Flagship Housing Group Limited
Consolidated Financial Statements
for the Year Ended 31 March 2014
Keswick Hall
Norwich
Norfolk
NR4 6TJ
www.flagship-housing.co.uk
Industrial and Provident Societies Act 1965 Registered No. 31211R
Homes and Communities Agency: Registered No. 4651
An Exempt Charity
Flagship Housing Group Limited
Contents
Page
Board of Management, Executive Team and Advisers
1
Chair’s Statement
2
Operating and Financial Review
3
Report of the Board
13
Report of the Board on Corporate Governance and Internal Financial Control
17
Report of the Independent Auditors
19
Income and Expenditure Accounts
20
Statements of Total Recognised Surpluses and Deficits
21
Statements of Historical Cost Surpluses and Deficits
21
Balance Sheets
22
Cash Flow Statements
23
Notes to the Financial Statements
24
2
Flagship Housing Group Limited
Board of Management, Executive Team and Advisers
Board of Management:
Member
Board
Audit
Committee
√
P Lakey
N
Chair
R Finon
N
√
Chair
J Makepeace
N
√
√
K Gordon
(Resigned 23 September 2013)
N
√
√
(to 23/09/2013)
D Ayre
N
√
A London
(Resigned 13 September 2013)
N
√
C Frazer
N
√
P Remington
N
√
D McQuade
E
√
D Armstrong
E
√
E King
EC
√
H Walsham
EC
√
R Ayden
Remuneration
Committee
Growth
Committee
(disbanded 1
January 2014)
√
Chair
Chair
(to 13/09/2013)
√
√
Chair
(from 14/09/2013)
S
The following are co-optees of the committees as indicated and not members of the Board
P Cook
(Appointed 1 June 2013)
R Bennett
(Appointed 3 June 2014)
√
C
C
√
Key:
N – Non-Executive Director; E – Executive Director; EC – Executive Director Co-opted onto the Board; S – Company
Secretary; C – Co-optee
Advisers:
Registered Office:
Solicitors:
Internal Auditors:
External Auditors:
Bankers:
Group Funders:
Keswick Hall, Keswick, Norwich, Norfolk, NR4 6TJ
Anthony Collins Solicitors, 134 Edmund Street, Birmingham, B3 2ES
Beever & Struthers, St Georges House, 215 - 219 Chester Road, Manchester,
M15 4JE
Mazars LLP, 45 Church Street, Birmingham, B3 2RT
National Westminster Bank, Norfolk & Waveney Corporate Business Centre,
Norfolk House, Exchange Street, Norwich, Norfolk, NR2 1DD
The
Royal Street,
Bank ofNorwich,
Scotland;
Santander
Exchange
NR2
1DD UK; The Co-operative Bank;
Nationwide Building Society
1
1
Flagship Housing Group Limited
Chair’s Statement
2013/14 was a satisfying and significant year for Flagship.
Our financial results remain strong, in a challenging environment. That is a very satisfying achievement.
Our new maintenance company, RFT Repairs, ‘went live’ on 3 June 2013 - providing a responsive repairs
service to our 22,000 customers - and that is of major significance to the future of Flagship. We opened two
distribution centres to give certainty of materials supply to RFT operatives, and to improve the efficiency and
quality of the service. It’s still early days, with further improvements to be made, but we know RFT will create
substantial gains in Value-for-Money and customer satisfaction for many years to come.
Also of significance, we have expanded geographically - acquiring 172 general needs and shared ownership
homes in the Cambridge area. These homes are part of a wider development in which we are partnering
BPHA, the Bedford-based housing association. This is an exciting opportunity and we are looking forward to
building the partnership.
The word ‘crisis’ is often used about housing, with some justification. The East of England, like most of the
country, faces huge challenges around affordability and supply. Far fewer homes are being built than are
needed, and it’s ever-more difficult to afford to buy or rent in the private sector. It is crucial, therefore, that
major housing associations like Flagship strive to provide as many high-quality, affordable homes as possible.
Over the next year, we plan to fund the building of 383 new homes and the re-modelling of three schemes in
Suffolk and Norfolk, to provide a further 41 homes.
As ever, I am very grateful to the staff of Flagship and to my fellow Board Directors for their considerable
efforts during the year. We are fortunate in having such a highly-skilled group of people, who are enthusiastic
about leading Flagship in the next stage of its evolution. We are going to have work very hard - with creativity
and courage - to continue to improve services for our customers and to develop new homes. We relish that
challenge.
Finally, I would like to thank Kate Gordon and Rosemary London, who stood down as Non-Executive
Directors. They were valued members of the Flagship Board, with many years of service, and had previously
chaired the boards of Peddars Way and Kings Forest Housing Associations, respectively, before
amalgamation. Their contribution over the years has been considerable.
Peter Lakey
Chair
31 July 2014
2
2
Flagship Housing Group Limited
Operating and Financial Review for the Year Ended 31 March 2014
Principal activities
Flagship's primary activity is to provide general needs
rented accommodation for people on low incomes. Our
purpose is the provision of homes for people in need.
The majority of our housing stock is one, two and three
bedroom accommodation. We provide five very
sheltered housing schemes with extra care and a
number of traditional sheltered schemes. In addition we
offer services for young people aged 16-24, shared
ownership homes, some student accommodation and a
small number of market rented homes. The Group had
22,017 (2013: 22,064) homes in management at 31
March 2014.
The results of Flagship Housing Developments Limited
and RFT Repairs Limited are consolidated in the
Group’s results. Flagship Housing Developments
Limited provides development services to the Group,
RFT Repairs Limited provides repairs services to the
Group.
the causes of variation in performance, act on the
system to reduce waste, build capacity and keep
improving.
We are regulated by the Homes & Communities Agency
(HCA). As with any regulator this involves an ongoing
dialogue in respect of all issues affecting the sector and
Flagship at a local level.
Following a periodic review by the HCA, it has been
confirmed that the Group has been awarded the highest
Governance and Viability ratings of G1 and V1.
www.homesandcommunities.co.uk/ourwork/regulatoryjudgements.
Principal strategic and operational risks
The principal risks faced by Flagship are identified by
the Board and senior managers at regular board
meetings and factored into the Business Plan. Currently
the external risks include:
Objectives and strategies

Our strategic intent is to provide the best housing
management and maintenance service in the East of
England.

Our aim is get service right, first time - and we
encourage this through a culture of continuous
improvement.

Reduced public funding restricting in the amount
of new developments and supporting housing
able to be built.
Welfare reform leading to a loss of income,
including uncertainty over future housing benefit
eligibility, caps and direct payments to
customers.
Inflation, interest rate and margin increases
resulting in higher costs.
Operating review
Repairs service
During the year Flagship’s development programme
produced 51 (2013: 148) new homes. No new Shared
Ownership properties were completed this year (2013:
16.) During the year there were 53 (2013: 47) staircasing
sales, 41 (2013: 34) of which were staircasing up to
outright ownership.
On 3 June 2013 Flagship launched its own maintenance
company, RFT Repairs Limited. RFT was created with
the aim of improving the service to our customers and
designing and delivering a much more efficient and
effective service. Through these efficiencies we will
create additional capacity to reinvest in the business.
The new service aims to complete repairs at our
customers’ convenience and ensure that repairs are
completed to a high standard at the first visit. Whilst
visiting our properties operatives identify and diagnose
any other repairs, ensuring that we address any issues
before they become problems and helping us to
maintain our homes to a high standard. Our own repairs
service positions us very strongly for the future providing
the insight into the needs of our customers and
properties to deliver a truly exceptional service.
Improvement of the housing stock remains a priority and
during the year we invested £43.6m (2013: £32.4m) on
routine and planned maintenance. This additional
expenditure is a core part of the Group’s two year
programme to invest more in maintenance by ensuring
we do the right repairs to protect the long term value of
our housing stock.
We are committed to the continuous improvement of all
our services through Systems Thinking. This method
enables us to understand what is going on in the work,
3
3
Flagship Housing Group Limited
Operating and Financial Review for the Year Ended 31 March 2014
Group financial results: Five year summary
Income & Expenditure
2014
Account
(£’000)
Social housing lettings
99,413
turnover
11,438
Other turnover
Turnover
110,851
Social housing lettings
(61,049)
operating costs
(9,254)
Other operating costs
Operating costs
(70,303)
Operating surplus
40,548
Surplus on sale of assets
1,391
Net interest charge
(24,795)
Surplus for the year
17,144
Balance Sheet
Housing
properties
at
valuation
Other tangible fixed assets
and investments
Net current assets
Creditors due after 1 year
Other long term liabilities
Reserves
Cash flow statement
Net
cash
flow
from
operating activities
Returns on investments
and servicing of finance
Taxation
Capital expenditure
Management
of
liquid
resources
Financing
Net cash flow
Financial ratios
Operating margin – social
housing
Operating margin
Operating costs per home
- Social Housing
Operating costs per home
Operating
surplus
to
interest Covenant
Debt per unit
2013
(£’000)
2012
(£’000)
2011
(£’000)
2010
(£’000)
92,783
85,890
80,444
77,363
13,771
106,554
20,697
106,587
31,245
111,689
35,615
112,978
(49,771)
(43,397)
(41,965)
(38,524)
(9,975)
(59,746)
46,808
1,407
(25,467)
22,748
(16,435)
(59,832)
46,755
582
(25,077)
22,260
(30,441)
(72,406)
39,283
399
(25,453)
14,229
(34,377)
(72,901)
40,077
668
(24,840)
15,905
1,017,708
904,062
863,327
811,261
750,858
8,539
4,217
3,868
3,694
3,773
66,086
1,092,333
(2,913)
905,366
1,823
869,018
10,803
825,758
18,343
772,974
584,758
6,547
501,028
1,092,333
515,868
6,764
382,734
905,366
521,149
5,802
342,067
869,018
535,144
4,086
286,528
825,758
528,227
8,669
236,078
772,974
52,976
63,658
62,301
45,493
61,416
(24,695)
(30,815)
(25,284)
(32,645)
(25,521)
(30,028)
(25,590)
(41)
(35,115)
(25,547)
(7)
(30,225)
40,000
69,836
27,302
(2,917)
2,812
(6,822)
(70)
8,936
(6,317)
(14,349)
(8,712)
38.6%
46.4%
50.3%
47.8%
50.2%
36.6%
43.9%
43.9%
35.2%
35.5%
£2,865
£2,332
£2,027
£2,020
£1,869
£3,193
£2,708
£2,741
£3,355
£3,406
2.16
2.36
2.27
1.89
1.79
£27,066
£23,776
£24,430
£24,917
£24,710
4
4
Flagship Housing Group Limited
Operating and Financial Review for the Year Ended 31 March 2014
Five year summary
 Core social housing rental income continues to
increase on an annual basis in accordance with
our rental policy.
 Other income fluctuations show the planned
reduction for new shared ownership and third party
property sales activities.
 Financial ratios reflect the results of the planned
increase in the responsive repairs completed.
Financial performance
The Group surplus before tax for 2013/14 has decreased
by £5.6m to £17.1m. The financial statements continue to
demonstrate strong performance. Some key facts are:
Income:
 Social housing lettings income increased from
£92.8m to £99.4m, reflecting the increased rent
levels in accordance with the approved rent policy,
and £815k revenue grants received.
Expenditure:
Operating costs have increased, 2014 - £70.3m; 2013 £59.7m.
 Routine maintenance, cyclical maintenance,
planned
maintenance
and
major
works
expenditure for the full year increased to £43.6m
from £32.4m (including the capital elements).
 Establishing RFT Repairs Limited and our new
way of working has identified a significant demand
for responsive repair work. In the 10 months RFT
has been operational, we have received over 50%
more demand for repairs than we would have
previously expected. In our business plan, which
reflects the new way of working, we have
anticipated a greater investment in repairs over 2-3
years. Ensuring we complete all the necessary
repairs at each property when we visit and
ensuring we do the right repair, resolving the root
cause and not just patching the symptom, in the
longer term will deliver a better service, reduce the
costs of ownership and extend the life of our
housing stock.
 As a result the surplus generated from social
housing lettings at £38.4m has decreased by
£4.6m.
 This has had a knock on impact by showing a
deterioration the financial ratio’s looking at
operating performance.





The properties were valued by Savills (L&P)
Limited and there was an increase in valuation of
£113.6m.
Current assets have increased by £69.0m,
primarily due to the cash in hand and short term
investments. The Group drew down its remaining
existing loan facilities of £71.7m to benefit from the
favourable arrangements that were due to expire
before the year end.
Creditors due under one year have dropped
slightly to £20.8m (2013: 23.1m) due to fewer
retentions payable at 31 March 2014 than in prior
years.
The gearing ratio (showing the level of
indebtedness) has improved to 44.5% (2013:
45.7%).
The pension liability under FRS 17 is £6.5m. This
does not reflect the position of the Group’s SHPS
scheme. The estimated employers’ debt in the
SHPS scheme is £27.1m (2013: £27.2m).
Cash Flows:
 Operating activities generated cash of £53.0m.
 Interest paid was lower than the prior year at
£24.7m (2013: £25.3m). This is due a greater
proportion of the debt moving to the variable rates,
taking advantage of historically low interest rates.
 During the year £30.6m (2013: 46.9m) was spent
on the improvement, construction and purchase of
housing properties. This was offset by £1.0m
(2013: 6.8m) of social housing grant received.
 £1.0m of social housing grant was repaid during
the year. This had been provided for in prior year
accounts.
 At 31 March 2014, £71.7m funding was drawn
down (2013: £3m repaid).
 Repayments of £2.1m were made of the RSL
Finance No1 bond.
Funding:
 Gross loans outstanding at 31 March 2014 were
£591.9m (2013: £524.6m). The average interest
rate on these loans is 4.18% (2013: 4.78%)
 Flagship has comfortably met the covenants
required as a condition of the above funding.
 The Business Plan confirms that these conditions
will continue to be met.
Balance Sheet:
Housing properties are valued at £1,017.7m.
5
5
Flagship Housing Group Limited
Operating and Financial Review for the Year Ended 31 March 2014
Operational performance and benchmarking
Key performance indicators
The table below details some of our key housing management and maintenance performance indicators. Operating
performance is reviewed monthly by the Executive Team and at all Group Board meetings to ensure we are achieving our
objectives and strategies.
Customer satisfaction
Overall customer satisfaction
Rent
Current tenant rental arrears as a % of income
Current tenant rental arrears
Average weekly gross rent (52 weeks)
Housing management
Average re-let time
Rent loss from voids as a % of income
Homes in management
Development activities
New handovers in year
First tranche shared ownership sales
Staircasing shared ownership sales
Repairs
Number of kitchens replaced
Number of bathrooms replaced
Number of boilers replaced
Number of heating systems replaced
Number of homes receiving windows installations
Number of non-communal doors installed
Number of roofs replaced
SHIFT Rating
2014
2013
84%
88%
*2.1%
£3.2m
£87.06
2.2%
£2.1m
£83.45
44.7 days
1.21%
22,017
17.4 days
0.7%
22,064
51
53
148
16
47
856
377
1,026
902
449
520
164
900
534
1,063
775
419
804
99
47.9
47.9
* As adjusted for Housing Benefit received immediately post year end, consistent with prior years
6
6
Flagship Housing Group Limited
Operating and Financial Review for the Year Ended 31 March 2014
Investment for the future
Value for Money (VfM)
Our purpose is to provide homes for people in need
across the East of England. Our core business is the
provision of housing management and maintenance
services to over 22,000 rented homes. We also have a
new build development programme where we expect to
handover over 300 new properties in the year to 31
March 2015.
At Flagship our purpose is the provision of homes for
people in needs and our strategic intent is to provide the
best housing management and maintenance service in
the east of England. We currently own and manage over
22,000 properties; homes to over 50,000 customers.
Our strategic intent is to provide the best housing
management and maintenance service in the East of
England.
By delivering services which are truly designed against
customer needs we will build a different business model
to all other housing associations in the East, enabling us
to provide a significantly better overall service.
Our relentless pursuit of continuous improvement and
learning will differentiate us from our competitors and
position us strongly for the future.
Business priorities:
 We plan to grow our core business through the
development of new affordable homes at a rate of at
least 170 new homes per year.
 Improve performance in housing management and
our repairs service.
 Focus on implementing continuous improvement
group-wide (developing a learning company) to
deliver improved value for money.
 Consider business growth ideas that could add
value to our strategic intent.
 Review options on current business areas that do
not align to our strategic intent.
 Develop new partnerships and alliances where this
supports our strategic intent and business focus.
Environmental sustainability
For 2013/2014, Flagship’s retained its silver award from
SHIFT; however, to reflect operational changes,
Flagship are completing a business-wide review of
sustainability that is tasked with analysing our current
response to social, economic and environmental
aspects. Comprising Group-wide representation, the
review will present the opportunities and vulnerabilities
faced by Flagship in terms of sustainability, along with a
plan for the future. This work is to conclude in April
2015.
Value for Money (VfM) is fundamental to the way we
operate: it is woven into our DNA. We define Value for
Money as achieving the best possible results with the
available resources. Our approach is built around a
culture of continuous improvement and the concept of
right first time - linked to a preference for long-term value
over short-term savings.
We have adopted the Vanguard Method of systems
thinking to drive our continuous improvement. This
involves understanding what our customers need and
designing our services from their perspective. By only
doing the work required to deliver what the customer
needs and ensuring we get service right first time, we
will deliver an efficient and effective service that will
release resources to reinvest in building new homes,
improving our services, enhancing our existing assets
and delivering greater social value.
This summary of our self-assessment includes a review
of our progress during the 2013-14 financial year and
outlines our plans and aspirations for 2014-15 and
beyond. For additional details please visit the annual
reports section of our website at:
www.flagship-housing.co.uk/annual-reports-andfinancial-statements
2013-14 Self-Assessment
2013/14 remained a tough year, with the economy only
beginning to show signs of recovery towards the final
quarter. The austerity measures required to deal with the
recession included policy changes and substantial cuts
to public spending. These measures are likely to
continue until 2018 at least.
Against this economic backdrop our customers faced
increasing challenges with few new jobs created, wage
rises at or below inflation, utility price rises above
inflation and increased demand for affordable homes.
During this difficult period it is more important than ever
that Flagship strives to deliver VfM, to ensure we can
deliver efficient and effective services and as many high
quality affordable homes as possible.
7
7
Flagship Housing Group Limited
Operating and Financial Review for the Year Ended 31 March 2014
This has been a transitional year as we change our
focus from low cost services to long-term value,
improving the quality of our homes and services. As a
result we expect that during this transitional period some
of our services will cost more as we invest in
improvement and long term value, creating housing that
both we and our customers can be proud of.
We are continuing with detailed reviews of each area of
operation, seeking out opportunities to improve the value
that we offer. Flagship is run as a business in the pursuit
of our social purpose, not for profit or shareholder return.
Where it is beneficial to do so, we aim to develop our
commercial activity so that any profit can be invested
back into providing quality homes for people in need.
2013/14 has seen the delivery of the remaining benefits
of our plans under the 1Future amalgamation with the
recruitment of 12 Community Rangers and 5 Community
Managers. As one major initiative concludes another
very significant one has commenced. On 3 June 2013
we launched our own repairs service – RFT. The new
service has been designed using the Vanguard Method
of systems thinking – designing the service from a
customer’s perspective to deliver repairs at the
customer’s convenience. Designing around the
customer’s perspective ensures that we drive out waste
to maximise our efficiency, effectiveness and ultimately
deliver the best economic performance. The Vanguard
Method of systems thinking will ensure we continue to
think differently about how we design and deliver
services and subject everything we do to a rigorous
process of continuous evaluation and improvement.
Our self-assessment has taken place by collating a
range of data from performance dashboards and board
reports used throughout the year to manage
performance, together with detailed activity input from
our Operational Directors and benchmarking data
collected internally and via HouseMark. We have
prepared our evaluation and shared the results with our
Customer Operations Group and the Board.
Financial Performance
 Whilst our overall surplus was better than predicted,
our operating margin deteriorated due to higher than
expected demand for responsive repairs. The
additional demand has been driven by our desire to
do the right repair, not just a patch, and to ensure
that any other repair issues are identified and
resolved at the property before they become
problems. The knock-on impact of this additional
spend has been a deterioration in several of our
financial measures against our expectations – but
we remain ahead of the pack compared to others in
the sector. We firmly believe this short-term
increased investment will have long-term benefits for
Flagship and our customers.
 Our return on assets reduced in the year as a result
of the additional repairs expenditure. Once the
difference in asset valuations methods are taken into
account the return (3.7% to 6%) is better than the
benchmark group.
 From a balance sheet perspective the increase in
our property valuation helped deliver an improved
gearing ratio and financial headroom, while
additional finance at variable rates drove down our
overall cost of capital.
 We engage in a small amount of commercial
activities that deliver both homes for those in need
and/or generates a positive surplus to reinvest in
affordable homes. Both our market rent and student
portfolios outperformed expectations for the year.
The student portfolio outperformed budget
considerably as a result of work to review the
management arrangement and decision to bring the
service back in-house.
 The rising property prices during the year also
resulted in our asset disposals exceeding
expectations. In addition to the housing asset
disposal figure is the profit on sale of office
accommodation no longer required (£272k) - a key
savings as a part of the group amalgamation in
2011.
The self-assessment is divided into a number of key
areas as detailed below.
8
8
Flagship Housing Group Limited
Operating and Financial Review for the Year Ended 31 March 2014
Measure
2014
Social
Housing
margin
Market
rent
margin
Total
operating
margin
Return
on
assets
Cash
generated per
unit
Debt per unit
Gearing
Cost of capital
Comparison to
2013
Budget
Benchmark
VFM
38.6%
46.4%
37.4%
N/A
63.1%
66.5%
53.0%
N/A
36.6%
43.9%
39.9%
29.0%
B
3.7%
5.2%
4.9%
5.1%
B
£2,406
£2,885
£2,525
£1,926
B
£27,066
£23,776
£26,400
£21,667
B
44.5%
45.7%
49.3%
45.3%
B
4.8%
4.8%
4.8%
4.2%
B
Financial
£212m
£202m
£145m
N/A
headroom
Commercial Activities
Market Rent
£480k
£518k
£395k
N/A
Surplus
Student
£920k
£545k
£540k
N/A
Surplus
Asset
Disposal
£1,119k
£1,407k
£485k
N/A
Surplus
Benchmark data has been obtained from two sources:
Housemark (H) and an internal benchmarking report comparing the top 30
RP’s by units (B)
Asset Management and Development
During the year we continued to address some of our
more difficult to let properties. Our approach to these
assets is to review the local housing demand and the
property condition and, using this data, determine the
best VfM outcome. In addition to the sale of those assets
where the best VfM was disposal, we began remodelling four schemes to put 46 empty homes back
into use and have confirmed plans to renovate and
redevelop a further 3 major schemes in 2014/15.
After careful consideration we completed the sale of 72
poorly performing market rent units at a modest profit of
£215k. Although this reduced our market rent portfolio
substantially, it was clear that the best value was to sell
and reinvest elsewhere. We have agreed a new market
rent strategy and are currently putting in place a revised
management structure to add greater investment
expertise alongside the existing housing management
capabilities. We expect to add a small number of new
units to the portfolio over the next 12 months as we
begin to grow the business again.
A key element of our new repairs service is to ensure we
identify all repair issues when we visit each property in
order to address them before they become problems.
Although this has led to increased costs in the shortterm, we believe there is significant long-term value in
this approach.
In terms of new development we handed over 51
properties. The number of handovers was a significant
disappointment and was substantially lower than
planned. Re-phasing at developer controlled sites was
the primary reason for the delays. This is a critical area
for improvement given the affordable housing shortage.
2014/15 has a much more substantial programme of
handovers including 172 properties in the Cambridge
area as a result of our partnership with bpha. This
partnership includes a cost sharing vehicle to reduce the
VAT costs of the housing management and
maintenance service to deliver improved value. Moving
forward we have invested time evaluating the potential
for development on land we currently own and building a
credible future pipeline of development. As part of our
review of the development strategy, we agreed to
increase the specification of our new build homes to
provide better long-term value for Flagship through
higher quality components and reduced utility costs for
our customers through improvements to thermal
efficiency of the materials used.
During the coming year we will be revising our asset
management strategy and gathering much better data
on the performance of our assets – we recognise this is
an area for significant improvement and aim to develop
our asset evaluation model during 2014/15. The detailed
data we are now gathering with RFT will be invaluable in
this work.
Measure
2014
New homes
handed over
Build cost per
unit
Comparison to
2013
Budget
Benchmark
51
148
152
N/A
£120k
£101k
£120k
N/A
VFM
Housing Management
Our arrears management continued to perform well,
ending the year at just 2.1%, marginally better than last
year and significantly better than sector averages. In
contrast our void performance was poor and is a key
area of focus in 2014/15. We expected the turnaround
times to increase as we planned to use the void period
to ensure any repairs and replacements in the property
9
9
Flagship Housing Group Limited
Operating and Financial Review for the Year Ended 31 March 2014
are completed, allowing us to deliver a high quality home
to the new customer. However, the additional demand
for responsive repairs together with the higher number
and standard of repairs to our voids, resulted in
significantly increased turnaround time. Actions to
review the process and resources have corrected this
situation and the position is expected to improve
significantly in 2014/15.
During the year the number of mutual exchange
enquiries increased by 62% as customers with spare
rooms sought to downsize. To assist our customers
needing to move we waived the fees for gas and
electrical safety checks (normally £185).
As part of our community work we created a junior
ranger scheme to work with local schools to improve our
communities.
Measure
2014
Average
weekly rent
£87.06
Comparison to
2013
Budget
£83.45
£87.06
Benchmark
VFM
N/A
As part of the process of continual review and redesign
we improved the supply chain of materials to
tradespeople by opening three logistics distribution
centres (DCs).The DCs utilise local independent
suppliers where possible as part of our approach to
support the local economy and work closely with our
chosen partners. Over 60% of materials orders are now
fulfilled by our own DCs, helping to reduce material
order times by 50%, improving van stock replenishment
times and ensuring the right materials are delivered
when required.
During the year we provided external wall insulation to
250 homes part-funded by securing ECO grants of
£815k. The insulation is estimated to reduce heating bills
by up to 50% for our customers. Another project resulted
in the installation of a gas main to one of our rural areas,
delivering improved choice and reduced costs to 130
homes.
Measure
Arrears %
2.1%
2.2%
2.8%
3.0%
H
Void days
Void loss %
44.7
1.2%
17.4
0.7%
17.5
1.3%
25.5
1.1%
H
H
Upper
Quartile
Upper
Quartile
Upper
Quartile
N/A
H
Housing
Management
cost
per
property
repairs previously neglected such as fencing.
Benchmark data has been obtained from two sources:
Housemark (H) and an internal benchmarking report comparing the top
30 RP’s by units (B)
Housing Maintenance
On 3 June 2013 we launched our own repairs service
(RFT) to deliver improved customer service and reduce
long-term total costs of ownership. In the first ten months
RFT visited more than 70% of our properties, completed
30% of repairs within 24 hours and delivered £2.4m of
savings in comparison to an externally provided service.
However, we underestimated the demand for repairs
and as a result the lead times for repairs and the end to
end times are not where we want them to be. This has
been reflected in our customer feedback where
appointment times were a relative disappointment for
our customers but the overall service has been strongly
endorsed. Our repair costs have increased as part of
our planned additional investment in responsive repairs.
We believe that spending more money now to do a
higher quality repair will prove to be better VfM in the
long-term. In addition to the increased volume and
quality we are also taking the opportunity to invest in
Comparison to
2013
Budget
2014
Repair end
to end time
(days)
Customer
satisfaction
– easy to
book
a
repair
Customer
satisfaction –
appointment
convenience
Benchmark
36
N/A
N/A
N/A
94%
N/A
N/A
N/A
85%
N/A
N/A
N/A
VFM
Customer
satisfaction
85%
N/A
N/A
N/A
– quality
Cost
per
Property
Upper
Upper
Upper
Major
N/A
Quartile
Quartile
Quartile
Works and
Cyclical
Cost
per
Property
Lower
Upper
Median
Responsive
N/A
Quartile
Quartile
Quartile
Repairs and
Voids
Benchmark data has been obtained from two sources:
Housemark (H) and an internal benchmarking report comparing the top
30 RP’s by units (B)
Customer satisfaction data collection redesigned – 2014 a small sample
size, no comparative data available
10
10
Flagship Housing Group Limited
Operating and Financial Review for the Year Ended 31 March 2014
Social Value
In addition to our core housing management and
maintenance business we provide a number of key care
and support services. Whilst these only deliver a small
financial return they play an important part in the delivery
of our overall social purpose because of the value they
bring to others.
 Housing support assisted 36% more people at their
drop in clinic – a crisis centre preventing the need
for longer-term support.
 Customer satisfaction at our Learning Difficulties
centre increased to 99% (previously 97%)
 Our Young People’s Services achieved 77%
engagement for our customers in employment,
education, training and volunteering beating the
national averages. This was slightly down on our
prior year performance (78%). However, we
significantly improved our intervention process
achieving 85% planned moves for young customers
helping them to a better future (up from 64%).
Other VFM activity:
 Retendered Wide Area Network achieving
incorporating additional sites, improved service, and
delivering £21k of savings
 Internal software development capability has saved
£113k on new application development
 New software testing process has reduced software
errors by 75%
 New translation service saved £11k
 Mutual Exchange speed dating with other providers
to accelerate the matching process
repairs costs; delivery of new affordable homes and our
asset evaluation model.
Other actions for 2014/15 include:
 Legal services and Payroll service reviews
 New asset management strategy
 Development of our market rent portfolio
 Tenders for grounds maintenance, cleaning and
waste management
 Mobile call routing review – savings estimated in
excess of £100k
 Secure cost effective new funding to increase the
supply of new homes
 Working with local credit unions on jam jar accounts
to assist customers concerned about budgeting
under the new direct payment scheme.
Conclusion
Our main aim for this year was to progress with our
learning and implementation of the Vanguard Method of
systems thinking. During the year all of our managers,
leaders and the Board have attended sessions on
Vanguard Method and we have also engaged a large
proportion of our staff. We’ve delivered a tremendous
amount of change in a year and made good progress in
many areas but we must do better in others.
Given the progress to date the Board recognises the
areas in need for improvement, but in overall terms
considers Flagship is achieving Value for Money.
Capital structure
Our Plans for 2014/15
Value for Money is a continuous process of evaluation
and improvement and we firmly believe the Vanguard
Method of systems thinking is the most effective way to
achieve it. With our first major intervention completed
and RFT operational we have learnt a tremendous
amount about our business, the method, and how best
to approach further improvements. We will continue to
review and refine RFT to ensure we deliver what our
customers need. We have also completed work on the
Allocations, Lettings and Voids process – but put this on
hold for further review, together with one or two small
scale interventions. To accelerate the improvement
process we have created a Vanguard Method team who
will be able to offer support and advice for staff looking
to lead and participate in reviewing and redesigning our
services. We aim to improve our performance across the
board but will pay particular attention to the weaknesses
we identified this year: void performance; responsive
Flagship Housing Group Limited is registered under the
Industrial and Provident Societies Act 1965. It has
issued share capital of £142. The shares do not have a
right to any dividend or distribution in a winding-up, and
are not redeemable. Each share has full voting rights.
Further details of the group structure can be found in
Note 12 to the financial statements.
11
11
Flagship Housing Group Limited
Operating and Financial Review for the Year Ended 31 March 2014
Treasury policy
Flagship Housing Group has adopted a group Treasury
Policy that sets out the parameters and controls for
treasury activities across the group. Properties are
financed through loans from the debt and capital
markets. The gross amount owed by Flagship Housing
Group as at 31 March 2014 relating to these facilities
was £594.2m (2013: £524.6m.) Further details relating
to these facilities can be found in note 16 to the financial
statements.
Statement of compliance
In presenting the Operating and Financial Review, the
Board has endeavoured to follow the principles as set
out in the Statement of Recommended Practice for
accounting by Registered Providers.
By order of the Board
R Ayden
Company Secretary
31 July 2014
12
12
Flagship Housing Group Limited
Report of the Board for the Year Ended 31 March 2014
The Board of Management (the Board) presents its
report and audited financial statements for the year
ended 31 March 2014.
Statement of board's responsibilities
The Board is responsible for preparing the board’s report
and the financial statements in accordance with
applicable law and regulations.
Industrial and Provident Societies Law requires the
Board to prepare financial statements for each financial
year. Under those regulations the Board has elected to
prepare the financial statements in accordance with UK
Accounting Standards.
The financial statements are required by law to give a
true and fair view of the state of affairs of the company
and the Group and of the surplus or deficit for that
period. In preparing these financial statements, the
Board is required to select appropriate accounting
policies and then apply them consistently; make
judgements and estimates which are reasonable and
prudent; state whether applicable UK Accounting
Standards and the Statement of Recommended Practice
have been followed, subject to any material departures
being disclosed and explained in the financial
statements, and prepare them on the going concern
basis unless it is inappropriate to presume that the
Group will continue in business.
The Board is responsible for keeping proper accounting
records that are sufficient to show and explain the
Group’s transactions and disclose with reasonable
accuracy at any time the financial position of the Group
and enable it to ensure that the financial statements
comply with the Industrial and Provident Societies Acts
1965 to 2003, the Housing and Regeneration Act 2008
and the Accounting Direction for Private Registered
Providers of Social Housing 2012. The Board has
general responsibility for taking such steps as are
reasonably open to it to safeguard the assets of the
Group and to prevent and detect fraud and other
irregularities.
The Board is responsible for the maintenance and
integrity of corporate and financial information included
on Flagship’s website. Legislation in the UK governing
the preparation and dissemination of financial
statements may differ from legislation in other
jurisdictions.
Disclosure of information to auditors
The members of the Board who held office at the date of
approval of this Board’s report confirm that, so far as
they are each aware, there is no relevant audit
information of which Flagship’s auditors are unaware;
and each member of the Board has taken all the steps
that they ought to have taken as a member of the Board
to make themselves aware of any relevant audit
information and to establish that Flagship’s auditors are
aware of that information.
Group structure
The trading companies of the Group for the year
comprise:
Flagship Housing Group Limited;
Flagship Housing Developments Limited;
RFT Repairs Limited.
Operational results
Flagship's consolidated turnover was £110.9m (2013:
£106.6m) and its operating surplus was £40.7m (2013:
£46.8m). After taking into account property sales,
interest paid, interest received and taxation, Flagship
recorded a surplus of £17.1m (2013: £22.7m), which
was in line with expectations.
Flagship's total assets less current liabilities were
£1,092.3m (2013: £905.4m).
Community initiatives and charitable donations
During the year the Group spent £119,900 (2013: 4,388)
on Community initiatives. No charitable donations were
made (2013: £Nil).
13
13
Flagship Housing Group Limited
Report of the Board for the Year Ended 31 March 2014
The board of management and executive team
The Board and Executive Team who served Flagship during the year are detailed on page 1 of the financial statements.
Each Director of the Board holds one fully paid share of £1 in the Company, with the exception of the Chief Executive, the
Executive Director - Finance, the Executive Director - Operations and the Executive Director - People & Communication.
The Executive Director - Governance & Commercial holds no interest in the Company's share capital, and although he
does not have the legal status of Director, he acts as executive within the authority delegated by the Board.
The composition of the Board is:
Non-Executive Directors
Executive Directors
To 23 September
From 24
2013 September 2013
8
6
4
4
12
10
Flagship has purchased Directors' and Officers' Liability Insurance for the Non-Executive Directors, Executive Directors
and staff of the Company.
Recruitment and selection procedures for NonExecutive Directors
The Board has an open recruitment and selection policy
for Non-Executive Directors (NEDs). In the event of a
vacancy, advertisements are placed in regional business
websites, the local and, where appropriate, specialist
press seeking candidates with expertise in the areas
where the Board has identified it is least well served,
ensuring that all relevantly experienced applicants have
an equal opportunity to apply. A copy of the recruitment
and selection policy is available on request from the
Executive Director - Governance & Commercial.
All new NEDs are provided with induction training and
are required to abide by a formal Code of Conduct
setting out their obligations and commitment to the
Group.
NEDs serve a maximum term of 6 years (plus a further
year in exceptional circumstances) with transitional
arrangements in place for existing NEDs who were in
post at 1 April 2012.
National Housing
Governance
Federation
(NHF)
Code
of
The Board has adopted the NHF Code of Governance
2010 and complies with all aspects of the Code.
14
14
Flagship Housing Group Limited
Report of the Board for the Year Ended 31 March 2014
Chair's and Non-Executive Directors’ remuneration
Flagship remunerates its Chair and other Non-Executive Directors (the Executive Directors do not receive any additional
remuneration for serving on the Board). The remuneration is in recognition of the commitment required for these crucial
and demanding governance roles. Payments in the year ended 31 March 2014 are summarised as follows:
Board member
Board role
P Lakey
R Finon
A London
P Remington
Chair
Audit Committee Chair
Remuneration Committee Chair
Remuneration Committee Chair / Senior Independent
Director
Growth Committee Chair
Non-Executive Director
Non-Executive Director
Non-Executive Director
Co-optee
D Ayre
J Makepeace
C Frazer
K Gordon
P Cook
Executive Directors' remuneration
The Board has noted the content of the Combined Code
on Directors' Remuneration. Although it does not apply
to housing associations, the Board is committed to
acting in an open and accountable manner.
Emoluments - 2014
£
23,500
12,000
5,462
12,013
12,000
10,000
10,512
5,000
2,000
the Joint Negotiating and Consultation Committee where
management consult with elected staff representatives.
At an operational level Flagship relies on regular team
meetings and ‘one to ones’ with individuals.
Equality and diversity
Flagship's policy with regard to the remuneration of the
Executive Team reflects that applicable to the
remuneration of our entire staff. Flagship seeks to
provide remuneration packages that will attract, retain
and motivate officers and staff of the quality required,
but seek to avoid paying more than is necessary.
External professional advice is sought as necessary to
ensure that regard is taken of remuneration levels in
similar housing associations and in the locality. All of the
Executive Team are employed on contracts with a
maximum notice period of six months.
As a housing provider Flagship understands that it has
legal and social responsibilities to ensure that: all
customers and employees have equal opportunities;
unlawful discrimination is eliminated; good relationships
between different people are actively promoted.
Summary information of the remuneration of Chair, NonExecutive Directors and Executive Team is provided in
note 22 to the financial statements.
Auditors
Employees
Employee information is set out in note 23 to the
financial statements. Flagship ensures that sufficient
staff with appropriate skills are employed and that
effective employment policies are in place and good
practice is followed.
Flagship involves all our employees in matters affecting
their functions. At a formal level this takes place through
This means Flagship takes steps to ensure that no
individual or group of people is treated less favourably
because of their: age, disability, gender, gender identity,
ethnicity, nationality, religion, faith or belief, sexuality, or
any other reason that cannot be justified.
A resolution to consider reappointing Mazars LLP as
external auditors will be proposed at the forthcoming
Annual General Meeting.
By order of the Board
R Ayden
Company Secretary
31 July 2014
15
15
Flagship Housing Group Limited
Report of the Board for the Year Ended 31 March 2014
The Board continues to follow the latest version of the
National Housing Federation's Code of Governance
2010 and details of the Group's compliance as required
are contained earlier within this report.
The Board has overall responsibility to the Group and
Company for all aspects of the business. This includes
ensuring that Flagship has in place a system of controls
that is appropriate to the various environments in which
it operates. Each member of the Board is responsible as
a trustee and has a fiduciary responsibility to the
Company's membership. As appropriate for the effective
and efficient running of the business, the Board has
delegated to the Committees listed below responsibility
for specific areas of operation. The schemes of
delegation are clearly defined and are reviewed regularly
to ensure that they continue to be appropriate in the light
of operational experience.
Set out below is the framework of corporate governance
and a description of the system of internal control
adopted by Flagship.
Committee Structure
The composition of each Committee from 1 April 2013 to 31 March 2014 is summarised below:
Audit Committee
Remuneration Committee – to 13
September 2013
Remuneration Committee – from 14
September 2013
Growth Committee
(disbanded 1 January 2014)
Three Non-Executive Directors
Three Non-Executive Directors, one independent co-optee
Two Non-Executive Directors, one independent co-optee
Three Non-Executive Directors
The composition of each Committee from 1 April 2014 is summarised below:
Audit Committee
Remuneration Committee
Three Non-Executive Directors (and one co-optee from 3 July 2014)
Two Non-Executive Directors and one co-optee
Executive Team
Members of the Executive Team are all full-time employees. They are responsible for the operational management of
Flagship and for ensuring that the policies determined by the Board are properly implemented. The composition of the
team is:
Chief Executive
Executive Director (Finance)
Executive Director (People & Communication)
Executive Director (Operations)
Executive Director (Governance & Commercial)
David McQuade
David Armstrong
Helen Walsham
Emma King
Rod Ayden
16
16
Flagship Housing Group Limited
Report of the Board on Corporate Governance and Internal Financial Control
Full compliance statement on internal control
statements.
The Board has overall responsibility for establishing and
maintaining the whole system of internal control and for
reviewing its effectiveness. The Board’s responsibility
applies for all organisations within the Flagship Group.
Control environment and control procedures
The Board recognises that no system of internal control
can provide absolute assurance or eliminate all risk. The
system of internal control is designed to manage risk
and to provide reasonable assurance that key business
objectives and expected outcomes will be achieved. It
also exists to give reasonable assurance about the
preparation and reliability of financial and operational
information and the safeguarding of assets and
interests.
In meeting its responsibilities, the Board has adopted a
risk-based approach to internal controls, which are
embedded within the normal management and
governance process. This approach includes the regular
evaluation of the nature and extent of risks to which
Flagship is exposed.
The process adopted by the Board in reviewing the
effectiveness of the system of internal control, together
with some of the key elements of the control framework,
is detailed below.
Identification and evaluation of key risks
Management responsibility has been clearly defined for
the identification, evaluation and control of significant
risks. There is a formal and ongoing process of
management review in each area of the activities. This
process is co-ordinated through a regular reporting
framework by the Executive Team.
The Executive Team regularly considers reports on
significant risks facing Flagship and is responsible for
reporting to the Board any significant changes affecting
key risks. The strategic risk map is reviewed by the
Board at each of the regular meetings.
The Board retains responsibility for a defined range of
issues covering strategy, finance and compliance,
including treasury management and new investment
projects. The Board has adopted, and disseminated to
all employees, the National Housing Federation Code of
Governance 2010. This sets out Flagship’s policies with
regard to the quality, integrity and ethics of Board
Directors and employees. It is supported by a framework
of policies and procedures with which Board, Directors
and employees must comply. These cover issues such
as delegated authority, segregation of duties,
accounting, treasury management, health and safety,
data and asset protection and fraud prevention and
detection.
Information and financial reporting systems
Financial reporting procedures include detailed budgets
for the year ahead and forecasts for subsequent years
which are reviewed and approved by the Board. The
Board also regularly reviews key performance indicators
to assess progress towards the achievement of key
business objectives, targets and outcomes.
The internal control framework and the risk management
process are subject to regular review by the Internal
Auditors who are responsible for providing independent
assurance to the Board via the Audit Committee, which
acts under delegated authority from the Board. The
Audit Committee considers internal control and risk at
each of its meetings during the year.
Fraud
The Group has a zero tolerance approach to fraud and
action is taken to limit the risk of fraud through the
system of internal control. A fraud policy and response
plan is incorporated in the risk management framework.
Monitoring and corrective action
A process of management control, self-assessment and
regular management reporting on control issues
provides hierarchical assurance to successive levels of
management and to the Board. This includes a rigorous
procedure for ensuring that corrective action is taken in
relation to any significant control issues, particularly
those with a potentially material impact on the financial
17
17
Flagship Housing Group Limited
Report of the Board on Corporate Governance and Internal Financial Control
Bribery
The Group has a zero tolerance approach to bribery and
action is taken to limit the risk of bribery through the
system of internal control. Flagship undertakes regular
reviews of the anti-bribery measures in place, ensuring
that they remain adequate.
The Board has received the Executive Team’s annual
report, has conducted its annual review of the
effectiveness of the system of internal control, and has
taken account of any changes needed to maintain the
effectiveness of the risk management and control
process.
The Board confirms that there is an ongoing process for
identifying, evaluating and managing significant risks
faced by Flagship. This process has been in place
throughout the year under review, up to the date of the
annual report, and is regularly reviewed by the Board.
By Order of the Board
R Ayden
Company Secretary
31 July 2014
18
18
Flagship Housing Group Limited
Report of the Independent Auditors
We have audited the financial statements of Flagship
Housing Group Limited for the year ended 31 March
2014, which comprise the Group and Company Income
and Expenditure Accounts, the Group and Company
Statements of Total Recognised Surpluses and Deficits,
the Group and Company Balance Sheets, the Group
and Company Cash Flow Statements and the related
notes. The financial reporting framework that has been
applied in their preparation is applicable law and United
Kingdom Accounting Standards (United Kingdom
Generally Accepted Accounting Practice).
Opinion on financial statements
In our opinion the financial statements;



Respective responsibilities
Management and auditors
of
the
Board
of
As explained more fully in the Statement of Board’s
Responsibilities set out on page 13, the Company’s
board is responsible for the preparation of financial
statements and for being satisfied that they give a true
and fair view.
Our responsibility is to audit and express an opinion on
the financial statements in accordance with applicable
law and International Standards on Auditing (UK and
Ireland). Those standards require us to comply with the
Auditing Practices Board’s (APB’s) Ethical Standards for
Auditors.
This report is made solely to the Company’s members,
as a body, in accordance with section 9 of the Friendly
and Industrial and Provident Societies Act 1968 and the
Housing and Regeneration Act 2008. Our audit work has
been undertaken so that we might state to the
Company’s members those matters we are required to
state to them in an auditor’s report and for no other
purpose. To the fullest extent permitted by law, we do
not accept or assume responsibility to anyone other than
the Company and the Company’s members as a body
for our audit work, for this report, or for the opinions we
have formed
Scope of the audit of the financial statements
A description of the scope of an audit of financial
statements is provided on the Financial Reporting
Council’s
website
at
www.frc.org.uk/auditscopeukprivate.
give a true and fair view of the state of affairs of the
Group and the Company as at 31 March 2014 and
of their income and expenditure for the year then
ended;
have been properly prepared in accordance with
United Kingdom Generally Accepted Accounting
Practice; and
have been properly prepared in accordance with the
Industrial and Provident Societies Acts 1965 to
2003, the Housing and Regeneration Act 2008 and
the Accounting Direction for Private Registered
Providers of Social Housing 2012.
Matters on which we are required to report by
exception
We have nothing to report in respect of the following
matters where the Industrial and Provident Societies
Acts 1965 to 2003 require us to report to you if, in our
opinion:




a satisfactory system of control over transactions
has not been maintained; or
the Company has not kept proper accounting
records; or
the financial statements are not in agreement with
the books of account; or
we have not received all the information and
explanations we need for our audit.
Mazars LLP, Chartered Accountants and Statutory
Auditor
45 Church Street
Birmingham, B3 2RT
15 August 2014
19
Flagship Housing Group Limited
Income and Expenditure Account for the Year Ended 31 March 2014
Notes
Group
Group
Company
Company
2014
£’000
2013
£’000
2014
£’000
2013
£’000
Turnover
2
110,851
106,554
111,096
106,816
Operating costs
2
(70,303)
(59,746)
(70,399)
(60,008)
Operating surplus
2
40,548
46,808
40,697
46,808
Surplus on sale of housing
4
1,119
1,407
1,119
1,407
Surplus on sale of other fixed assets
272
-
272
-
Interest receivable
112
108
112
108
Interest payable and similar charges
5
(24,681)
(25,391)
(24,681)
(25,391)
Other finance costs
6
(226)
(184)
(226)
(184)
Surplus on ordinary activities for the
year
8
Tax on surplus on ordinary activities
7
Surplus for the year after taxation
17,144
(7)
17,137
22,748
17,293
22,748
1
-
-
22,749
17,293
22,748
All amounts relate to continuing activities.
Notes on pages 24 to 53 form part of the financial statements.
20
20
Flagship Housing Group Limited
Statement of Total Recognised Surpluses and Deficits for the Year Ended 31
March 2014
Notes
Surplus for the year after taxation
Group
2014
£’000
Group
2013
£’000
Company
2014
£’000
Company
2013
£’000
17,137
22,749
17,293
22,748
19,036
100,827
19,036
Unrealised surplus on revaluation
18
101,012
Actuarial gain / (loss) recognised in the
pension schemes
21
145
Total recognised surplus relating to the
year
118,294
(1,118)
40,667
145
(1,118)
118,265
40,666
Statement of Historical Cost Surpluses and Deficits for the Year Ended 31
March 2014
Group
2014
£’000
Group
2013
£’000
Company
2014
£’000
Company
2013
£’000
17,144
22,749
17,293
22,748
837
1,544
837
1,544
Historic cost surplus for the year before
taxation
17,981
24,293
18,130
24,292
Historic cost surplus for the year after
taxation
17,974
24,294
18,130
24,292
Notes
Surplus for the year before taxation
Difference between historical cost
surplus and reported surplus on sale of
revalued assets
18
21
21
Flagship Housing Group Limited
Balance Sheet as at 31 March 2014
Fixed assets
Housing properties at valuation
Other tangible fixed assets
Investments - Homebuy
Investments - Other
Current assets
Stock
Debtors due within one year
Debtors due after more than one year
Current asset investments
Cash at bank and in hand
Less Creditors
Amounts falling due within one year
Notes
Group
2014
£’000
Group
2013
£’000
Company
2014
£’000
Company
2013
£’000
9
10
11
12
1,017,708
8,387
152
904,062
4,065
152
1,017,708
4,705
5,252
904,062
4,065
152
1,026,247
908,279
1,027,665
908,279
1,085
8,291
3,515
40,000
34,022
94
11,318
2,056
6,720
282
9,313
3,515
40,000
32,398
94
10,365
2,056
5,868
86,913
20,188
85.508
18,383
(20,827)
(23,101)
(21,027)
(21,447)
66,086
(2,913)
64,481
(3,064)
13
14
14
15
Net current assets / (liabilities)
Total assets less current liabilities
1,092,333
905,366
1,092,146
905,215
Creditors
Amounts falling due after more than
one year
16
584,758
515,868
584,751
515,868
Pension liability
21
6,547
6,764
6,547
6,764
Capital and reserves
Non-equity share capital
Revaluation reserves
Revenue reserves
17
18
18
411,596
89,432
311,421
71,313
409,225
91,623
309,235
73,348
1,092,333
905,366
1,092,146
905,215
These financial statements were approved by the Board of Management on 31 July 2014 and were signed on its behalf
by:
P Lakey
Chair
R Finon
Board Member
D Armstrong
Executive Director - Finance
22
22
Flagship Housing Group Limited
Cash Flow Statement for the Year Ended 31 March 2014
Net cash flow from operating
activities
Notes
Group
2014
£’000
Group
2013
£’000
Company
2014
£’000
Company
2013
£’000
25
52,976
63,658
52,980
63,199
112
(24,715)
108
(25,328)
112
(24,715)
108
(25,328)
(92)
(64)
(92)
(64)
(24,695)
(25,284)
(24,695)
(25,284)
(30,556)
1,019
(1,053)
(6,851)
(46,905)
6,796
(1,257)
(30,741)
1,019
(1,053)
(2,342)
(46,905)
6,796
(1,257)
Returns on investments and
servicing of finance
Interest received
Interest and related costs paid
Interest element of finance lease
rental payments
Capital expenditure
Acquisition and construction of
housing properties
Social Housing grant received
Social housing grant repaid
Purchase of other fixed assets
Proceeds from sales of other fixed
assets
Proceeds from sales of housing
properties
Net cash (outflow) / inflow before
use of liquid resources and
financing
Acquisitions and disposals
Investment in subsidiary undertaking
124
575
124
6,051
8,597
6,051
8,597
(30,815)
(32,645)
(26,491)
(32,645)
(2,534)
5,729
1,794
5,270
-
Management of liquid resources
Payments into short term deposits
(40,000)
Financing
Loans received
Loans repaid
Capital element of finance lease
rental payments
Increase in cash and liquid
resources
575
71,700
(2,126)
262
25
-
(5,100)
-
-
(40,000)
-
(3,249)
332
71,700
(2,126)
262
(3,249)
332
69,836
(2,917)
69,836
(2,917)
27,302
2,812
26,530
2,353
23
23
Flagship Housing Group Limited
Notes to the Financial Statements for the Year Ended 31 March 2014
1.
Principal accounting policies
Flagship Housing Group Ltd is a Registered
Provider (RP) incorporated under the Industrial &
Provident Societies Act 1965 and registered with
the Homes and Communities Agency as an RP as
defined by the Homes and Communities Act 2008.
Basis of accounting
The financial statements have been prepared on
the going concern basis, in accordance with
applicable Accounting Standards in the United
Kingdom and the Accounting Direction for Private
Registered Providers of Social Housing 2012. The
financial statements have also been prepared in
compliance with the Statement of Recommended
Practice published by the National Housing
Federation in 1999 and updated in 2010 (SORP
2010). The financial statements are prepared on
the historical cost basis of accounting except as
modified by the revaluation of housing properties.
Other accounting policies have been consistently
applied from the prior year and throughout the
group. In accordance with Financial Reporting
Standard
2
‘Accounting
for
subsidiary
undertakings’, the group consolidated financial
statements incorporate the financial statements of
the group’s parent, Flagship Housing Group
Limited, and its subsidiaries. The acquisition
method of accounting has been used.
construction costs together with capitalised
repairs and incidental costs of acquisition and
construction directly attributable to property,
including interest payable during the period of
construction.
Housing properties in the course of construction
are stated at cost less SHG and are transferred
into housing properties when completed.
Expenditure on schemes that are subsequently
aborted is written off in the year in which it is
recognised that the scheme will not be completed.
Completed housing properties have been split
between their land and structure costs and a
specific set of major components that require
periodic replacement.
Refurbishment or replacement of such a
component is capitalised and then depreciated
over the estimated useful life of the component at
the following rates:
Structure
Kitchen
Bathrooms
Boilers
Heating system (exc boiler)
Windows & doors
Lifts
Roofs
1.0%
5.0%
3.3%
10.0%
3.3%
3.3%
2.5%
1.4% to 5.0%
Turnover
Freehold land is not depreciated.
Turnover represents rental and service charge
income receivable, grants from local authorities
(except where such grants are reimbursement of
specific items of expenditure), income for the
provision of Design and Build services in respect
of the development of new homes being built for
development partners, and other income. Property
sales are recognised on completion of contracts.
Housing properties
Completed housing properties have been valued
on the Open Market Existing Use Valuation for
Registered Social Housing (EUV) basis and are
revalued annually. The aggregate surplus on
revaluation is the difference between the cost of
the property less Social Housing Grant (SHG) and
depreciation, and the amount of the valuation. The
cost of properties is their purchase price and
Housing properties are subject to impairment
reviews annually. Other assets are reviewed for
impairment if there is an indication that
impairment may have occurred. Impairments
arising from a major reduction in service potential
are charged to the income and expenditure
account to the extent that the carrying value
exceeds the recoverable amount. The recoverable
amount is the higher of its net realisable value and
value in use (adjusted for any planned subsidy.)
Value in use is the present value of future cash
flows obtainable as a result of the continued use
of the property. If there is an impairment above
the adjusted value in use, a charge is made to the
income and expenditure account.
24
24
Flagship Housing Group Limited
Notes to the Financial Statements for the Year Ended 31 March 2014
1.
Principal accounting policies (continued)
Properties for sale
Sales of housing property are accounted for on
completion of contracts. Due to the nature of the
transfer agreement with Breckland, Suffolk
Coastal and Forest Heath District Councils, it is
not possible to identify separately the value of
each transfer property sold. Instead an average
value is eliminated from housing property and
charged to the income and expenditure account.
Properties developed for shared ownership sale
are divided between fixed assets and current
assets, the split being based on the first tranche
sale proportion. Sales proceeds, along with the
associated costs, from first tranche sales are
included in Turnover and Cost of Sales.
Subsequent tranche sales are treated as sales of
fixed assets and are shown as a separate item
after the operating surplus in the Income and
Expenditure Account. All other sales of fixed asset
properties are dealt with in this way.
Development costs which arise directly from the
construction or acquisition of a property are
initially capitalised to housing properties in the
course of construction.
Major maintenance works programme
Expenditure incurred by way of improvement or
major repair that increases the rental income,
reduces future maintenance or enhances the
value of housing property is capitalised into
housing properties and depreciated.
Properties developed for outright sale and sales of
new social housing stock to non-group Registered
Providers are included in current assets.
Current assets are shown at the lower of cost and
net realisable value. If the net realisable value is
lower than the cost, then the asset is impaired and
a charge is made to the income and expenditure
account to the extent that the impairment exceeds
the realisable value.
Social Housing Grant
Leased assets
Social Housing Grant (SHG) is paid by local
authorities and the Homes and Communities
Agency to subsidise the cost of housing properties
and is included in fixed assets. SHG received in
excess of the cost of housing properties in the
course of construction is shown as SHG received
in advance and included as a current liability.
Other tangible fixed assets
Other tangible fixed assets are stated at cost, less
accumulated
depreciation.
Depreciation
is
charged on a straight line basis over the expected
useful economic life of the assets at the following
annual rates:
Office buildings
Computer equipment
Leased assets
Office equipment
Plant and machinery
Owned vehicles
4%
33%
Over the life of
the lease
10 - 20%
20%
25%
Where assets are financed by leasing agreements
that give rights approximating to ownership, they
are treated as if they had been purchased
outright. The amount capitalised is the present
value of the minimum lease payments payable
during the lease term. The corresponding leasing
commitments are shown as obligations to the
lessor. The lease payments are treated as
consisting of capital and interest elements: the
capital is applied to reduce the outstanding
obligations and the interest element is charged to
the income and expenditure account.
Rentals paid under operating leases are charged
to the income and expenditure account on a
straight line basis over the lease term.
Pension costs
Contributions to pension schemes are calculated
as a percentage of pensionable salaries of
employees, determined in accordance with
qualified
actuaries’
recommendations.
25
25
Flagship Housing Group Limited
Notes to the Financial Statements for the Year Ended 31 March 2014
1. Principal accounting policies (continued)
The company operates pension schemes
providing benefits based on final pensionable pay
and defined contribution schemes. The assets of
the schemes are held separately from those of the
company.
Pension scheme assets are measured using
market values. Pension scheme liabilities are
measured using a projected unit method and
discounted at the current rate of return on a high
quality corporate bond of equivalent term and
currency to the liability.
Where the company is able to identify the pension
scheme surplus (to the extent that it is
recoverable) or deficit, it is recognised in full. The
movement in the scheme surplus/deficit is split
between operating charges, finance items and, in
the statement of total recognised surpluses and
deficits, actuarial gains and losses.
If the company is unable to identify its share of the
underlying assets and liabilities of the scheme on
a consistent and reasonable basis, as required by
FRS 17 ‘Retirement benefits’, it accounts for the
scheme as if it were a defined contribution
scheme. As a result, the amount charged to the
income and expenditure account represents the
contributions payable to the scheme in respect of
the accounting period.
Major repairs designations
Provision for a major repair is only made where a
contractual
liability exists.
Due
to
the
establishment of regular programmes of repair
and maintenance, the company does not make
provision for cyclical repairs, but charges actual
costs incurred to the income and expenditure
account.
Recycling of capital grant
Social Housing Grant (SHG) can be recycled by
the RP under certain conditions: if a property is
sold; or if another relevant event takes place. In
these cases, the SHG can be used for projects
approved by the Homes and Communities
Agency. However, SHG may have to be repaid if
certain conditions are not met. Where SHG is
recycled, it is credited to a fund, which appears as
a creditor until spent.
Value Added Tax
The Group is registered for VAT in the name of
Flagship Housing Group Limited, but a large
proportion of its income, including rents, is exempt
for VAT purposes. A large portion of its
expenditure is subject to VAT, which cannot be
reclaimed, and expenditure is therefore shown
inclusive of VAT. Any VAT subsequently
recovered is credited to the income and
expenditure account.
Loan finance issue costs
These are written off evenly over the life of the
related loan. Loans are stated in the Balance
Sheet at the amount of the net proceeds after
issue, plus increases to account for any
subsequent amounts written off.
Investments - HomeBuy
Investments and the associated grant under the
HomeBuy scheme are held within the balance
sheet as fixed asset investments.
Provisions for liabilities and charges
A provision for a liability or charge will be
recognised when Flagship has a present
obligation as a result of a past event, it is probable
that a transfer of economic benefits will be
required to settle the obligation and a reliable
estimate can be made of the amount of the
obligation.
Corporation Tax
A significant proportion of the Group’s activities
occurs in the Group entity which is recognised by
Her Majesty’s Revenue and Customs as an
exempt charity for tax purposes and is therefore
not liable to Corporation Tax on surpluses. Where
a taxable activity is undertaken, the charge for
taxation is based on the result of the taxable
activity
for
the
period.
26
26
Flagship Housing Group Limited
Notes to the Financial Statements for the Year Ended 31 March 2014
1. Principal accounting policies (continued)
Deferred taxation
Deferred tax balances are recognised in respect
of all timing differences that have originated but
not reversed by the balance sheet date, except for
where recognition of deferred tax assets is limited
to the extent that the Group anticipates making
sufficient profits in the future to absorb the
reversal of the underlying timing differences.
Deferred tax balances are not discounted.
27
27
Flagship Housing Group Limited
Notes to the Financial Statements for the Year Ended 31 March 2014
2.
Turnover, Operating costs and Operating surplus
Turnover
Notes
£’000
Group 2014
Social housing lettings
Other social housing activities
- Supporting People Block Gross contracts
- Supporting People Block Subsidy contracts
- Other
Non–social housing activities
- Lettings
- Other
3(a)
99,413
(61,049)
38,364
1,348
762
3,487
(1,328)
(646)
(3,157)
20
116
330
4,287
1,554
(2,799)
(1,324)
1,488
230
110,851
(70,303)
40,548
Turnover
£’000
Total
Operating
surplus
£’000
3(c)
Total
Group 2013
Social housing lettings
Other social housing activities
- Supporting People Block Gross contracts
- Supporting People Block Subsidy contracts
- Low cost home ownership sales
- Other
Non–social housing activities
- Lettings
- Other
Operating
costs
£’000
3(a)
Operating
Costs
£’000
Operating
Surplus
£’000
92,783
(49,771)
43,012
1,318
800
1,017
4,468
(1,240)
(753)
(1,064)
(4,324)
4,606
1,562
(2,594)
-
2,012
1,562
106,554
(59,746)
46,808
78
47
(47)
144
3(c)
28
28
Flagship Housing Group Limited
Notes to the Financial Statements for the Year Ended 31 March 2014
2.
Turnover, Operating Costs and Operating Surplus (continued)
Turnover
Notes
£’000
Company 2014
Social housing lettings
Other social housing activities
- Supporting People Block Gross contracts
- Supporting People Block Subsidy contracts
- Low cost home ownership sales
- Other
Non–social housing activities
- Lettings
- Other
3(b)
99,413
(61,857)
37,556
1,348
762
3,487
(1,328)
(646)
(3,157)
20
116
330
4,287
1,799
(2,799)
(612)
1,488
1,187
111,096
(70,399)
40,697
Turnover
£’000
Total
Operating
surplus
£’000
3(c)
Total
Company 2013
Social housing lettings
Other social housing activities
- Supporting People Block Gross contracts
- Supporting People Block Subsidy contracts
- Low cost home ownership sales
- Other
Non–social housing activities
- Lettings
- Other
Operating
costs
£’000
3(b)
Operating
Costs
£’000
Operating
Surplus
£’000
92,783
1,318
800
1,017
4,468
(49,771)
(1,240)
(753)
(1,064)
(4,324)
43,012
78
47
(47)
144
4,606
1,824
(2,856)
-
1,750
1,824
106,816
(60,008)
46,808
3(c)
29
29
Flagship Housing Group Limited
Notes to the Financial Statements for the Year Ended 31 March 2014
3. (a)
Income and Expenditure from social housing lettings – Group
Total
Total
£’000
2014
£’000
2013
£’000
184
14
-
2,940
254
-
95,783
2,815
815
90,090
2,693
-
247
198
3,194
99,413
92,783
152
852
501
27
12
51
96
28
1
-
6
26
50
3
-
179
748
23
4,480
17,349
26,684
1,443
571
4,017
14,912
15,663
2,911
371
9,737
-
185
-
10
-
19
-
537
-
10,488
-
11,941
(64)
32
-
-
-
2
34
20
Total expenditure
57,541
1,729
186
104
1,489
61,049
49,771
Operating surplus
on lettings
36,452
313
52
61
94
1,705
38,364
43,012
Rent losses from
FROM
voids LETTINGS
(1,714)
(20)
(1)
(1)
(2)
(1,738)
(1,018)
General
needs
housing
£’000
Supported
housing
Keyworker
housing
Shared
ownership
£’000
Temporary
social
housing
£’000
£’000
Rents receivable net
of identifiable service
charges
Service income
Revenue grants
90,736
2,442
815
1,748
33
-
175
72
-
Total income
93,993
1,781
Services
Management
Routine maintenance
Cyclical maintenance
Bad debts
Depreciation of
housing properties
Impairment
Property lease
charges
4,092
15,627
26,105
1,412
536
Income
Expenditure
30
30
Flagship Housing Group Limited
Notes to the Financial Statements for the Year Ended 31 March 2014
3. (b)
Income and Expenditure from social housing lettings – Company
Total
Total
£’000
2014
£’000
2013
£’000
184
14
-
2,940
254
-
95,783
2,815
815
90,090
2,693
-
247
198
3,194
99,413
92,783
152
852
501
27
12
51
96
28
1
-
6
26
50
3
-
179
748
23
4,480
17,349
27,492
1,443
571
4,017
14,912
15,663
2,911
371
9,737
-
185
-
10
-
19
-
537
-
10,488
-
11,941
(64)
32
-
-
-
2
34
20
Total expenditure
58,349
1,729
186
104
1,489
61,857
49,771
Operating surplus
on lettings
35,644
313
52
61
94
1,705
37,556
43,012
Rent losses from
FROM
voids LETTINGS
(1,714)
(20)
(1)
(1)
(2)
(1,738)
General
needs
housing
£’000
Supported
housing
Keyworker
housing
Shared
ownership
£’000
Temporary
social
housing
£’000
£’000
Rents receivable net
of identifiable service
charges
Service income
Revenue grants
90,736
2,442
815
1,748
33
-
175
72
-
Total income
93,993
1,781
Services
Management
Routine maintenance
Cyclical maintenance
Bad debts
Depreciation of
housing properties
Impairment
Property lease
charges
4,092
15,627
26,913
1,412
536
Income
Expenditure
(1,018)
31
31
Flagship Housing Group Limited
Notes to the Financial Statements for the Year Ended 31 March 2014
3. (c) Turnover from non-social housing activities
Lettings
General management charges
Market rented and commercial property
rents
Student accommodation
Private garages
Other
4.
Group
2013
£’000
-
-
Company
2014
£’000
Company
2013
£’000
245
262
835
2,797
655
1,554
771
3,147
688
1,562
835
2,797
655
1,554
771
3,147
688
1,562
5,841
6,168
6,086
6,430
6,708
(5,589)
9,380
(7,973)
6,708
(5,589)
9,380
(7,973)
1,119
1,407
1,119
1,407
24,681
34
92
(126)
25,532
31
64
(236)
24,681
34
92
(126)
25,532
31
64
(236)
24,681
25,391
24,681
25,391
Surplus on sale of housing
Proceeds of sales
Cost of disposals
5.
Group
2014
£’000
Interest payable and similar charges
On loans wholly or partly repayable in more
than 5 years
Amortisation of debt issue costs
On finance leases
Less: Interest capitalised
The weighted average interest on borrowings of 4.67% (2013: 4.8%) was used for calculating capitalised interest.
6.
Other finance costs
Expected return on pension scheme assets
Interest on pension scheme liabilities
667
(893)
653
(837)
667
(893)
653
(837)
(226)
(184)
(226)
(184)
32
32
Flagship Housing Group Limited
Notes to the Financial Statements for the Year Ended 31 March 2014
7.
Taxation
Group
2014
£’000
Group
2013
£’000
Company
2014
£’000
Company
2013
£’000
UK corporation tax:
Current tax on profits for the year
Adjustments in respect of prior years:
-
(1)
-
-
Deferred tax:
Origination and reversal of timing
differences
7
-
-
-
7
(1)
-
-
Reconciliation of tax charge
Tax on surplus on ordinary activities at
standard UK corporation tax rate of 23%
(2013: 24%)
Charitable non-taxable income
Marginal relief
Depreciation in excess of capital allowances
Adjustments in respect of previous periods
UK corporation tax
8.
3,943
5,424
3,977
5,424
(3,935)
(1)
(7)
-
(5,424)
(1)
(3,977)
-
(5,424)
-
-
(1)
-
-
Group
2014
Group
2013
Company
2014
Company
2013
£’000
£’000
£’000
£’000
47
1
621
38
11
385
34
1
621
34
11
385
363
309
1,766
-
81
219
1,741
(74)
54
309
1,766
-
81
219
1,741
(74)
Surplus for the year
Is stated after charging:
Auditors’ remuneration (excluding VAT):
 In their capacity as auditors
 Other services
Bad debts
Operating Leases:
 Hire of plant and machinery
 Rent of office buildings
 Rent of housing properties
Impairment losses
Depreciation on owned assets:
 Housing stock
 Other assets
Depreciation on assets held under finance
leases:
 Other assets
(Surplus) on sale of fixed assets
11,151
1,566
11,975
569
11,151
739
11,975
569
453
(1,391)
371
(1,407)
453
(1,391)
371
(1,407)
33
33
Flagship Housing Group Limited
Notes to the Financial Statements for the Year Ended 31 March 2014
9. (a) Tangible fixed assets – Housing properties - Group
Housing
Properties
Housing
Properties
Under
Construction
Shared
Ownership
Properties
Shared
Ownership
Properties
Under
Construction
Total
£’000
£’000
£’000
£’000
£’000
Net book value on revalued
assets at 1 April 2013
Cost at 1 April 2013
Additions
Disposals
Transfers
Movement on revaluation
831,602
15,040
(404)
4,222
91,800
9,342
11,785
(6,508)
-
63,024
(2,469)
2,286
(2,293)
94
187
-
At 31 March 2014
942,260
14,619
60,548
281
Depreciation
At start of the year
Charge for year
Disposals
Movement on revaluation
10,626
(319)
(10,307)
At 31 March 2014
-
-
525
(164)
(361)
-
-
-
-
894,626
9,436
27,012
(2,873)
89,507
1,017,708
11,151
(483)
(10,668)
-
Net book value
At 31 March 2014
942,260
14,619
60,548
281
1,017,708
At 31 March 2013
831,602
9,342
63,024
94
904,062
857,415
(217,279)
14,682
(63)
75,933
(19,647)
281
-
948,311
(236,989)
640,136
14,619
-
56,286
281
711,322
(5,455)
-
(94,542)
-
(525)
-
(11,151)
-
164
-
Analysis of cost or valuation at 31 March 2014
Gross cost
Social housing grant
Historical cost depreciation
brought forward
Depreciation charge on
historic cost
Depreciation released on
disposals
(89,087)
(10,626)
319
483
Net book value of historic cost
Revaluation Reserve
540,742
401,518
14,619
-
50,470
10,078
281
-
606,112
411,596
Revalued net book value
942,260
14,619
60,548
281
1,017,708
34
34
Flagship Housing Group Limited
Notes to the Financial Statements for the Year Ended 31 March 2014
9. (b) Tangible fixed assets – Housing properties - Company
Housing
Properties
Housing
Properties
Under
Construction
Shared
Ownership
Properties
Shared
Ownership
Properties
Under
Construction
Total
£’000
£’000
£’000
£’000
£’000
Net book value on revalued
assets at 1 April 2013
Cost at 1 April 2013
Additions
Disposals
Transfers
Movement on revaluation
831,602
15,225
(404)
4,222
91,615
9,342
11,785
(6,508)
-
63,024
(2,469)
2,286
(2,293)
94
187
-
At 31 March 2014
942,260
14,619
60,548
281
Depreciation
At start of the year
Charge for year
Disposals
Movement on revaluation
10,626
(319)
(10,307)
At 31 March 2014
-
-
525
(164)
(361)
-
-
-
-
894,626
9,436
27,197
(2,873)
89,322
1,017,708
11,151
(483)
(10,668)
-
Net book value
At 31 March 2014
942,260
14,619
60,548
281
1,017,708
At 31 March 2013
831,602
9,342
63,024
94
904,062
859,786
(217,279)
14,682
(63)
75,933
(19,647)
281
-
950,682
(236,989)
642,507
14,619
-
56,286
281
713,693
(5,455)
-
(94,542)
-
(525)
-
(11,151)
-
164
-
Analysis of cost or valuation at 31 March 2014
Gross cost
Social housing grant
Historical cost depreciation
brought forward
Depreciation charge on
historic cost
Depreciation released on
disposals
(89,087)
(10,626)
319
483
Net book value of historic cost
Revaluation Reserve
543,113
399,147
14,619
-
50,470
10,078
281
-
608,483
409,225
Revalued net book value
942,260
14,619
60,548
281
1,017,708
35
35
Flagship Housing Group Limited
Notes to the Financial Statements for the Year Ended 31 March 2014
9. (c) Tangible fixed assets – Housing properties
Maintenance spend
Group
2014
£’000
Group
2013
£’000
Company
2014
£’000
Company
2013
£’000
The amount spent on existing properties
during the year was
Maintenance capitalised in fixed assets
Maintenance expensed in the Income &
expenditure account
13,796
13,750
14,604
13,750
29,776
18,730
29,961
18,730
43,572
32,480
44,565
32,480
Housing properties were professionally valued by Savills (L&P) Limited, a firm providing surveying and valuation
services around the country. The valuer is external.
The valuation is as at 31 March 2014 on the Existing Use Valuation - Social Housing (EUV-SH) basis.
This valuation has been made in accordance with the RICS Appraisal and Valuation Manual and takes into
account the "Performance Standards for Registered Providers" published in December 1998.
Development administration expenditure and interest costs capitalised during the year amounted to: Group and
company £126k (2013: £236k).
36
36
Flagship Housing Group Limited
Notes to the Financial Statements for the Year Ended 31 March 2014
10.
Tangible fixed assets – Other fixed assets
Group
Offices
Plant and
Equipment
£’000
7,546
6,728
(1,557)
Total
Cost
At 1 April 2013
Additions
Disposals
£’000
3,962
122
(944)
£’000
11,508
6,850
(2,501)
At 31 March 2014
3,140
12,717
15,857
Depreciation
At 1 April 2013
Charge for the year
Disposals
1,999
131
(640)
5,445
1,888
(1,353)
7,444
2,019
(1,993)
At 31 March 2014
1,490
5,980
7,470
Net book value 31 March 2014
1,650
6,737
8,387
Net book value at 31 March 2013
1,963
2,101
4,064
Cost
At 1 April 2013
Additions
Disposals
3,962
122
(944)
7,546
2,219
(1,557)
11,508
2,341
(2,501)
At 31 March 2014
3,140
8,208
11,348
Depreciation
At 1 April 2013
Charge for the year
Disposals
1,999
131
(640)
5,445
1,061
(1,353)
7,444
1,192
(1,993)
At 31 March 2014
1,490
5,153
6,643
Net book value 31 March 2014
1,650
3,055
4,705
Net book value at 31 March 2013
1,963
2,101
4,064
Company
The net book value of tangible fixed assets for Group and Company includes an amount of £1,664k (2013:
£1,042k) in respect of assets held under finance leases.
37
37
Flagship Housing Group Limited
Notes to the Financial Statements for the Year Ended 31 March 2014
11.
HomeBuy
Group
2014
£’000
38
(38)
Loans to home purchasers
Less: Social Housing Grant
Net Cost
12.
Group
2013
£’000
Company
2014
£’000
38
(38)
38
(38)
Company
2013
£’000
38
(38)
-
-
-
-
152
152
5,100
152
152
152
152
5,252
152
Class of
shares
Number of
shares
owned
Percentage
Owned
%
Registered
in England
and Wales
£1 Ordinary
1
100%
Yes
£1 Ordinary
1
100%
Yes
£1 Ordinary
£1 Ordinary
1
1
100%
100%
Yes
Yes
Fixed asset investments
Group companies
Other Investments (at historical cost)
Subsidiary companies
Flagship Housing Developments Limited
RFT Repairs Limited
(Commenced trading on 1 June 2013)
RFT Repairs & Maintenance Limited
(Dormant)
East Anglian Homes Limited (Dormant)
Flagship Housing Developments Limited provides development services to the Group.
RFT Repairs Limited provides a repairs and maintenance service to the Group.
13.
Stock
Materials
Shared ownership
construction
properties
–
Group
2014
£’000
Group
2013
£’000
Company
2014
£’000
Company
2013
£’000
803
-
-
-
282
94
282
94
1,085
94
282
94
in
38
38
Flagship Housing Group Limited
Notes to the Financial Statements for the Year Ended 31 March 2014
14.
Debtors
Amounts falling due within one year
Amounts owed by Group companies
Rental debtors:
 Amounts due from tenants
 Bad and doubtful debt provision
Other trade debtors:
 Amounts due from other trade debtors
 Bad and doubtful debt provision
Other debtors
Prepayments and accrued income
Amounts falling due after more than one
year
Other debtors – refurbishment commitment


Group
2014
£’000
Group
2013
£’000
Company
2014
£’000
-
-
5,116
(1,977)
3,600
(1,260)
5,116
(1,977)
3,600
(1,260)
783
(33)
1,538
2,864
617
(152)
4,884
3,629
765
(33)
1,512
2,864
575
(152)
4,859
2,311
1,066
Company
2013
£’000
432
8,291
11,318
9,313
10,365
3,515
2,056
3,515
2,056
3,515
2,056
3,515
2,056
On 11 October 2004, immediately prior to stock being transferred by Forest Heath District Council to the Group,
the Council entered into a contract for the Group to carry out required refurbishment works to bring the stock up
to the required state of repair. The Group invoiced the Council for a fixed sum equal to the expected cost of the
required work over 10 years. The Group therefore has:
a refurbishment commitment asset, for which it has paid on the transfer of the stock – the Council’s obligation for
the refurbishment of the stock; and
a refurbishment commitment liability – an obligation to carry the refurbishment on behalf of the Council under the
refurbishment contract.
These provisions are reduced by the actual expenditure incurred on refurbishment under the contract in each
financial year.
39
39
Flagship Housing Group Limited
Notes to the Financial Statements for the Year Ended 31 March 2014
15.
Creditors - Amounts falling due within one year
Housing loans
Obligations under finance leases (note 16)
Trade creditors
Other creditors including taxation and social
security
Accruals and deferred income
Other creditors – refurbishment provision
Recycled Capital Grant Fund (see below)
Disposals Proceeds Fund
16.
Group
2014
£’000
Group
2013
£’000
Company
2014
£’000
Company
2013
£’000
2,270
699
4,301
565
3,588
2,270
699
2,846
565
3,469
2,407
9,707
591
852
-
3,745
11,849
2,852
502
-
2,388
11,381
591
852
-
3,740
10,319
2,852
502
-
20,827
23,101
21,027
21,447
Recycled Capital Grant Fund
Balance brought forward
Grants recycled
Interest accrued
New build
502
323
27
-
337
182
23
(40)
502
323
27
-
337
182
23
(40)
At end of year
852
502
852
502
Creditors - Amounts falling due after more than one year
Group
2014
£’000
Housing loans:
591,904
 Repayable in five years or more (Gross)
(12,234)
 Less: liquidity deposit reserve
Group
2013
£’000
Company
2014
£’000
Company
2013
£’000
524,600
(12,234)
591,904
(12,234)
524,600
(12,234)
 Repayable in five years or more (Net)
 Deferred debt issue costs
Obligation under finance leases
Accruals and deferred income
Other creditors – refurbishment provision
Deferred taxation
579,670
(122)
964
724
3,515
7
512,366
(155)
836
764
2,057
-
579,670
(122)
964
724
3,515
-
512,366
(155)
836
764
2,057
-
584,758
515,868
584,751
515,868
40
40
Flagship Housing Group Limited
Notes to the Financial Statements for the Year Ended 31 March 2014
16.
Creditors – Amounts falling due after more than one year (continued)
Housing loans are secured by way of a fixed charge on specific assets of the Group. They bear interest at variable
(linked to LIBOR) and fixed rates. The current average interest rate is 4.18%; the average during the year was
4.67%. The above maturities are calculated by reference to the existence of committed facilities at 31 March 2014
in accordance with Financial Reporting Standard No. 4. The earliest dates on which repayment could be demanded
under committed revolving facilities are as follows:
Group
Company
Group
Company
2014
2014
2013
2013
£’000
£’000
£’000
£’000
Housing loans:
Repayable in one year or less
Repayable between one and two years
Repayable between two and three years
Repayable between three and five years
Repayable in five years or more
Less: Liquidity deposit reserve
2,270
2,423
7,186
14,906
567,390
(12,234)
2,021
2,173
14,048
506,358
(12,234)
2,270
2,423
7,186
14,906
567,390
(12,234)
2,021
2,173
14,048
506,358
(12,234)
581,941
512,366
581,941
512,366
Variable Rate
£’000
Fixed Rate
£’000
Total
£’000
190,554
-
269,446
134,174
460,000
134,174
190,554
403,620
594,174
Weighted
Average Rate
Undrawn
Facilities
%
Weighted
Average Term
of fixing
Years
3.5%
6.6%
7
25
-
Group
2014
£’000
Group
2013
£’000
Company
2014
£’000
Company
2013
£’000
699
964
389
679
699
964
389
679
1,663
1,068
1,663
1,068
The interest rate profile of the Group was:
Syndicated bank loans
RSL Finance (No 1) Bond
Syndicated bank loans
RSL Finance (No 1) Bond
Net finance lease obligations:
In one year or less
Between two and five years
£’000
41
41
Flagship Housing Group Limited
Notes to the Financial Statements for the Year Ended 31 March 2014
17.
Non-equity share capital
2014
£
2013
£
Allotted, issued and fully paid
At start of the year
Issued during the year
142
-
142
-
At end of the year
142
142
The shares do not have a right to any dividend or distribution in a winding-up, and are not redeemable. Each
share has full voting rights.
18.
Reserves
Group
2014
£’000
Company
2014
£’000
Revaluation reserve
At 1 April 2013
Revaluation surplus realised on sale of housing
Surplus on revaluation
311,421
(837)
101,012
309,235
(837)
100,827
At 31 March 2014
411,596
409,225
At 1 April 2013
Revaluation surplus realised on sales
Surplus for the year
Actuarial gain recognised in the pension scheme
71,313
837
17,137
145
73,348
837
17,293
145
At 31 March 2014
89,432
91,623
Company
2014
£’000
Company
2013
£’000
Revenue reserve
Revenue reserve
liability
Pension liability
excluding
Group
2014
£’000
Group
2013
£’000
95,979
(6,547)
78,077
(6,764)
98,170
(6,547)
80,112
(6,764)
89,432
71,313
91,623
73,348
pension
Revenue reserve including pension
liability
42
42
Flagship Housing Group Limited
Notes to the Financial Statements for the Year Ended 31 March 2014
19.
Capital commitments
Capital expenditure that has been contracted
for but has not been provided for in the financial
statements
New dwellings
Vehicles
Group
2014
£’000
Group
2013
£’000
Company
2014
£’000
Company
2013
£’000
17,376
-
8,829
921
17,376
-
8,829
921
17,376
9,750
17,376
9,750
The total amount contracted for at 31 March 2014 in respect of new dwellings relates to approved schemes for
which grant approval has been received and or private finance arranged.
20.
Operating leases
The Group holds lettable housing stock, distribution centres and office accommodation under non-cancellable
operating leases. At 31 March 2014 the Group had annual commitments under these leases as follows:
Group
2014
£’000
Group
2013
£’000
Company
2014
£’000
Company
2013
£’000
24
110
179
1,364
24
34
179
1,364
24
110
179
1,364
24
34
179
1,364
1,677
1,601
1,677
1,601
Leases expiring:
Within one year
Between one to five years
Between five to ten years
Between twenty to thirty years
43
43
Flagship Housing Group Limited
Notes to the Financial Statements for the Year Ended 31 March 2014
21.
Pension obligations
The Group and Company participates in four defined benefit schemes: the Norfolk County Council Pension
Scheme, Suffolk County Council Pension Scheme, the Social Housing Pension Scheme (which is managed by The
Pensions Trust), and the Plumbing & Mechanical Services (UK) Industry Pension Scheme. The Group participates
in various defined contribution schemes. Details of the schemes operated are outlined below.
21. (a)
Norfolk County Council Pension Fund and Suffolk County Council Pension Fund
The Norfolk County Council Pension Fund and Suffolk County Council Pension Fund are defined benefit pension
schemes. Valuations for the purposes of FRS 17 were carried out at 31 March 2013. The results of the valuations
are as follows:
Assumptions:
Group and
Company
2014
% per annum
2.7%
4.0%
5.9%
4.2%
Group and
Company
2013
% per annum
2.8%
5.1%
5.1%
5.1%
6.7%
4.1%
4.8%
3.7%
5.7%
3.6%
3.9%
3.0%
Males
2013
Years
21.3
23.7
Females
2013
Years
23.4
25.8
Group and
Company
2014
£’000
8,725
2,765
1,527
326
Group and
Company
2013
£’000
8,952
2,695
1,387
307
13,343
(19,763)
13,341
(19,981)
Net underfunding in funded plans
Present value of unfunded liabilities
(6,420)
(127)
(6,640)
(124)
Net pension liability
(6,547)
(6,764)
Financial assumptions:
Pension increase rate
Salary increase rate
Expected return on assets
Discount rate
Breakdown of the expected return on assets by category:
Equities
Bonds
Property
Cash
Mortality rates (based on the PFA92 and PMA92 tables)
Current pensioners: post-retirement life expectancy
Future pensioners: post-retirement life expectancy
Balance Sheet:
Scheme assets value
Equities
Bonds
Property
Cash
Total fair value of scheme assets
Present value of scheme liabilities
Males
2014
Years
22.3
24.4
Females
2014
Years
24.4
26.9
44
44
Flagship Housing Group Limited
Notes to the Financial Statements for the Year Ended 31 March 2014
21. (a)
Norfolk County Council Pension Fund and Suffolk County Council Pension Fund (continued)
Recognition in the Income and
Expenditure Account
Current service cost
Interest cost
Expected return on employer assets
Losses on curtailments and settlements
Group and
Company
2014
£’000
Group and
Company
2013
£’000
145
893
(667)
-
124
837
(653)
5
Total
371
Actual return on plan assets
907
Current service cost
Interest cost
Expected return on employer assets
Losses on curtailments and settlements
Total
313
1,606
% of Pay
28.1%
201.8%
(165.6%)
-
% of Pay
23.0%
170.6%
(146.8%)
0.6%
64.3%
47.4%
Reconciliation of defined benefit obligation
Opening defined benefit obligation
Current service cost
Interest cost
Contribution by members
Actuarial (surpluses) / deficits
Losses on curtailments
Estimated unfunded benefits paid
Estimated benefits paid
20,105
145
893
34
(632)
Closing defined benefit obligation
19,890
(9)
(646)
17,684
124
837
35
2,067
5
(9)
(638)
20,105
45
45
Flagship Housing Group Limited
Notes to the Financial Statements for the Year Ended 31 March 2014
21. (a)
Norfolk County Council Pension Fund and Suffolk County Council Pension Fund (continued)
Reconciliation of fair value of employer assets
Group and
Company
2014
£’000
Group and
Company
2013
£’000
Opening fair value of employer assets
Expected return on assets
Contributions by members
Contributions by the employer
Contributions in respect of unfunded benefits
Actuarial (losses) / gains
Unfunded benefits paid
Benefits paid
13,341
667
34
434
9
(487)
(9)
(646)
11,882
653
35
455
9
954
(9)
(638)
Fair value of employer assets
13,343
13,341
13,343
(19,890)
13,341
(20,105)
(6,547)
(6,764)
Amounts for the current and previous
accounting periods
Fair value of employer assets
Present value of defined benefit obligation
Deficit
(487)
(3.6%)
1,107
954
7.2%
32
5.6%
0.2%
Amounts recognised in Statement of Total
Recognised Surpluses and Deficits
Actuarial gains / (losses)
145
(1,118)
Actuarial gains / (losses) recognised in STRSD
145
(1,118)
Experience (losses) / gains on assets
Percentage of scheme assets
Experience gains on liabilities
Percentage of present value of scheme
liabilities
Cumulative actuarial losses
(4,020)
(5,140)
46
46
Flagship Housing Group Limited
Notes to the Financial Statements for the Year Ended 31 March 2014
21. (b)
Social Housing Pension Scheme
The Group participates in the Social Housing Pension Scheme (SHPS). The Scheme is funded and is contracted
out of the state scheme. The Group closed the scheme to new entrants from 1 April 2008.
It is not possible in the normal course of events to identify on a consistent and reasonable basis the share of
underlying assets and liabilities belonging to individual participating employers. This is because the Scheme is a
multi-employer scheme where the Scheme assets are co-mingled for investment purposes, and benefits are paid
from total Scheme assets. Accordingly, due to the nature of the Scheme, the accounting charge for the period
under FRS 17 represents the employer contribution payable.
The Trustee commissions an actuarial valuation of the Scheme every three years. The main purpose of the
valuation is to determine the financial position of the Scheme in order to address the level of future contributions
required so that the Scheme can meet its pension obligations as they fall due.
The last formal valuation of the scheme was performed as at 30 September 2011 by a professionally qualified
actuary using the projected unit method. The market value of the scheme's assets at the latest valuation date was
£2,062m. The valuation revealed a shortfall of assets compared to liabilities of £1,035m, equivalent to a past
service funding level of 67%.
The Scheme Actuary has prepared an Actuarial Report that provides an approximate update on the funding
position of the Scheme as at 30 September 2013. Such a report is required by legislation for years in which a full
actuarial valuation is not carried out. The market value of the Scheme’s assets at the date of the Actuarial Report
was £2,718 million. The Actuarial Report revealed a shortfall of assets compared with the value of liabilities of
£1,151 million, equivalent to a past service funding level of 70%.
Accordingly due to the nature of the Plan, the accounting charge for the period under FRS 17 represents the
employer contribution payable.
Flagship Housing Group has been notified by The Pensions Trust of the estimated employer debt on withdrawal
from the Plan based on the financial position of the Scheme as at 30 September 2013, this is shown below.
Social Housing Pension Scheme – Growth Plan
Flagship Housing Group participates in the SHPS’s Growth Plan. The Plan is funded and is not contracted out of
the state scheme. The Growth Plan is a multi-employer pension plan.
It is not possible in the normal course of events to identify on a consistent and reasonable basis the share of
underlying assets and liabilities belonging to individual participating employers. This is because the Scheme is a
multi-employer scheme where the Scheme assets are co-mingled for investment purposes, and benefits are paid
from total Scheme assets. Accordingly, due to the nature of the Scheme, the accounting charge for the period
under FRS17 represents the employer contribution payable.
The last formal valuation of the scheme was performed as at 30 September 2008 by a professionally qualified
actuary using the projected unit credit method. The market value of the scheme's assets at the latest valuation
date was £1,527m. The valuation revealed a shortfall of assets compared to liabilities of £663m, equivalent to a
funding level of 70%. The next full actuarial valuation will be carried out as at 30 September 2014.
47
47
Flagship Housing Group Limited
Notes to the Financial Statements for the Year Ended 31 March 2014
21. (b)
Social Housing Pension Scheme (continued)
Employers joining the scheme after 1 October 2002, including the Group, that do not transfer any past service
liabilities to the scheme, pay contributions at the ongoing future service contribution rate. This rate is reviewed at
each valuation and applies until the second valuation after the date of joining the scheme, at which point the
standard employer contribution rate is payable. Contribution rates are changed on the 1 April that falls 18 months
after the valuation date.
Following a change in legislation in September 2005 there is a potential debt on the employer that could be levied
by the Trustee of the Plan. The Trustee’s current policy is that it only applies to employers with pre-October 2001
liabilities in the Plan. The debt is due in the event of the employer ceasing to participate in the Plan or the Plan
winding up.
The debt for the Plan as a whole is calculated by comparing the liabilities for the Plan (calculated on a buyout
basis i.e. the cost of security benefits by purchasing annuity policies from an insurer, plus an allowance for
expenses) with the assets of the Plan. If the liabilities exceed assets there is a buy-out debt.
The leaving employer’s share of the buyout debt is the proportion of the Plan’s pre-October 2001 liability
attributable to employment with the leaving employer compared to the total amount of the Plan’s preOctober 2001 liabilities (relating to employment with all the currently participating employers). The leaving
employer’s debt therefore includes a share of any ‘orphan’ liabilities in respect of previously participating
employers. The amount of the debt therefore depends on many factors including total Plan liabilities, Plan
investment performance, the liabilities in respect of current and former employees of the employer, financial
conditions at the time of the cessation event and the insurance buyout market. The amounts of debt can therefore
be volatile over time.
Flagship Housing Group has been notified by The Pensions Trust of the estimated employer debt on withdrawal
from the Plan based on the financial position of the Plan as at 30 September 2013.
Contributions
Pension scheme
Group
2014
£’000
Group
2013
£’000
Company
2014
£’000
Company
2013
£’000
787
832
787
832
27,085
48
27,218
57
27,085
48
27,218
57
Estimated employer debt on withdrawal
Pension scheme
Growth plan
48
48
Flagship Housing Group Limited
Notes to the Financial Statements for the Year Ended 31 March 2014
21. (c)
The Plumbing & Mechanical Services (UK) Industry Pension Scheme
The Group participates in the Plumbing & Mechanical Services (UK) Industry Pension Scheme (the Scheme).
The Scheme is funded and is contracted-out of the State Pension scheme.
It is not possible in the normal course of events to identify on a consistent and reasonable basis the share of
underlying assets and liabilities belonging to individual participating employers. This is because the Scheme is a
multi-employer scheme where the Scheme assets are co-mingled for investment purposes, and benefits are paid
from total Scheme assets. Accordingly, due to the nature of the Scheme, the accounting charge for the period
under FRS17 represents the employer contribution payable.
The Trustee commissions an actuarial valuation of the Scheme every three years. The main purpose of the
valuation is to determine the financial position of the Scheme in order to address the level of future contributions
required so that the Scheme can meet its pension obligations as they fall due.
The last formal valuation of the Scheme was performed as at 5 April 2012 by a professionally qualified actuary
using the Projected Unit Method and the actuary found that the assets were sufficient to cover 100% of the
Scheme's liabilities.
The Scheme Actuary has prepared an Actuarial Report that provides an approximate update on the funding
position of the Scheme as at 5 April 2013. Such a report is required by legislation for years in which a full
actuarial valuation is not carried out. This shows that the assets covered liabilities by about 98% on an ongoing
basis.
Contributions
21. (d)
Group
2014
£’000
Group
2013
£’000
Company
2014
£’000
Company
2013
£’000
10
-
-
-
Defined Contribution Pension Schemes
The Group participates in a number of defined contribution pension schemes. From 1 February 2014 the Group
offered auto-enrollment in a pension scheme for all staff. The scheme offered is a defined contribution workplace
pension scheme. Contributions paid by the Group to the schemes were:
Contributions
Group
2014
£’000
Group
2013
£’000
Company
2014
£’000
Company
2013
£’000
348
188
268
188
49
49
Flagship Housing Group Limited
Notes to the Financial Statements for the Year Ended 31 March 2014
22.
Directors’ emoluments
The Directors are defined as the members of the Board and the Executive Directors. All the Executive Directors’
remuneration was borne by Flagship.
Those Board members that are also tenants of the Group have a standard tenancy agreement and are required
to fulfil the same obligations and receive the same benefits as other tenants.
The aggregate amount of emoluments (including pension contributions) with respect to service as Directors and
paid to or receivable by the directors in the Group during the year was Group: £834,842 (2013: £937,959).
Retirement benefits are accruing to the Executive Directors under defined benefit schemes (3 members; 2013 –
3 members) and defined contribution schemes (2 members, 2013 – 2 members). The Chief Executive, who is
also the highest paid Director, is an ordinary member of the Social Housing Pension Scheme (see Note 21b).
2014
NonExecutive
Directors
£
Executive
Directors
£
Total
Executive
Directors
£
£
2013
NonExecutive
Directors
£
Total
£
642,000
22,461
90,487
-
732,487
22,461
731,199
22,141
84,050
-
815,249
22,141
-
-
-
31,500
-
31,500
Total excluding
pension
contributions
Pension
contributions
664,461
90,487
754,948
784,840
84,050
868,890
79,894
-
79,894
69,069
-
69,069
Aggregate total
744,355
90,487
834,842
853,909
84,050
937,959
Salary
Benefits
Compensation
for loss of office
2014
2013
Salary
Benefits
179,375
3,488
175,000
3,765
Total excluding pension contributions
Pension contributions
182,863
16,054
178,765
14,262
Aggregate total
198,917
193,027
Emoluments paid to the highest paid Director
50
50
Flagship Housing Group Limited
Notes to the Financial Statements for the Year Ended 31 March 2014
23.
Employee information
The average full time equivalent number of
persons (including Executive Directors) employed
during the year was:
Group
2014
Number
Group
2013
Number
Company
2014
Number
Company
2013
Number
677
412
450
412
The full time equivalent number is calculated based on a 37 hour working week.
Staff costs (for the above persons):
Group
2014
£’000
Group
2013
£’000
Company
2014
£’000
Company
2013
£’000
Wages and salaries (including redundancy
costs)
Social Security costs
Pension costs
17,243
1,544
1,341
10,921
892
832
11,334
954
1,244
10,921
892
832
Total – excluding temporary staff costs
Temporary staff costs
20,128
1,167
12,645
157
13,532
425
12,645
157
Total
21,295
12,802
13,957
12,802
Salary Bands
Salary banding for all employees earning over £60,000 (including salaries and benefits in kind and
compensation for loss of office, but excluding pension contributions paid by the employer):
£60,000 to £70,000
£70,001 to £80,000
£80,001 to £90,000
£90,001 to £100,000
£100,001 to £110,000
£120,001 to £130,000
£140,001 to £150,000
£170,001 to £180,000
£180,001 to £190,000
Group
2014
Number
1
4
2
3
1
3
1
Group
2013
Number
1
1
1
1
2
3
1
1
-
Company
2014
Number
1
4
2
2
1
3
1
Company
2013
Number
1
1
1
1
2
3
1
1
-
15
11
14
11
51
51
Flagship Housing Group Limited
Notes to the Financial Statements for the Year Ended 31 March 2014
24.
25.
Housing stock
Housing accommodation
Housing accommodation at intermediate rent
Supported housing accommodation
Shared ownership accommodation
Keyworker properties
Housing accommodation let at market rent
Student accommodation
Group
2014
Units
19,702
99
377
1,090
38
111
600
Group
2013
Units
19,768
57
376
1,104
38
121
600
Company
2014
Units
19,702
99
377
1,090
38
111
600
Company
2013
Units
19,768
57
376
1,104
38
121
600
Total
22,017
22,064
22,017
22,064
Company
2014
£’000
Company
2013
£’000
Notes to the cash flow statement
Group
2014
£’000
Group
2013
£’000
Operating surplus
Depreciation charges
Impairment and abortive provision movements
(Increase) / decrease in stock
Decrease / (increase) in debtors
Increase in creditors
Other non-cash movements
40,548
13,171
46,808
11,941
(65)
1,056
3,420
833
(335)
40,697
12,344
(187)
(2,218)
2,642
(298)
46,808
11,941
(65)
1,056
2,998
796
(335)
Net cash inflow from operating activities
52,976
63,658
52,980
63,199
Reconciliation of operating surpluses
to net cash inflow from operating activities
(990)
177
368
(298)
Reconciliation of net cash flow to movement in
net debt
Increase in cash in the period
Cash used to increase liquid resources
Cash (inflow) / outflow from movement in debt
Capital element of finance lease payments
Change in net debt resulting from cash flows
27,302
40,000
(69,574)
(262)
2,812
3,249
(332)
26,530
40,000
(69,574)
(262)
2,353
3,249
(332)
(2,534)
5,729
(3,306)
5,270
Non cash transactions - amortisation of debt issue
Net debt at start of the year
(33)
(506,892)
(33)
(512,588)
(33)
costs
(507,744)
(33)
(512,981)
Net debt at end of the year
(509,459)
(506,892)
(511,083)
(507,744)
52
52
Flagship Housing Group Limited
Notes to the Financial Statements for the Year Ended 31 March 2014
25.
Notes to the cash flow statement – (continued)
At 31
March
2013
£’000
Cash
flows
£’000
Non cash
transaction
£’000
At 31
March
2014
£’000
6,720
-
27,302
40,000
-
34,022
40,000
Debt due within 1 year
Debt due after 1 year
6,720
(565)
(513,047)
67,302
(2,404)
(67,432)
(33)
74,022
(2,969)
(580,512)
Total
(506,892)
(2,534)
(33)
(509,459)
Analysis of net debt - Group
Cash in hand and at bank
Current asset investments
Analysis of net debt – Company
Cash in hand and at bank
Current asset investments
26.
5,868
-
26,530
40,000
-
32,398
40,000
Debt due within 1 year
Debt due after 1 year
5,868
(565)
(513,047)
66,530
(2,404)
(67,432)
(33)
72,398
(2,969)
(580,512)
Total
(507,744)
(3,036)
(33)
(511,083)
Related parties
The Board has tenant members who hold tenancy agreements on normal terms and cannot use their position to
their advantage.
The Group has taken advantage of the disclosure exemptions under FRS 8, which applies to transactions and
balances between group entities that have been eliminated on consolidation.
53
53