asra Housing Group Limited asra housing Financial Statements 2016 7 Principal Activities and review...

asra Housing Group LimitedFinancial Statements for the year ended 31 March 2016

Financial Statements 2016 3 2 asra housing

Contents

Board and Directors 3

Chairman’s Statement 4

Report of the Board of Management including value for money assessment 5

Statement of the Board’s responsibilities in respect of the 9Board Report and the financial statements

Strategic report 10

Independent Auditor’s Report 19

Consolidated Statement of Comprehensive Income 21

Consolidated Statement of Financial Position 22

Statement of Changes in Reserves 23

Consolidated Statement of Cash Flows 24

Notes to the Financial Statements 25

Board and Directors

Members of the Board

Group Chairman Aman Dalvi OBE

Other Members Matt Cooney (Co-optee) Stephen Duck Resigned 31 May 2016 JafferKapasiOBE Ponniah Rasanesan Anne Turner Wayne Morris Appointed 1 April 2015 Steve Amos Aniekan Umoren Appointed 1 April 2015 Chris Cheshire Appointed 1 May 2016 KatherineLyons Appointed1May2016

Group Chief Executive Matt Cooney

Group Company Secretary Martin Lewis Resigned 31 March 2016 Matt Cooney Appointed 1 April 2016

Registered Office 3 Bede Island Road Leicester LE2 7EA

Auditors KPMGLLP One Snowhill Snowhill Queensway Birmingham B4 6GH

Solicitors Devonshires 30 Finsbury Circus London EC2M 7DT

Visram House in Park Royal, London


Chairman’s statementOver the last year the housing sector has seen some of the most fundamental changes to housing policy. The Government’s announcement of a four year 1% rent reduction, and lack of certainty thereafter has had a major impact on the investment plans of the housing sector. The Government has clearly signalled a preference that future investment should be to encourage home ownership. The result of the EU Referendum leads us to anotherlevelofuncertainty.Investmentinmuchneedednewhomesisdependentonusraisingnewfinance,and with focus now on home ownership, a stable or improving residential property market.

Againstthisdemandingpolicyandeconomicbackground,asrahasmadesignificantprogressinreorganisingservices and reshaping our future. Our recently published corporate plan sets out an ambitious programme for the future, a future that builds on our heritage. Over the last year we have gained a more complete understanding of the long term value of each of our homes and developed strategies to leverage these for future investment and divest of those which have no long term social value as part of the asra portfolio.

Wehavedevelopedarevisedoperatingmodelthatbuildsefficiencies,modellingbestperformanceintheprivateandpublicsectors.Themodelaimstoresolvethevastmajorityofcustomerissuesatthefirstpointofcontact.We already have an award winning contact centre and a robust technology platform, and we are making further investment to enable customers to more easily order repairs and make enquiries through our website. As a result of the 1% rent cut we have reduced our operating costs. In March 2016, 80 colleagues left the business. Thereshapingofresourcestofrontlineandfirsttimefixhasreducedourmanagementcostsbyover10%.Othersavings have been achieved in major repairs and in the cost of re-letting properties.

In March 2016, the Homes and Communities Agency re-graded asra to G2/V2. This followed an agreed programmeofwork.ThisisthefirststeptorestoringustoaG1status.

Despite the economic uncertainty, our business plan includes ambitious programme to develop new homes. Wewillbeapproachingexistinglendersandthewiderfinancialmarketstoraisenewmoneytofinancethisplan.AspartofthisfinancingexerciseweareevaluatingwhetherwewillamalgamatethetwooperatingRegisteredProviders in the Group: Leicester Housing Association and Asra Housing Association.

This year, the results of the Group are presented under International Financial Reporting Standards. Whilst thereissomedifferenceinterminologyandpresentation,theresultsarelargelycomparablewiththeresultspresentedunderUKstandards.Therearetwomajorchangesinhowwemeasureresults:

(a) adjustments for the fair value of interest rate derivatives at 31st March 2016 was £78m (2015: £71m);

(b) amortisation of social housing grant, for the year ended 31st March 2016 was £4.9m (2015: £4.6m).

Theyearended31stMarch2016wasacommerciallyandfinanciallysuccessfulyearandwehaveachievedaGroupsurplusof£11.9mcomparedwiththedeficitof£0.2mlastyear.Theunderlyingoperatingsurplusofthebusiness,beforepropertydisposals,hasimprovedby£0.8m(2015propertysalesincludedourofficeinLondon).

On behalf of the Board I would like to record my thanks to our stakeholders, contractors, suppliers and all of our staffwhohavesupportedtheGroupduringthischallengingyear.Weembarkonthenewfinancialyearwithaclear sense of purpose and programme of work to deliver our mission.

Aman Dalvi, Group Chairman

21 July 2016

Asra Housing Group’s Operating and Financial Review

6 asra housing Financial Statements 2016 7

Principal Activities and review of businessThe Board presents their report of the Board of ManagementontheaffairsoftheGroup,togetherwiththefinancialstatementsandauditors’report,fortheyear ended 31 March 2016.

TheGroupisapublicbenefitentityandcomprisesAsra Housing Group Limited (Association), and its subsidiary undertakings, which together form the Group. Asra Housing Group Limited is a non-asset holding, non-trading, non-charitable registered provider registered under the Industrial & Provident Societies Act 1965 and now governed by the CooperativeandCommunityBenefitSocietiesAct2014 and is regulated by the Homes and Communities Agency.

For 2015–16 the operating subsidiaries were:

- Leicester Housing Association (LHA) – a charitable Registered Provider (RP)

- Asra Housing Association Limited (ASRA) – a charitable RP

- Asra Construction Services Limited (ACSL) – non-charitable

TheGroupownsandmanagesapproximately14,000homes across the Midlands, Greater London and the South East including the provision of care, support and housing to those with special needs. The Group operates four key business streams:

• housing for rent, primarily by families who are unable to rent at open market rates;

• supported housing and care for people who need additional housing-related support or additional care;

• low-cost home ownership, primarily shared ownership; and

• managed services for local housing co-operatives.

Effects of material estimates and judgments upon performanceIn carrying out its responsibilities, the Board is required to assess whether suitable accounting policies have been adopted and to challenge the managementjudgmentsreflectedintheresults.Thesignificantaccountingissueswherejudgementorestimate are required were:-

Estimated value of completed properties. The Board is required to ensure that the value of completedpropertiesexceedtheinvestmentmadein those properties, after taking into account grants received to support that investment. The value is thevalueofthefuturecashflowsincludingrentalincome, management, maintenance and long term repaircosts.Theseestimatedcashflowsarebasedonbest available information including stock condition data and data provided to us by our valuer Savills plc. In some limited cases, mainly sheltered schemes and properties with common facilities, the cost after deductinggrantexceedsthevalue.Intheseinstanceswe have relied on estimated depreciated replacement cost of these assets, these costs based on data provided by a panel Employer’s Agent.

Recoverability of rent arrears. The accounts includes provision against recoverability of rent arrears. Rent collection performance is monitored by the Board and ExecutiveTeamthroughstandardkeyperformanceindicators. Rent collection targets are annually assessed,andinrecentyearshavebeeninfluencedbyGovernment policy on welfare reform. Performance is benchmarked against other registered providers. The bad debt provision policy is reassessed each year based upon performance and benchmark data.

Going concern. The Board bases its assessment of the Group and the individual group members on the latest business plan forecasts. These forecasts include assessment of compliance with loan covenants, profitability,liquidity,availablepropertysecurity.Theseare subject to sensitivity and scenario testing.

Asra Housing Group’s Report of the Board of Management


Effects of material estimates and judgments upon performance - continuedValue of schemes in the course of development. Provision is made for the cost of work undertaken but not yet certifiedatthebalancesheetdate.Schemesorunitsthatare developed for either private sale or part sale through shared ownership are included in current assets at the lower of cost of cost or net realisable value. The realisable value is based on latest market information.

Qualifying third party indemnity provisionsThe group has no qualifying third party indemnity provisions in place for directors of Asra Housing Group Limited – Registered Social Housing Provider.

Value for Moneyasra has a well developed programme to ensure that we make the best use of our resources and continuously improve value for money. The Government’s announcement that social housing rents would reduce by 1% per annum over four consecutive years sharpened this focus. During the year we have reorganised the way that we deliver our services, and implemented a new operating model. The cost base effective1stApril2016hasbeenreducedbymorethan 10%. We have made use of benchmarking to inform our decisions, with focus being given to repairs, contact centre, and management costs.

Wehavemadesignificantprogressonassessingthelong term value of our properties and also as security forraisingfinance.Wehavecalculatedthereturnsonallof our assets and have developed a strategy to divest those assets where there is limited value to the Group.

Our value for money self assessment sets out in detail the progress that we have made and the work thatwewillbedoingin2016-17.Inthisnextyearourfocus will be on embedding the new operating model, implementing a digital transformation project that will enable customers to access majority of services online and to progress our rationalisation of poorer performing stock.

Our annual value for money self-assessment is published on our website at http://www.asra.org.uk/about-us/performance/value-for-money/.

Compliance with Governance and Financial Viability StandardThe Group has assessed its compliance with the Governance and Viability Standard issued by the HomesandCommunitiesAgencyandcertifiesit’scompliance therewith.

TheBoardmustadheretoCommunityBenefitSocietyRules; a set of standards determined by the Housing Regulator; and a recognised code of governance. The chosen code is the National Housing Federation Codeofgovernance:Promotingboardexcellenceforhousing associations (2015 edition) which the Board is fully committed to, and complied therewith.

The Governance and Remuneration Committee receives a report on its compliance with the Homes and Communities Agency (HCA), Governance and Financial Viability Standard. The Group was compliant with the standards at 31st March 2016. On 1st April 2015, the Group was assessed by the HCA as G3/V2 grading. The Governance grading of G3 is deemed to be non compliant with the requirements of the Standards. In March 2016, the HCA re-graded asra as G2/V2, a compliant grading. This followed completion of a work programme to give the HCA the assurances required to satisfy the observations set out in the Regulatory Judgement of April 2015.

During the year the Group has implemented a comprehensive asset and liability register. The work hasbeenreviewedbySavillsplcwhohavecertifiedthat in their opinion the register is compliant with the requirement of the Standards and Code of Practice.

Going ConcernThe Group’s activities, together with the factors likely toaffectitsfuturedevelopment,itsfinancialposition,financialriskmanagementobjectives,detailsofitsfinancialinstrumentsandderivativeactivities,anditsexposurestocredit,liquidityandcashflowriskaredescribed in the Strategic Report.

The Group has a well developed business plan and risk management strategy. The Board has assessed the plans based on latest available information, and whilst noting the risks and uncertainties in the current environment, that Asra Housing Group Limited has adequate resources to continue its operations for the foreseeable future. For this reason they continue to adopt the going concern basis in preparing accounts.

asra Housing Group’s Report of the Board of Management – continued

Post balance sheet eventsThere are no adjusting post balance sheet events.

Assessment of the effectiveness of internal controlThe Group Board has overall responsibility for establishing and maintaining the system of internal control. As with all systems of internal control, it is designed to manage rather than eliminate all risk of failure to achieve business objectives and can therefore provide reasonable and not absolute assurance against material misstatement or loss. The system of internal control is subject to continuing review and development.

The Group Board delegates responsibility for the annualreviewoftheeffectivenessofthesystemofinternal control to the Risk & Audit Committee. The Committeemetfivetimesduringthecourseoftheyear. Assurance over the control environment was obtained from the following main sources:

(a) Risk management framework

(b) Internal audit service

(c) Financial and performance monitoring and management systems

(d)Seniormanagementcertificationofcontrols

(e) Policy framework covering all major aspects of the operation of the business

(f) Human Resource policies and performance management system

The Risk and Audit Committee formally reviews the system of internal controls on an annual basis. The Committee is mandated to have oversight of the system and considers internal controls at each meeting. The formal review comprises of:

(a) Annual report of the Group Internal Auditor.

(b) Analysis of the senior management assessment of internal control, measured against actual performance and the Group’s risk register.

(c) Statement of review of internal controls by the ExecutiveTeamandpresentedtotheCommitteebytheGroupChiefExecutive.

The Risk and Audit Committee document their review in an annual report which is presented to the Group Board.

ConclusionThe Group Board, through the Risk and Audit Committee,hasreviewedtheeffectivenessoftheGroup’s risk management, internal control and governance processes throughout the year ended 31 March 2016 and up to the date of approval of the annual report and accounts. The Group Board confirmsthatnosignificantweaknessesininternalcontrolshavebeenidentifieduptothedateofsigningthe annual report and accounts that would result in material losses, contingencies or uncertainties, and requiredisclosureinthefinancialstatements.


Board member’s responsibilitiesThe Board is responsible for preparing the Board andStrategicReportsandthefinancialstatementsinaccordance with applicable law and regulations.

Co-operativeandCommunityBenefitSocietylawrequirestheBoardtopreparefinancialstatementsforeachfinancialyear.UnderthoseregulationstheBoardhaveelectedtopreparethefinancialstatementsinaccordancewithUKAccountingStandards.

ThefinancialstatementsarerequiredbylawtogiveatrueandfairviewofthestateofaffairsoftheGroupandtheassociationandoftheincomeandexpenditureofthegroup and the association for that period.

Inpreparingthesefinancialstatements,theBoardisrequired to:

• select suitable accounting policies and then apply them consistently;

• make judgements and estimates that are reasonable and prudent;

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

• prepare the financial statements on the going concern basis unless it is inappropriate to presume that the association will continue in business.

The Board is responsible for keeping proper books of account that disclose with reasonable accuracy at any time thefinancialpositionoftheassociationandenablethemtoensurethatitsfinancialstatementscomplywiththeCo-operativeandCommunityBenefitSocietiesAct2014,theHousing and Regeneration Act 2008 and the Accounting Direction for Private Registered Providers of Social Housing 2015. The Board has general responsibility for taking such steps as are reasonably open to it to safeguard the assets of the association and to prevent and detect fraud and other irregularities.

The Board is responsible for the maintenance and integrity ofthecorporateandfinancialinformationincludedontheassociation’swebsite.LegislationintheUKgoverningthepreparationanddisseminationoffinancialstatementsmaydifferfromlegislationinotherjurisdictions.

Disclosure of information to Auditors TheDirectorswhoheldofficeatthedateofapprovalofthisstatementconfirm,sofarastheyareeachaware,there is no relevant audit information of which the Group’s independent auditors are unaware; and each Director has taken all the steps he/she ought to have taken as a Director to make himself/herself aware of any relevant audit information and to establish that the Group’s independent auditors are aware of that information.

Approved by the board and signed on its behalf by:

Anne Turner

Board Member

21 July 2016

Asra Housing Group’s Report of the Board of Management – continued











Disclosure of information to Auditors

TheDirectorswhoheldofficeatthedateofapprovalofthisstatementconfirm,sofarastheyareeachaware,there is no relevant audit information of which the Group’s independent auditors are unaware; and each Director has taken all the steps he/she ought to have taken as a Director to make himself/herself aware of any relevant audit information and to establish that the Group’s independent auditors are aware of that information.


Anne Turner

Board Member

21 July 2016












Disclosure of information to Auditors

TheDirectorswhoheldofficeatthedateofapprovalofthisstatementconfirm,sofarastheyareeachaware,there is no relevant audit information of which the Group’s independent auditors are unaware; and each Director has taken all the steps he/she ought to have taken as a Director to make himself/herself aware of any relevant audit information and to establish that the Group’s independent auditors are aware of that information.


Anne Turner

Board Member

21 July 2016


Objectives and strategy for achieving those objectivesIn2011-12weconsultedextensivelywithstakeholdersabout their perceptions of asra and, as a result, we set the following purpose and values:

Our purpose - providing homes, not just places to live.

Our values - See it from the customer’s perspective

- Serving diverse communities on their doorstep

- Team asra (“one” team, individually responsible)

Our vision - Achieve a reputation for delivering great homes and great services.

The original Asra Housing Association began as a Black and Minority Ethnic (“BME”) housing provider in 1984 and its initial remit was to provide homes and services for Asian older people. Many of the original BME housing associationsnolongerexistasindependentorganisationsandwithapprox.14,000homes,asraisthelargestremainingBMEhousingassociationintheUK. Today asra is a prominent provider of housing services to multicultural communities.

Asra Housing Group’s Strategic Report

TheBoardpresenttheirstrategicreportontheaffairsoftheGroup,togetherwiththefinancialstatementsandauditors’report, for the year ended 31 March 2016.



Asra Housing Group’s Strategic Report

Business ModelAsra Housing Group Limited is a parent company Registered Provider with no assets or liabilities. The two principal operating subsidiaries, Leicester Housing Association and Asra Housing Association are both Registered Providers. All three Registered Providers have charitable objectives. Together these Companies provide homes and services principally across the East Midlands and Greater London. Each of the operating subsidiaries have their own loan facilities secured on assets owned by those companies. New homes are developed with the support of capital grants from either the Greater London Authority or the Homes and Communities Agency. In some cases, new developments are supported by grants from local authorities through their own Right to Buyreceipts.Developmentsmaybefinancedthroughdiscounted priced developments as a result of Section 106 agreements.

The focus of the Group’s services is the delivery of affordablehousingproductsincludingsocial,affordableand intermediate rent and shared ownership. The Group has limited involvement in direct care and support schemes,marketrentandbespokefinancing/contractingschemes. The scope of activity has been narrowed in recent years to focus on core housing products. The Group does develop homes for sale, but only as part of wideraffordablehousingdevelopments.

Services to customers are largely administered from theHeadOfficeinLeicester,withlocalteamslocatedinLondon and Northampton. Our revised operating model encourages contact online or alternatively through the centralised contact centre. The aim is to achieve resolution to95%ofallenquiriesatthefirstpointofcontact.Daytoday repairs are booked through the contact centre and delivered by outsourced contractors in the East Midlands and London. In the Northamptonshire area maintenance services are provided by Asra Property Services. Planned maintenance of homes, including major component replacement, is delivered by outsourced contractors. We aim to publicise major component replacement programmes at least two years in advance of the works being undertaken.

The Group is governed by a common Board that covers all of the Registered Providers in the Group. The only other operating company, Asra Construction Services Limited (ACSL) is a company limited by shares which manages the construction contracts on behalf of Asra Housing Association Limited and Leicester Housing Association Limited.TheDirectorsofACSLaretwoExecutiveDirectorsof the Group.

The Board has published a corporate plan setting out the unique asra business recipe and corporate objectives and targets. This is available at http://www.asra.org.uk/about-us/purpose-vision-and-values/

The Corporate Plan sets out our vision with delivery linked to four priority areas:


Achieving our vision We have taken a strategic approach to achieving our new vision which is building “a reputation for delivering great homes and great services.” Successful delivery of our vision and what is stands for is linked to four priority areas, which align with our core purpose and values.

Serving customers well

Improve the 3 R’s

Helping those squeezed out of housing market

Extendpropertyshop to sales and London market

Managing our business well

Consider consolidating the Group into single entity

Working in partnership

Engage with local authorities about our plans to replace RTB properties

Achieve and sustain £3m salary savings

Deliver the new operating model and embed the Business Recipe

Implement welfare reform plan

Review service charges

Dispose of under-performing homes and homes outside our core areas

Deliver the One Woolwich programme

Considerexitingfrom remaining non-core services

Considerofferingenhanced RTB discount for homes that don’t meetfinancialtargets

Offertenantsconversionto Shared Ownership

Achieve & sustain a 95% FTF

Achieve & sustain 90% customer satisfaction

Achieve & sustain 90% satisfaction with repairs

Shift 30% of calltrafficon-line

Deliver Chat as a new customer channel

Offervideoappointment slots to customers

Situation Today – start of 2016

Achieving our VISION

A reputation for

delivering great homes and great services.

Improved operating model that delivers higher quality at

lower cost

High quality customer

experience

Recognised by customers & regulator

for high standards

Empowered employees

Great place to work & build a

career

Recognised by customers &

regulator for high standards

Core purpose

Our Values

Providing homes, not just places to live

See it from customer’s perspective, Serving diverse communities, Team asra.

Operational performance substantially improved

Asset management approach improved

Customer satisfaction is good, but - need to modernise & improve customerexperience

Need to change operating model and make savings to absorb 4-year 1% rent reduction

Need to develop a clear business recipe to guide future development of our business


asra Housing Group’s Strategic Report continued

Future prospects

Like all other Registered Providers, asra’s prospects areinfluencedbychangesinUKGovernmentpolicy on housing and by changes in the regulatory requirements of the Homes and Communities Agency.

InJuly2015,theUKGovernmentlegislatedtoreducesocial housing rents by 1% per annum for a period of fouryears,impactingontheprofitabilityandvalueofrented homes. The Government reached agreement with the National Housing Federation to introduce a voluntary right to buy programme, with discounts availabletoexistingeligiblecustomersbeingfundedbylocal authority sale of high value properties.

The Government’s policy is aimed at increasing home ownership whilst limiting the development of affordablenewrentedhomes.TheGovernmentissuedplanning practice guidance that outlines how s106 agreements should prioritise investment in starter homes.Thiswillinfluencehowdeveloperswillmakeunits available for rented and other shared ownership products. The Homes and Communities Agency “SharedOwnershipandAffordableHomesProgramme2016 to 2021” announced £4.7bn of grant to help people to buy their own home mainly through shared ownership products. The election of a new Mayor of London delayed the announcements of the Greater London Authority programme but it is anticipated that the focus will also be shared ownership.

In March 2016, asra regulatory grading was upgraded to the governance grading G2 and viability grading maintained at V2. This was an important step to raisingfurtherfinancetoexpandourdevelopmentprogramme.

The result of the European Union (EU) referendum has created further uncertainty in the short to medium term,includingavailabilityoffinance,inflationandinterest rates and sales values.

We are a strong and resilient business operating in an increasingly volatile political and economic environment. Our corporate plan sets out how we will deliver on our ambition to help people who are squeezed out of the housing market. We have a rich heritage in supporting communities. We are proud of our BME heritage. We have a track record of delivering ambitious programmes to build new homes and develop customer services.

Our decisions are made based on the twin components of social purpose and value for money.

Ourbusinessandfinancialplansincludeasignificantprogrammeofhomebuilding,investmentinexistinghomes, rationalisation of non performing housing assetsandoperationalefficiencies.Tobuildnewhomesweplantoraisenewfinanceandtoevaluatethe option of amalgamating the Registered Provider entities into a single legal entity. This would improve operational performance and enable us to make better use of our assets as property security. Like many Registered Providers we remain open to the opportunity of working collaboratively and more closely with other like-minded Registered Providers.

Ouroperational,businessandfinancialplansarestress tested under a wide range of circumstances. Regardlessoftheeconomic,financialandpoliticalfallout following the EU Referendum, asra remains a vibrant and successful business.

Principal risks and uncertainties

asra’s risk and governance model is designed so to ensure that the Board maintains overall responsibility for risk. Each Director and Head of Service is responsible for identifying, reporting and managing risks.BoardandtheExecutiveTeamreviewthestrategic risks at each of its Board meetings. The Board has a process of horizon scanning, evaluating both the internalandexternalenvironment,toensurethatbothrisk appetite and strategic risks are actively managed. The Board has an agreed appetite statement and the Group takes and manages risk to conform with that appetite statement.

asra’sexternalriskisheavilyinfluencedbyeconomic,regulatoryandpoliticalinfluences.Internalriskisdriven by our objectives, our change programme and ensuring that our services and homes meet legislation and regulation.

Principal risk

Main mitigation

Key performance measure or similar

How risk has changed in the reporting period

Internalandexternalinfluencesonviabilityof business plans

1. Business plan- regular reviews based on latest available evidence

2. Treasury strategy to support planning

3. Valuation of all property assets4. Stress testing of the business plan.

1. Financial targets including key financialcovenantmeasures

2. Cashflowandinvestment forecasting

The Government rent reduction has negatively impacted viability and the capacity to develop new homes. Gov’t housing policy favours home ownership, and introduction of Right to Buy supports new investment. Implementation of RTB has been delayed. The EU Referendum has created additional volatility in housingandfinancialmarkets.

Achieving target for sales of homes developed for sale and initial sale of equity.

1. LimitingsalesexposuretoBoardagreed policy limits.

2. Sensitivity testing of alternative outcomes

1. Sales targets

Treasury risk including liquidity, managing mark to market, and interest rateexposures

1. Treasury strategy covering liquidity andinterestrateexposures

2. Regular in depth reporting to Investment Committee and Board

3. Specialist advice and support through treasury advisers.

1. Cashflowforecasts2. Treasury and

property security forecasts

Increasedexposuretomarktomarketasaresultofvolatilityinfinancialmarkets.Exposuretomargincallscovered with increased property security, implementation of a 50bps security buffer.

Regulation and managing regulatory grades

1. Review by Board and Governance and Remuneration sub-committee.

1. Action plan reports to Governance & Remuneration Committee

Regulatory upgrade in March 2016 from G3/V2 to G2/V2. This followed completion of a comprehensive action plan. We completed an in depth review ofgovernanceundertakenbyexternalconsultants.

Asset management delivering a cost effectiverepairsservice, managing the planned programme and disposing of unviable homes.

1. Stock condition survey for 90% of stock undertaken by specialist contractor and validated

2. Return on asset reporting and modelling of viable assets

3. Programme of planned repairs4. Asset disposal strategy

1. Management accounts

2. Keyperformancemeasures

In 2015-16 completed comprehensive stock condition data and resulting financialmodelling.Specialistcomponents have been subject to a separate condition survey.

Welfare reform and impact on customers and asra Housing Group.

1. Partnerships with others to publicise welfare reform

2. Early intervention in arrears cases, providing support to help customers to sustain tenancy

1. Keyperformancemeasures, in particular rent collection and arrears.

Rollout of universal credit

Managing the change in operating model and digital transformation programme

1. Board oversight of programme2. Specialist project managers3. Strategic partnerships with

specialist providers

1. Customer satisfaction

2. Rent collection and arrears

ImplementednewmodeleffectiveApril2016, for the year under review the pre-existingmodelapplied.

Contractor insolvency and performance leading to delays in delivering new homes and increased costs

1. Close monitoring of progress on schemes and monitoring by Investment Committee

2. Pre-qualificationcriteriaforcontractors and developer partners.

1. Reporting to Investment Committee

Build prices have increased, particularly inLondon.Contractorsareexperiencingshortage of skilled labour and increasing costs. Two Asra schemes have been delayed.

TheBoardhasseparatelyreviewedthefinancialrisksincludingcreditrisk,cashflowrisk,andassetrisk.

Table 1: The following are the key risks:


Asra Housing Group’s Strategic Report continued

Credit risk

TheGroup’sprincipalfinancialassetsarebankbalances and cash, rent arrears and other receivables, and investments in money market funds. The credit risk on liquid funds, funds placed to secure marked to market derivative positions and performance under derivativefinancialinstrumentsislimitedbecausethe counterparties are banks with acceptable credit-ratings assigned by international credit-rating agencies. Surplus cash placed on deposit is subject to the policy approved by the Board, the objective of the policy is tolimitexposureeitherthroughthecreditqualityofthe counterparty or through concentration of cash inanyoneinstitution.TheGrouphasnosignificantconcentrationofcreditrisk,withexposurespreadovera large number of counterparties and tenants.

Cash flow risk

Theprincipalcashflowrisksaresetoutinthestrategicrisksabove.Theprincipalcashflowrisksincluderentcollection, management costs, maintenance and long term repair costs, development and construction costs, sales of equity in homes and interest rate risk. The Group has a robust asset management strategy agreedbytheBoardtosupportinvestmentinexistinghomes.

TheGroup’sloanportfolioexposesitprimarilytocashflowriskasaresultofchangesininterestrates.The Group uses interest rate swap contracts on either an embedded or stand-alone basis. Stand alonederivativesexposetheGrouptothecashflowrisk of margin calls. Interest rate risk is managed in accordance with the Group’s treasury strategy. As at March 2016, 78.57% of the loan portfolio was hedged against adverse movement in interest rates, with an averageunexpiredtermoftheportfoliobeing23years.

TheGroupmanagescashflowriskthroughhavinginplace loan facilities to support investment and provide aliquiditybufferforanyreasonableadversescenarios.As at March 2016 the Group had £36m of unutilised loan facilities, fully secured and available to be drawn down on 48-hour notice. During 2016-17 the Group will be approaching the market to increase available facilities.

Asset risk

The 1% rent reduction, Right to Buy and volatility in fair value of interest rate derivative transactions has introducedanewclassoffinancialrisk.Thevalueof property unsecured and available for charge at 31st March 2016 was £140m. The Board monitors compliancewithexistingassetcoverratiosrequiredbylenders,andensuresthatthereissufficientheadroom to cover marked to market positions, secure further borrowings and to protect the Group when rationalising housing assets.

Review of business performance – financial and non-financial performance

The Board ensures that the Group delivers the vision and objectives of the four priorities through acombinationoffinancialandnon-financialperformance measures. The targets for 2016-2019 are set out in the Corporate Plan. The Board receives regular performance information in the form of management reports, management accounts and key performance measures.

ThefinancialresultsforyearendedMarch2016arereportedforthefirsttimeunderInternationalFinancial Reporting Standards, in accordance with the Housing Statement of Recommended Practice 2014 for Registered Social Housing Providers. The results for the prior year have been restated to provide comparison.Thesurplusfortheyear,aftertax,was£11.9m (2015 restated £(0.2m)). The results for the year include the principal adjustments required under IFRS, being amortisation of Social Housing Grant increasing income by £4.9m (2015: £4.6m) and adjustments required through accounting for the fair value of interest rate hedging transactions of £6.7m (2015: £34.5m).

Priority area Measure Actual 2015/16

Target 2015/16

Looking forward: target for 2016/17

Serving customers well

Customer satisfaction improved to 86% 90% 85%

Satisfaction with complaint resolution 91% 91% 92%

Satisfaction with repairs 91% 90% 90%

Anti-social behaviour cases closed within 60 days

74% 80% 55%

%homesthermalefficient 97.3% 97.5% 96.5%

Firsttimefixforcustomerqueries 93.5% No target 95%

Helping people squeezed out of the housing market

Building new homes 208 200 250

RTB receipts reinvested in new homes N/A N/A 0%

Converting tenants to shared owners N/A N/A 50%

Managing our business well

Rents – net collection rate 101% 100% 101%

Rent – arrears as % of debit 3.3% 4.0% 4%

Relets - % of empty homes 0.73% 1.5% 0.4%

Relets – average relet time (days) 33 37 32

Repairs – routine completed on time 97.9% 97.0% 97.2%

Repairs – appointments kept as % of appointments made

95.0% 90.0% 95.0%

Health&Safety-%gascertificatesinplace

99.92% 100% 100%

Operating margin 32% UKGAAP:33% 36%

Surplus on group turnover 13% UKGAAP:£8m 11%

Procurement savings £683k £250k £250k

Working in partnership with others

Deliver new homes in partnership with Lovell Homes : One Woolwich

Phase 1: 133 homesPhase 2: 52 homes

Over three year period

Table 2: Performance


Asra Housing Group’s Strategic Report continued

Review of business performance – financial and non-financial performance

The Board has reviewed the performance and whilst generally there has been outperformance against targets, there is no room for complacency. In 2016-17 we envisage a more demanding operating environment.

During the year we have delivered against an ambitious work programme. The majority of the programme has met targets with successful outcomes against business priorities. The main events are:

In 2015-16 we completed 208 new homes, 113 in the East Midlands and 95 in London. Of the total completed136wereforaffordablerentand72were for shared ownership at a cost of £38m and benefitingfromgrantof£5m.Schemescompletedincluded Robin Hood Chase, in St Ann’s, Nottingham, comprisingof45purposebuiltflatsforthoseover55or living with a disability; and Rectory Fields Crescent, in Charlton, Royal Borough of Greenwich, which provided10homesforaffordablerentand20forshared ownership. Ourdevelopmentexpertiseisbackedupbystrongsales performance, with the 15 shared ownership homesinphase1ofTavernKeys,Southwark,beingsold before the scheme was handed over by the developers. Sales times for our homes are always within three months of completion. We work in partnership with organisations to deliver new homes. In 2015-16 we delivered the St Nicholas’ Church development, in partnership with the Diocese of London and Perivale Parish Church Council. The partnership delivered 7 houses and 10 apartments forsharedownershipandaffordablerentandanewchurch hall and vicarage for the congregation, which wasawardedaBREEAMExcellentenvironmentalassessment rating.

During the year we embarked to a programme to reorganise the way that services are delivered. The focus is to resolve the majority of customer issues atthefirstpointofcontact.Intheinitialstagethiswill place greater emphasis on contact by phone, and the issue being resolved by the contact centre.

This medium term strategy is to divert customers online so that they can make online payment, account enquiry, order repairs and report community, estate or neighbourhood issues. This change has resulted in traditional generalist housing teams being replaced by specialists that will provide the infrastructure and process,andalsodealwiththemorecomplexissues.

As part of this change we have concentrated all property related matters into a single team with responsibility for major repairs, planned maintenance programmes, day to day repairs and our own in-house repairs service. During the year we have obtained a more complete understanding of the long term repair and investment requirement of all of our homes. We have also surveyed all of our specialist equipment and given greater focus to investment compliance. During the year we spent £20.6m on repairing our properties, and our business plan includes similar level of investment into the foreseeable future. This year we have published our forward three-year investment programme.

Governance

The Group is governed by a common board comprising eightNon-ExecutiveDirectors,whoaremembersofboth LHA and AHA as well as the parent Board, and theChiefExecutive.EachDirectorisselectedfortheskillsandknowledgetheyofferrelativetothestrategicpriorities of the Group. The Board also delegates authority to four specialist committees, Risk & Audit, Governance & Remuneration, Customer Services and Investment. Roles, responsibilities and accountabilities are established in Standing Orders, a document owned by the board.

TheGroupcertifiescompliancewiththeGovernanceand Financial Viability Standard issued by the HCA.

Table 3 shows the attendance record of the Board and Committee members at Board and Committee meetings during the year.

Name Board Risk & Audit Committee

Investment Committee

Customer Service

Committee

Governance & Remuneration

CommitteeBoard Members:

Aman Dalvi 6 of 7

Stephen Duck 7 of 7 5 of 5 5 of 5

Jaffer Kapasi 6 of 7 4 of 4 1 of 1

Ponniah Rasanesan 6 of 7 5 of 5 5 of 5

Anne Turner 6 of 7 1 of 1 3 of 5

Steve Amos 6 of 7 5 of 5 5 of 5

Wayne Morris 6 of 7 2 of 4 5 of 5

Aniekan Umoren 4 of 7 2 of 4 0 of 1

Committee members:Paul Periton 4 of 5

Matt Cooney 7 of 7 5 of 5 5 of 5

William Cornall 5 of 5

Board members received the following pay in:

2015-16£

2014-15£

2015-16£

2014-15£

Remuneration(including pension contributions)

Expenses reimbursement

Aman Dalvi 21,098 20,627 209 108

Sally Jacobson - 5,706 - 395

Stephen Duck 11,014 11,189 1,194 1,290

Shaama Saggar-Malik - 4,657 - -

Jaffer Kapasi 11,332 8,586 - 937

Ponniah Rasanesan 10,906 11,088 750 264

Anne Turner 9,200 - 382 -

Steve Amos 9,200 - 766 -

Aniekan Umoren 8,803 - 223 -

Wayne Morris 11,331 - 688 -

TOTAL 92,884 61,853 4,212 2,994

Table 3: Board Member Attendance

Non-executivemembersreceivedthefollowingremunerationfortheyear:

Table 4: Board Member Remuneration


Witheffectfrom1April2015Boardmembershavereceivedthefollowingremuneration:£20,890perGroupChairman, £13,995 per Deputy (vacant), £11,332 per Chair of Committees and £8,774 per ordinary member per annum. (2014: £20,440 per Group Chairman, £13,694 per Deputy, £11,088 per Chair of Committees and £8,586 per ordinary member per annum.)

OnlyGroupBoardnon-executiveDirectorsreceiveremuneration.

Approval


Anne Turner

Board Member

21 July 2016

WehaveauditedthefinancialstatementsofAsraHousing Group for the year ended 31 March 2016 setoutonpages21to64.Thefinancialreportingframework that has been applied in their preparation isapplicablelawandUKAccountingStandards(UKGenerally Accepted Accounting Practice), including FRS 102 The Financial Reporting Standard applicable in the UKandRepublicofIreland.

This report is made solely to the association in accordance with section 87 of the Co-operative and CommunityBenefitSocietiesAct2014andsection128of the Housing and Regeneration Act 2008. Our audit work has been undertaken so that we might state to the association those matters we are required to state to it in an auditor’s report and for no other purpose. Tothefullestextentpermittedbylaw,wedonotaccept or assume responsibility to anyone other than the association as a body, for our audit work, for this report, or for the opinions we have formed.

Respective responsibilities of the Board and auditor

AsmorefullyexplainedintheStatementofBoard’sResponsibilities set out on page 9, the association’s Boardisresponsibleforthepreparationoffinancialstatements which give a true and fair view. Our responsibilityistoaudit,andexpressanopinionon,thefinancialstatementsinaccordancewithapplicablelawandInternationalStandardsonAuditing(UKandIreland). Those standards require us to comply with the Auditing Practices Board’s Ethical Standards for Auditors.

Scope of the audit of the financial statements

A description of the scope of an audit of financialstatementsisprovidedontheFinancialReporting Council’s website at www.frc.org.uk/auditscopeukprivate.

Opinion on financial statements

In our opinion the financial statements:

• give a true and fair view, in accordance with UK Generally Accepted Accounting Practice, of the state of affairs of the group and the association as at 31 March 2016 and of the income and expenditure of the group and the association for the year then ended;

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

• have been properly prepared in accordance with the Housing and Regeneration Act 2008 and the Accounting Direction for Private Registered Providers of Social Housing 2015.

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 BenefitSocietiesAct2014requiresustoreporttoyouif, in our opinion:

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

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

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

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

Harry Mearsfor and on behalf of KPMG LLP, Statutory Auditor Chartered Accountants One SnowhillSnow Hill QueenswayBirmingham B4 6GH

Independent auditor’s report to the members of Asra Housing Group Limited


Consolidated Statement of Comprehensive Income for the year ended 31 March 2016

Consolidated Statement of Financial Position as at 31 March 2016

£’000

Note 2016 2015Restated

Turnover 2 90,187 83,759Less:OperatingExpenditure 2 (59,730) (56,130)Less:Operatingcostspensiondeficit (3,654) -Gain on disposal of property, plant and equipment 7 2,019 10,264Operating Surplus 2 28,822 37,893Interest receivable 256 166Interestandfinancingcosts 10 (18,626) (17,113)Movementinfairvalueoffinancialinstruments 23 1,294 (20,037)Movement in fair value of investment properties 13 244 (930)Surplus/(deficit) before tax 6 11,990 (21)Taxation 11 (96) (177)Surplus/(deficit) for the year 11,894 (198)Changeinfairvalueofhedgedfinancialinstruments 23 (8,036) (14,484)Total comprehensive income (deficit) for the year 3,858 (14,682)

2016 2015

Note £’000 £’000 £’000 £’000

Fixed Assets

Intangible assets and goodwill 30 (14,591) (15,502)

Tangiblefixedassets–housingproperties 12 960,176 937,862

Othertangiblefixedassets 12 4,839 5,508

Investment properties 13 8,274 8,030

Investments 14 525 680

959,223 936,578

Current Assets

Stock 15 13,376 11,957

Trade and other debtors 16 3,654 4,493

Investments 17 14,720 18,240

Cash and cash equivalents 30,692 46,497

62,442 81,187

Less: Creditors: amounts falling due within one year 18 (37,499) (30,914)

Net current assets 24,943 50,273

Total assets less current liabilities 984,166 986,851

Creditors: amounts falling due after more than one year 19 (930,290) (936,833)

Total net assets 53,876 50,018

Reserves

Incomeandexpenditurereserve 84,353 72,299

Called up share capital 26 - -

Cash Flow Hedge reserve 29 (30,752) (22,716)

Revaluation reserve 29 110 110

Restricted reserve 29 165 325

53,876 50,018

The turnover and operating surplus for the current year all relate to continuing activities.

Thefinancialstatementsonpages21to64wereapprovedbytheBoardon21July2016andsignedonitsbehalfby:

Aman Dalvi Anne Turner Matt CooneyChairman Board Member Company Secretary


Statement of Changes in Reserves as at 31 March 2016

Notes to the Financial Statements for the year ended 31 March 2016

Consolidated Statement of Cash Flow for the year ended31 March 2016

Cash Flow Hedge reserve

£’000

Revaluation reserve

£’000

Restricted reserve

£’000

Income and exp.reserve

£’000

Total

£’000

At 1 April 2015 - restated (22,716) 110 325 72,299 50,018

Movement in the year (8,036) - - 11,894 3,858

Transferofrestrictedexpenditureto incomeandexpenditurereserve - - (160) 160 -

Balance at 31 March 2016 (30,752) 110 165 84,353 53,876

Note 2016 2015

£’000 £’000

Net cash generated from operating activities 31 34,489 41,538

Cash flow from investing activities

Taxpaid 11 (176) (7)

Purchaseoftangiblefixedassets (38,443) (64,653)

Proceedsfromsaleoftangiblefixedassets 8,849 17,005

Grants received 1,663 9,247

Grants repaid 25 (1,505) -

Interest received 256 167

Cash flow from financing activities

Interest paid (20,634) (18,676)

New secured loans - 57,000

Repayments of borrowings (3,824) (3,950)

Withdrawal from deposits 3,520 (310)

Net change in cash and cash equivalents (15,805) 37,361

Cash and cash equivalents at beginning of the year 46,497 9,136

Cash and cash equivalents at end of year 30,692 46,497

Theaccompanyingnotesformanintegralpartofthefinancialstatements.

1 Basis of accountingThefinancialstatementshavebeenpreparedunderthehistoricalcostconvention,modifiedtoincludecertain 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 Direction for private registered providers of social housing2015asraHousingGroupisapublicbenefitentity,asdefinedinFRS102andappliestherelevantparagraphsprefixed‘PBE’inFRS102.Detailsofthetransition to FRS102 are shown in Note 33.

1.1 Accounting Convention

The Financial statements are prepared under the historical cost convention.

After making enquiries, reviewing budgets and forecastsandexaminingmajorareaswhichcouldgiverisetosignificantfinancialexposure,theDirectorsaresatisfiedthatnomaterialorsignificantexposuresexistotherthanasreflectedinthesefinancialstatements and that Asra Housing Group Limited has adequate resources to continue its operations for the foreseeable future. For this reason they continue to adopt the going concern basis in preparing accounts.

1.2 Going Concern

The Group’s activities, together with the factors likely toaffectitsfuturedevelopment,itsfinancialposition,financialriskmanagementobjectives,detailsofitsfinancialinstrumentsandderivativeactivities,anditsexposurestocredit,liquidityandcashflowriskaredescribedintheStrategicReportintheGroupfinancialstatements.

The Group has a well developed business plan and risk management strategy. The Board has assessed the plans based on latest available information, and whilst noting the risks and uncertainties in the current environment, has concluded that the Group has sufficientresourcestocontinueitsoperationsfortheforeseeable future. For this reason they continue to adopt the going concern basis in preparing accounts.

1.3 Key estimates and Judgements

The key estimates and judgements used in preparing thesefinancialstatementsaretheestimatedvalueof completed properties, the recoverability of rent arrears, the impairment of housing properties, the fair value of investment properties, the value of schemes inthecourseofdevelopment,thefairvalueoffinancialinstruments and the assumption of going concern.

1.4 Basis of consolidation

The Group is required by the Co-operative and CommunityBenefitSocietiesAct2014topreparegroup accounts.

The Group accounts comprise those of Asra Housing Group Limited together with its subsidiaries, in accordance with the requirements of FRS102.

The Association itself had no turnover, operating costs orotherincomeorexpenditureandhadnoassetsor liabilities other than investment in subsidiaries. All notes are the consolidated Group position.

1.5 Turnover

Turnover is net of voids and VAT and includes:

• Rents and service charges• Residential charges• Revenue grants• Supporting People income receivable• Management Fees• Call Centre income• Training Centre / Office rent• Amortisation of social housing grant

Charges for services provided and Supporting People income are recognised as income when asra has provided the service concerned. Grants made as contributionstorevenueexpenditurearecreditedtoincomeintheperiodinwhichtherelatedexpenditureis incurred.

Turnover has been analysed in accordance with the requirements of Homes and Communities Agency – RegulatoryCommitteeguidance‘RegulatingaDiverseSector’ (see note 2).


1.6 Interest Payable

Interestiscapitalisedonborrowingtofinancedevelopmentstotheextentthatitaccruesinrespectof the period of development if it represents either:

a)interestofborrowingsspecificallyfinancingthedevelopment programme after deduction of interest on social housing grant in advance; or

b) interest on borrowings of asra as a whole after deduction of interest on social housing grant in advancetotheextentthattheycanbedeemedtobefinancingthedevelopmentprogramme.

Other interest payable is charged to the income and expenditureaccountintheperiod.

1.7 Pensions

TheGroupparticipatesinthedefinedcontributionschemes of the Social Housing Pension Scheme.

The Group participated until 31 December 2013 inapensionschemeprovidingbenefitsbasedoncareer average pay. The assets of the scheme are held separately from those of the Group. The Group is unable to identify its share of the underlying assets and liabilities of the scheme on a consistent and reasonable basis and therefore, as required by paragraphs 28.13 and 28.13A of FRS 102 accounts fortheschemeasifitwereadefinedcontributionsscheme.

A contractual agreement is in place between the GroupandSHPStofundthedeficit.Theliabilityforcontributions payable that arise from the agreement (totheextentthattheyrelatetothedeficit)isrecognised as a liability in the Statement of Financial Position in the year in which they become payable andtheresultingexpenseinsurplusordeficitintheStatement of Comprehensive Income for the present value of the contributions payable that arise from the agreementtotheextentthattheyrelatetothedeficit.

Contributions payable to the Group stakeholder’s pension scheme are charged to the income and expenditureaccountintheperiodtowhichtheyrelate.

1.8 Taxation

Thechargefortaxationisbasedonsurplusesarisingoncertainactivitieswhichareliabletotax.TheGroupaccountsfordeferredtaxinlinewiththerequirementsofFRS102.Adeferredtaxassetisonlyrecognisedonthe basis of available evidence where it is more likely thannotthattherewillbetaxableprofitsinthefuture,againstwhichadeferredtaxassetwillbeoffset.

1.9 VAT

Certain members of the group are VAT registered but alargeproportionoftheincome(rents),isexemptforVAT purposes and this therefore gives rise to partial exemptioncalculation.Expenditureisthereforeshown inclusive of VAT and the input VAT recovered is included in turnover.

1.10 Supported Housing schemes

In respect of supported housing schemes owned bytheGroupwherethemanagingagentssuffertherisksandhavecontrolofbenefits,theincomeandexpenditureandrelatedcurrentassetsandliabilitiesarenotincludedinthefinancialstatements.

1.11 Housing properties and depreciation

General Needs, Sheltered Housing and Shared Ownership properties are stated at cost less depreciation.

Cost for housing properties includes the cost of acquiring land and building, construction costs includinginternalequipmentandfittings,directlyattributable development administration costs, cost of capital employed during the development period andexpenditureincurredinrespectofimprovementsandextensionofexistingpropertiestotheextentthatitenhancestheeconomicbenefitderivedfromtheassets.

Directly attributable development administration costs are the labour costs of the Group’s own employees arising directly from the construction or acquisition of the property, and the incremental costs that would have been avoided, only if the property had not been constructed or acquired.

Expenditureonrepairstopropertiesandequipmentarising through normal wear and tear is charged to the incomeandexpenditureaccountintheyearinwhichitoccurs.

Properties developed for outright sale

Sharedownershippropertiesaresplitbetweenfixedand current assets, with the element relating to the expectedfirsttranchesalebeingtreatedasacurrentasset along with completed properties for outright sale Current asset properties are stated at the lower of cost and net realisable value. Cost comprises materials, direct labour costs and other direct overheads. Net realisable value is based on the estimated sales price after allowing for all further costs of completion and disposal.

Anysurplusmadeonthesaleofthefirsttrancheis treated as turnover in the Statement of Comprehensive Income in accordance with the treatment proposed in the SORP 2014. Second and subsequenttranchesurplusesordeficitsareshownafter operating surplus has been determined, but before interest.

TheGroupseparatelyidentifiesthemajorcomponentswhich comprise its housing properties, and charges depreciation to write down the cost of each component to its estimated residual value, on a straight line basis, over its estimated useful economic life.

The major components of its housing properties and their useful economic lives are as follows:

Building structure - 60 – 125 yearsRoofs - 50 yearsKitchens - 30 yearsBathrooms - 40 yearsWindows and doors - 40 yearsHeating and boilers - 15 years Photo-voltaic Panels - 24 years

Freehold land is not depreciated. Also, assets in the course of construction are not depreciated.

Social housing grant and other capital grants are included in creditors and amortised in line with the life of the structure.

Depreciation has been provided to write down the cost of housing buildings, less capital grants received, to their estimated residual value, over the useful economic life of the buildings in equal annual instalments.

The useful economic life of a property has been deemed to commence at:• the completion of major refurbishment work after

purchase; or• completion of building work for new build properties;

or• date of purchase if no major refurbishment works

take place

Impairment reviews are carried out annually where propertieshaveaneconomiclifeinexcessof50years,and provision made against the carrying value where appropriate.

1.12 Investment properties

Properties that are held to earn commercial/market rate rentals or for capital appreciation, or both, are treated as investment properties and accounted for in accordance with Section 16 of FRS102. Investment properties include market rent, student let and commercial properties. Investment properties are accounted for at fair value and are professionally valued at each reporting date.

1.13 Basic Financial Instruments

Rental Debtors (tenant arrears) and other debtors are recognised initially at transaction price less attributable transaction costs. Subsequent to initial recognition they are measured at amortised cost using theeffectiveinterestmethod,lessanyimpairmentlosses.Ifthearrangementconstitutesafinancingtransaction,forexampleifpaymentisdeferredbeyond normal business terms, then it is measured at the present value of future payments discounted at a market rate of instrument for a similar debt instrument.


Trade and other creditors are recognised initially at transaction price plus attributable transaction costs. Subsequent to initial recognition they are measured at amortisedcostusingtheeffectiveinterestmethod.Ifthearrangementconstitutesafinancingtransaction,forexampleifpaymentisdeferredbeyondnormalbusiness terms, then it is measured at the present value of future payments discounted at a market rate of instrument for a similar debt instrument.

1.14 Social housing grant

Government grants are recognised using the accrual model and are classed as either 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 expenseorlossesalreadyincurredorforthepurposeofgivingimmediatefinancialsupportwithnofuturerelated costs, it is recognised as revenue in the period in which it becomes receivable.

Grants relating to assets are recognised in income on asystematicbasisovertheexpectedlifeoftheasset.Grants received for housing properties are recognised inincomeovertheexpectedusefullifeofthehousingproperty structure. Where a grant is received specificallyforcomponentsofahousingproperty,thegrantisrecognisedinincomeovertheexpectedusefullife of the component.

Grants received from non-government sources are recognised as revenue using the performance model.

1.15 Recycled Capital Grant Fund

The Group has the option to recycle social housing grant, which would otherwise be repayable, for re-use on new developments. If unused within a three year period, it will be repayable to the either the Homes and Communities Agency or Greater London Authority (for London grant) with interest. Any unused recycled capital grant held within the fund, which it is anticipated will not be used within one year is disclosedinthebalancesheetunder‘creditorsdueafter more than one year’. The remainder is disclosed under‘creditorsduewithinoneyear’.

1.16 Other grants

The capital costs of housing properties are stated net of capital grants receivable from public bodies.

Grants in respect of revenue are credited to the incomeandexpenditureaccountinthesameperiodastheexpendituretowhichtheyrelate.

1.17 Finance Issue CostsArrangement fees (and other up front direct transactioncosts),forbothfixedandfloatingfacilities,arecalculatedatfacilitylevel(whichreflectstherealityof the arrangement) and are apportioned evenly acrossallinterestperiods,effectivelymeaningthattransaction costs are amortised on a straight line basis over the life of the loan. For the purposes of transition to FRS102 at 1st April 2014, the Association has adjusted the carrying value in the opening balance sheet (1st April 2014) for eachfixedandfloatingrateloantothenominaldebtamountlesstheunamortisedfeesunderUKGAAPforthat loan. FRS102 paragraph 11.20 requires that the unamortisedfeebalanceisnettedoffagainsttheloanliability.

1.18 Hedges

Interestrateswapsrelatetofixingvariablerateinterestandarethereforedesignatedascashflowhedges. Acashflowhedgeisahedgeoftheexposuretovariabilityincashflowsthatisattributabletoaparticular risk associated with a recognised asset or liability or a highly probable transaction, which could affectprofitorloss.Theyaremeasuredatfairvalueateachreportingdate.Gainsandlossesoncashflowhedgeswhicharehighlyeffectivearerecognisedinother comprehensive income and accumulated in the cashflowhedgereserve.Anyineffectiveportionofagainorlossoncashflowhedgesisrecognisedinprofitorloss.

In order to apply hedge accounting, an economic relationshipmustexistbetweenthehedgeditemandthe hedging instrument. The Group must formally designate and document the hedging relationship at inception so that the risk being hedged, the hedged item and the hedging instrument are clearly identified,andtheriskmanagementobjectiveandforundertaking the hedge. It is also required to determine anddocumentthecausesofhedgeineffectiveness. Inacashflowhedge,ifthehedgedfuturecashflowsarenolongerexpectedtooccur,theamountthathasbeenaccumulatedinthecashflowhedgereserveisreclassifiedfromthecashflowhedgereservetoprofitor loss immediately. All of the Group’s stand-alone swaps satisfy the above criteria and the Group has chosen to test the effectivenessofitshedgesannually.Forineffectivehedges the movement in fair value has been recognisedintheprofitorloss.

1.19 Other tangible fixed assets

Other freehold properties: Officebuildingsaredepreciateddowntotheirresidualvalue over 50 years.

Other fixed assets:Depreciation is charged on a straight line basis over theexpectedusefullivesofotherassetsatthefollowing annual rates:-

Furniture, fixtures and fittings 10% & 20%Motor vehicles 20%Computer and office equipment 20% to 33 .3%

1.20 Investments

Investments are stated at market value.

1.21 Reserves

Although under their Rules the Registered Providers donottradeforprofit,theBoardplanstheGroup’sfinancialaffairssothateachyearincomeexceedsexpenditure.ThispolicyensuresthattheGrouphasamarginofsafetytomanageunexpectedexpenditureor shortfalls in income. The annual surplus also enables the Group to meet its commitments to providersofprivatefinanceandcontinuetoraisefurtherprivatefinance.

TheBoardregularlyreviewstheGroup’sfinancestodetermine the minimum amount of reserves required for day to day management of the group and to provide for the future. Any amounts over and above this minimum are invested in the provision of social housing.

1.22 Restricted reserves

The restricted reserve is grant received from the Big Lottery Fund. This funding is held in a designated bank account as a requirement of the grant conditions. If the grant is not spent according to the agreement then it must be repaid to The Big Lottery and is therefore also included as a creditor.

1.23 Provisions

Provisions are recognised when the Group has a present legal or constructive obligation as a result of a past event. It is probable that a transfer of economic benefitwillberequiredtosettletheobligationandareliable estimate can be made of the amount of the obligation.


1.24 Impairment

An assessment of whether indicators of impairment existiscarriedoutateachreportingdate.Ifsuchanindicatorexistsanimpairmentassessmentiscarriedout and the recoverable amount of the asset or cash generating unit is carried out. Any impairment in an income generating unit is recognised by a change to the Statement of Comprehensive Income. The following indicators of impairment are considered;

• government rent regime changes i.e. the 1% rent reduction announced in Summer 2015:

• a change in government policy, regulation or legislation which has a material detrimental effect on the development programme or scheme;

• a contamination or other similar issue that was not identified as part of planning for a development which results in a material increase in development costs. e.g. identification of asbestos which requires material additional expenditure for removal of the asbestos in order to complete the development;

• a change in demand for a property that is considered irreversible;

• market value declining significantly more than would be expected in those circumstances where assets are intended or expected to be sold or where the occupant has the right to purchase under shared ownership arrangements;

• obsolescence of a property, or part of a property. e.g. regeneration or demolition planned.

Whereanindicatorofimpairmentexistsanimpairment assessment is carried out as follows:

• the level at which an impairment is to be assessed is determined i.e. the asset or cash generating unit;

• the recoverable amount is estimated;• the carrying amount is calculated;• the carrying amount is compared to the

recoverable amount to see if an impairment loss has occurred.

An impairment loss occurs when the carrying amount ofanassetorcashgeneratingunitexceedsitsrecoverable amount. This impairment loss is charged to the Statement of Comprehensive Income as expenditure.

1.25 Stocks

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

1.26 Leases

Assetsacquiredunderfinanceleases are capitalised and the outstanding future lease obligations are shown in creditors. Operating lease rentals are charged to the profitandlossaccountonastraight-linebasis over the period of the lease.

1.27 Negative Goodwill on fair value exchanges

Negativegoodwill,beingtheexcessoffairvalueoftheunderlying separable net assets over the fair value of theconsideration,isshownaspartofintangiblefixedassets.

An amount equal to the fair value of the non-monetary assets acquired is being released to the income andexpenditureaccountcommensuratelywiththe recovery of the non-monetary assets acquired, whether through depreciation or sale.

1.28 Goodwill and Negative Goodwill on non-exchange transactions

Fornon-exchangetransactions(acquisitionsinthesocial housing sector that are in substance a gift of one business to another), the fair value of the gifted recognised assets and liabilities is recognised as a gain orlossintheincomeandexpenditureaccountintheyear of transaction.

1.29 Prior Period Adjustment

IntheseconsolidatedfinancialstatementstheGrouphas a prior period adjustment, of £0.6m additional cost of sale, relating to the disposal of the Highpoint ConferenceCentrein2013-14.Thishastheeffectofchanging the previously stated GAAP reserves at 31 March 2015 from £83.6m to £83.0m.


2016£’000

2015restated

£’000

TurnoverOperating

costs

Operatingsurplus/(deficit) Turnover

Operatingcosts

Operatingsurplus/(deficit)

Income and expenditure from lettings

Housing accommodation 61,501 (43,797) 17,704 57,995 (41,078) 16,917

Supported Housing accommodation 1,471 (1,880) (409) 2,022 (3,104) (1,082)

Housing for Older People 10,360 (6,859) 3,501 8,932 (2,640) 6,292

Shared ownership accommodation 2,648 (1,509) 1,139 2,372 (901) 1,471

75,980 (54,045) 21,935 71,321 (47,723) 23,598

Other income and expenditure

Current asset property sales 7,515 (4,623) 2,892 5,971 (4,510) 1,461

Developmentcostswrittenoff 143 (252) (109) 292 (544) (252)

Managed services 1,369 (1,034) 335 627 (443) 184

Goodwill Amortisation 911 - 911 994 - 994

Sub-letofoffices - - - 332 (226) 106

Other 3,050 (1,503) 1,547 3,056 (1,366) 1,690

Market Rented 1,219 (1,177) 42 1,166 (1,318) (152)

Impairment - (750) (750) - - -

Gain on disposal of property, plant and equipment - - 2,019 - - 10,264

90,187 (63,383) 28,822 83,759 (56,130) 37,893



2 Particulars of turnover, operating costs and operating surplus

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Total development administration costs capitalised were £1,111k (2015: £684k).

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Tota

lTo

tal

Inco

me

from

lett

ings

act

ivit

ies

Rent

s re

ceiv

able

54,5

01

874

2,24

26,

699

64,3

16

59,6

29

Supp

ortin

g pe

ople

2 16

1-

2518

8 85

7

Serv

ice

char

ges

rece

ivab

le2,

957

151

308

2,92

96,

345

5,91

1

Net

rent

s re

ceiv

able

57

,460

1,18

62,

550

9,65

370

,849

66

,397

Amor

tisat

ion

of S

ocia

l Hou

sing

Gra

nt4,

034

6298

707

4,90

14,

578

Reve

nue

gran

ts fr

om lo

cal a

utho

ritie

s an

d ot

her a

genc

ies

-33

--

33

33

Mis

cella

neou

s in

com

e fr

om le

ttin

gs7

190

--

197

313

Tota

l inc

ome

from

lett

ings

act

iviti

es61

,501

1,47

12,

648

10,3

6075

,980

71

,321

Expe

ndit

ure

on le

ttin

gs a

ctiv

itie

s

Serv

ices

3,85

623

228

21,

985

6,35

55,

178

Man

agem

ent

15,6

381,

201

650

2,46

919

,958

15,9

65

Pensioneff

ecto

ftrie

nnialactua

rialvalua

tion

2,92

381

116

534

3,65

4-

Day

to d

ay re

pairs

8,37

221

698

707

9,39

310

,262

Plan

ned

mai

nten

ance

2,90

450

938

23,

345

2,99

4

Maj

or re

pairs

and

sto

ck re

-inve

stm

ent

(92)

87-

7166

692

Rent

loss

es fr

om b

ad d

ebts

161

--

1517

658

1

Dep

reci

atio

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sing

pro

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ies

10,0

3513

354

696

11,0

9811

,899

Impa

irmen

t-

--

--

152

Totalexpen

ditureonlettingsactivities

43,7

971,

880

1,50

96,

859

54,0

4547

,723

Ope

ratin

g su

rplu

s fr

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3523

,598

Void

Los

ses

789

5544

173

1,06

11,

110


4 Intra group transactions between regulated and non-regulated entities

Asra Construction Services Limited (ACSL) provides design and build development services to LHA and to ASRA. ItisnotaregisteredproviderandisthereforeclassifiedbytheHCAasanon-regulatedentity.

Service Level and Framework Agreements are in place between LHA, ASRA and ACSL. Development services are provided to ACSL by both ASRA and LHA. Finance services are provided by LHA. These are recharged by ASRA and/or LHA at cost with an appropriate transfer pricing mark-up applied.

ACSL recharges ASRA or LHA with design and build costs for development services carried out. ACSL has no employees.

Aggregate costs recharged for the year ended 31 March 2016 are as follows:

2016 2015

ACSL£’000

ASRA£’000

LHA£’000

ACSL£’000

ASRA£’000

LHA£’000

ACSL recharges - 25,578 2,701 - 21,793 13,902

ASRA development recharge 279 - - 133 - -

ASRAfinancerecharge - - - 63 - -

LHA development recharge - - - 155 - -

LHAfinancerecharge 38 - - 51 - -



2016 Number

2015 Number

Social Housing Properties

General needs housing 8,770 8,745

Affordablerent 857 668

Intermediate rent 333 335

Supported housing 145 270

Shared ownership 600 536

Housing for older people 1,306 1,304

Total Owned 12,011 11,858

Managed on behalf of others 1,214 1,148

Total Managed Social Housing 13,225 13,006

General Needs Housing 246 226

Supported 310 324

Total Social Owned but managed by others 556 550

Non-social housing

Keyworkers 226 226

Student accommodation 20 20

Market rent 105 105

Total Managed Non-social Housing 351 351

Non-social owned but managed by others 11 11

All Accommodation

Owned 12,362 12,209

Managed 1,214 1,148

Total Managed 13,576 13,357

Total Owned but managed by others 567 561

Total Stock 14,143 13,918

2016 £’000

2015 Re-stated

£’000

Surplusonordinaryactivitiesbeforetaxationisaftercharging/(crediting):

Depreciationofhousingpropertiesandwriteoffofreplacedcomponents 10,378 10,450

Depreciationonothertangibleownedfixedassets 1,160 1,003

Amortisation of social housing grant (4,902) (4,578)

Impairment of properties 750 152

Operating lease payments 381 369

Auditor’s remuneration:

In their capacity as auditors 96 52

In respect of other services 22 40

Total 2016

£’000

Total2015

£’000

Proceeds of sale - 7,266

Less: costs of sale - (4,463)

Net surplus on disposal - 2,803

5 Units of accommodation group 6 Surplus on ordinary activities before taxation

7 Sale of Properties

Commercial£’000

Voluntary sales£’000

Shared ownership subsequent tranches

£’000

Rightto buy£’000

Total 2016£’000

Total2015

£’000

Proceeds of sale 1,610 3,739 2,955 281 8,585 12,503

Less: costs of sale (1,666) (2,790) (1,753) (219) (6,427) (5,184)

Abated losses - - (116) (23) (139) 142

Net surplus on disposal (56) 949 1,086 39 2,019 7,461

Property Plant and Equipment

Investment Property

Notes to the Financial Statements for the year ended 31 March 2016Notes to the Financial Statements for the year ended 31 March 2016


Directors (including former directors)2016

£’0002015

£’000

Emoluments(includingpensioncontributionsandbenefitinkind)–ExecutiveDirectors 734 500

Emoluments(includingpensioncontributionsandbenefitinkind)–Non-Executivedirectors 93 62

Compensationpayabletopastdirectorsinrespectoflossofoffice 47 32

Theemolumentsofdirectorsdisclosedabove(excludingpensioncontributions,butincludingbenefitsinkind)includeamountspaidto:

The highest paid director 153 149

8 Directors’ and senior staff emoluments

The highest paid director refers to Matt Cooney, Group ChiefExecutive.Theamountincludesbasicsalaryof£146,702 (2015: £143,544) and a car allowance. The GroupChiefExecutiveisanordinarymemberofthepension scheme as set out in note 27.

TheNon-ExecutiveDirectorswereremuneratedasfollows:

From 1 April 2015: £20,890 per Group Chairman, £13,995 per Deputy Chairman, £11,832 per Chair of Committees and £8,967 per ordinary member per annum.

From 1 April 2014: £20,440 per Group Chairman, £13,694 per Deputy Chairman, £11,088 per Chair of Committee’s and £8,586 per ordinary member per annum.

OnlyGroupBoardnon-executiveDirectorsreceiveremuneration, named individual remuneration and expenditurereimbursementdetailsincompliancewithProvision D11 of the 2015 NHF code can be found in the Operating & Financial Review.

Staffemoluments(includesredundancypayments)2016

Number2015

Number

Fulltimeequivalentnumberofstaff(includingdirectors)whoseremunerationpayable(includingcompensationforlossofoffice,benefitsinkindandpensioncontributions)wasbetween:

£60,000 - £70,000 10 7

£70,001 to £80,000 5 2

£80,001 to £90,000 3 1

£90,001 to £100,000 3 -

£100,001 to £110,000 4 -

£110,001 to £120,000 2 2

£120,001 to £130,000 2 -

£130,001 to £140,000 - 1

£140,001 to £150,000 - -

£150,001 to £160,000 - -

£160,000 to £170,000 1 1

Total 30 14

Included above due to redundancy 18 -



9 Staff Costs

2016£’000

2015restated

£’000

Staffcostsincludingdirectors:

Wages and salaries 13,436 11,438

Social security costs 1,161 1,098

Other pension costs 844 490

Triennialactuarialvaluationeffect 3,654 -

19,095 13,026

Average number of full time equivalent persons (including the directors) employed during the year:

Number Number

Development and Assets 87 71

Housing, Lettings and Care 236 251

Central Services 91 79

Total employees 414 401

10 Interest payable and similar charges

2016£’000

2015restated

£’000

Housing loans interest 13,463 12,842

Housing loan fees 1,360 384

Pension unwinding cost 31 313

Interest rate swap obligation 5,809 5,513

RCGF and DPF interest 2 129

20,665 19,181

Less: Capitalised (2,039) (2,068)

18,626 17,113

Interest rates charged on Housing Loans varied between 0.76% and 15.5%

The average rate of interest charged on Housing Loans drawn down (including margins) was 3.73%

Interest is capitalised on properties under construction using the weighted average interest rate for the whole facility (drawn and swaps) of 4.97%.



11 Taxation 12 Tangible Fixed Assets – Housing Properties

2016£’000

2015restated

£’000

Analysis of charge in year

Currenttax:

UKcorporationtaxonsurplusforyear 96 167

Adjustment in respect of prior year - 10

Totalcurrenttax(seebelow) 96 177

Deferredtaxcurrentyearcharge(credit) -

Deferredtaxprioryearadjustment -

Totaltaxcharge 96 177

Factors affecting the tax charge for the year

Surplus/(deficit)beforetaxation 11,990 (21)

Taxchargeat20%(2015:21%) 2,398 (4)

Exemptcharitableincome (2,302) 265

Otherpermanentadjustments–expensesnotdeductiblefortax - -

Depreciation on ineligibles less IBAs - -

Capitalallowancesforperiodinexcessofdepreciation - -

Shorttermtimingdifferences - -

Nontaxableproportionofcapitalgainsprofit - -

Utilisationoftaxlosses - (84)

Non-taxableinterest - -

Marginal relief - -

Currenttaxchargefortheyear(seeabove) 96 177

Housing properties held

for letting£’000

Housing properties held

for letting£’000

Completed shared ownership housing

properties£’000

Shared ownership in the course of construction

£’000Total

£’000

COST

At 1 April 2015 – as restated 919,092 22,115 47,788 4,760 993,755

Additions 3,719 27,711 5,455 1,308 38,193

Transfer (to)/ from current assets (5,152) 7,665 (9,008) 6,057 (438)

Worktoexistingproperties 7,646 - - - 7,646

Disposals -s/o staircasing - - (1,846) - (1,846)

-s/ofirstsales - - (2,920) (1,692) (4,612)

-Other (4,487) - - - (4,487)

Schemes completed 15,336 (16,041) 6,641 (5,936) -

Writeoffofreplacedcomponents/aborted schemes (1,175) - - - (1,175)

At 31 March 2016 934,979 41,450 46,110 4,497 1,027,036

DEPRECIATION

At 1 April 2015 – as restated 54,437 - 1,456 - 55,893

Charge for the period 10,868 - 348 - 11,216

Write-offofreplacedcomponents (954) - - - (954)

Impairment - 375 - 375 750

Fair value adjustment re. acquisition 117 - - - 117

Transfer to current assets (11) - - - (11)

Eliminated on disposal (85) - (66) - (151)

At 31 March 2016 64,372 375 1,738 375 66,860

NETBOOKVALUE

At 31 March 2016 870,607 41,075 44,372 4,122 960,176

At 31 March 2015 restated 864,655 22,115 46,332 4,760 937,862

2016£’000

2015restated

£’000

Housing properties comprise:

Freeholds 866,661 845,911

Long leaseholds 87,257 84,371

Short leasehold 6,258 7,580

960,176 937,862



12 Tangible Fixed Assets – Housing Properties continued 12 Tangible Fixed Assets continued - other

Asra Housing Association Limited and Leicester Housing Association Limited commission Asra Construction ServicesLimited(ACSL)toundertakedesignandbuilddevelopmentservices.TheprofitgeneratedbyACSLontheseadditionstofixedassetsiseliminatedonconsolidation.

Fixedassetsincludethefairvalueofassetsacquiredfrom:

Finance leases

The Group had no assets held under such leases at eitheryearend.Suchassetsaregenerallyclassifiedasfinanceleasesastherentalperiodamountstotheestimated useful economic life of the assets concerned and often contain the option to purchase the assets outright at the end of the minimum lease term by paying a nominal amount.

Impairment

The Group considers each scheme to represent separate cash generating units when assessing for impairment in accordance with the requirements of FRS102 and SORP 2014.

During the current year, the Group has recognised an impairment cost of £750k (2015 - £152k) in respect of a development scheme and £152k impairment from 2014-15 was released as it is no longer necessary.

Totalworkstoexistingpropertiesaredisclosedinthefinancialstatementsas:

Asset£’000

Depreciation£’000

Family First 20,365 2,193

Black Roof Housing 10,782 611

2016£’000

2015£’000

Capital works 7,646 9,635

Planned maintenance 3,418 3,093

Major repairs 69 701

11,133 13,429

Freeholdoffices£’000

Furniturefixturesandfittings

£’000

Computers and officeequipment

£’000Motor vehicles

£’000Total

£’000

COST

At 1 April 2015 –restated 5,200 1,049 2,492 239 8,980

Additions - 229 573 - 802

Write-off’s (187) (183) (1,280) (24) (1,674)

At 31 March 2016 5,013 1,095 1,785 215 8,108

DEPRECIATION

At April 2015 1,084 723 1,556 109 3,472

Charge for year 104 265 749 42 1,160

Write-off’s (187) (183) (969) (24) (1,363)

At 31 March 2016 1,001 805 1,336 127 3,269

NETBOOKVALUE

At 31 March 2016 4,012 290 449 88 4,839

At 31 March 2015 4,116 326 936 130 5,508



13 Investment properties

Student Accommodation

£’000 Market Rent

£’000Commercial

£’000Total

£’000

At 1 April 2015 - 6,759 1,271 8,030

Additions - - - -

Disposals - - - -

revaluations - 244 - 244

At 31 March 2016 - 7,003 1,271 8,274

Student Accommodation

£’000 Market Rent

£’000Commercial

£’000Total

£’000

Cost 450 7,028 2,172 9,650

Depreciation (9) (304) (41) (354)

Net Book Value At 31st March 2016 441 6,724 2,131 9,296

At 31 March 2015 441 6,724 2,131 9,296

Commercial properties were professionally valued by Jones Lang LaSalle, chartered surveyors, an independent valuer, to fair value at 31st March 2014 and 31 March 2015, with subsequent additions during 2015-16 at cost.

Investment properties, which are all freehold or long leasehold, were valued to fair value at 31 March 2014, 2015 and 2016, based on a valuation undertaken bySavills(UK)Limited,RICSRegisteredValuers,anindependentvaluerwithrecentexperienceinthelocation and class of the investment property being valued. The method of determining fair value was Market Value for Social Housing (MV-STT) using thediscountedcashflowoftherentalstreamandsignificantassumptionsappliedwereasfollows:

• Based on market evidence from numerous sources;• The property is not subject to any unusual or

onerous restrictions;• The building(s) is/are structurally sound.

Freehold buildings with a carrying value of £609m have been pledged to secure borrowings of the Association. The Association is not allowed to pledge these assets as security for other borrowings or to sell them to another entity.

If investment properties had not been revalued they would have been included at the following amounts:



14 Fixed Asset Investments

15 Stocks and work in progress

16 Debtors due within one year

17 Short Term Investments

The above investments have been provided as a mortgage to various NHS Trusts as part of joint partnership arrangements. They are measured at fair value with the future cash receipts discounted to net present value.

During 2015-16, at the request of the lenders, cash collateral of £14,720k (2015: £18,140k) has been lodged with Lloyds, Santander and The Royal Bank of Scotland to secure mark to market (MTM) positions with swap counter-parties. This collateral is included within

current asset investments in the balance sheet. The intention is to secure MTM positions with property security. Until property is charged the Group does not have access to this investment balance.

2016£’000

2015restated

£’000

Other loans 525 680

525 680

2016£’000

2015£’000

Rental debtors 4,562 4,549

Less: provision for bad debts (2,039) (2,126)

2,523 2,423

Other debtors 574 687

Prepayments and accrued income 557 1,383

3,654 4,493

GROUP AND ASSOCIATION 2016£’000

2015£’000

Fixedtermcashdeposits - 100

Collateral 14,720 18,140

14,720 18,240

2016£’000

2015restated

£’000

Consumable stocks 1 139

Housing stock for sale 73 -

Social rented completed units 673 1,247

Social rented under construction 1,190 953

Shared Ownership completed units 2,317 2,050

Shared Ownership under construction 4,562 3,331

Commercial completed units 22 552

Commercial under construction 1,998 92

Outright sales completed units - 1,261

Outright Sales under construction 2,313 2,156

Market rent completed 87 67

Market rent under construction 140 109

13,376 11,957



18 Creditors (amount falling due within one year) 19 Creditors (amount falling due after more than one year)

2016£’000

2015restated

£’000

Housing loans (note 19) 12,547 3,854

Trade creditors 1,847 1,654

Corporationtax 87 167

Othertaxation&Socialsecuritycosts 571 423

Accruals and deferred income 15,893 17,224

Recycled Capital Grant Fund (note 24) 320 263

Disposal Proceeds Fund (note 25) 12 1,481

Pensiondeficitcontributions 1,294 946

Deferred capital grant (note 20) 4,902 4,902

Onerous contract 26 -

37,499 30,914

2016£’000

2015restated

£’000

Housing loans 404,326 416,844

Issue Costs (2,450) (2,717)

Loan premium 93 127

Pensiondeficitcontributions 9,686 7,297

Recycled capital grant fund (note 24) 1,450 513

Disposal proceeds fund (note 25) 778 585

Onerous contract 394 451

Deferred capital grant (note 20) 438,404 442,866

Derivativesfinancialinstruments 77,609 70,867

930,290 936,833

Housing Loan amounts repayable by instalments:

Repayable within one year 12,547 3,854

Repayable between one to two years 45,909 12,569

Repayablebetweentwotofiveyears 43,334 79,210

Repayableafterfiveyears 315,084 325,065

416,874 420,698

Add: Loan premium 93 127

Less: Issue Costs (2,450) (2,717)

414,517 418,108

The average time take to pay creditors is 30 days (2015: 30 days).



20 Deferred Capital Grant 22 Financial Instruments

21 Provisions

2016£’000

2015restated

£’000

At 1st April 447,768 449,336

Grants received during the year 1,663 6,193

Grants recycled to the RCGF and DPF (notes 24 and 25) (1,223) (1,141)

Grants transferred out as part of stock swap with another RP - (2,042)

Released to income during the year (4,902) (4,578)

At 31st March 443,306 447,768

The original total value of the grant 502,417 501,977

Amount recognised in the Statement of Comprehensive Income 59,111 54,209

Due within one year 4,902 4,902

Due after one year 438,404 442,866

2016£’000

2015£000

Financial Assets

Measured at fair value through the Statement of Comprehensive Income:

Cash and cash equivalents 30,692 46,497

Measured at discounted amount receivable:

-Fixedassetinvestments(note14) 525 680

Measured at undiscounted amount receivable:

- Rent arrears and other debtors (note 16) 3,654 4,493

-

Total 34,871 51,670

Onerous contract

£000Total£000

Balance at 31 March 2015 432 432

Provisions used during the year (12) (12)

Balance at 31 March 2016 420 420

The present obligation under the contract is recognised and measured as a provision for onerous contracts within creditors

ThecarryingvaluesoftheGroup’sfinancialassetsandliabilitiesaresummarisedbycategorybelow:

2016£’000

2015£000

Financial Liabilities

Measured at fair value and designated in a hedging relationship 77,609 70,867

Financial liabilities measured at fair value at amortised cost 857,729 865,749

Financial liabilities measured at fair value through statement of comprehensive income 31,793 30,541

Total 967,131 967,157



22 Financial Instruments – continued 23 Derivative Financial Instruments – continued

23 Derivative Financial Instruments

2016£’000

2015£000

Interest income and expense

Totalinterestincomeforfinancialassetsatamortisedcost 256 183

Totalinterestexpenseforfinancialliabilitiesatamortisedcost (18,626) (17,113)

Fair value gains and losses

Onfinancialassets(includinglistedinvestments)measuredatfairvalue through the Statement of Comprehensive Income (6,742) (34,521)

TheGroup’sincome,expense,gainsandlossesinrespectoffinancialinstrumentsaresummarisedbelow: Interest Rate Swap Contracts

The following table details the notional principal amounts and remaining terms of interest rate swap contracts outstanding as at 31st March:

Interest rate swap contracts designated as hedges of variable interest rate risk recognised financial liabilities

Interestrateswapsarevaluedatpresentvalueoffuturecashflowsestimatedanddiscountedbasedontheapplicable yield curves derived from quoted interest rates.

The interest rate swaps settle on a quarterly basis. The floatingrateontheinterestrateswapsisthreemonths’LIBOR.TheGroupwillsettlethedifferencebetweenthefixedandfloatinginterestrateonanetbasis.

All interest rate swap contracts are designated as hedges of variable rate interest rate risk of the Group’s floatingrateborrowingsinaccordancewithFRS102withvaryingdegreesofeffectiveness.Thehedgedcashflowsareexpectedtooccurandtoaffectprofitorlossoverthe period to maturity of the interest rate swaps.

Losses of £8,036k (2015: £14,484k) were recognised in other comprehensive income representing the effectivecomponentoftheswap.Theineffectivecomponents of £1,294k gain (2015: loss of £20,037k) representingtheexcessofthefairvalueofhedginginstruments over the change in the fair value of expectedcashflowswererecognisedinprofitorloss.£30,752k(2015:£22,716k)wasreclassifiedtoprofitorloss for the year.

Current Non-current

2016£’000

2015£’000

2016£’000

2015£’000

Derivatives that are designated and effective as hedging instruments carried at fair value

Liabilities

Interest rate swaps 30,752 22,716

Non-hedged instruments car-ried at fair value - -

Interest rate swaps 46,856 48,151

- - 77,608 70,867

Average contract fixedinterestrate

Average contract fixedinterestrate Fair value

Effective hedges2016

%2015

%2016

£’0002015

£’0002016

£’0002015

£’000

Outstandingreceivefloatingratepayfixedcontracts

0 - 1 years - - - - - -

1 - 5 years - - - - - -

Over 5 years 8.86 8.58 150,000 120,000 30,752 22,716

At 31 March 8.86 8.58 150,000 120,000 30,752 22,716

Not effective

Outstandingreceivefloatingratepayfixedcontracts

0 - 1 years - - - - - -

1 - 5 years - - - - - -

Over 5 years - 8.48 - 30,000 46,856 48,151

At 31 March - 8.48 - 30,000 46,856 48,151

Total Hedges 8.86 17.06 150,000 150,000 77,608 70,867



23 Derivative Financial Instruments – continued

TheGrouphastwelvecashflowhedges.Thehedge relationships meet each condition for hedge accounting, which are consistent with the entity’s risk management objectives for undertaking hedges.

The group considers that an economic relationship existsbetweenthehedginginstrument(interestrateswap)andthehedgeditem(floatingrateloan)in that the values of the hedged item and hedging instrumentareexpectedtotypicallymoveinopposite directions in response to movements in the same risk, the hedged risk, over the life of the hedge.

The objective of the hedge is to mitigate the changes inthefuturecashflowsstemmingfromthefloatingrateinterestpaymentsrelatedtothefloatingrateloan entered into by the group.

In accordance with chapter 12 of FRS 102, hedge accounting has been applied to the following swap contracts:

The Hedged Items have a variable interest rate risk associated with the LIBOR linked bank loan. The counterparty to the swap and the credit risk

associated is considered to be low. Credit risk is reflectedintheCreditValuationAdjustmentamounttothe risk free fair value of the derivative instrument.

2016 2015

AHA £'000 £'000

Lloyds £50m 1.413% 12th October 2020 1,066 -

Santander £10m 4.84% 25th June2026 3,384 3,507

Lloyds £10m 4.70% 5th October 2032 4,622 4,419

Lloyds £20m 4.79% 4th January 2036 10,903 10,272

Lloyds £15m 4.44% 13th May 2038 7,965 7,262

Santander £10m 4.32% 4th July 2038 5,118 5,290

33,058 30,750

2016 2015

LHA £'000 £'000

Lloyds £20m 4.48% 26th February 2032 8,327 7,962

Lloyds £15m 4.39% 5th November 2037 7,680 7,024

Lloyds £15m 4.44% 13th May 2038 7,965 7,261

Lloyds £15m 4.37% 26 February 2041 8,561 7,728

Lloyds £10m 3.85% 13 November 2049 5,885 4,964

RBS £10m 3.90% 04 October 2050 6,133 5,178

44,551 40,117



24 Recycled Capital Grant funding 25 Disposal Proceeds Fund

2016£’000

2015£000

Opening balance 776 715

Inputs to reserve

Grants recycled 998 674

Interest accrued - 78

Recycling of grant:

New build - (572)

Other (4) (119)

Closing balance 1,770 776

2016£’000

2015£000

Opening balance 2,066 1,571

Inputs to reserve:

Grants recycled - Greater London Area 225 467

Grants recycled – outside GLA 2 -

Interest accrued - 51

Recycling of grant: - -

New build - -

Cashrepaidonexpiryofthreeyearinvestmentperiod (1,503) (23)

Closing balance 790 2,066

2016£’000

2015£000

Payable within one year 320 263

Payable greater than one year 1,450 513

1,770 776

2016£’000

2015£000

Payable within one year 12 1,481

Payable greater than one year 778 585

790 2,066

The regulator may require repayment of amounts 3 years or older of £320k (2015: £47k) The regulator may require repayment of amounts 3 years or older of £47k (2015: £1,503k).



26 Called up share capital 28 Pension obligations

2016£

2015£

Allotted, issued and fully paid:

At 1 April 4 6

Issued during the year 4 -

Cancelled during the year - (2)

At 31 March 8 4

The shares of the Association, each of £1.00 nominal value, carry no rights to a dividend or provision for redemption or a distribution on winding up. The members are entitled to a vote at annual and special meetings of the Association.

Defined Contribution Scheme - 1All colleagues eligible to join

TheGroupparticipatesinthedefinedcontributionschemes of the Social Housing Pension Scheme (“SHPS” or “the Scheme”). Members have the choice of paying contributions of between 4% and 6% of salary with the employer (LHA or ASRA) matching these contributions. Members can pay more than 6% if they wishbutthemaximumemployercontributionratewillbe6%;Thisbenefitstructureisforallnewstartersandcurrent colleagues who wish to join the scheme;

Defined Contribution Scheme - 3Auto Enrolment Scheme.

All eligible jobholders have been auto enrolled with effectfrom1May2014.Initiallymemberscontribute1% of pensionable salary and the employer (LHA or ASRA) also contributes 1% of pensionable salary.

Based on current legislation, the contributions are thenexpectedtobeincreasedoveraphasedperiodas follows:

• From 1 October 2017 – 2.5% from the employer and 2.5% from the employee.

• From 1 October 2018 – 4% from the employer and 4% from the employee.

At 31 March 2016 the Group was committed to non-cancellable operating lease minimum future payments for each of the following periods:

27 Operating lease obligations

Land and buildings Other

2016£’000

2015£’000

2016£’000

2015£’000

Operating leases which expire:

Less than 1 year 369 347 7 29

Within 1 to 5 years 886 1,080 - 7

After 5 years 2,140 2,301 - -

3,395 3,728 7 36

Defined Contribution Scheme - 2Closed Scheme to new entrants from 31 December 2013.

Members will have (members switching over from the CARE 1/60th section on 1 Jan 2014) the choice of paying contributions of between 4% and 6% of salary with the employer matching these contributions, plus the employer paying an additional 4%. Members canpaymorethan6%iftheywishbutthemaximumemployer contribution rate will be 10%.

Defined Contribution

Accordingly, the contribution rates payable (as a % of salary) will be as set out in the table below.

Member Contribution Member Contribution Total Contribution of Salary to be invested.

4% 4% 12%

5% 5% 14%

6% 6% 16%

Until 31 December 2013 the Group participated in the SocialHousingPensionDefinedBenefitScheme(thescheme). The Scheme is funded and is contracted out of the state scheme.

It is not possible in the normal course of events to identify on a consistent and reasonable basis the share of underlying assets and liabilities belonging to individual participating employers. This is because the Scheme is a multi-employer scheme where the Scheme assets are co-mingled for investment purposes,andbenefitsarepaidfromtotalSchemeassets. Accordingly, due to the nature of the Scheme, the accounting charge for the period under FRS17 represents the employer contribution payable.



28 Pension obligations - continued

Defined Benefit

The Trustee commissions an actuarial valuation of the Scheme every three years. The main purpose of thevaluationistodeterminethefinancialpositionof the Scheme in order to address the level of future contributions required so that the Scheme can meet its pension obligations as they fall due.

The last formal valuation of the Scheme was performed as at 30 September 2011 by a professionallyqualifiedActuaryusingtheProjectedUnit Method. The market value of the Scheme’s assets at the valuation date was £2,062m. The valuation revealed a shortfall of assets compared with the value of liabilities of £1,035m, equivalent to a past service funding level of 67%. TheSchemeActuaryiscurrentlyfinalisingthe2014valuation but key provisional results have been confirmed.Asat30September2014,themarketvalueof the Scheme’s assets was £3,123m. There was a shortfall of assets compared with the value of liabilities of £1,323m, equivalent to a past service funding level of 70%.

LHAandASRAhavebeennotifiedbythePensionsTrust of the estimated employer debt on withdrawal from the Social Housing Pension Scheme based on the financialpositionoftheSchemeasat30September2014. As of this date the estimated employer debt is £41,568,051 and £17,496,078 respectively.

Deficit contributions

From 1 April 2010 to 30 September 2010:A cash amount equivalent to 7.5% of members’ earnings per annum (payable monthly and increasing by 4.7% each year on 1st April). From 1 April 2013 to 30 September 2026:A cash amount equivalent to 3.1% of members’ earnings per annum (payable monthly and increasing by 3% each year on 1st April).

From 1 October 2020 to 30 September 2023:A cash amount equivalent to 3.1% of members’ earnings per annum (payable monthly and increasing by 4.7% each year on 1st April).

ThecontributionsareexpressedbySHPSinnominalpound terms (for each employer) increasing each year at the stated amount. The contributions are calculated by proportioning the nominal pound payment at the time of the change. Earnings at 30 September 2008 (for each employer) are used as a reference point for calculating these contributions.

The recovery plan contributions are allocated to each participating employer in line with their estimated share of the scheme liabilities.

WheretheschemeisindeficitandwheretheAssociationhasagreedtoadeficitfundingarrangement the Association recognises a liability for this obligation. The amount recognised is the net presentvalueofthedeficitreductioncontributionspayable under the agreement that relates to the deficit.Thepresentvalueiscalculatedusingthediscount rate detailed in these disclosures. The unwinding of the discount rate is recognised as a financecost.

28 Pension obligations - continued

2016£’000

2015£000

Present value of provision

10,980 8,243

2016£’000

2015£000

Provision at start of year 8,242 8,837

Unwindingofthediscountfactor(interestexpense) 198 214

Deficitcontributionspaid (947) (907)

Remeasurements–effectoftriennialactuarialvaluation 3,654 -

Remeasurements – impact of any change in discount factor (167) 99

10,980 8,243

2016£’000

2015£000

Interestexpense 198 214

Remeasurements – impact of any change in discount factor (167) 99

Remeasurements – amendments to the contribution schedule 3,654 --

Costs recognised in the income and expenditure account 3,685 313

2016% per annum

2015% per annum

Rate of discount 2.45 2.4

Present value of provision

Reconciliation of opening and closing provisions

Income and expenditure impact

Assumptions

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.



29 Reserves 31 Consolidated cash flow statement

30 Negative Goodwill

Thecashflowhedgereserverepresentsthehedgedcashflowsthatareexpectedtoaffectsurplusordeficitover the period to maturity of the interest rate swaps.

£88k of the restricted reserve is grant received from the Big Lottery Fund. This funding is held in a designated bank account as a requirement of the grant conditions. If the grant is not spent according to the agreement then it must be repaid to The Big Lottery and is therefore also included as a creditor. The restricted reserves are reserves to be spent for the tenantsbenefit.Forexample,holidayhomereserve.

Negativegoodwillarosewhenthefairvalueofassetsarisingfromtheacquisitionofabusinesswasinexcessofthe fair value of the consideration given. An amount equal to the fair value of the non-monetary assets acquired isbeingreleasedtotheprofitandlossaccountcommensuratelywiththerecoveryofthenon-monetaryassetsacquired, whether through depreciation or sale.

Negative goodwillRe-stated

£’000

At 1 April 2015 - restated 15,502

Amortisation of goodwill (911)

At 31 March 2016 14,591

Note2016

£’0002015£000

Cash Flow from operating activities

Surplus for the year 11,894 (198)

Adjustments for non-cash items:

Depreciationoftangiblefixedassets 12,438 13,347

Amortisation of intangible assets (911) (994)

Decrease/(increase) in stock (1,419) 2,586

Decrease/(increase) in trade and other debtors 730 (812)

Increase/(decrease) in trade and other creditors (787) 4,983

Pension costs less contributions payable 2,706 (310)

Carryingamountoftangiblefixedassetdisposals 6,398 7,071

Capital grants received - -

Saleofotherfixedassets - -

Movement in fair value of assets (1,538) 20,966

Corporationtax 96 177

Adjustments for investing or financing activities:

Proceedsfromthesaleoftangiblefixedassets (8,586) (17,331)

Government grants utilised in the year (4,902) (4,578)

Interest payable 18,626 16,798

Interest received (256) (167)

34,489 41,538



32 Capital Commitments 33 Transition to FRS102

2016£’000

2015£000

Expenditurecontractedforbutnotprovidedinthefinancialstatements 74,297 92,562

ExpenditureauthorisedbyBoardbutnotcontractedfor 35,193 47,530

109,490 140,092

The Group has successfully completed its 2011-15AffordableHomesProgrammeswithboththeGreater London Authority (GLA) in London and the Homes & Communities Agency (HCA) in the Midlands. Furthermore, the Group has now secured a fresh Social Housing Grant (SHG) allocation to deliver a similar sized Development programme over the current four year period from April 2015 through to March 2019, the majority of which will be in London with SHG funding from the GLA, whilst from now on, there will only be modest levels of development in the Midlands, again with SHG funding from the HCA.

ThisisthefirstyearthattheGrouphaspresenteditsfinancialstatementsunderFinancialReportingStandard 102 (“FRS102”) issued by the Financial reporting Council. The following disclosures are requiredintheyearoftransition.ThelastfinancialstatementsunderpreviousUKGAAPwerefortheyearended 31 March 2015 and the date of transition to FRS102 was therefore 1 April 2014. As a consequence of adopting FRS 102 a number of accounting policies have changed to comply with that standard.

The loan facilities are being arranged to deliver the anticipated programme. The Business Plan also demonstrates the Group’s ability to service its debts, secure loans and repay long term loans as they fall due.

In carrying out the transition to FRS102, the Group hasappliedthefollowingexemptionaspermittedbySection 35 “Transition to this FRS”:

Business combinations

The Group has elected not to apply Section 19 Business Combinations and Goodwill to business combinationsthatwereeffectedbeforethedateoftransition to FRS 102. No adjustments have been made to the accounting treatments adopted at that time.

Reconciliation of net assets and reserves at 1 April 2014 for the Group – date of transition to FRS 102

Note

Reserves as at 1 April

2014

£’000

Reserves as at 1 April

2014

£’000

Reserves as at 31 March

2015

£’000

AspreviouslystatedunderformerUKGAAP:restated 1.29 58,551 24,433 82,984

Revaluationtofairvalueoffixedassetinvestments (122) 13 (109)

Pension Deficit contributions (8,838) 597 (8,215)

Revaluation of investment properties to market value 578 (1,025) (447)

Revaluation of commercial properties to market value 1,519 (2,337) (818)

Financial Instruments at fair value (36,346) (34,520) (70,866)

Holiday Pay accrual (58) (4) (62)

Onerous contract (438) 6 (432)

Depreciationexpense (1,522) (4,549) (6,071)

Amortisation of Social Housing Grant 49,631 4,578 54,209

Amortisation of negative goodwill 477 (632) (155)

As stated in accordance with FRS 102 63,432 (13,440) 50,018



Fixed asset investments

FRS 102 requires that investments be measured at fair value with changes in fair value recognised in the Statement of Comprehensive Income. Under previous UKGAAP,theGroup’saccountingpolicyforbothfixedand current asset investments was to measure them atcostlessimpairments.Theeffectofthechangehasbeen to decrease reserves and to increase surplus for the year ended 31 March 2015.

Multi Employer defined benefit pension scheme

UnderpreviousUKGAAPtheSocialHousingPensionScheme,amultiemployer,definedbenefitpensionscheme of which both asra and Leicester Housing Association’s are members, was accounted for by theGroupasadefinedcontributionscheme,ItisnotpossiblefortheGrouptoobtainsufficientinformationtoenableittoaccountfortheschemeasadefinedbenefitschemeandsoitcontinuestoaccountfortheschemeasadefinedcontributionscheme.WhentheschemeisindeficitandwheretheGrouphasagreedtoadeficitfundingarrangementtheGroupnow recognises a liability for this obligation. The amount recognised is the net present value of the deficitreductioncontributionspayableundertheagreementthatrelatestothedeficit.Theunwindingofthediscountrateisrecognisedasafinancecost.This adjustment has resulted in a decrease to the opening reserves position of £8,838k. In the year to 31 March 2015 a credit was recognised in surplus in the Statement of Comprehensive Income and the liability at 31 March 2015 was £8,215k.

Investment properties

FRS 102 requires that changes in the fair value of investment properties be recognised in surplus or deficitfortheyear.UnderpreviousUKGAAPthesechanges were recognised outside of surplus or loss and presented separately in a revaluation reserve.

Financial instruments – derivative contracts (interest rate swaps)

This adjustment relates to the recognition of the fair valueofderivativefinancialinstrumentsheldbytheGroup as at 1 April 2014 and as at 31 March 2015. The Groupusesderivativefinancialinstrumentstoreduceexposuretointerestratemovements.Derivativesareinitially recognised at fair value at the date a derivative contract is entered into and are subsequently re-measured to their fair value at each reporting date. The resulting gain or loss is recognised in surplus or deficitimmediatelyunlessthederivativeisdesignatedandeffectiveasahedginginstrument,inwhicheventthetimingoftherecognitioninsurplusordeficitdepends on the nature of the hedge relationship. This adjustment has resulted in a decrease to the opening reserves of £36m and a decrease to the reserves position as at 31 March 2015 of £71m.

Holiday pay accrual

FRS102requiresshorttermemployeebenefitstobechargedinsurplusordeficittotheStatementofComprehensive Income as the employees’ service is received. This has resulted in the Association recognising a liability for holiday pay of £58k on transition to FRS 102. Previously holiday pay accruals were not recognised and were charged to the Income andExpenditureaccountastheywerepaid.Intheyear to 31 March 2015 an additional charge of £4k was recognised in the Statement of Comprehensive Income and the liability at 31 March 2015 was £62k.

33 Transition to FRS102 - continued

Depreciation and Amortisation of Social Housing Grant

Under FRS 102 social housing grant (“SHG”) is no longersetagainsthousingpropertywithinfixedassetsand depreciation is charged on the gross amount.

The SHG is held as a creditor and amortised over the life of the structure of the property.

Theeffectonthe1April2015balancesheetisthemovement of £448m SHG to long term creditors (with the estimated amortisation charge for 2015-16 shown in short term creditors). Movements to the long term creditor grants during 2014-15 are shown in Note 20.

Other Adjustments arising on transition to FRS 102

Inadditiontothetransitionadjustmentsidentifiedabovewhichaffectthesurplusforthefinancialyear, the following adjustments have arisen which havehadnoeffectonnetreservesorStatementofComprehensiveIncomebutwhichhaveaffectedthe presentation of these items on the Statement of Financial Position. The main item is:


Statement of Cash flows

TheGroup’scashflowstatementreflectsthepresentation requirements of FRS 102, which is differenttothatpreparedunderFRS1.InadditionthecashflowstatementreconcilestocashandcashequivalentswhereasunderpreviousUKGAAPthecashflowstatementreconciledtocash.CashandcashequivalentsaredefinedinFRS102as“cashonhand and demand deposits and short term highly liquid investments that are readily convertible to known amounts of cash and that are subject to an insignificantriskofchangesinvalue”whereascashisdefinedinFRS1as“cashinhandanddepositsrepayable on demand with any qualifying institution, less overdrafts from any institution repayable on demand”.TheFRS1definitionismorerestrictive.


34 The subsidiary companies

35 Legislative provisions

The Association has subsidiary companies (held at nil value) as follows: LeicesterHousingAssociationLimited - CharitableCommunityBenefitSociety AsraHousingAssociationLimited - CharitableCommunityBenefitSociety

The subsidiaries have subsidiary companies (held at nominal value) as follows: Newlight Properties Limited - Limited by shares - Dormant, 100 ordinary shares at £1Sandy Hill (Woolwich) Limited - Limited by shares - Dormant, 1 ordinary share at £1 Asra Construction Services Limited - Limited by shares - 1 Ordinary share at £1

These accounts consolidate the results of the above subsidiaries.

Asra Housing Group Limitedis a registered Housing AssociationCommunity Benefit Society

Homes and Communities Agency


Registration number

30442R

L4523

Asra Housing Group3 Bede Island Road

LeicesterLE2 7EA

0116 257 6716www.asra.org.uk

asra Housing Group Limited asra housing Financial Statements 2016 7 Principal Activities and review...

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