Financial Statements
31 March 2014
Contents
2
3
4
5
6
7
Independent auditor’s report
to the board of Peabody
Income and Expenditure
Accounts
Statement of Total Recognised
Surpluses and Deficits
Balance Sheets
Cash Flow
Statements
Notes to
the Accounts
2
Peabody
Report and financial statements for the year ended 31 March 2014
Independent auditor’s report
to the board of Peabody
We have audited the financial statements of Peabody for the
year ended 31 March 2014 which comprise the Peabody and
Group Income and Expenditure accounts, the Statements of
Total Recognised Surpluses and Deficits, the Reconciliations
of Movement in Peabody and Group Funds, the Peabody and
Group Balance Sheets, the Peabody and Group 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)
This report is made solely to the Board of Governors, as a
body, in accordance with section 144 of the Charities Act 2011
and section 137 of the Housing and Regeneration Act 2008.
Our audit work has been undertaken so that we might state
to the board 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 board as a body, for our audit work,
for this report, or for the opinions we have formed.
Respective responsibilities of the board and auditor
As explained more fully in the Statement of Board Responsibilities
(set out on page 45), the board is responsible for the preparation
of the financial statements and for being satisfied that they give
a true and fair view. Our responsibility is to audit and express an
opinion on the financial statements in accordance with applicable
law and International Standards on Auditing (UK and Ireland).
Those standards require us to comply with the Auditing Practices
Board's (APB's) Ethical Standards for Auditors.
Opinion on financial statements
In our opinion the financial statements:
– give a true and fair view of the state of Peabody's and the
Group's affairs as at 31 March 2014 and of Peabody's and
the Group's income and expenditure for the year then ended;
– have been properly prepared in accordance with United
Kingdom Generally Accepted Accounting Practice; and
– have been prepared in accordance with the requirements
of the Peabody Donation Fund Act 1948 as amended by the
Charities (The Peabody Donation Fund Act) Order 1997, the
Charities Act 2011, the Housing and Regeneration Act 2008
and the Accounting Direction for Private Registered
Provider of Social Housing 2012.
Opinion on other matter prescribed by
the Companies Act 2006
In our opinion the information given in the Operating
and Financial Review for the financial year for which
the financial statements are prepared is consistent
with the financial statements.
Matters on which we are required to report by exception
We have nothing to report in respect of the following matters
where the Charities Act 2011 and the Housing Association and
Regeneration Act 2008 require us to report to you if, in our opinion:
– adequate accounting records have not been kept by
the parent company; or returns adequate for our audit
have not been received from branches not visited by us; or
Scope of the audit of the financial statements
– Peabody’s financial statements are not in agreement
with the accounting records and returns; or
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/apb/scope/private.cfm.
– Certain disclosures of director’s
remuneration specified by law are not made; or
– we have not received all the information and
explanations we require for our audit.
Grant Thornton UK LLP
Registered Auditor, Chartered Accountants
Milton Keynes, England
9 July 2014
The financial position and results for the year are set out in the Financial Statements section of these statements.
3
Income and Expenditure Accounts
Income and Expenditure Accounts
Peabody
Group
2014
£'000
2013
£'000
2014
£'000
2014
£'000
2013
£'000
138,201
118,275
151,825
–
128,503
–
–
14,358
–
–
34
–
–
–
–
2
138,201
118,275
–
165,113
128,503
Cost of sales
2
(3,882)
–
–
(11,215)
–
Operating costs
2
(86,630)
–
(104,741)
(85,100)
Note
Turnover
Continuing activities
Acquisitions
Less share of joint venture
(1,070)
(79,540)
Operating Surplus/ (Deficit)
47,689
Continuing activities
Acquisitions
Share of joint venture profit/(loss)
34
38,735
50,693
(1,536)
–
43,403
–
–
–
–
–
–
196
–
–
47,689
38,735
–
49, 353
43,403
Surplus on sale of fixed assets
26
5,349
1,361
–
7,584
1,497
Gift on acquisition
31
–
–
–
256,447
–
Interest receivable and other income
7
5,654
3,510
–
364
2,814
Interest payable and similar charges
8
(24,881)
(20,864)
–
(22,679)
(21,781)
21
33,811
22,742
–
291,069
25,933
Surplus on ordinary activities before and
after taxation for the financial year
The accompanying notes form part of these financial statements.
These financial statements were approved by the board on 9 July 2014 and signed on their behalf by:
Christopher Strickland
Chair
The Group’s principal accounting policies are set out in the Financial Statements section of these statements.
4
Peabody
Report and financial statements for the year ended 31 March 2014
Statement of total recognised surpluses and deficits
Statement of total recognised surpluses and deficits
Peabody
Group
2014
£'000
2013
£'000
2014
£'000
2013
£'000
33,811
22,742
291,069
25,933
(1,719)
328
(2,713)
669
Group share of actuarial loss in joint
venture pension scheme
–
–
(306)
–
Unrealised surplus on revaluation
–
–
4,887
–
32,092
23,070
292,937
26,602
Note
Surplus for the financial year
Pension scheme actuarial (loss)/ gain
6
Total recognised surpluses relating to the year
Reconciliation of movement
in Peabody and group funds
Reconciliation of movement in Peabody and group funds
Peabody
Note
Opening funds
Total recognised surpluses and deficits relating to the year
Closing total funds
21
Group
2014
£'000
2013
£'000
2014
£'000
2013
£'000
263,738
240,668
290,042
263,440
32,092
23,070
292,937
26,602
295,830
263,738
582,979
290,042
The financial position and results for the year are set out in the Financial Statements section of these statements.
5
Balance Sheets
Balance Sheets
Peabody
Group
Note
2014
£'000
2013
£'000
2014
£'000
2013
£'000
Housing properties
11
1,218,925
1,178,488
1,913,905
1,299,107
Social Housing Grant
11
(374,225)
(363,368)
(486,987)
(366,837)
Other Public Grants
11
(53,900)
(60,846)
(88,381)
(85,310)
790,800
754,274
1,338,537
846,960
Fixed Assets
Other tangible fixed assets
12
14,521
10,069
28,546
16,604
Fixed asset investments
13
7,724
5,050
458
–
Starter homes initiative investment
32
1,056
–
1,300
–
814,101
769,393
1,368,841
863,564
Share of joint venture
– gross assets
34
–
–
67,317
–
– gross liabilities
34
–
–
(19,550)
–
814,101
769,393
1,416,608
863,564
Current Assets
Properties for sale
14
7,836
5,994
80,760
22,499
Debtor due in more than one year
15
180,042
87,684
–
–
Debtors due in less than one year
15
26,000
20,404
23,286
16,255
16,613
5,261
148,004
11,224
230,491
119,343
252,050
49,978
(41,413)
(34,327)
(72,820)
(34,962)
189,078
85,016
179,230
15,016
1,003,179
854,409
1,595,838
878,580
17
677,056
562,451
967,121
557,563
6
30,293
28,220
44,050
30,975
33
–
–
1,688
–
21
295,830
263,738
578,092
290,042
–
–
4,887
–
1,003,179
854,409
1,595,838
878,580
Cash at bank and in hand
Creditors: Amounts Falling Due Within One Year
16
Net Current Assets
Total Assets Less Current Liabilities
Creditors: Amounts Falling Due After More Than One Year
Pension Deficit
Provisions For Liabilities And Charges
Reserves
Revenue reserve
Revaluation reserve
The accompanying notes form part of these financial statements.
These financial statements were approved by the board on 9 July 2014 and signed on their behalf by:
Christopher Strickland
Chair
The Group’s principal accounting policies are set out in the Financial Statements section of these statements.
6
Peabody
Report and financial statements for the year ended 31 March 2014
Cash Flow Statements
Cash Flow Statements
Peabody
Group
Note
2014
£'000
2013
£'000
2014
£'000
2013
£'000
22
43,696
35,266
21,017
27,334
5,654
3,510
364
2,814
(25,914)
(20,786)
(25,913)
(23,497)
(20,260)
(17,276)
(25,549)
(20,683)
Construction of, investment in, and purchase
of housing properties
(66,333)
(38,090)
(134,125)
(81,306)
Capital grant received
13,687
6,290
13,687
9,757
Other grants received
282
27
282
27
22,694
6,404
31,169
3,164
–
–
5,623
–
Net cash inflow from operating activities
Returns on investments and servicing of finance
Interest received
Interest paid
Capital expenditure and financial investment
Sale of properties
Net cash received on acquisition
Purchase of other tangible fixed assets
(6,040)
(4,380)
(11,037)
(4,857)
(35,710)
(29,749)
(94,401)
(73,215)
Acquisitions and disposals
(3,730)
Net cash outflow on acquisition
Net cash outflow before financing
–
–
–
(16,004)
(11,759)
(98,933)
(66,564)
24,250
15,750
337,713
14,096
201,816
2,992
–
–
Loan to subsidiary
(100,296)
(55,348)
–
–
Repayment of loans – external lenders
(106,661)
(2,000)
Financing
New loans – external lenders
New loans – received from subsidiary
7,938
Repayment of loans – received from subsidiary
–
(102,000)
(2,000)
–
–
27,047
(38,606)
235,713
12,096
11,352
(50,365)
136,780
(54,468)
(Decrease)/Increase in cash
11,352
(50,365)
136,780
(54,468)
Cash inflow/(outflow) from financing
(27,047)
38,606
(235,713)
(12,096)
Increase/(Decrease) in cash
Reconciliation of net cash outflow to movement in net debt
Change in net debt resulting from cash flows
23
(15,695)
(11,759)
(98,933)
(66,564)
Non cash transactions
23
(310)
(47)
(179,716)
(43)
(16,005)
(11,806)
(278,649)
(66,607)
(465,219)
(453,413)
(541,971)
(475,364)
(481,224)
(465,219)
(820,620)
(541,971)
Movement in net debt in the year
Net debt at the beginning of the year
Net debt at the end of the year
23
The financial position and results for the year are set out in the Financial Statements section of these statements.
7
Notes to the Accounts
8
Peabody
Report and financial statements for the year ended 31 March 2014
1. Accounting Policies
Basis of Preparation
Turnover
The financial statements have been prepared in accordance
with UK Generally Accepted Accounting Principles (UK GAAP),
the Statement of Recommended Practice ‘Accounting by
Registered Social Landlords’ issued in October 2010 (SORP 2010)
and comply with the Accounting Direction for Private Registered
Providers of Social Housing 2012, the Charities Act 2011. The
financial statements have been prepared under the historical
cost convention, as modified by the revaluation of investment
properties held by the joint venture entity. A summary of the
more important accounting policies is set out below.
Turnover represents rental and service charge income
receivable, income from shared ownership first tranche sales,
fees and revenue grants from local authorities, the Homes and
Communities Agency and other funding bodies, and income
from the sale of housing properties built for sale.
Going concern
The Group’s business activities, its current financial position
and factors likely to affect its future development are set out
within the Operating and Financial Review. The Group has
in place long-term debt facilities which provide adequate
resources to finance committed reinvestment and development
programmes, along with the Group’s day to day operations.
The Group also has a long-term business plan which shows
that it is able to service these debt facilities whilst continuing
to comply with lenders’ covenants.
On this basis, the Board has a reasonable expectation that
the Group has adequate resources to continue in operational
existence for the foreseeable future, being a period of at least
twelve months after the date on which the report and financial
statements are signed. For this reason, it continues to adopt
the going concern basis in the financial statements.
Basis of Consolidation
The Group accounts consolidate the accounts of Peabody
and all its subsidiaries (excluding Peabody Pension Trust on the
basis of materiality) at 31 March using acquisition accounting.
Joint venture
The Group profit includes the Group’s share of results in its joint
venture based on their latest available audited accounts. The
consolidated balance sheet shows the investment in the joint
venture at cost plus the share of post-acquisition retained
profits and reserves attributable to the Group’s interest therein.
Income from first tranche sales and sales of properties built for
sale is recognised at the point of legal completion of the sale.
Rental income is recognised from the point when properties
under development reach practical completion or otherwise
become available for letting. Revenue grants are receivable when
the conditions for receipt of agreed grant funding have been met.
Housing Properties for Sale
Shared ownership first tranche sales, completed properties for
outright sale and property under construction are valued at the
lower of cost and net realisable value. Cost comprises materials,
direct labour and direct development overheads. Net realisable
value is based on estimated sales price after allowing for all
further costs of completion and disposal.
Housing Properties and Depreciation
Housing properties under construction are stated at cost
and are not depreciated. These are reclassified as Housing
Properties on practical completion of construction.
Freehold land is not depreciated.
The Group depreciates freehold housing properties by
component on a straight line basis over the estimated
useful economic lives of component categories.
The lives of these key components are outlined below:
Key components
Useful life
General structure
100 years
Roofs
50 – 70 years
Windows and doors
30-35 years
Bathroom
30 years
Lifts
20 – 30 years
Water / Mechanical installations
15 – 30 years
Electrical installations
25 – 40 years
Kitchens
25 years
Heating
15 years
Transferred stock structure, transferred
stock grant*
60 years
* Transferred stock relates to properties transferred to Gallions Housing
Association during the year 2000 from Thamesmead Town Limited
Notes to the Accounts
1. Accounting Policies (continued)
Internal works to properties for market rent are capitalised where
applicable and depreciated over the average market rent tenancy.
The Group depreciates housing properties held on long
leases in the same manner as freehold properties, except
where the unexpired lease term is shorter than the longest
component life envisaged, in which case the unexpired term
of the lease is adopted as the useful economic life of the
relevant component category.
Impairment reviews are carried out on an annual basis on assets
whose useful economic lives are expected to exceed 50 years,
in accordance with Financial Reporting Standard 11. Assessing
impairment requires use of estimation techniques. In making
this assessment, management considers publicly available
information, external valuations and internal forecasts of future
activity. Where there is evidence of impairment, assets are
written down to their recoverable amount, being the higher
of the net realisable value or the value in use in the Group.
Works to existing properties which replace a component or result
in an increase in net rental income over the lives of the properties,
thereby enhancing the economic benefits of the assets, are
capitalised as improvements.
Capitalisation of Interest
Interest on borrowings is charged to housing properties under
construction up to the date of completion of each scheme. The
interest charged is on net borrowings to the extent that they are
deemed to be financing a scheme and is charged at the average
interest rate in the period. This treatment applies irrespective of
the original purpose for which the loan was raised.
Sale of Housing Properties
Where properties built for sale are disposed of during the
year, the disposal proceeds are included in turnover, and
the attributable costs are included as cost of sales within
operating costs.
The surplus or deficit on the disposal of housing properties
held previously as fixed assets is shown on the face of the
income and expenditure account.
Shared Ownership Housing Properties and Staircasing
Shared ownership properties are split proportionally between
current and fixed assets based on the element relating to
expected first tranche sales. The first tranche proportion is
classed as a current asset and related sales proceeds included
in turnover and the remaining element is classed as a fixed asset
and included in housing properties at cost, less any provisions
needed for depreciation or impairment.
Capital Grant
Where developments have been financed wholly or partly by
Social Housing Grant (SHG) or other capital grants the amount
of grant received and receivable in respect of housing properties
is deducted from the cost of housing properties.
SHG is subordinated to the repayment of loans by agreement
with the Homes and Communities Agency. SHG released on sale
of a property may be repayable but is normally available to be
recycled and is credited to a Recycled Capital Grant Fund and
included in the balance sheet in creditors.
Capitalisation of Development Administration Costs
Revenue Grant
The cost of housing properties comprises their purchase price,
together with directly attributable costs in bringing them into
working condition for their intended use. Directly attributable
costs, in accordance with FRS 15, include salary costs of own
employees incurred directly in respect of the construction or
acquisition of the property, and incremental costs that would
have been avoided only if individual properties had not been
constructed or acquired.
Grants in respect of revenue expenditure are credited to the
income and expenditure account in the same period as the
expenditure to which they relate.
Overheads and other indirect costs are written off as incurred.
Recycled Capital Grant Fund / Disposal Proceeds Fund
On disposal of relevant housing properties Peabody is allowed
to retain any social housing grant applied to that property for
eligible re-investment. This amount is disclosed separately within
creditors. If unused within a three year period, it will be repayable
to the Homes and Communities Agency with interest.
9
10
Peabody
Report and financial statements for the year ended 31 March 2014
1. Accounting Policies (continued)
Other Fixed Assets and Depreciation
Pension Costs
Other fixed assets are stated at cost less accumulated depreciation.
i. Local Government Defined Benefit Pension Scheme
Depreciation is charged on a straight line basis over the estimated
useful economic lives of assets at the following annual rates:
Freehold offices
2 years
Office
5 –10 years
IT equipment
3 years
Plant and machinery
4 – 5 years
Vehicles including vans
6 –10 years
Solar equipment – panel
25 years
– invertor
10 years
– other solar
15 years
Depreciation is charged on the above assets from
the month of purchase until the month of disposal.
Operating Leases
Assets held under finance leases are included in the balance sheet
and depreciated in accordance with the group’s normal accounting
policies. The present value of future rentals is shown as a liability.
The interest element of rental obligations is charged to the income
and expenditure account over the period of the lease
in proportion to the balance of capital repayments outstanding.
Rentals payable under operating leases are charged to the
income and expenditure account on a straight-line basis over
the lease term.
Fixed Asset Investments
Investments in subsidiary undertakings are shown at cost less
any provision for impairment.
Value Added Tax
Value Added Tax is accounted for on an accruals basis.
The primary activities of the Group, social housing lettings,
constitute exempt supplies, and accordingly no input tax borne
is recoverable. For business supplies chargeable to tax, or where
special dispensations have been agreed, input tax directly
relating to goods and services that have enabled the supply,
and relating to a fair proportion of the cost of central services
in support of these, are recovered from HM Revenue & Customs.
The Group provides membership of the Local Government
Pension Scheme, the London Pension Fund Authority, for all
employees who elected to take up this option prior to 31 March
2008. This is a funded final salary pension scheme. The assets
of the pension fund are managed by third-party investment
managers and are held separately in trust.
Regular valuations are prepared by independent professionally
qualified actuaries. These determine the level of contributions
required to fund the benefits set out in the rules of the fund and
allow for the periodic increase of pensions in payment. Following
the full adoption of FRS 17, the current service cost of providing
retirement benefits to employees during the year, together with
the cost of any benefits relating to past service
is charged against the operating surplus in the year.
The pension scheme assets are measured at fair value. The
pension scheme liabilities are measured using the projected unit
method and discounted at the current rate of return on a high
quality corporate bond of equivalent term and currency.
A pension scheme asset is recognised on the balance sheet
only to the extent that the surplus may be recovered by reduced
future contributions or to the extent that the trustee has agreed
a refund from the scheme at the balance sheet date. A pension
scheme liability is recognised to the extent that the Group has
a legal or constructive obligation to settle the liability.
A credit representing the expected return on the assets of the
pension fund during the year is included within other finance
income. This is based on the market value of the assets of the
fund at the start of the financial year.
A charge within other finance charges representing the expected
increase in the liabilities of the pension fund during the year is
included within net interest. This arises from the liabilities of the
fund being one year closer to payment.
The difference between the market value of assets and the
present value of accrued pension liabilities is shown as an
asset or liability in the balance sheet net of deferred tax.
Differences between actual and expected returns on assets
during the year are recognised in the statement of total
recognised surpluses and deficits in the year, together
with differences arising from changes in assumptions.
ii. Friends Provident Defined Contribution Pension Scheme
Employees of the Peabody Group are able to join the Peabody
Group Pension Scheme which is a defined contribution scheme
operated by Friends Provident. The assets of this scheme are
held separately from those of the Group. Employer contributions
in respect of this scheme are charged to the income and
expenditure account as incurred.
Notes to the Accounts
1. Accounting Policies (continued)
iii. Aegon Group Stakeholder Pension Scheme
Employees of Gallions are able to join the Aegon Group
Stakeholder Scheme which is a defined contribution scheme
operated by Aegon. The assets of this scheme are held
separately from those of the Group. Employer contributions
in respect of this scheme are charged to the income and
expenditure account as incurred.
Loans and Other Financial Instruments
Loans and other financial instruments are stated in the balance
sheet at the amount of the gross proceeds less the initial cost of
raising the finance which is amortised over the period of the loan
using the effective interest rate.
Where loans and other financial instruments are redeemed during
the year, any redemption penalty is recognised in the income and
expenditure account of the year in which redemption takes place.
Financial assets and liabilities are recognised when the Group
becomes a party to the contractual provisions of the financial
instrument and are measured initially at fair value adjusted by
transaction costs.
Homes Managed by Other Parties on Behalf of Peabody
A number of Peabody’s supported homes are managed by
third parties on behalf of Peabody. Where the risks and benefits
of managing these homes have been transferred to the third
party the transactions relating to such homes are excluded from
Peabody’s income and expenditure account. Where the risk
remains with Peabody the transactions are recognised in the
income and expenditure account.
Related Party Transactions
Peabody has taken advantage of the exemption permitted
by FRS 8 – ‘Related Party Disclosures’, and does not disclose
transactions with wholly owned Group undertakings that
are eliminated on consolidation.
Taxation
The charge for taxation is based on the surplus for the year
and takes into account taxation deferred.
Deferred tax is recognised in respect of all timing differences that
have originated but not reversed at the balance sheet date where
transactions or events that result in an obligation to pay more tax
in the future or a right to pay less tax in the future have occurred at
the balance sheet date. Timing differences are differences between
the Group's taxable profits and its results as stated in the financial
statements that arise from the inclusion of gains and losses in
tax assessments in periods different from those in which they are
recognised in the financial statements.
A net deferred tax asset is regarded as recoverable and therefore
recognised only to the extent that, on the basis of all available
evidence, it can be regarded as more likely than not that there
will be suitable taxable profits from which the future reversal
of the underlying timing differences can be deducted.
Deferred tax is measured at the average tax rates that are
expected to apply in the periods in which the timing differences
are expected to reverse, based on tax rates and laws that have
been enacted or substantively enacted by the balance sheet date.
11
12
Peabody
Report and financial statements for the year ended 31 March 2014
2(a). Turnover and Operating Surplus
Peabody
Turnover Cost of sales
Operating
costs
2014
£'000
2014
£'000
2014
£'000
Operating
surplus /
(deficit)
2014
£'000
94,652
–
(70,393)
24,259
90,665
(63,331)
27,334
Shared ownership
1,743
–
(603)
1,140
1,699
(772)
927
Keyworker
3,855
–
(1,212)
2,643
3,478
(957)
2,521
Affordable Rent
2,293
–
(843)
1,450
1,131
(627)
504
Leasehold properties
1,214
–
(1,797)
1,170
(1,996)
103,757
–
(74,848)
28,909
98,143
(67,683)
30,460
Donations received (intra-group)
7,572
–
–
7,572
163
–
163
Development
1,000
–
(930)
70
25
(1,104)
Supporting People contract income
135
–
(135)
–
302
(302)
–
First tranche shared ownership sales
4,710
–
828
–
–
–
Turnover
Operating
costs
2013
£'000
2013
£'000
Operating
surplus /
(deficit)
2013
£'000
Social housing lettings
General needs housing
(583)
(826)
Other social housing activities
(3,882)
(1,079)
Non-social housing activities
Market renting
7,100
–
(2,171)
4,929
6,185
(1,500)
4,685
Commercial lettings
3,001
–
(905)
2,096
2,939
(645)
2,294
Community regeneration (Note 2c)
1,023
–
(3,007)
(1,984)
1,520
(3,608)
(2,088)
Other *
9,903
–
(4,634)
5,269
8,998
(4,698)
4,300
(86,630)
47,689
118,275
(79,540)
38,735
Total
*
138,201
(3,882)
Includes intermediate market rent properties
Breakdown of Community Regeneration Income for 2014 (£'000)
Peabody
Turnover
Operating
costs
Operating
surplus/
(deficit)
Big Lottery Programme
839
(820)
19
Other programmes
184
(2,187)
(2,003)
1,023
(3,007)
(1,984)
Total Community Regeneration
Notes to the Accounts
13
2(a). Turnover and Operating Surplus
Group
Turnover Cost of sales
2014
2014
Operating
costs
2014
£'000
Operating
surplus /
(deficit)
2014
£'000
Turnover
2013
Operating
costs
2013
£'000
£'000
Operating
surplus /
(deficit)
2013
£'000
£'000
£'000
110,849
–
(83,688)
27,161
98,848
(67,680)
31,168
Shared ownership
2,785
–
(975)
1,810
1,699
(772)
927
Keyworker
3,855
–
(1,212)
2,643
3,478
(957)
2,521
Affordable Rent
2,293
–
(843)
1,450
1,131
(627)
504
Leasehold properties
1,283
–
(1,897)
1,170
(1,996)
121,065
–
(88,615)
32,450
106,326
(72,032)
869
–
869
–
1,917
–
(1,577)
340
410
(1,409)
Supporting People contract income
135
–
(135)
–
366
(363)
First tranche shared ownership sales
6,803
–
275
–
–
–
–
30
Social housing lettings
General needs housing
(614)
(826)
34,294
Other social housing activities
Donations received (intra-group)
Development costs
(6,528)
–
–
–
(999)
3
21
–
(5)
16
30
Market renting
7,100
–
(2,171)
4,929
6,185
(1,500)
4,685
Commercial lettings
4,336
–
(933)
3,403
3,752
(650)
3,102
Community regeneration
1,106
–
(4,107)
(3,001)
1,628
(3,997)
Other
Non-social housing activities
Commercial Sales
11,179
Other
10,582
6,492
–
(7,198)
3,384
9,806
(5,149)
4,657
(104,741)
49,157
128,503
(85,100)
43,403
–
(977)
87
–
–
–
(11)
–
(7)
(18)
–
–
–
1
–
(1)
–
–
–
–
16
–
112
128
–
–
–
–
–
(1)
(1)
–
–
–
1,070
–
(874)
196
–
–
–
(116,830)
49,353
128,503
165,113
(4,687)
–
(11,215)
–
(2,369)
–
–
Share of joint venture turnover
Property investment
Property trading
Landfill
Property management
Property sales
Total
1,064
166,183
(11,215)
The figures for the year ended 31 March 2014 include the following amounts relating to acquisitions:
cost of sales £4,288,000 and operating cost £10,536,000.
(85,100)
43,403
14
Peabody
Report and financial statements for the year ended 31 March 2014
2(b).Particulars of Income and Expenditure from Social Housing Lettings
Peabody
General
Needs
Housing
Supported
Housing
and
Housing
for older
people
Shared
ownership
Keyworker
Affordable
Rent
Leasehold
Properties
Total
Total
2014
£'000
2014
£'000
2014
£'000
2014
£'000
2014
£'000
2014
£'000
2014
£'000
2013
£'000
81,801
4,246
1,198
3,793
2,275
185
93,498
87,928
Service charges receivable
5,222
573
478
27
5
911
7,216
7,410
Charges for support services
1,106
176
27
–
–
104
1,413
1,144
1
1,527
40
35
13
14
1,630
1,661
88,130
6,522
1,743
3,855
2,293
1,214
103,757
98,143
Income from lettings
Rents receivable
Other income
Total income from social housing
Expenditure
Services
(11,562)
(698)
(349)
(525)
(174)
(175)
(13,483)
(12,642)
Management
(21,848)
(2,667)
(35)
(55)
(270)
(911)
(25,786)
(23,303)
Routine maintenance
(14,003)
(590)
(4)
(390)
(378)
(25)
(15,390)
(11,640)
Cyclical maintenance
(9,395)
(118)
(4)
(28)
(21)
168
(9,398)
(9,935)
–
–
–
–
–
(522)
(6)
–
(3)
–
(8)
(539)
(733)
Depreciation of housing properties
(8,561)
(423)
(211)
(211)
–
(846)
(10,252)
(9,430)
Operating costs on social housing
(65,891)
(4,502)
(603)
(1,212)
(1,797)
(74,848)
(67,683)
Operating surplus on
social housing lettings
22,239
2,020
28,909
30,460
Major maintenance
Rent losses from bad debts
Rent losses from voids
–
(1,047)
(44)
1,140
(17)
2,643
(48)
(843)
1,450
(26)
(583)
(3)
–
(1,185)
–
(1,338)
Notes to the Accounts
15
2(b).Particulars of Income and Expenditure from Social Housing Lettings
Group
General
Needs
Housing
Supported
Housing
and
Housing
for older
people
Shared
ownership
Keyworker
Affordable
Rent
Leasehold
Properties
Total
Total
2014
£'000
2014
£'000
2014
£'000
2014
£'000
2014
£'000
2014
£'000
2014
£'000
2013
£'000
97,196
4,246
2,062
3,793
2,275
185
109,757
96,042
Service charges receivable
6,024
573
656
27
5
980
8,265
7,479
Charges for support services
1,107
176
27
–
–
104
1,414
1,144
–
1,527
40
35
13
14
1,629
1,661
104,327
6,522
2,785
3,855
2,293
1,283
121,065
106,326
Income from lettings
Rents receivable
Other income
Total income from social housing
Expenditure
Services
(13,314)
(698)
(532)
(525)
(174)
(178)
(15,421)
(12,711)
Management
(25,207)
(2,667)
(75)
(55)
(270)
(911)
(29,185)
(25,826)
Routine maintenance
(17,184)
(590)
(4)
(390)
(378)
–
(18,618)
(12,810)
Cyclical maintenance
(10,917)
(118)
(48)
(28)
(21)
118
(11,014)
(10,276)
Major maintenance
(215)
–
–
–
–
–
(215)
Rent losses from bad debts
(586)
(6)
(3)
(3)
–
(8)
(606)
(756)
Depreciation of housing properties
(10,497)
(423)
(211)
–
(846)
(12,290)
(9,653)
Impairment of housing properties
(1,266)
Operating costs on social housing
(79,186)
(4,502)
Operating surplus on
social housing lettings
25,141
2,020
Rent losses from voids
(1,250)
–
(44)
(313)
–
(975)
1,810
(47)
–
(1,212)
2,643
(48)
–
(843)
1,450
(26)
–
(1,897)
(614)
(3)
(1,266)
–
–
(88,615)
(72,032)
32,450
34,294
(1,418)
(1,346)
16
Peabody
Report and financial statements for the year ended 31 March 2014
3. Accommodation Owned and in Management
At 31 March
Peabody
Group
2014
Units
2013
Units
2014
Units
2013
Units
13,633
13,764
20,100
15,132
– affordable
291
188
649
192
Shared ownership
465
456
1,073
492
Rent to Homebuy
–
–
125
–
69
69
69
69
370
359
430
359
– directly managed
412
441
467
496
– managed by others
356
380
356
380
Leasehold managed
1,439
1,330
2,053
1,371
Non-social housing
1,973
2,035
2,222
2,041
19,008
19,022
27,544
20,532
General needs housing
– social
Keyworker
– other
– intermediate market rent
Supported housing
Total
Notes to the Accounts
17
4. Emoluments of Governors and Executive Officers
None of the Governors received any emoluments
during the year (2013: £nil).
Governors were reimbursed expenses totalling £231 (2013: £212).
The remuneration paid to the Group Chief Executive, Peabody
Executive Officers (as listed on page 5) and the Chief Executive
of CBHA, was as follows:
Total emoluments (including pension contributions and benefits in kind)
2014
£
2013
£
1,168,497
984,206
233,261
210,277
Highest Paid Director:
Emoluments (including pension contributions) paid to the Group Chief Executive
The new Executive Director – Development and Regeneration
joined the Executive Team in November 2013.
The Group Chief Executive is no longer an ordinary member
of Peabody’s pension scheme.
The Nominations and Remuneration Committee of the Governors
meets twice a year and fixes the remuneration of the Group Chief
Executive and the Peabody Executive Team.
18
Peabody
Report and financial statements for the year ended 31 March 2014
5. Employee Information
Peabody
Group
2014
2013
2014
2013
The average number of full-time equivalent employees
(based on a standard working week of 35 hours)
No.
No.
No.
No.
Head office functions
146
143
178
147
Housing management
413
396
604
422
–
2
16
2
Community services
101
107
109
119
Total
660
648
907
690
Maintenance
Peabody
Group
2014
2013
2014
2013
£’000
£’000
£’000
£’000
Wages and salaries
23,913
21,752
28,100
22,995
Social security costs
2,199
2,033
2,523
2,155
Other pension costs (note 6)
1,844
1,772
2,120
1,929
Other employee costs
1,060
334
1,088
341
29,016
25,891
33,831
27,420
Employee costs
Total
Notes to the Accounts
19
5. Employee Information (continued)
The numbers of employees and directors who received remuneration (excluding pension
contributions) in excess of £60,000 per annum are stated below in bandings of £10,000:
Peabody
Group
2014
No.
2013
No.
2014
No.
2013
No.
£60,001 to £70,000
13
8
19
9
£70,001 to £80,000
5
10
11
11
£80,001 to £90,000
4
4
11
5
£90,001 to £100,000
4
2
4
2
£100,001 to £110,000
2
–
2
–
£110,001 to £120,000
–
–
1
–
£120,001 to £130,000
–
3
–
3
£130,001 to £140,000
1
1
1
1
£140,001 to £150,000
2
–
2
–
£150,001 to £160,000
1
–
1
–
£160,001 to £170,000
–
1
–
1
£170,001 to £180,000
–
–
–
–
£180,001 to £190,000
1
–
1
–
£190,001 to £200,000
–
–
–
–
£200,001 to £210,000
–
1
–
1
£210,001 to £220,000
–
–
–
–
£220,001 to £230,000
–
–
–
–
£230,001 to £240,000
1
–
1
–
34
30
54
33
The relationship of pay between the highest and lowest earner is 12.7:1 (2013: 11.5:1)
The Chief Executive’s remuneration on a per unit basis (owned and managed) is £8.14 per property (2013: £9.93).
20
Peabody
Report and financial statements for the year ended 31 March 2014
6. Pension Liabilities
The London Pensions Fund Authority – Peabody
Peabody participates in the London Pensions Fund Authority
Scheme (LPFA) for those employees who elected to join prior
to 31 March 2008. The scheme is now closed to new entrants.
The pension cost, which includes liability for pension increases, has
been determined in accordance with the advice of professionally
qualified consulting actuaries based on an actuarial valuation
made as at 31 March 2013 using the projected unit method. The
most significant actuarial assumptions used in this valuation were:
Discount rate
4.5% per annum
Rate of general pay increases
4.6% per annum
Rate of increase in pensions in payment
2.8% per annum
Price inflation
2.8% per annum
Valuation of assetsvalued at a 12 month
smoothed market value
Peabody's service cost under the LPFA was £1,164,000 (2013: £1,189,000).
The Group’s service cost under the LPFA was £1,472,500 (2013: £1,342,000).
The major assumptions used to value the liabilities of the scheme under FRS 17 are:
At 31 March 2014
% per annum
At 31 March 2013
% per annum
CPI inflation increase rate
2.8
2.6
Pension increase rate
2.8
2.6
Rate of increase in salaries
4.6
4.3
Expected return on assets
6.4
5.6
Discount rate
4.5
4.5
Projected unit
Projected unit
Valuation method
The demographic assumptions are consistent with those used
for the formal funding valuation as at 31 March 2014. The post
retirement mortality tables adopted were based on the
Club Vita mortality analysis.
The assumed life expectations are:
Retiring today – male
86.6
Retiring today – female
89.8
Retiring in 20 years – male
88.9
Retiring in 20 years – female
92.0
Notes to the Accounts
21
6. Pension Liabilities (continued)
The assets in the Scheme and expected rates of return (based on long-term
future expected investment return for each asset class) were:
Expected
long term
rate of
return
Value at
31 March
2014
£’000
Expected
long term
rate of
return
Value at
31 March
2013
£’000
Equities
6.9%
29,277
6.0%
39,573
LDI/Cashflow matching
3.6%
3,314
n/a
–
Target return portfolio
6.3%
16,572
4.6%
5,421
n/a
–
5.0%
8,132
Infrastructure
6.5%
2,210
n/a
–
Commodities
6.3%
552
n/a
–
Property
5.7%
1,657
n/a
–
Cash
3.4%
1,657
0.5%
1,084
Alternative assets
55,239
54,210
Present value of scheme liabilities
(85,474)
(82,379)
Net (under) funding in funded plans
(30,235)
(28,169)
Present value of unfunded liabilities
(58)
(51)
(30,293)
(28,220)
Total fair value of assets
Net pension liability
Amounts charged to operating profit
2014
£’000
2014
(% of payroll)
2013
£’000
2013
(% of payroll)
Current service cost
1,164
24.0
1,189
22.3
Interest cost
3,685
76.1
3,484
65.4
(3,014)
(62.2)
(2,822)
(53.0)
–
–
–
–
(101)
2.1
8
0.2
Total
1,734
40.0
1,859
34.9
Actual return on plan assets
1,850
Expected return on employer assets
Past service cost
Losses on curtailments and settlements
6,799
22
Peabody
Report and financial statements for the year ended 31 March 2014
6. Pension Liabilities (continued)
Reconciliation of defined benefit obligation
2014
£’000
2013
£’000
82,430
76,174
Current service cost
1,164
1,189
Interest cost
3,685
3,484
Contribution by members
329
362
Actuarial (gains) / loss
577
3,649
Past service credit
–
–
Losses on curtailments
–
8
Opening defined benefit obligation
Liabilities assumed / (extinguished) on settlements
Estimated unfunded benefits paid
Estimated benefits paid
Closing defined benefit obligation
(333)
–
(4)
(4)
(2,316)
(2,432)
85,532
82,430
2014
£’000
2013
£’000
Opening fair value of employer assets
54,210
48,078
Expected return on employers assets
3,014
2,822
Contribution by members
329
362
Contribution by employer
1,376
1,403
4
4
Reconciliation of fair value of employer assets
Contribution in respect of unfunded benefits
Actuarial gains (losses)
Unfunded benefits paid
Benefits paid
Settlement prices received / (paid)
Closing fair value of employer assets
(1,142)
3,977
(4)
(4)
(2,316)
(2,432)
(232)
–
55,239
54,210
2014
£’000
2013
£’000
Present value of Funded Obligation
85,474
82,379
Fair Value of Scheme Assets (bid value)
(55,239)
(54,210)
Net Liability
30,235
28,169
58
51
–
–
30,293
28,220
The best estimate of employer contributions for the year ending 31 March 2015 is £1,295,000.
Net Pension Asset as at
Present Value of Unfunded Obligation
Unrecognised Past Service Cost
Net Liability in Balance Sheet
Notes to the Accounts
23
6. Pension Liabilities (continued)
Amounts for the current and previous accounting periods
2014
£’000
2013
£’000
2012
£’000
2011
£’000
2010
£’000
Fair Value of employer assets
55,239
54,210
48,078
47,893
43,945
Present value of defined benefit obligation
(85,532)
(82,430)
(76,174)
(63,345)
(75,923)
Deficit
(30,293)
(28,220)
(28,096)
(15,452)
(31,978)
Experience gains on assets
Experience gains / (losses) on liabilities
Past service credit
Actuarial (losses) and gains
(1,164)
(555)
–
(1,719)
3,977
(2,745)
1,420
7,681
(3,649)
(10,122)
8,081
(25,162)
–
328
–
(12,867)
8,606
–
18,107
(17,481)
2014
£’000
2013
£’000
The past service credit of £8,606,000 in 2011 relates to the
government’s announcement on 22 June 2010 that future
pensions increases would be linked to CPI as opposed to
RPI. Peabody has recognised this amount in the statement
of total recognised surpluses and deficits in accordance with
Urgent Issues Task Force (UITF) Abstract 48, as the directors
consider that no constructive obligation existed prior to the
announcement to link such benefit increases to CPI. As such,
the resulting gain has been accounted for as a change in
actuarial assumption.
Analysis of amount recognisable in the statement
of total recognised surpluses and deficits (STRSD)
Actuarial (losses)/ gains
(1,719)
328
Actuarial (losses)/ gains recognisable in the STRSD
(1,719)
328
Cumulative Actuarial losses recognised in the STRSD
(9,786)
(8,067)
24
Peabody
Report and financial statements for the year ended 31 March 2014
6. Pension Liabilities (continued)
The London Pension Fund Authority – CBHA
The following are the disclosures presented in the financial statements of the
Peabody’s wholly owned subsidiary CBHA in respect of the LPFA pension scheme.
The assets in the Scheme and expected rates of return (based on long-term
future expected investment return for each asset class) were:
Expected
long term
rate of
return
Value at
31 March
2014
£’000
Expected
long term
rate of
return
Value at
31 March
2013
£’000
Equities
6.9%
2,444
6.0%
3,334
LDI/Cashflow matching
3.6%
277
n/a
–
Target return funds
6.3%
1,384
4.6%
457
n/a
–
5.0%
685
Infrastructure
6.5%
184
n/a
–
Commodities
6.3%
46
n/a
–
Property
5.7%
138
n/a
–
Cash
3.4%
138
0.5%
91
Alternative assets
4,612
4,567
Present value of scheme liabilities
(7,559)
(7,322)
Net (under) funding in funded plans
(2,947)
(2,755)
Net pension liability
(2,947)
(2,755)
Total fair value of assets
The demographic assumptions are consistent with those used for the formal funding valuation as at 31 March 2014.
The post retirement mortality tables adopted were based on the Club Vita mortality analysis.
The assumed life expectations are:
Retiring today – male
86.4
Retiring today – female
89.6
Retiring in 20 years – male
88.7
Retiring in 20 years – female
91.8
Notes to the Accounts
25
6. Pension Liabilities (continued)
Amounts charged to operating profit
2014
£’000
2014
(% of
payroll)
2013
£’000
2013
(% of
payroll)
Current service cost
121
24.3
153
24.3
Interest cost
339
68.1
328
52.1
Expected return on employer assets
(251)
(50.4)
(242)
(38.5)
–
–
–
–
Total
209
42.0
239
37.9
Actual return on plan assets
153
–
584
–
2014
£’000
2013
£’000
7,322
7,245
Current service cost
121
153
Interest cost
339
328
34
43
107
2
–
–
(364)
(449)
7,559
7,322
2014
£’000
2013
£’000
Opening fair value of employer assets
4,567
4,219
Expected return on employers assets
251
242
34
43
Contribution by employer including unfunded benefits
145
169
Actuarial (losses) gains
(20)
343
(364)
(449)
4,612
4,567
2014
£’000
2013
£’000
Present value of Funded Obligation
7,559
7,322
Fair Value of Scheme Assets (bid value)
(4,612)
(4,567)
Net Liability in Balance Sheet
2,947
2,755
Past service cost
Reconciliation of defined benefit obligation
Opening defined Benefit obligation
Contribution by members
Actuarial (gains) / losses
Past service (gains) / costs
Estimated benefits paid
Closing defined benefit obligation
Reconciliation of fair value of employer assets
Contribution by members
Benefits paid including unfunded benefits paid
Closing fair value of employer assets
Net Pension Asset as at
26
Peabody
Report and financial statements for the year ended 31 March 2014
6. Pension Liabilities (continued)
The London Pensions Fund Authority – CBHA (continued)
Amounts for the current and previous accounting periods
2014
£’000
2013
£’000
2012
£’000
2011
£’000
2010
£’000
Fair Value of employer assets
4,612
4,567
4,219
4,087
3,638
Present value of defined benefit obligation
(7,559)
(7,322)
(7,245)
(5,796)
(7,166)
Deficit
(2,947)
(2,755)
(3,026)
(1,709)
(3,528)
Experience gains on assets
(97)
343
(238)
12
Experience (losses) / gains on liabilities
(30)
(2)
(1,096)
1,243
–
–
Past service credit
Actuarial (losses) and gains
(127)
341
–
(1,334)
739
1,994
623
(2,637)
–
(2,014)
The past service credit of £739,000 in 2011 relates to the government’s announcement on 22 June 2010 that future pension increases
would be linked to CPI as opposed to RPI. CBHA has recognised this amount in the statement of total recognised surpluses and deficits in
accordance with Urgent Issues Task Force (UITF) Abstract 48, as the directors consider that no constructive obligation existed prior to the
announcement to link such benefits to CPI. As such, the resulting gain has been accounted for as a change in actuarial assumptions.
Analysis of amount recognisable in the statement
of total recognised surpluses and deficits (STRSD)
2014
£’000
2013
£’000
Actuarial (losses)/ gains
(127)
341
Actuarial (losses)/ gains recognisable in the STRSD
(127)
341
Cumulative Actuarial losses recognised in the STRSD
(1,854)
(1,727)
The London Pensions Fund Authority – Gallions
The following are the disclosures presented in the financial statements of the
Peabody’s wholly owned subsidiary Gallions in respect of the LPFA pension scheme.
The assets in the Scheme and expected rates of return (based on long-term future
expected investment return for each asset class) were:
Expected
long term
rate of
return
Value at
31 March
2014
£’000
Equities
6.9%
14,466
LDI/Cashflow matching
3.6%
1,638
Target return funds
6.3%
8,189
n/a
–
Infrastructure
6.5%
1,092
Commodities
6.3%
273
Property
5.7%
819
Cash
3.4%
819
Alternative assets
Total fair value of assets
27,295
Present value of scheme liabilities
(38,105)
Net (under) funding in funded plans
(10,810)
Net pension liability
(10,810)
Notes to the Accounts
27
6. Pension Liabilities (continued)
The demographic assumptions are consistent with those used for the formal funding valuation as at 31 March 2014.
The post retirement mortality tables adopted were based on the Club Vita mortality analysis.
The assumed life expectations are:
Retiring today – male
86.6
Retiring today – female
89.8
Retiring in 20 years – male
88.9
Retiring in 20 years – female
92.1
Amounts charged to operating profit
2014
£’000
2014
(% of
payroll)
Current service cost
750
24.1
Losses on curtailments and settlements
108
3.4
1,608
51.6
(1,469)
(47.2)
Total
997
31.9
Actuarial return on plan assets
899
Interest cost
Expected return on employer assets
Reconciliation of defined benefit obligation
Opening defined Benefit obligation
Current service cost
Interest cost
Contribution by members
Actuarial losses
2014
£’000
35,041
750
1,608
213
1,552
Losses on curtailments
108
Estimated benefits paid
(1,167)
Closing defined benefit obligation
Reconciliation of fair value of employer assets
38,105
2014
£’000
Opening fair value of employer assets
26,358
Expected return on employers assets
1,469
Contributions by group
Actuarial (losses)
894
(259)
Benefits paid including unfunded benefits paid
(1,167)
Closing fair value of employer assets
27,295
The best estimate of employer contributions for the year ending 31 March 2015 is £387,000.
28
Peabody
Report and financial statements for the year ended 31 March 2014
6. Pension Liabilities (continued)
The London Pensions Fund Authority – Gallions (continued)
Net Pension Asset as at
2014
£’000
Present value of Funded Obligation
(38,105)
Fair Value of Scheme Assets (bid value)
27,295
Net Liability in Balance Sheet
(10,810)
Amounts for the current and previous accounting period
2014
£’000
Fair Value of employer assets
27,295
Present value of defined benefit obligation
(38,105)
Deficit
(10,810)
Experience (losses) on assets
(569)
Experience gains on liabilities
1,004
Changes in assumptions
(2,246)
Actuarial gains and losses
(1,811)
Analysis of Amount Recognisable in Statement of Total Recognised
Surpluses and Deficits (STRSD)
2014
£’000
Actuarial (losses) gains
(1,811)
Actuarial (losses) gains recognisable in the STRSD
(1,811)
Cumulative actuarial gains and losses
(9,376)
Notes to the Accounts
6. Pension Liabilities (continued)
Friends Provident Defined Contribution Pension Scheme
Employees of the Peabody Group from 1 April 2008 are able
to join the Peabody Group Pension Scheme which is a defined
contribution scheme operated by Friends Provident. The assets of
this scheme are held separately from those of the Group. Employer
contributions in respect of this scheme are charged to the income
and expenditure account as incurred. During the year ended
31 March 2014 employer contributions totalling £786,204 (2013:
£568,916) were made into the scheme.
Aegon Group Stakeholder Pension Scheme (Gallions only)
Since 1 January 2011, all new employees are able to join the Aegon
Group Stakeholder Pension Scheme. On 31 March 2014 there were
5 current employees (2013: 5) in total who were members of the
Aegon Group Stakeholder Pension Scheme. There were also no
deferred pensioners and no active pensioners.
Peabody Pension Trust Limited (PPT)
Peabody Pension Trust acts as Trustee and administrator for the
Governors of Peabody for the operation of a retirement benefits
scheme for those Peabody employees who were eligible at
31 December 1977. Peabody has entered into commitments to
pay the shortfall of pension payments over income for PPT for
each year. The excess of liabilities over commitments is measured
with respect to RPI in April of each year and in the year ended
31 March 2014 was £14,924 (2013: £14,229).
PPT is not a pension scheme under the terms of the Pension
Scheme Disclosure Regulations.
29
30
Peabody
Report and financial statements for the year ended 31 March 2014
7. Interest Receivable and Similar Income
Peabody
Group
2014
£’000
2013
£’000
2014
£’000
2013
£’000
295
131
353
2,814
–
–
11
–
Interest received from Group entities
5,359
3,379
–
–
Total
5,654
3,510
364
2,814
Other interest receivable and similar income
Share of joint venture interest receivable
8. Interest Payable and Similar Charges
Peabody
Group
2014
£’000
2013
£’000
2014
£’000
2013
£’000
Interest payable on borrowings
12,550
13,188
27,300
23,457
Interest payable to Group entities
13,364
7,644
–
–
–
–
(17)
–
671
662
898
748
26,585
21,494
28,181
24,205
Share of joint venture interest
Net interest cost on pension scheme (note 6)
Less: Interest capitalised
(1,704)
Total
24,881
Capitalisation rate used to determine the finance costs
capitalised during the period
3.75%
(5,502)
(2,424)
20,864
22,679
21,781
2.36%
3.75%
2.36%
(630)
Notes to the Accounts
31
9. Surplus on Operating Activities
Peabody
Group
2014
£’000
2013
£’000
2014
£’000
2013
£’000
11,844
12,218
14,191
12,792
–
–
1,194
–
–
–
102
72
79
62
–
–
35
16
35
16
Surplus on ordinary activities before taxation is stated after charging:
Depreciation on tangible fixed assets
Impairment on housing assets
Auditors’ remuneration:
In their capacity as auditors:
Group
Peabody
In respect of non-audit services
10. Taxation Charge
The tax assessed for the period is lower than that resulting from applying the standard rate of 23% corporation tax in the UK.
The differences are explained below:
Peabody
Surplus on ordinary activities before taxation
Tax on profit on ordinary activities at standard rate of 23% (2013: 24%)
Group
2014
£’000
2013
£’000
2014
£’000
2013
£’000
34,174
22,742
229,091
25,933
7,860
5,458
52,691
6,224
(7,860)
(5,458)
(52,691)
(6,224)
Factors affecting charge for the year:
Charitable surplus exempt taxation
–
–
–
–
32
Peabody
Report and financial statements for the year ended 31 March 2014
11. Housing Properties
Completed Properties
Peabody
Properties under
construction
Housing
properties
held for
letting
£’000
Shared
ownership
housing
properties
£’000
Housing
properties
held for
letting
£’000
Shared
ownership
housing
properties
£’000
Total
£’000
1,201,380
40,429
16,895
5,343
1,264,047
Cost
At 1 April 2013
Reclass of Social Homebuy loans
(10,386)
–
–
–
(10,386)
Reclass to office accommodation
(788)
–
–
–
(788)
7,678
6,053
14,326
4,875
32,932
19,765
–
–
–
19,765
Additions – new build properties
–
–
21,276
5,699
26,975
Interest capitalised
–
–
1,046
372
1,418
6,530
3,931
(7,660)
(2,028)
(11,171)
(6,043)
(4,007)
(247)
Properties acquired
Works to existing properties
Schemes completed
Disposals
At 31 March 2014
773
(21,468)
1,213,008
44,370
41,876
14,014
1,313,268
82,837
2,722
–
–
85,559
Charge for the year
9,752
504
–
–
10,256
Disposals
(1,373)
–
–
Depreciation
At 1 April 2013
At 31 March 2014
(99)
(1,472)
91,216
3,127
–
–
94,343
At 31 March 2014
1,121,792
41,243
41,876
14,014
1,218,925
At 31 March 2013
1,118,543
37,707
16,895
5,343
1,178,488
341,722
14,089
6,989
568
363,368
–
–
–
–
12,978
709
Depreciated cost
Social housing grant
At 1 April 2013
Reclass of DFG
Recycled capital grant fund (receipt)
Recycled capital grant fund (payment)
Completed development properties
(1,948)
–
(57)
(825)
709
341,968
–
13,687
(882)
(2,251)
(709)
13,973
17,716
568
374,225
60,846
–
–
–
60,846
Reclass of Social Homebuy Grant
(9,176)
–
–
–
(9,176)
Reclass of DFG
1,948
–
–
–
1,948
282
–
–
–
282
53,900
–
–
–
53,900
At 31 March 2014
725,924
27,270
24,160
13,446
790,800
At 31 March 2013
715,975
23,618
9,906
4,775
754,274
At 31 March 2014
2,251
–
(1,948)
–
Other public grants
At 1 April 2013
Received
At 31 March 2014
Net book value
The DFG grant received in previous years has been adjusted this year to be correctly reflected under Other public grants rather than Social housing grant.
Notes to the Accounts
33
11. Housing Properties (continued)
Completed Properties
Group
Properties under
construction
Housing
properties
held for
letting
£’000
Shared
ownership
housing
properties
£’000
Housing
properties
held for
letting
£’000
Shared
ownership
housing
properties
£’000
Total
£’000
1,268,859
43,891
62,981
9,586
1,385,317
(6,537)
4,095
(4,676)
Cost
At 1 April 2013
Transfer to / from current assets
(768)
(1,466)
Reclass of Social Homebuy loans
(10,386)
–
–
–
(10,386)
Reclass to office accommodation
(787)
–
–
–
(787)
–
–
51,781
10,184
61,965
22,757
–
–
–
22,757
Additions – new build properties
–
–
45,615
12,866
58,481
Interest capitalised
–
–
3,379
680
4,059
7,308
4,041
(8,438)
(2,138)
(11,605)
(6,746)
(1,620)
495,807
39,536
9,186
4,335
548,864
1,771,185
79,256
156,347
39,608
2,046,396
At 1 April 2013
83,579
2,990
–
–
86,569
Charge for the year
11,561
600
–
–
12,161
Impairment
1,194
–
–
–
1,194
Disposals
(1,374)
(99)
–
–
(1,473)
33,066
974
–
–
34,040
128,026
4,465
–
–
132,491
At 31 March 2014
1,643,159
74,791
156,347
39,608
1,913,905
At 31 March 2013
1,185,280
40,901
62,590
10,336
1,299,107
341,722
14,089
8,945
2,081
366,837
–
–
–
–
11,536
867
Properties acquired
Works to existing properties
Schemes completed
Disposals
Acquisition of Gallions
At 31 March 2014
–
773
(19,971)
Depreciation
Acquisition of Gallions
At 31 March 2014
Depreciated cost
Social housing grant
At 1 April 2013
Reclass of DFG
Recycled capital grant fund (receipt)
Recycled capital grant fund (payment)
(1,948)
–
(826)
(6,920)
2,251
911
(2,251)
Disposals
–
223
Transfers
1
(495)
Completed development properties
Acquisition of Gallions
At 31 March 2014
(56)
–
(1,234)
–
(709)
–
(187)
(1,948)
12,403
(7,802)
202
223
(1,915)
88,644
19,033
10,682
628
118,987
430,614
32,935
20,758
2,680
486,987
34
Peabody
Report and financial statements for the year ended 31 March 2014
11. Housing Properties (continued)
Completed Properties
Group
Properties under
construction
Housing
Shared
properties
ownership
held for
housing
letting
properties
£’000
£’000
Housing
properties
held for
letting
£’000
Shared
ownership
housing
properties
£’000
78,538
2,525
3,451
797
Total
£’000
Other public grants
At 1 April 2013
85,311
Reclass of Social Homebuy loans
(9,176)
–
–
–
(9,176)
Reclass of DFG
1,948
–
–
–
1,948
286
–
–
–
286
Acquisition of Gallions
10,012
–
–
–
10,012
At 31 March 2014
81,608
2,525
3,451
797
88,381
1,130,937
39,331
132,138
36,131
1,338,537
761,569
23,491
53,645
8,255
846,960
Received
Net book value
At 31 March 2014
At 31 March 2013
Peabody
Total expenditure on works to existing properties for the
year amounts to £19.8 million which consists of £12.3 million
of improvements and £7.4 million of the replacement
of components.
Housing properties includes £744 million of land which
has not been depreciated.
Group
Total expenditure on works to existing properties for the
year amounts to £22.8 million.
Housing properties includes £799 million of land which
has not been depreciated.
Notes to the Accounts
35
11. Housing Properties (continued)
Peabody
Housing properties comprise:
Freeholds
Long leaseholds
Peabody
The total Social Housing Grant receivable to date is £374 million
(2013: £363 million).
Group
The total Social Housing Grant receivable to date is £493 million
(2013: £367 million).
The Group’s assets have been reviewed for impairment. The
recoverable amount has been determined on a value-in-use basis.
The key assumptions used in determining the value in
use are as follows:
Assumption
Revenue rate
average weekly rent £75 – £107
Growth rate
0.5% - 2.0% (year 10)
Discount rate
5.6% real; 8.3% nominal
Group
2014
£’000
2013
£’000
2014
£’000
2013
£’000
1,217,980
1,161,595
1,911,108
1,283,224
95,288
102,452
95,288
102,452
1,313,268
1,264,047
2,046,396
1,385,676
36
Peabody
Report and financial statements for the year ended 31 March 2014
12. Other Tangible Fixed Assets
Peabody
Freehold
offices
£’000
Office
equipment
£’000
Total
£’000
13,648
5,865
19,513
–
(726)
1,639
4,135
(1,477)
(1,477)
Cost
At 1 April 2013
Reclass of investment
(726)
Additions
2,496
Disposals
–
Work in progress
1,294
1,324
2,618
At 31 March 2014
16,712
7,351
24,063
7,426
2,018
9,444
516
1,072
1,588
(1,490)
(1,490)
Depreciation
At 1 April 2013
Charge for the year
Disposals
–
At 31 March 2014
7,942
1,600
9,542
Net book value at 31 March 2014
8,770
5,751
14,521
At 31 March 2013
6,222
3,847
10,069
Solar
equipment
Total
£’000
Equipment,
F&F, Motor
vehicles
£’000
£’000
£’000
14,110
6,052
6,537
26,699
–
–
7,060
149
Group
Freehold
offices
Cost
At 1 April 2013
Reclass of investment
(726)
Additions
8,512
Disposals
–
(726)
15,721
(1,639)
–
(1,639)
Work in Progress
1,294
1,324
–
2,618
At 31 March 2014
23,190
12,797
6,686
42,673
7,493
2,142
460
10,095
Charge for the year
584
1,115
331
2,030
Additions
304
3,286
–
3,590
Disposals
–
(1,587)
–
(1,587)
Depreciation
At 1 April 2013
At 31 March 2014
Net book value at 31 March 2014
At 31 March 2013
8,381
4,955
791
14,127
14,809
7,842
5,895
28,546
6,617
3,910
6,077
16,604
Notes to the Accounts
37
13. Fixed Asset Investments
Peabody
Investment in
subsidiary
undertakings
Group
Investment in
non-subsidiary
undertakings
2014
2013
2014
2013
£’000
£’000
£’000
£’000
At 1 April
5,050
5,050
–
–
Additions
2,674
–
458
–
At 31 March 2014
7,724
5,050
458
–
The financial statements consolidate the results of all entities (detailed in Note 24) which were
subsidiaries of Peabody at the end of the year. Peabody is the ultimate parent undertaking.
14. Properties for Sale
Peabody
Group
2014
2013
2014
2013
£’000
£’000
£’000
£’000
5,994
5,994
22,499
22,499
–
–
16,253
–
5,928
–
69,502
–
(773)
–
(6,480)
–
(3,313)
–
(21,013)
–
Properties
Work in progress
Acquisition of Gallions
Additions – work in progress
Schemes completed
Disposals
Capitalised interest included in the above
7,836
5,994
80,760
22,499
477
223
1,939
456
Properties held for sale represents the costs of outright sales units and first tranche proportion
of shared ownership units of development schemes currently under construction. It is anticipated
that the net realisable value of the units will exceed the value held in current assets at the year end.
38
Peabody
Report and financial statements for the year ended 31 March 2014
15.Debtors
Peabody
Group
2014
2013
2014
2013
£’000
£’000
£’000
£’000
Rent and service charges in arrears
13,559
12,671
16,390
13,435
Less: provision for bad debts
(5,082)
(4,967)
8,477
7,704
10,207
8,188
6,280
7,337
–
–
139
126
167
136
11,104
5,237
12,912
7,931
26,000
20,404
23,286
16,255
180,042
87,684
–
–
Amounts falling due within one year:
Amounts owed by subsidiary undertakings
Loans to employees
Other debtors and prepayments
(6,183)
(5,247)
Amounts falling due within one year:
Amounts owed by subsidiary undertakings
At the balance sheet date, £137,505,000 (2013: £50,522,000) is on-lent to CBHA, a fixed interest rate of 7.1% is
applicable to £16 million of the loan. The balance of the amount falling due after one year relates to Peabody
(Services) Ltd totalling £36 million (2013: £37m) and Peabody Enterprises Ltd totalling £7m (2013: nil).
16. Creditors: Amounts Falling Due Within One Year
Peabody
Group
2014
2013
2014
2013
£’000
£’000
£’000
£’000
Trade creditors
2,521
2,100
5,592
2,627
Rent and service charges received in advance
7,070
7,893
7,460
8,274
Amounts owed to subsidiary undertakings
1,714
3,395
–
–
–
–
–
–
1,338
1,023
8,991
1,110
24,770
17,916
46,777
20,951
4,000
2,000
4,000
2,000
41,413
34,327
72,820
34,962
Recycled capital grant fund (note 18)
Other taxation and social security costs
Accruals and deferred income
Debt (note 20)
Notes to the Accounts
39
17. Creditors: Amounts Falling Due After More Than One Year
Peabody
Group
2014
2013
2014
2013
£’000
£’000
£’000
£’000
325,330
551,503
962,960
551,195
Recycled capital grant fund (note 18)
1,511
1,789
2,495
1,870
Disposal proceeds fund (note 19)
1,666
4,498
1,666
4,498
348,549
4,661
–
–
677,056
562,451
967,121
557,563
Debt (note 20)
Amounts owed to subsidiary undertakings (note 20)
18. Recycled Capital Grant Fund
Peabody
At 1 April
Reclassification from SHI
Acquisition of Gallions
Grant recycled
Interest accrued
Transfer to subsidiary
Withdrawals – schemes started on site
At 31 March
There are no amounts repayable before 31 March 2015 (2014: nil).
Group
2014
2013
2014
2013
£’000
£’000
£’000
£’000
1,789
7,696
5,338
7,783
543
–
543
–
–
–
904
–
1,909
2,060
1,907
2,060
4
42
5
42
–
–
–
(2,050)
(684)
1,511
(8,009)
(6,202)
(8,015)
1,789
2,495
1,870
40
Peabody
Report and financial statements for the year ended 31 March 2014
19. Disposal Proceeds Funds
Peabody
At 1 April
Net sale proceeds recycled
Interest accrued
Group
2014
2013
2014
2013
£’000
£’000
£’000
£’000
4,498
4,433
4,498
4,433
8
43
8
43
10
23
10
23
Withdrawals
(2,850)
At 31 March
1,666
(1)
4,498
(2,850)
1,666
(1)
4,498
There are no amounts repayable as at 31 March 2014 (2013: nil). Withdrawals from the disposal proceeds fund were used for approved
works to existing housing properties.
20. Debt Analysis
(a). Book Value of Debt
Peabody
Group
2014
2013
2014
2013
£’000
£’000
£’000
£’000
Bank and building society loans
327,000
408,750
510,600
408,750
Amounts owed to subsidiary undertaking
348,549
150,000
–
–
2043 Bond
–
–
208,446
150,000
2053 Bond
–
–
251,750
–
675,549
558,750
970,796
558,750
Nominal Value
Unamortised issue costs
Bank and building society loans
Amounts owed to subsidiary undertaking
(1,670)
–
(1,670)
(1,980)
(1,598)
(5,247)
(3,836)
–
(3,836)
(2,288)
(1,598)
(5,555)
Book value and fair value
Bank and building society loans
325,330
406,770
506,764
406,462
Amounts owed to subsidiary undertaking
348,549
148,402
–
–
2043 Bond
–
–
208,446
148,402
2053 Bond
–
–
251,750
–
673,879
553,503
966,960
553,195
Notes to the Accounts
41
20. Debt Analysis
(b). Maturity of Debt
Peabody
Group
2014
2013
2014
2013
£’000
£’000
£’000
£’000
4,000
2,000
4,000
2,000
–
–
–
–
2043 Bond
25,000
14,000
25,000
14,000
2053 Bond
646,549
529,000
941,796
529,000
675,549
558,750
970,796
558,750
Bank and building society loans
Amounts owed to subsidiary undertaking
20. Debt Analysis
(c). Interest Analysis
Peabody
Fixed
Floating
Group
2014
2013
2014
2013
£’000
£’000
£’000
£’000
578,549
356,000
817,982
356,000
97,000
202,750
152,814
202,750
675,549
558,750
970,796
558,750
42
Peabody
Report and financial statements for the year ended 31 March 2014
Bank and building society loans
Bond 2053 (coupon rate 4.625%)
The Group’s bank and building society loans are secured by
specific charges over housing properties. The borrowings bear
interest rates of between 0.7% and 6.9% and are repayable
in instalments as disclosed in (b) above.
On 6 December 2013, Peabody Capital No 2 PLC issued a
£250 million Sterling Secured bond repayable in 40 years
with an effective rate of 4.63% as shown in the Group
figures. An additional £100 million was retained (issued
at nil consideration) to be sold to the secondary market
at a later date. This remains unsold at 31 March 2014.
Amounts owed to subsidiary undertaking
Peabody Capital PLC has made a loan to Peabody with a nominal
value of £200m (2013: £150m) repayable in March 2043. The loan
incurs an interest charge of 5.25% per annum paid semi-annually.
Also in the year Peabody Capital No 2 PLC issued a loan of £140m
at a rate of 4.625% also paid semi-annually.
Bond 2043 (coupon rate 5.25%)
On 17 March 2011, Peabody Capital PLC issued a £150 million
Sterling Secured bond repayable in 32 years with an effective
rate of 5.32% as shown above in the Group figures. An additional
£50 million was retained (issued at nil consideration) to be sold
to the secondary market at a later date.
On 29 April 2013, Peabody Capital PLC sold the remaining
£50 million of the 2043 Bond. The sale was transacted at a spread
of 0.95% over the benchmark 2042 gilt, resulting in an all in
cost of funding of 3.94% and proceeds of £61 million.
Risks
The main risks associated with the Group’s borrowings are
interest rate risk and liquidity risk. The Finance and Investment
Committee reviews and agrees policies for managing these
risks and these are summarised below:
Interest rate risk
The Group regularly reviews its policy on the proportion of
debt that should be held at fixed and floating interest rates.
Liquidity risk
Liquidity risk is the risk that the Group might be unable to meet
its obligations. Expected cash flows from financial assets, in
particular its cash resources and trade receivables, are used by
the Directors in assessing and managing liquidity risk. At 31
March 2014 the Group had undrawn committed facilities of
£275 million (2013: £106.75 million). The remaining £100 million
of the 2053 Bond is held within Peabody Capital No 2 PLC which
retains all rights and obligations relating to the retained bond.
21.Reserves
Peabody
Group
2014
2013
2014
2013
Peabody
£’000
£’000
£’000
£’000
At 1 April
263,738
240,668
290,042
263,440
33,811
22,742
291,069
25,933
Surplus in the year
Pension scheme acturial (loss) / gain
Unrealised surplus on revaluation
At 31 March
(1,719)
328
(3,019)
669
–
–
4,887
–
295,830
263,738
582,979
290,042
At 31 March 2014 reserves were all used in financing investment in social housing or in the programme of community
regeneration activities. Any surpluses are reinvested in the above activities thus ensuring that Peabody is able to continue
to deliver its mission to make London a city of opportunity for all by ensuring as many people as possible have a good
home, real sense of purpose and a strong feeling of belonging.
Notes to the Accounts
43
22.Reconciliation of Operating Surplus to Net Cash Inflow
from Operating Activities
Peabody
Group
2014
2013
2014
2013
£’000
£’000
£’000
£’000
Operating surplus
47,689
38,735
49,353
43,403
Depreciation
11,844
12,218
15,385
12,792
–
–
(4,858)
Decrease in investments
–
(Increase) / decrease in properties for sale
(1,842)
1,285
(47,245)
(15,220)
(Increase) / decrease in debtors
(5,596)
(6,789)
(2,039)
(3,224)
(Decrease) / increase in creditors
(8,082)
(9,973)
12,182
(10,277)
Adjustment for pension funding
(317)
(210)
Net cash inflow from operating activities
(1,760)
(140)
43,696
35,266
21,017
27,334
At 1 April
2013
Cash
flow
£’000
£’000
Other
non-cash
changes
£’000
At
31 March
2014
£’000
5,261
11,352
–
16,613
5,261
11,352
–
16,613
23. Reconciliation of Movement in Net Debt
Peabody
Cash at bank and in hand
Debt due after one year
Debt due within one year
Debtor due after more than one year
Group
Cash at bank and in hand
Debt due before one year
Debt due after one year
(558,164)
–
(115,405)
(310)
(4,000)
–
87,684
92,358
–
(465,219)
(15,695)
(310)
(673,879)
(4,000)
180,042
(481,224)
£’000
Other
non-cash
changes
£’000
At
31 March
2014
£’000
11,224
136,780
–
148,004
11,224
136,780
–
148,004
At 1 April
2013
Cash
flow
£’000
(2,000)
–
(2,000)
(4,000)
(551,195)
(235,713)
(177,716)
(964,624)
(541,971)
(98,933)
(179,716)
(820,620)
44
Peabody
Report and financial statements for the year ended 31 March 2014
24. Legislative Provisions, Taxation and Subsidiary Undertakings
Peabody is a registered charity formed under an Act of Parliament,
and a registered provider registered with the Home and
Communities Agency (HCA).
Peabody has the following wholly owned subsidiaries, all of
which are incorporated in Great Britain and have been included
in the Group results (with the exception of Peabody Pension Trust
Limited, which has been excluded on the grounds of materiality):
– CBHA (a charitable company, limited by guarantee and
a registered social landlord)
– Peabody Enterprises Limited (registered social landlord)
– Gallions Housing Association Limited (an Industrial and
Provident society and a registered social landlord)
– Peabody Capital PLC
– Peabody Capital No 2 PLC
– Peabody Land Limited
– Peabody (Services) Limited
– Peabody Group Maintenance Limited
– Peabody Pension Trust Limited
– Create Communities Limited
– Freshleaf Homes Limited
– Southmere Village Management Company Limited
– Thamesmead Landscape Limited
– Gateway Sustainable Investments Limited
Peabody Land Limited, Peabody Enterprises Limited, Peabody
(Services) Limited, Create Communities Limited and Freshleaf
Homes Limited are trading subsidiaries involved in the
development and sale of land and private residential property.
Peabody Group Maintenance provides repairs & maintenance
services to CBHA.
Peabody Capital PLC and Peabody Capital No 2 PLC raise finance
for the use of Peabody Trust and its subsidiaries.
Southmere Village Management Company Limited provides
management services for Gallions Housing Association.
Gallions Housing Association Limited holds a 50% joint venture
of Tilfen Land Limited (a commercial property company) and
Freshleaf Homes Limited holds a 50% joint venture of Galley
Ilford LLP (commercial development company).
Freshleaf Homes Limited also holds an investment in Igloo
Insurance PCC Limited (registered in Guernsey) which provides
insurance services to Gallions Housing Association Limited.
Notes to the Accounts
45
25. Transactions with Related Parties
At 31 March 2014 there were two members of the Board or
other Committees who had tenancy agreements with Peabody.
There were seven residents involved with the Governance of CBHA
at 31 March 2014. The tenancy agreements have been granted
on the same terms as for all other residents, and the housing
management procedures, including those relating to management
of arrears have been applied consistently to these residents.
Transactions with Tilfen Land Ltd – joint venture
During the year, the group earned £10k of turnover in relation
to property development and maintenance costs and costs
of £4k being rent of a property from Tilfen.
Gift aid paid from Tilfen to the Group totalled £2m.
26. Sale of Fixed Assets
Peabody
2014
Group
2014
Proceeds
Costs
Surplus
Proceeds
Costs
Surplus
No
£’000
£’000
£’000
No
£’000
£’000
£’000
Shared ownership – fully staircased
20
2,738
1,703
1,035
26
3,450
2,187
1,263
Shared ownership – subsequent tranches
12
990
622
368
13
1,083
681
402
Social Homebuy
4
1,019
342
677
4
1,019
342
677
Right to Buy
2
260
67
193
18
2,125
481
1,644
Old stock
6
3,479
651
2,828
6
3,479
651
2,828
Disposal of land
3
14,013
13,960
53
4
888
303
585
Subsidised Housing loan repayment
6
73
–
73
6
73
–
73
Reclass of SHI Proceeds
–
122
–
122
–
122
–
122
SHI Disposals
–
–
–
–
–
–
(5)
5
Disposal other fixed assets
–
–
–
–
–
–
15
(15)
53
22,694
17,346
5,349
77
12,239
4,655
7,584
Total
46
Peabody
Report and financial statements for the year ended 31 March 2014
27. Capital Commitments
Peabody
Capital expenditure contracted for but not provided
for within the financial statements
Capital expenditure authorised by the board, but not contracted
Group
2014
2013
2014
2013
£’000
£’000
£’000
£’000
138,418
3,070
378,602
16,277
80,948
85,507
691,637
208,557
All of this anticipated expenditure is covered by Social Housing Grant, reserves and debt finance.
28. Contingent Liabilities
There are no known material contingent liabilities as at 31 March 2014 (2013: £nil).
29. Intra Group Transactions Between Regulated and Non-Regulated Entities
Peabody, Peabody Enterprises Ltd and Peabody (Services) Ltd develop mixed tenure sites together under single construction
contracts. The social elements of the sites belong to Peabody and the open market sale elements to Peabody Enterprises Ltd.
Peabody (Services) Ltd provides build and design services to both companies. Costs are allocated to individual units within
the developments on a square metre basis.
Create Communities Limited and Freshleaf Homes Limited develop mixed tenure sites for Gallions Housing Association
Limited whereby the social elements belong to Gallions and the open market sale elements to Freshleaf Homes Limited.
The material recharges for services between non-regulated entities and regulated entities are:
From Non-regulated entity
To Regulated entity
Total
Peabody (Services) Limited
Peabody Trust
£10.8m
Peabody (Services) Limited
Peabody Enterprises
£32.5m
Create Communities
Limited Gallions
£9.6m
30. Post Balance Sheet Events
On 1 April 2014 Trust Thamesmead joined the Peabody Group bringing the remaining 50% share of Tilfen Land Limited
which is now a 100% member of the Group. As shown in note 13, acquisition costs of £458,000 are recognised as an
investment at the balance sheet date.
Notes to the Accounts
47
31. Gift on Acquisition
On 3 January 2014 Gallions Housing Association, a registered housing provider based in Sidcup,
joined the Group.
As the substance of the transaction is gifting control for nil consideration this has been accounted
for as a non-exchange transaction under Statement of Recommended Practice: Accounting by
Registered Social Housing Providers Update 2010 accounting rules and has been included in the
Group’s consolidated balance sheet as follows:
Group
Balance
sheet on
acquisition
Fair value
adjustment
Fair value
Balance
Sheet to
Group
£’000
£’000
£’000
261,343
126,883
388,226
2,725
–
2,725
44,633
–
44,633
244
–
244
Current assets
24,611
–
24,611
Creditors: amounts falling due within one year
(11,117)
–
(11,117)
(178,711)
–
(178,711)
Housing Properties
Tangible Fixed Assets
Joint venture
Investment in Starter Home Initiative
Creditors: amounts falling due after one year
Provisions
(10,241)
Net assets acquired
133,487
(944)
125,939
Costs on acquisition
(11,185)
259,426
(2,979)
Gain recognised on acquisition
256,447
The financial results of Gallions for the year to 31 March 2013 and for the period to the date of acquisition were as follows:
Turnover
£’000
Operating
surplus
£’000
Deficit
before tax
£’000
Deficit
after tax
£’000
Financial year to 31 March 2013
54,761
5,389
(870)
(864)
1 April 2013 to 3 January 2014
47,870
756
(3,354)
(3,476)
48
Peabody
Report and financial statements for the year ended 31 March 2014
32. Investments in Starter Home Initiative
Peabody
Group
2014
2014
£’000
£’000
–
1,831
Reclassification from housing properties
10,386
10,386
Disposals in the year
(3,568)
(3,664)
At 31 March
6,818
8,553
–
1,576
Reclassification from housing properties
9,175
9,175
Disposals in the year
(3,413)
(3,498)
At 31 March
5,762
7,253
Net book value at 31 March
1,056
1,300
Peabody
Group
2014
2014
£’000
£’000
Acquisition of Gallions
–
1,688
At end of the year
–
1,688
Loans
At 1 April
Grant
At 1 April
33. Provisions for Liabilities and Charges
This provision was made in Gallions during year ended 31 March 2009 for non-structural uninsured and required remedial works
as a result of developer failure.
Notes to the Accounts
49
34. Investment in Joint Venture
Gallions holds a 50% interest in Tilfen Land Limited with Trust Thamesmead. Details of the results of this joint venture are detailed below:
2014
£’000
Share of turnover before gift aid
Share of profit before and after tax
1,070
196
Movement in net assets
Being:
Share of operating surplus in joint venture
196
Share of joint venture interest receivable
11
Share of joint venture interest payable
(17)
Share of assets:
Fixed assets
48,110
Current assets
19,207
Share of gross assets
67,317
Share of liabilities:
Creditors due within one year
Creditors due after more than one year
Provision for liabilities and charges
Provision for defined benefit obligations
Share of gross liabilities
Share of net assets
(12,423)
–
(6,539)
(588)
(19,550)
47,767
50
Peabody
Report and financial statements for the year ended 31 March 2014
Contact Details
Peabody
45 Westminster Bridge Road
London
SE1 7JB
Tel: 020 7021 4000
Fax: 0
20 7021 4004
Email: info@peabody.org.uk
Website: w ww.peabody.org.uk
Peabody is constituted under the Peabody
Donation Fund Act 1948, as amended by
The Charities (The Peabody Donation Fund)
Order 1997.
PUB_14_011
© Peabody 2014