£nil)

Monmouthshire Housing Association

Where Our Homes Are Located Grosmont Fawr (20) Crucorney Fawr (11)

Gilwern (53)

Govilon/ Llanfoist (147)

Clydach (32)

Mardy (367)

Llantilio United (20)

Abergavenny (599)

Llanelly Hill (54)

Monmouth (343) Wyesham (152)

Llanarth (16)

Mitchell Troy United (30)

Llanover Fawr (39)

Raglan United (79) Goytre Fawr (64)

Trellech United (47)

Gwehelog Fawr (4)

Tintern (19)

Usk (93)

Devauden (20) St Arvans (16)

Llangybi (35)

Shirenewton (6) Caerwent (45)

Chepstow (447) Mathern (17)

Other (5)

Caldicot (657) Magor (58) Undy (18)

Annual Accounts 2015-16

Portskewett (57)

Rogiet (57)

115

0345 677 2277 customerservices@monmouthshirehousing.co.uk www.monmouthshirehousing.co.uk Monmouthshire Housing Association Nant-Y-Pia House, Mamhilad Technology Park Mamhilad, Monmouthshire, NP4 0JJ facebook.com/Monmouthshire.Housing twitter.com/mon_housing

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