accord group annual report 2014

1Annual Report and Financial Statements 2014

Year at a glance 2

Chair and Chief Executive’s foreword 4

Our mission 6

Connecting our customers 8

Homes which link communities 12

Connecting and linking our customers 16

An employer who connects 20

Making strong connections 24

Facts and figures 28

Financial statements 32

Notes to the financial statements 76

Accord Group Annual Report and Financial Statements 2014 Contents

Year at a glance

We actively engaged with

We increased turnover to

We built

We delivered over

on last year

2,460 CUSTOMERS, 458

70,000 hours

£100.7 million

A 47% INCREASE NEW HOMES

of care a week

2 Accord Group

in Group surplus to

was invested per colleague on

We invested

HOMES

£203£36.1 million

savings of £1.3 million

£3.6 million

20% INCREASE

SECURED

TRAINING AND DEVELOPMENT

in new and existing

THROUGH STRATEGIC PROCUREMENT


4 Accord Group


Chair and Chief Executive’s forewordAnother year has passed, and what a great year it has been for the Accord Group, with a strong financial performance which underpins the varied and exciting opportunities in which the Accord Group is involved. The work that we do with neighbourhoods and communities - making a real difference for people - takes place because we believe in it and are passionate about it, but also because we have created the financial stability required which allows us to think creatively and look at proposals holistically.

Strong financial connectionsA surplus of £3.6 million, an increase of 20 per cent from 2013, is a tremendous result for the year. This money will be reinvested into our neighbourhoods and services. Plus, we will continue with our £146 million development programme to build over 1,000 homes in the next three years. This is being funded as part of a wider £21 million grant allocation, awarded to the Matrix Housing Partnership by the Homes and Communities Agency. We will also explore new ways of making a difference and ensuring everything we deliver is value-for-money.

Over the course of the last year, the Board have responded to the increased focus on value-for-money with a revised strategy and regular reporting. We know we need to keep our costs under review and have set ourselves a challenge of finding increased efficiencies during the next 12 months.

Strengthening our linksDuring the year, the Accord Group has strengthened partnerships and is delighted to welcome Heantun Housing Association into the Group. This is a long-established and fantastic community organisation with services predominantly across Wolverhampton and Walsall. They are very politically connected with a lot of expertise, which in turn will allow us to offer even greater services to our combined customer-base, particularly around health and social care.

We reflected last year that there would be challenges ahead with the changes to Welfare Reform Act having now taken hold, which is why we have also invested significantly in providing customers with employment and job training and will continue to channel our resources into support for jobs, volunteering, apprenticeships, training and enterprise creation to help people get off welfare and into work.

Linking our prioritiesWe have spent a lot of time reflecting on the changes facing our customers and exploring solutions. We have come up with some answers, but we know we need to do more and we will respond as appropriate, as well as plan as best as we can for what is known.

The result of some of this thinking was the re-thinking of our mission, values and priorities through the business planning process in the year. We have distilled our mission to Making a Difference which we know sets us some challenges, but which gives us a clear focus on what we do. We have set out three values and three core priorities around meeting need, great housing and services and good to great and will be monitoring all our activities under these headings. Finance is not a strategic priority, but continuing our financial strength and the focus on value-for-money supports the priorities and their delivery.

We are therefore looking forward to the year ahead. The Board will continue to work with colleagues to ensure that our strategic targets are successfully delivered.

We are grateful for all the hard work and support from everyone within the Accord Group and we would like to take this opportunity to thank the Board, the Executive Board, and colleagues for their efforts, commitment and contribution during the last year. By working together we can look to the future with confidence, enthusiasm and optimism.

Barrie Blower MBE Group Chair

Dr Chris Handy OBE Group Chief Executive

6 Accord Group

Making a difference

To be a strong diverse Group which makes the most of our individual and combined strengths to deliver positive outcomes, improving life chances for our customers

and the wider communities which we serve.

VALUES

CORPORATE OBJECTIVES

DELIVERY AND ACTIONS

COMMUNITIESWe work with communities where people want to live

1. MEETINGNEED

CUSTOMER REVOLUTION

COMMITMENTWe put our customers and our people at the

heart of everything we do

2. GREAT HOUSING/SERVICES

PERFORMANCE

INNOVATIVEWe are optimistic,

passionate and forward-thinking and

we deliver better value every day

3. GOOD TO GREAT

VALUE- FOR-MONEY

Homes which link

COMMUNITIES

Connecting and linking

CUSTOMERS

An employer who

CONNECTS

Making strong

CONNECTIONS

7

Connecting with our

CUSTOMERS


8 Accord Group

Connecting with our

CUSTOMERS

The Accord Group is visible and responsive in each of its neighbourhoods it serves and offers customers a range of ways to access services. We are a Placeshaper organisation and will continue to connect with our customers to improve our links with them to make sure they are satisfied that we are delivering excellent customer service.

CASE STUDY CASE STUDY


u Undertaken a review of our Customer Engagement Strategy with a panel of residents, which has now has a number of dedicated forums around specific topics

u Actively engaged with 2,460 customers through customer engagement activities – a 47 per cent increase on the previous year

u Increased the number of activities we offer to our customers to get more involved, from panels and forums to projects and consultation

u Held an interactive customer business planning session using Planning for Real® activities. This was attended by 54 per cent of our most involved customers.

u Carried out three scrutiny reviews by the Scrutiny Panel and advisors which gave a snapshot review of how we have communicated Welfare Reform, a full review of our Birmingham locality learning and disabilities service and a health check on our customer call centre, Customer First. Report recommendations of all of these have been successfully fed into business action plans.

u Reviewed many of our processes as part of our Customer Service vision, aiming to make things simpler for customers. One example is driving people to interact with us more online through a dedicated Channel Shift Strategy, offering a 24/7 service.

u Implemented our Care and Support Strategy which delivers a more personalised service to our customers independent to where they live

u Rolled out a comprehensive implementation programme to fit internet access points within our schemes

u Become a member of the UK Online Digital Inclusion group, offering internet access and training programmes from a variety of locations to our customers, including many of our own Accord offices

u Mobilised the Buzz to take internet access and training out to customers who live in the areas we service where local access for many is not possible.

APRIL 2013We partnered with Walsall Housing Group and Walsall Council’s Sport and Leisure Services and Public Health Walsall, to run a free health and fitness programme for men in Walsall.

MAY 2013Solve, run by the Accord Group, the Long Run Venture and Hub Westminster, was launched to offer 1,500 promising entrepreneurs expert help in turning their ideas into viable enterprises.

DURING THE LAST YEAR, WE HAVE:

10 Accord Group

FutureLINKS

Going forward we will:Concentrate further on our customer service vision

making changes to improve the ways that customers can contact us and access our services. This includes

implementing a channel shift strategy to encourage more customers online to become self-serving.



JUNE 2013The Peer Support Project was launched in Staffordshire to help people with dementia and their carers cope with the condition – which affects 11,000 people in the county.

JANUARY 2014Job seeking customers in Birmingham and the Black Country were given the chance to get one step ahead by signing-up to a free course to help them become more employable.

Connecting with our customers

During the last year we have actively engaged with

2,460 customers through customer engagement

activities – a 47 per cent increase on the last year

12 Accord Group

Homes which link

COMMUNITIES


As one of the largest developing housing associations in the Midlands, we continue to enjoy an excellent relationship with the Homes and Communities Agency and have built 458 new homes over the last 12 months. Going forward, we will be delivering a £146 million development programme to build over 1,000 homes in the next three years. This is being funded as part of a wider £21 million grant allocation, awarded to the Matrix Housing Partnership this year by the Homes and Communities Agency. Half of these homes will be manufactured in the LoCaL Homes factory, with 35 per cent delivered by our own in-house construction team.


u Also secured funding to build a further 366 homes within the Matrix Housing Partnership, on which Accord leads, through the Affordable Homes Guarantee Programme. These will be complete by March 2015.

u Celebrated our factory LoCaL Homes second anniversary with the 500th low carbon timber frame home being manufactured – a UK housing association first

u Improved our customer satisfaction rating on repairs to over 90 per cent

u Delivered over £1.5 million of energy efficient improvement works to our homes

u Introduced a new mobile working application to assist surveyors to efficiently and effectively collect stock condition date and other critical information

u Carried out stock condition surveys across all care and support schemes

u Introduced a rolling stock survey of all our homes

u Invested more than £27 million in making our homes more modern, including fitting new kitchens, windows, bathrooms and repainting properties

u Secured £1.5 million of retrofit funding through the European Regional Development Fund

u Made cost-savings of up to half a million pounds on developments through the introduction of our own construction arm.

March 2013We launched our own construction arm which now sees the Group design, manufacture and build its own homes whilst making significant savings.

OCTOBER 2013Homes were made available to buy through the Help to Buy scheme, including 13 properties at the award-winning Pattern Gardens’ development in Darlaston.


14 Accord Group

FutureLINKS

Going forward we will: Continue to develop and build new homes which will also be affordable to run and built to the very highest of standards.

Going forward we will: Create our first Mutual Home Ownership Society, a

home savings co-operative, which offers customers the opportunity to live in high quality, affordable housing, whilst

sharing in the equity of gains from within a property.

Going forward we will: Continue to seek out new funding opportunities to

maximise the retrofit of our homes.



FEBRUARY 2014The Pattern Gardens housing development in Darlaston, which is made up of 106 homes, was shortlisted for the Development of the Year award at the 2014 UK Housing Awards.

MARCH 2014Redditch Co-operative Homes’ Marlfield development in Church Hill was named as one of the country’s top 50 affordable housing developments by Inside Housing magazine.

Homes which link communities

During the last year we have invested more than

£27 million in making our homes more modern,

including fitting new kitchens, windows, bathrooms and repainting properties.

16 Accord Group

Connecting and linking

CUSTOMERS


We are committed to improving the levels of service delivery to all of our customers and creating new opportunities for them, as we recognise the need to make commitments to neighbourhoods and support their physical, economic and social transformation. Therefore, we strive to continually work in partnership with the local community and partner agencies, with the aim of delivering safer, secure and sustainable communities.


u Recruited 21 apprentices into vacant posts as part of our on-going commitment to creating jobs and enterprise and seven have moved into permanent jobs within the Accord Group

u Signed up 22 customers to our Recruitment, Opportunities, Learning and Employment (ROLE) programme, which gives people the skills they need to obtain work in the future. Plus, for those working within the health and social care arena, a guaranteed job will be offered. 18 of the 22 ROLE apprentices are Accord Group residents.

u Held our third Great Resident Awards which showcases the excellent work our residents have undertaken

u Supported 28 residents as part of RiSE, 13 have gone on to set up their own businesses – gardening and grounds maintenance, gutter cleaning and window cleaning, boat repair and maintenance, monumental maintenance and flower arranging

u Recruited eight young people from Birmingham and the Black Country to take part in the new wave of The A Fund: Entrepreneurial Skills for Young Entrepreneurs in Europe. Four young women and young men have travelled to Amsterdam to improve their entrepreneurial skills, and develop their business ideas. The young people supported have businesses in fashion and design, journalism, fast food and event catering, spoken work poetry, mentorship and performing arts, teaching and skills development.

u Supported seven young social entrepreneurs to start up their projects and businesses as part of our project with UnLtd*, Building Futures with Matrix Housing Partnership. Businesses supported include a creative industry CIC supporting campaigning and social justice through music and photography, a sport and poetry project supporting young people in Shard End, an emotional resilience training programme developed by a young person and delivered to local organisations, an ethical clothing brand, and social enterprise offering cleaning jobs to NEETs and ex-offenders whilst developing their employability skills through real-life work experience.

APRIL 2013Moseley and District resident Eisa Habibi was one of just seven young people to receive a Dynamic Youth Award, which celebrate inspirational young people who have beaten the odds to succeed.

FEBRUARY 2014Job hunters in Walsall had the chance to get one step ahead in the search for work by signing-up to a free workshop to help them become more employable.


18 Accord Group

FutureLINKS

Going forward we will: Continue working with customers and support

community development initiatives addressing anti-social behaviour, financial exclusion and worklessness,

particularly in light of changes to benefits.

Going forward we will: Actively encourage and support social enterprises

offering financial and back office support to get their business off the ground.

Going forward we will: Ensure job, training and volunteering opportunities within the Group and our partners, supply chain, are

made available to our customers.


CASE STUDY

CASE STUDY

MARCH 2014Former Shropshire dinner lady Alice Elliott, who lives at the Cartlidge House scheme, marked her 105th birthday with a celebratory tea party with friends and family.

MARCH 2014We officially launched our ROLE (recruitment, opportunities, learning and employment) programme, which will see 150 residents and their family members recruited as apprentices over the next three years. Connecting and linking customers

During the last year

we have recruited eight young people

to take part in the new

wave of The A Fund:

Entrepreneurial Skills for

Young Entrepreneurs in

Europe. They travelled to

Amsterdam to improve

their entrepreneurial skills and develop their

business ideas.

20 Accord Group

An employer who

CONNECTS


We ensure that all employees are valued, recognised and supported in their employment by taking action on the issues our colleagues tell us are important. We are proud to have been awarded Investors in Excellence and Investors in People, and continually help our colleagues develop their skills and realise their potential. Because we expect the very best from our people, we also offer a variety of great benefits in return for the work that they do.


u Enrolled our second cohort of nine colleagues into our leadership academy where they will gain a Level 5 ILM certificate in leadership and management, investing over £9,600 per colleague

u Implemented a challenging Coaching Strategy and methodology where we now have 45 accredited coaches all qualified at Level Five with Chartered Management Institute via Coventry University

u Recruited 46 Staff Voices representatives who have a consultative role and who contribute to the organisation’s decisions

u Invested in our people, who attended 12,541 training days last year equating to 6.97 days per employee at an average investment of £203 per person

u Celebrated and rewarded colleagues who were nominated by their peers for outstanding work at the annual Great People Awards

u Invested significantly in our IT, updating our desktop environment and telephony to deliver a more efficient and sustainable solution

u Introduced a staff discount scheme for all employees to use across who spectrum of the retail and leisure sector

u Undertaken an employee satisfaction survey to understand our colleagues better which 64 per cent completed

u Started a review as part of the employee satisfaction survey looking at the Group’s culture and identity as to what we stand for and refreshed our values.

APRIL 2013Refuge Manager Sahdaish Pall was one of just six people from across the country shortlisted for the Inspirational Colleague of the Year award at the Housing Heroes Awards 2013.

JUNE 2013Two colleagues from Direct Health raised a toast after both winning national awards for their inspirational work at the Great British Care Awards.


22 Accord Group

FutureLINKS

Going forward we will: Recruit employees and members whose skills and experience match our needs, who demonstrate the potential for future development and who commit

and where colleagues contribute to the delivery of our corporate objectives and reach their full potential.

Going forward we will: Continue to look at diverse opportunities and new areas

of business and product development.



OCTOBER 2013Our Customer First Contact Centre was named as the ‘Best Contact Centre of the Year – Under 50 Seats’ in the Midland Contact Centre Forum Awards 2013.

FEBRUARY 2014Throughout February, ‘It’s not fair?’ sessions were held for colleagues, exploring the definition of Fairness and what could be done to make things fairer in communities .

An employer who connects

During the last year our people attended 12,541 training days, equating to 6.97 days per employee at an

average investment of £203 per person.

24 Accord Group

Making strong

CONNECTIONS


We grow our business through merger, new development, stock transfer, and diversification, achieving operational efficiency to help meet housing need. Our work with our stakeholders help to shape housing policy and our proactive campaigns and initiatives give the housing sector a voice on matters of the utmost importance for their future.

CASE STUDY

CASE STUDY

CASE STUDY

CASE STUDY

u Successfully acquired Heantun Housing Association as partner into the Accord Group

u Achieved more than £300,000 worth of media coverage in key national newspapers and taken part in a number of significant on-line debates

u Held a national care conference for 200 health and housing professionals on the topic of integrating housing, health and social care

u Participated in key think tank around the table discussions

u Organised a national conference on behalf of the Black Country Local Enterprise Partnership around social enterprise.

MARCH 2013We brought together leaders from public health, housing and children services to discuss our Holiday Kitchen initiative and how they can work together to help struggling families during school holidays.

NOVEMBER 2013We launched our Retrofit Project and invited businesses to the Black Country Living Museum to find out how they could benefit from the £3 million scheme which will see 250 homes get ‘green’ make-overs.

MARCH 2014We were given the thumbs up by the Care Quality Commission (CQC) for meeting a range of essential quality and safety standards in Nottinghamshire.

DECEMBER 2013We were selected to lead the £2.8 million Housing Jobs and Prosperity pilot as part of the Black County City Deal, on behalf of the Black Country LEP.


26 Accord Group

FutureLINKS

Going forward we will: Continue to grow and ensure that the services and

facilities we provide are better targeted, more innovative and cost-effective.

Going forward we will: Work with partners such as the LEP’s to maximise

regional opportunities via initiatives like City Deal.

27Annual Report 2014

CASE STUDY

CASE STUDY

CASE STUDY

CASE STUDY

MARCH 2014We were shortlisted for the European Commission’s EMAS (Eco Management and Audit Scheme) Awards, representing the UK in the Private – Large Company category.

MARCH 2013Birmingham’s Cabinet Member for Health and Well-being, Councillor Steve Bedser, visited some of our clients who are previous offenders. Fry Housing Trust has been successfully working with offenders for more than 50 years.

MARCH 2014New businesses and start-ups were invited to the Bank’s Stadium in Walsall to find out how they could win work from the Group – including fitting UPVC windows and installing kitchens and bathrooms.

AUGUST 2013The Group was chosen as one of a handful of organisations to carry out pioneering European-wide research to develop smart technology to help people with dementia around the home.

28 Accord Group

Facts and figures

HOW TENANTS’ RENT IS SPENT

£1

28p: Service costs

25p: Interest

16p: Management costs

15p: Routine maintenance

14p: Planned maintenance

2p: Voids losses

COMPLIMENTS AND COMPLAINTS

: ) / : (121: Compliments

580: Complaints

SOURCE OF NEW LETTINGS

608: Referrals

534: Direct applications

463: Nominations

213: Transfers

158: Other

Total: 1,976

TYPES OF NEW LETTINGS

910: Single adults

344: One adult (with at least one child)

155: Two or more adults (with at least one child)

308: Older people

144: Two adults, no children

102: Other

Total: 1,960

£

1009080706050403020100

Accord

(89.47)

Bromford

(89.74)

Midland Heart

(91.98)Black Country

(88.73)

AVERAGE WEEKLY RENTS AT 31 MARCH 2013Data taken from RSR submissions 2013


344: One adult (with at least one child)

155: Two or more adults (with at least one child)

3,398: White

541: Black

157: Mixed

276: Asian British Indian

63: Asian British Other

78: African

45: Not Known

52: Other

Group work profile

2014

7,025: General needs

1,324: Supported

1,205: Shared ownership

932: Other

427: Affordable rent

347: In development

78: Leasehold

Total: 10,991

Group stockAT 31 MARCH 2014

30 Accord Group

EMPTY HOMES

296Empty homes at 31 March, 2014

18.12%Homes let

in the last year

30.64Average days

taken to let

£1,680Average cost of works

for re-fitting

REPAIRS

CUSTOMER SATISFACTION

Actual Target

97% 90%

FIRST TIME FIX

Actual Target

78% 80%

CP12S

Actual Target

100% 100%

AVERAGE VOID DAYS IN MAINTENANCE

Actual Target

RESPONSE TO EMERGENCIES

Target

HOURS MINUTUES

HOURS MINUTUES

Actual

32 Accord Group

FINANCIAL STATEMENTS


The Board, Executive and advisors

Board member Appointed ResignationMr Barrie Blower, MBE (Chair) 2009 Mr Akshay Parikh (Deputy Chair) 2007 Mr Ghulam Shabar 2007 Dr Christopher R. Handy, OBE* 2006 Mr Bruce Gilbert, OBE 2010 Mrs Shahana Khan 2013 Cllr Bill Hartnett 2014 Mrs Elisabeth Buggins, CBE 2014 Dr Lola Abudu 2014 Mr Simon Eastwood 2014 Mrs Margaret Cope 2005 March 2014 Mr Derek Leyland 2005 July 2014 Mr Barry Picken 2005 September 2014

*Executive Director

SecretaryMr Lakhbir Jaspal CPFA

Executive BoardDr Christopher Handy OBE, Group Chief Executive Mr Lakhbir Jaspal, Deputy Group Chief Executive Mr Jas Bains, Chief Executive of Ashram Housing Association Mr Rob Donath, Chief Executive of Fry Housing Trust Mr Jonathan Vellacott, Chief Executive of Direct Health Group Ms Sara Woodall, Chief Executive of Heantun Housing Association Mr Alan Yates, Executive Director of Regeneration Mr David Williams, Executive Director of Health, Social Care and Support

FundersAbbey National Treasury Services PLC Co-operative Bank Crown Mortgage Management Dexia Public Finance Bank Lloyds Banking Group The Housing Finance Corporation (THFC) The Royal Bank of Scotland Plc

External auditorsGrant Thornton UK LLP Registered Auditors Grant Thornton House 202 Silbury Boulevard Central Milton Keynes MK9 1LW

BankersCo-operative Bank Plc Lloyds Banking Group Royal Bank of Scotland 118 – 120 Colmore Row, PO Box 908, 125 Colmore Row, 139-144 Lichfield Street Birmingham B3 3BA Birmingham B3 2DS Walsall WS1 1SE

34 Accord Group

Registration details

Registration Registered office

Registry of Friendly Societies under the Industrial and Provident Societies Act 1965 (Registration No. 27052R)

Homes and Communities Agency under the Housing Act 1996 (Registration No. LH3902)


Homes and Communities Agency under the Housing Act 1996 (Registration No. L0883)


Homes and Communities Agency under the Housing Act 1996 (Registration No. LH4034)



Company Limited by Shares (Company No. 5638085)

178 Birmingham Road West Bromwich West Midlands B70 6QG




Parkway House Haddenham Business Park Haddenham Buckinghamshire HP17 8LJ

Organisation

Accord Housing Association Limited

Caldmore Area Housing Association Limited

Ashram Housing Association Limited

Birmingham Co-operative Housing Services Limited (bchs)

Direct Health Group Limited


Registration Registered office

Company Limited by Guarantee (Company No. 6297777)


Charity Commission (Charity No. 1119879)










3 Wellington Road Bilston Wolverhampton WV14 6AA




Organisation

Fry Housing Trust

Heantun Housing Association

Redditch Co-operative Homes

Accord Group Treasury Limited

Accord Care Services Limited

36 Accord Group

Report of the Board and Operating Financial Review

IntroductionThe Board of Management presents its report and audited consolidated financial statements for Accord Housing Association and its subsidiary undertakings for the year ended 31 March 2014. The principal activity of the Group is the provision and management of housing and appropriate support services for people in need.

Corporate governanceThe Group is controlled and governed through the Group Board of Management which comprises the following non-executive members and one executive member.

The Group Board of Management meet four times a year formally and also attend conferences and training courses where appropriate. In addition, there are a number of special meetings during the year to review and approve specific proposals which fall outside the scheduled meeting dates. The Accord Group is committed to the principles of good governance and a high standard of business integrity in everything it does. As a result the Group has adopted the NHF Code of Excellence in Governance. This Code sets out a number of principles as outlined below, which the Group Board of Management assesses its compliance against:

u Constitution and composition of the board

u The Chief Executive

u Essential functions of the board

u Committees of the board

u Board induction and information

u Openness transparency and accountability

u Board recruitment, renewal and review

u Diversity and inclusion

u Responsibilities of the Chair

u Audit and risk

u Conduct of the board’s business

u Conduct and probity.

NED – Non Executive Director ED – Executive Director

Membership details

Group Board

Group Resources and Audit Committee

Group Remuneration Committee

Group Governance Committee

Group Care and Support Committee

Barrie Blower Chair / NED

Bruce Gilbert NED

Akshay Parikh Vice Chair / NED Chair

Ghulam Shabar NED

Derek Layland NED Chair (to July 2014) Chair

Elisabeth Buggins NED

Barry Picken NED Chair

Lola Abudu NED

Shahana Khan NED Chair (from August 2014)

Bill Hartnett NED

Simon Eastwood

Chris Handy

NED

ED


The essential functions of the Board of Management are formally recorded. They include the setting of strategy and monitoring of progress in achieving that strategy, the definition of values and objectives, approving policies plans and budgets and monitoring performance of the business. By doing this the Board seeks to ensure that the Group does not take any undue risks and that affairs are conducted to the highest level of performance and propriety. Every Board/Committee across the Group has responsibility for the implementation, monitoring and review of key policies and strategies that are relevant to the specialist nature of their area of operation. The respective responsibilities of the Boards and committees are set out in the Group’s Standing Orders and Financial Regulations. The Group Board delegates day-to-day management of the activities to the Group Chief Executive and his team, who in turn are responsible for ensuring that the organisations have appropriate executive arrangements in place to meet their objectives and targets.

Our review against the NHF Code of Governance demonstrated compliance. There was recognition that there are areas of improvement to be made during 2014/15 focusing on 100% of individual appraisals for non-executive directors and the implementation of a new induction process. A number of non-executive directors reached their maximum term of nine years during 2013/14 and have retired. In addition a number of non-executive directors will also retire in 2014/15 as they too will reach their maximum terms in office. Following the successful recruitment process of new non-executive directors in April/May 2014, we continue to have a Board which has the necessary skills and knowledge to effectively manage the business and a process which ensures continuous renewal.

In April 2014, the Group received the highest possible ratings for Governance and Viability from the HCA (G1 and V1). Details of the remuneration drawn by members of the board during the year are set out in Note 6 of the Financial Statements. The total remuneration of non-executive members represents 0.1% of turnover.

Our marketplaceAccord recognises that the operating environment continues to change and present challenges. However, the Group’s ability to plan successfully, is based on a foundation of understanding the current and future political, statutory and economic environment and the ability to shape and influence local, regional and national policy. Our understanding is based upon work including:

u Analysis of the housing and care markets in which we operate

u Consultation with our customers to maintain and develop excellent services

u Research into the local demographics and how demand for our service might change in the future

u Consultation and dialogue with staff, Board and Committee members and external stakeholders

u Understanding of the political, economic, social, legislative, environmental and demographic drivers for change in our sector

u Robust risk analysis of the activities we are engaged in.

Our analysis of the operating environment suggests that the key factors and drivers are:

u Better value for the taxpayer

u Quality service provision

u Working with customers to help them understand and manage increasing financial pressures

u More empowerment of local communities

u Supporting the sustainability of local economies

u Greater integration between housing health and social care

u Greater accountability to service users/communities

u The need for greater joined up working between registered providers, local authorities and other key partners continue to be very important.

Whilst the wider economy is showing signs of recovery, there are significant funding pressures on public finances and associated public services which the housing association and care sectors are not immune to. The social housing sector has already experienced the financial challenges brought about by reduction in grant funding to support the development of new social housing and the implementation of the early stages of welfare reform. Accord is committed to identifying solutions to these on-going financial pressures and is equally committed to working alongside our customers to ensure they understand how these financial challenges also impact upon them. In the short and medium-term, Accord, in common with other associations, has reviewed its financial assumptions and decisions in order to reflect the current economic environment and equip ourselves appropriately to manage these ongoing pressures. The Group continues to stress test the Business Plan each year with various scenarios to demonstrate the ability to manage these pressures. The Group remains confident that growth opportunities will remain for strong organisations like ourselves.

38 Accord Group

Group objectives and strategyThe Group’s objectives and strategy are set out in the Strategic Five Year Plan that is reviewed annually and approved by the Board. Accord sees identifying and managing its risks and opportunities as integral to the way we do business. The Group’s main objectives and strategies are taken from the Strategic Plan 2013-18, are summarised here:

Strategic objective: Meeting Need

By 2019, we will:

u Through Government funding and other funding options, build at least 300 new homes per year

u Develop a co-dependency housing model combining general needs and care and support customers and allocate up to 15 per cent of all new build homes to residents with learning disabilities or mental health needs, via agreed scheme-based Local Lettings Plans

u Undertake research and feasibility studies to explore the options of ownership or operating responsibility for a community centre, a free school and potentially a business academy

u Offer a wider choice in how customers access services and communicate with the Group

u Have ensured that 500 residents/customers or members of residents’/customers’ families have gained work experience within the Accord Group either through apprenticeships or through substantive employment

u Have ensured the on-going success and evolution of the ROLE programme and by 2015 will have had 200 customer volunteers who will have been engaged on the ROLE programme within health, social care and support services

u Worked with the Black Country LEP on the City Deal Welfare pilot to target job opportunities to our tenants and communities

u Further developed and enhanced the Group’s volunteering programme to provide opportunities for customers, which will include 180 volunteers over the five years being engaged across the Group, including customers, their families and community volunteers

u We will offer a range of innovative pre-tenancy support services to all new general needs customers based on the principles of shared responsibility for sustaining tenancies; together with post tenancy services, we will generate additional household income or savings of £50 per week on average per engaged customer

u Have developed innovative approaches to reduce the impact of child poverty in neighbourhoods.

Strategic objective: Great Housing and Services

By 2019, we will:

u We will have developed our first Mutual Home Ownership scheme

u Identified options for acquisition of additional external facilities services

u Have achieved 80 per cent customer satisfaction in 2015 and 85 per cent by 2019 for our internal and external services

u Have reduced office costs by 25 per cent in order to invest in new services for customers

u Have retained and acquired external accreditations to evidence high quality services and products and standards - using the Investors in People framework, we will go beyond the Core Standard retained in 2013 to ensure that by 2019, we have been accredited as Investors in People Gold

u Have key performance indicators and benchmarking tools reviewed to ensure effective assessment of performance across all services and incorporating adding value to people’s lives

u Have developed and will lead on a benchmarking forum of truly comparable housing groups, measuring the indicators that we consider business critical, and using data to help drive improvement across all services areas

u Each quarter hold regular ‘back to the floor’ sessions for senior management and Boards

u Have achieved 95 per cent CQC compliance

u Hold external accreditation for all corporate service delivery teams in area of specialist service delivery as appropriate.


Strategic objective: Good to great

By 2019, we will:

u The Accord Group will have a minimum of 80 per cent of its employees stating they are engaged with the work that they do and satisfied with the Group as an employer

u After achieving in 2017, an employee satisfaction rating of 70 per cent, the Accord Group will feature in the list of the 100 Best Not for Profit organisations to work for

u Have launched an employee discount scheme and have achieved 50 per cent take up in the first year

u Have had 50 colleagues benefit from the Leadership Academy

u Ensure every Personal Development Review (PDR) has targets around value-for-money firmly embedded to further the ‘make it count’ culture.

u Be recognised for publishing each year a paper on one of the Group’s innovative services or products

u Be nationally recognised for holding a service specific national conference each year

u Have developed an existing care site as a flagship dementia centre of excellence

u Have achieved a turnover of £200 million and 3.5 per cent surplus

u Have become a leading player in the national social innovation market, generating new revenue streams to support mission-led social enterprises

u Have completed a 0-5 year stock review and Disposal Strategy.

40 Accord Group

Value-for-money (VFM) statement

Why VFM?This Statement sets out to the Accord Group’s stakeholders and customers how we ensure we deliver services which are high quality and which ensure value-for-money. The Statement combines the many threads of our VFM work which is embedded in the day to day work of our organisation and sets out what our stakeholders, including the regulator, should expect from us.

“Value-for-money is fundamental to our ‘social business’ approach. It ensures we achieve value for our customers.” Barrie Blower MBE, Accord Group Chair

The Accord Group has a diverse heritage, further fostered and built by each of its organisations, all of whom were established as charitable, not for profit associations providing homes and services for those most in need in society. We are proud that we still have that vision and we have seen our services develop over time as needs have varied. We are able to build homes and provide services through a combination of public funding, private finance and have always worked hard to ensure that every pound is spent in an efficient way to maximise the return on that investment. We have therefore always ensured that best value is a prerequisite throughout all that we do; delivering housing management services, building new homes, providing care and supported by efficient back-office services. We have a long-standing and proven commitment to delivering VFM for our customers, stakeholders and the tax-payer and this is fundamental to how we manage our business.

We monitor, challenge and review how we achieve value in all that we do and we use a framework of six key principles to enable us to do this:

1. We have a robust approach to strategic decisions and VFM

2. We have embedded governance and reporting

3. We meet the regulator’s requirements

4. We have rigorous performance and cost management

5. We maximise the return on our assets

6. We provide added social and environmental value.

1. Strategic decisions and VFMThe Group-wide vision provides customers, stakeholders and staff with a clear understanding of what is important to the Accord Group and the approach to delivering value is a fundamental part of that vision.

We show how we achieve on our VFM targets in a way that is clear and open. Our Business Plan sets out the strategic objectives and how we will achieve these. They are:

1. Meeting need 2. Great housing and services 3. Good to great.

We produce an Annual Report and Financial Statements which shows how we are managing our performance and finances. Our customers produce a report on what we have done throughout the past 12 months and our corporate plans take the strategic objectives to the departmental level so colleagues are clear about what they need to achieve. An electronic copy of Accord’s VFM self-assessment statement can be found on the VFM area of the Group website at accordgroup.org.uk/VFM

To be a strong diverse Group which makes the most of our individual and combined strengths to deliver positive outcomes, improving life chances for our customers

and the wider communities which we serve.

VALUES

CORPORATE OBJECTIVES

DELIVERY AND ACTIONS

COMMUNITIESWe work with communities where people want to live

1. MEETINGNEED

CUSTOMER REVOLUTION

COMMITMENTWe put our customers and our people at the

heart of everything we do

2. GREAT HOUSING/SERVICES

PERFORMANCE

INNOVATIVEWe are optimistic,

passionate and forward-thinking and

we deliver better value every day

3. GOOD TO GREAT

VALUE- FOR-MONEY


2. Embedded governance and reportingThis VFM approach is firmly embedded across the Group, and visibly so. All levels of governance have a role to play.

Group Board assurance

Group BoardStrategic decision–making and setting the vision and key objectives is led and directed by the Group Board of Management. VFM is a key strand within this. The Board receive regular reports on VFM achievements, for example recently in using our new in-house construction team to save around 20 per cent on new housing developments.

Resources and Audit Committee and local BoardsBudgetary control and reporting is scrutinised by the Resources and Audit Committee and the locality Boards review performance and financial viability.

Executive BoardThe operational delivery is overseen by the Executive Board which also ensures that all strategies and policy documents clearly demonstrate how they support VFM approaches to the specific service area.

Directors Group and senior managersSenior management are responsible for ensuring that the strategic objectives are cascaded to front-line staff and that the VFM approach is ingrained throughout all we do.

Colleagues are empowered to challenge spend at all levels and for many years, the Accord Group has encouraged and enabled staff to make suggestions about improved and more efficient ways of working or procuring. The current internal ‘Make It Count’ campaign has seen a cross-departmental task group support over 200 actions across all parts of the business which reinforces the long-standing approach to securing value.

The annual self-assessment and Statement enable the Group to show how we have protected our assets and ensured return on the investment in them over the previous 12 months. This Statement is externally validated by the Group’s auditors, Grant Thornton (GT) and sits alongside the regular internal audit reviews of services which includes the VFM approach to delivery. GT has reviewed the statement content against its own interpretation of the VFM regulatory standard and highlighted where compliance was considered to be good and recommendations highlighting where further disclosure may be required to enhance the quality and transparency of reporting.

Customer and stakeholder involvementWe involve customers in all areas of our work and use their feedback to find innovative ways to deliver more for less. Our Customer Scrutiny Panels and ‘armchair auditors’ regularly review our policies and services and test how effectively these work.

The Group’s customers produce an annual report which reflects on key areas of service delivery including repairs and maintenance, customer service and VFM.

The Accord Group includes co-operative and mutual organisations within its structure. There is much research and evidence to show that housing co-ops deliver real VFM as tenants are in control of how their rent is spent. Redditch Housing Co-operative and the co-ops that bchs supports further prove this.

42 Accord Group

Organisational approachTo drive further improvements in service delivery, each key service area is challenged on a rolling six-monthly basis by a Performance and Strategy Review Board and actions are monitored. Internal Audit reviews highlight areas of good practice and recommendations are shared.

Furthermore, the Accord Group’s internal processes including the Project Approval Panel for large or higher risk projects scrutinise and test whether the initiative or development achieves and demonstrates value. The Asset Management Strategy is being further developed in 2014 and will see further strides being made in improving and enhancing existing assets to protect that investment further.

Accord is a member of several benchmarking clubs and uses information to compare and measure performance and value against other organisations. Housemark data is used along with informal networks and data is analysed by Accord’s Performance and Quality team with areas of good practice shared. Accord is a key member of the PlaceShapers group of housing organisations and uses this forum to compare and measure performance in a range of areas.

Embedded VFM

Accord Group Board

Resources and Audit Committee and

local boards

Customer panels and scrutiny committees

Strategies, policies and procedures

Project Approval Panel, internal audit,

Performance and strategy review

boards

Executive Board

Directors Group

Colleagues


3. Meeting the regulator’s requirementsThe current HCA regulatory standard outlines its expectations for providers to demonstrate VFM services are being delivered, and moreover VFM is embedded in the culture of the organisation. Accord continues to be an organisation strongly committed to providing VFM and in light of on-going economic pressures, this commitment becomes increasingly important. Accord is also committed to demonstrate to its stakeholders that it is able to manage its finances and resources diligently, whilst continuing to provide excellent services to its customers. The Group’s achievements have been benchmarked against the requirements of the standard, as demonstrated below:

How Accord delivers against these requirements

u Social return on investment models have been developed and have reported outputs in both Ashram and Fry. These models have been formally recognised/accredited.

u A thorough review of care and support assets has been undertaken. The quality of the buildings has been considered in the context of the financial performance of the services run from the building and the ongoing cost of maintenance. This information has been used to determine those assets which do not provide an appropriate return on investment.

u Colleagues in asset management also continue to undertake cyclical stock conditions surveys to understand whether expected returns on investment are being achieved and whether preventative actions need to be taken to address future potential problems. Responsive repairs by property have also been reviewed to ascertain where return on assets could be further improved.

u For every new housing development undertaken a detailed financial appraisal is undertaken. The financial appraisal contains the payback period highlighting the return on investment over time. It also informs the Project Approval Panel decision and the Board decision. This process is followed up by a post completion financial review to ensure that projected development costs have been achieved and the original financial viability is still valid.

u STAR satisfaction survey carried out October 2013 to gauge satisfaction levels of customers in a number of areas to gain an understanding of the investments made.

u Detailed annual benchmarking exercises are undertaken to understand Accord’s performance in the context of its peers. Particular focus is paid to metrics which help us to understand our return on assets relative to those of peer organisations.

“Registered providers shall”

“Understand the return on its assets, and

have a strategy for optimising the future

returns on assets – including rigorous

appraisal of all potential options for

improving VFM including the potential

benefits in alternative delivery models

- measured against the organisation’s

purpose and objectives.”

u Budget assumptions reports provide the Executive and those charged with governance on the appropriate investment of finite resources. The budget assumptions report also makes reference to the Group’s strategic objectives

u The Project Approval Panel process is the Group’s internal mechanism for approving major new projects. This documentation which supports this process allows the panel to consider the opportunity cost of these projects

u The Caldmoreaccord locality has understood the efficiencies and enhanced service which could be achieved through expanding the scale of the In House Maintenance team. This has already achieved identified efficiencies, particularly VAT savings.

“Have a robust approach to making

decisions on the use of resources to

deliver the provider’s objectives, including

an understanding of the trade-offs and

opportunity costs of its decisions.”

44 Accord Group

How Accord delivers against these requirements

u KPI data is reported to the Executive, Group Board and local Boards.

u Performance and Strategy scrutiny meetings are held twice annually for each core service within the Group. These forums challenge senior management and the leadership on aspects of their performance.

u Performance interventions have been employed to help improve performance within certain parts of the Group. Performance and Quality colleagues embedding themselves in a team or function to work collaboratively with the team to drive performance improvement.

u Financial performance management information is presented to each meeting of the Executive and Directors Group, local Board, the Group Board and the Group Resources and Audit Committee. Colleagues are held to account by those charged with governance regarding financial performance.

u Discreet financial performance reports are also prepared, for example the care and support financial viability report. These reports are used to manage financial performance to ensure that expectations are being achieved and VFM delivered/demonstrated.

u Board reporting and monthly performance summaries show progress on performance from previous year, quarter and month, showing clear directions of travel.

u The Performance and Quality team conduct Quarterly audits with teams and where risks are identified P&Q interventions take place, which focus on specific areas to identify where improvements are to be made. Examples include Gas servicing,arrears and void management interventions.

u Active benchmarking is undertaken across the Group:

l Housemark is used to benchmark performance of core housing services

l Care and support benchmark care standards against national data to ensure above average compliance is achieved

l Central services use benchmarking clubs to assess the efficiency of these services and also to measure the comparative corporate performance.

l Best practice is shared at formal and informal benchmarking clubs (e.g. Placeshapers)

u Lean reviews have been successfully employed by the Group to drive performance improvement on process based areas of core business

u Regeneration colleagues have insourced construction services which delivered significant savings of c15 per cent on its first project.

“Registered providers shall”

“Have performance management and

scrutiny functions which are effective

at driving and delivering improved VFM

performance.”

“Understand the costs and outcomes of

delivering specific services and which

underlying factors influence these costs

and how they do so.”

Accord’s Board approved VFM Strategy has been developed around meeting the requirements of the regulatory code and ensuring VFM becomes embedded in every aspect of the Group’s operations. The Strategy consists of four strategic themes which are each aligned to regulatory requirements.


Alignment to regulatory requirements

Through understanding and managing our resources and making decisions on how best to invest these resources we are able to demonstrate to our Board, our stakeholders and the regulator that we “Have a robust approach to making decisions on the use of resources to deliver objectives, including an understanding of the trade-offs and opportunity costs.”

The regulator has defined that providers are required to “Understand the return on its assets, and have a strategy for optimising the future returns on assets.” Through market engagement and assessment, benchmarking and performance management we will understand and report our return on assets. Therefore, by delivering against this strategic objective and reporting our performance, we will satisfy the necessary expectations and further demonstrate our commitment to continuous improvement.

By increasing accountability and transparency in reporting VFM, we are able demonstrate “performance management and scrutiny functions which are effective at driving and delivering improved VFM performance.” By reporting VFM information to the Board, we are also able to demonstrate we are an organisation which is held to account by its board on delivering against our commitment to VFM.

With a thorough, robust and strategic approach to procurement in place, we are able to demonstrate we “Have a robust approach to making decisions on the use of resources to deliver the provider’s objectives, including an understanding of the trade-offs and opportunity costs of its decisions.” Through strategic procurement we ensure the Group’s resources are utilised in a way which delivers against the strategic objectives, and which also maximises the return on the financial commitment made.

VFM strategic objective

To understand and manage our costs : In order for us to be an effective organisation which provides a VFM service, it is important that we fully understand our costs. In addition, it is equally important that these costs are managed in a responsible way to ensure that the Group’s resources are used in the most effective manner and therefore provide a return on investment. We will also continue to give consideration to the opportunity cost at a strategic level by considering what we commit financial resources to, and what the available alternatives are.

To understand return on assets: Understanding our return on assets is necessary to ensuring that the regulator’s expectations are being met and to ensuring we demonstrate a VFM approach to core business. Measuring, assessing, understanding and improving return on assets demonstrates that we are an effective organisation, moreover an organisation which provides VFM services to our customers, communities and wider stakeholders.

To increase accountability and transparency in reporting VFM: It is important that evidence based VFM performance management information should be presented to the Board on a regular basis. This information will provide the Board with assurance that Accord is an organisation which is committed to delivering VFM services and also that we are able to achieve a series of VFM targets/objectives.

To become a better buyer: The Accord Group generates and commits substantial financial resource in the delivery of its core objectives and core services. Where these resources are committed to external organisations which support us in delivering excellent services we will ensure that our approach to procurement is robust and that maximum value and returns from the investment are achieved.

The VFM strategy is supported by an action plan. Progress against the action plan is reported to the Group Resources and Audit Committee and Group Board as part of the VFM annual report. Furthermore, each department/function within the Group has a department action plan - progress against these plans is also provided in the VFM Annual report to the Board.

As at 31 March 2014, 233 individual VFM actions were included in the departmental action plans – 223 (96%) of actions were implemented. This highlights the commitment to a fully embedded Group-wide approach to delivering VFM. Looking ahead, the 2014-15 Accord Group budget has built in VFM efficiencies totalling £5.5m. Furthermore, the partnership between Accord and Heantun will generate annual efficiencies of £176,000 per annum from 2014/15.

VFM is branded as ‘Make it Count’ within Accord Group. The campaign is supported by a working group which meets monthly to co-ordinate VFM activities in the Group. The intention of the Make it Count campaign is to:

u Educate and inform colleagues of the three key principles of VFM (effectiveness, efficiency and economy)

u Help colleagues to identify what these really mean

u How colleagues can make these principles real and apply them to their everyday jobs/roles

u How colleagues can share good ideas and good practices whether they be new or existing.

46 Accord Group

4. Performance and cost managementAccord has benchmarked its performance on a number of key areas of performance. The benchmarking cohort of 20 registered providers has been selected to reflect the scope and nature of Accord’s work, particularly the commitment to care services and community based initiatives. The findings of the benchmarking process are outlined below.

Benchmarkedindicator

Performance against the

cohort of 20

2013performance

2014performance

What does this measure?

Social housing lettings operating margin

Social housing lettings total operating costs per home

Average interest rate

Void losses per home

Return on assets: Turnover (all activities)

Return on Assets: Operating Surplus (All activities)

Income earned per Executive Officer

Executive costs as a percentage of total staff costs

6

14

7

17

9

14

11

1

29%31%

£3,416£3,430

4.2%3.8%

£106£115

21.4%22.6%

3.6%3.6%

£10.1 m£11.2 m

2.5%2.4%

The percentage of income from lettings converted to operating surpluses

The total cost of managing each social housing home for one year.

The average cost of debt being interest paid as a percentage of total debt held

The total amount of void income forsaken in the year averaged across all homes in management.

The return on assets expressed as total turnover as a percentage of total assets less grant

The return on assets expressed as total operating surplus as a percentage of total assets less grant

The value of income generated averaged across the number of Executive Officers

The percentage of total costs of the Executive as a percentage of total staff costs.

Operational indicators

Corporate indicators

Bad debts per home 2 [£1]£58The total amount of bad debts written off in the year averaged across all homes in management.

Total Asset management spend per home in management

5 £1,172£1,292The average investment in each home in management per year.


2012performance

Direction of travel

2014 - looking aheadKey influencing factors

26%

£3,408

4.0%

£77

16.1%

3.2%

£5.8 m

4.0%

Improving performance confirms management continues to improve cost-efficiency and maximising income generated. Further efficiencies have been built in the 2014/15 operational housing management budgets.

Housing management policies, budget performance, rent policy, market wage, inflation, service reorganisation.

Management continues to monitor voids closely with improved performance expected in 2015. Processes have been reviewed to support this improvement.

By identifying that Executive costs continue to represent a very small percentage of overall staffing costs management continues to demonstrate VFM.

New debt drawn attracts a slightly higher overall rate than historic debt which is reflective of the market.

Additional income and activity from Direct Health joining the Accord Group resulted in favourable trends on these corporate measures. Looking ahead in 2014 and beyond, and in light of the importance of demonstrating VFM, management will continue to focus on further improvements to corporate performance indicators and measures

* Welfare reform, housing management policy, contractor performance, social mobility, customer economic pressures, demand.

£37

Arrears and debt recovered identify a positive position for 2013. 2014 saw performance decrease. Management scrutiny over this PI will increase in 2015.

*

Contractor performance, cyclical investment need, customer aspirations, compliance with standards, demand, service reorganisation.

£1,295

Increased effectiveness in asset management procurement identifies financial efficiency. Again this will continue to be the focus of asset management colleagues in 2014.

Welfare reform, housing management policy, social mobility/abandonment, customer economic pressures, demand.

Income generation/welfare reform/public sector spending, economic influences.

Income generation/welfare reform/public sector spending, management performance/cost control.

Income generation/welfare reform/public sector spending, management performance/cost control, wage inflation.

Interest rates, economic market performance, Treasury Management Strategy.

*See overleaf for further information Source: 2012 and 2013 financial statement data

48 Accord Group

Targeted performance improvementIncluded in the table above are two indicators which show deterioration in performance. Specific actions being taken by management to address this position and drive performance improvement are outlined below:

u Void losses per home: An End-to-end systems and lean review of lettings process undertaken. Resource has been redeployed for focussed improvement on lettings. Increase data analysis has been undertaken to better understand termination reasons – this information has been used to inform lettings policy.

u Bad debts per home: There has been an increased focus on arrears KPI data to ensure operational teams are aware of management’s expectations. Locality teams have been set targets for former tenant arrears recovery. The performance of this KPI is aligned to voids, particularly where increased abandonment is apparent – intelligence and data is being used to increase intervention with the aim of reducing abandonment rates. Abandonment rates have increased since the implementation of welfare reforms.

Performance against targets

Core service Key Performance Indicators 2013/14The Executive and the Board both receive regular performance management updates with respect to performance against KPI targets for aspects of core services. Core KPI performance for 2013/14 is outlined below:

Current tenant arrears (%)

KPIs

Former tenant arrears (%)

Re-let times (days)

Void losses (%)

Repairs: satisfaction with service (%)

Repairs: first time fix (%)

Gas compliance CP12 (%)

2013/14Actual

2013/14Actual

2013/14Target

2013/14Target

Housing services Care and support services

3.3 3.6

2.1 3.5

27.4 32.6

1.0

99.0

92.2

99.9

7.3

99.0

92.2

99.9

4.1 3.3

2.0 2.2

15.0 22.7

0.6

95.0

86.0

100

3.4

95.0

86.0

100.0

Financial performance targets2013/14 saw increasingly strong financial performance with surpluses once again outperforming the previous periods and the agreed budget plan targets as shown in the table below:

Group surpluses

2014Actual

2013Actual

2014Budget

2012Actual

£3.635m £3.003m£3.081m £1.711m


VFM targetsIncluded in the 2013/14, Board approved budget assumptions were a number of pre-determined VFM focused objectives. These measures continue to be included in the budget setting process and demonstrate the Board’s commitment to ensuring VFM is embedded in all aspects of the Group’s operations. Performance in the year against these measures is outlined below:

Measure 2013/14 achievementsDelivered

Savings from repairs procurement

Reduction in new build cost per unit

Reducing the Housing Benefit bill by helping residents into work

Releasing internal staff capacity to work on Accord’s Big Issues work-streams

Reduction in former tenant arrears

Reduction in re-let times

The 10 year responsive repairs partnering contract with Lovell identified saving of £1.4 million over the life of the contract. The contract costs and proposed savings were externally ratified by a cost consultant. Furthermore, additional savings of c£120,000 have been identified through the continued insourcing of other aspects of asset management obligations, such as gas maintenance.

The Bushbury development using in house design, manufacture and construction identified reduced new build costs per unit of c20%. The overall final cost per square metre for this development was c£1,025 compared to an industry expectation of around £1,250.

Colleagues in the Transformation Team, Jobs and Skills coaches have helped people into work and therefore reduced their dependence on housing benefit. During the year, nine customers have been supported to help them build confidence, become work-ready and secure permanent employment.

As outlined in case study two at section nine of this statement, £762,000 of existing group staffing and financial resource has been diverted to the Group’s Big Issues work-streams. This investment has helped to transform people’s lives, help people find training and employment opportunities and to support local social enterprises.

2013/14 has seen consistent performance on former tenant arrears balances. General Needs FTAs represents c2% of the rent debit, with care and support FTAs at 3%. Whilst a reduction hasn’t been achieved in 2013/14 performance remains consistent and no further deterioration has occurred. 2014/15 will see further increased focus on KPI performance to ensure the required improvements are achieved.

During 2013/14 re-let times for general needs have improved by nine per cent (2.7 days). Care and Support re-let times have improved by four per cent (1.35 days) during 2013/14.

3

3

3

3

7

3

50 Accord Group

5. Return on Assets

Understanding our asset baseOur business is built on the homes we own and manage and it is imperative that we have up to date, accurate and useful data about those homes. As a developing organisation, one which consistently out-performs on delivering new homes, we carry out regular valuation exercises as part of the security process when seeking private finance. This information provides us with assurance that we know the value of our stock and we are able to use this information to help inform the management of our assets.

As well as developing new homes to provide much needed housing and choice of housing for local people, we ensure we maintain and enhance our existing assets to drive value through standing stock.

We have further developed our management tools and asset registers and have wider insight through data collection about our homes, our customers and their families. We use geo-mapping technology to plot locations and this helps housing and assets colleagues in planning best use of time when visiting customers and properties. It also brings a wealth of other data and allows us to take current stock and areas of operation into consideration when looking to build new homes, helping us deliver an integrated approach to planning new homes and the wider locality and community services those new homes require. We have also revised our process of planned maintenance and this links to externally-funded programmes of retrofit and new eco technologies. Accord has successful track record in securing external funding to help develop enhanced retrofitting schemes bringing added value to the properties.

Our robust Disposals Strategy provides us with the analysis and tools required to take strategic decisions on how we manage our stock and the strategy is linked to the Asset Management Strategy to ensure all of our data is used effectively when considering disposals and maintenance programmes.

Our day to day repairs contract ensures we receive intelligence from our contractor which is fed into the assets strategy and we also talk to the people that live in our homes on a regular basis so that we can be confident that we have current and valid data about our assets and can protect them and maintain them to a high standard. We also look to win further funding, particular from Europe to deliver solutions which bring added long-term value to our stock.

Moseley & District owned a property in Selly Oak which had provided supported housing for vulnerable people, together with some office space for administration purposes. The funding for providing the support came to an end and the buildings were no longer used for supported housing. Moseley & District carried out a review of the use of the buildings and decided that the asset could not be utilised effectively or efficiently in its current form. As part of the review process, the rest of the Accord Group were made aware of the availability of the buildings and Fry Housing Trust assessed the possibility of taking over the asset for a brand new supported housing service. As a result of this assessment, the Trust took over the buildings and, following refurbishment, is opening the 12 units as a specialist service for ex-military personnel who are struggling to return to civilian life. The office space is being used by the Birmingham Scheme Manager and her team which has resulted in significant savings in rental payments for the previous office base.

More efficiencies have been achieved by delivering the new service through siting the support workers in the new office base and utilising existing staff combined with the contribution of volunteers.


Return on our assetsOur up to date and comprehensive housing management and stock condition information ensures we have a strategic and informed approach to stock disposal. This approach demonstrates Accord’s approach to understanding its return on assets. The location of stock and required future investment contribute to the decision to dispose – this ensures an efficient approach to managing stock.

During 2013/14, £2.2m of income was generated from the disposal of housing stock. These funds have been re-invested in the development of new homes and further improvements. Furthermore, in the next five years, the Group’s approach to strategic asset management sees the disposal of housing stock identify a further £24.2m return on assets from strategic stock disposal over the life of the five year business plan.

Accord’s approach to strategic stock disposal will consider:

u The location and market value – is this a cash generative asset?

u The location in the context of other properties – is the property in an area of strategic importance?

u The type, condition and overall viability of the property – is there demand for this property?

u Current and future rent levels – will the property generate a sufficient income yield?

The Group Business Plan identifies how income from the strategic disposal of property will support the development of new homes over the next five years, as outlined below:

2014 2015 2016 2017 2018 2019 Actual Forecast Forecast Forecast Forecast Forecast

Number of housing units disposed 36 34 30 40 35 30

Return on assets generated through strategic £2.2m £4.1m £4.0m £5.8m £5.4m £4.9m asset management

There is significant investment in both the development of new homes and improving the condition of new homes over the life of the five year Business Plan. As outlined below, a significant proportion of investment in new and existing homes is achieved from the resources generated from existing assets. The data below shows a total investment in new and existing homes of £261.4m, £164.3m (63%) is funded by returns generated from existing assets.

2014 2015 2016 2017 2018 2019 Actual Forecast Forecast Forecast Forecast Forecast No. of new homes handed over in year 181 282 31 260 603 - Investment in new homes developed £22.1m £31.5m £22.0m £73.2m £35.2m £1.4mInvestment in existing housing stock £14.0m £12.4m £12.4m £12.6m £12.4m £12.2m

Total investment in housing £36.1m £43.9m £34.4m £85.8m £47.6m £13.6m

Net loan debt required/(repaid) to finance £12.4m £15.1m £7.4m £54.2m £17.6m (£9.6m) investment programme

Return on Assets available to invest in £23.7m £28.8m £27.0m £31.6m £30.0m £23.2m new and existing housing

52 Accord Group

6. Social and environmental added valueAccord is an organisation with a strong commitment to its communities. So in addition to ensuring our operations are efficient and provide VFM, we recognise the importance of delivering significant social value. Below are three case studies demonstrating examples where Accord has delivered social value added and highlights how the careful investment of our resources has helped to improve our communities, peoples’ life chances and our environment. We have been able to deliver these achievements by remaining committed to our social purposes and continuing to innovate through challenging existing assumptions.

Case study one LoCaL Homes and in-house construction services

Accord’s LoCaL Homes factory, based in Walsall, produces between 150 and 200 new homes each year. The pioneering design and manufacture of these homes, using the closed panel timber frame system, ensures:

u Fast and efficient off-site manufacturing

u Construction using sustainable resources

u Efficient on-site construction as erecting the closed panel timber frame system is substantially faster than traditional build timescales

u A high degree of design engineered thermal efficiency. This ensures news homes are highly, which in turn ensures that residents occupying these homes will benefit from reduced heating costs.

In addition to in-sourcing the manufacture of timber framed homes, Accord has also commenced in-sourcing construction services. Construction Services has identified significant cost-savings in the development process and has also brought about a greater degree of control to schemes and developments being managed in this way.

The first development both manufactured by LoCaL homes using the timber frame system and constructed using in-house Construction Services, identified savings of around £400,000, representing 20 per cent of approved budget. The overall final cost per square metre for this development was c£1,025, compared to an industry expectation of around £1,250.

In addition to the VFM and environmental achievements associated with the manufacture and construction of the timber frame system, there have also been substantial socio-economic benefits. The LoCaL Homes factory has created around 20 jobs for local people from our local communities, many of which are social housing tenants who have been taken from unemployment and trained with a vocational skill in manufacturing. The in-sourcing of construction services has also created a number of permanent jobs, but more importantly it allows the Accord Group to ensure that local businesses are provided with the opportunity to ensure they thrive in times of austerity.

The processes adopted by Accord in the design, manufacture and construction of these thermally efficient, environmentally friendly, cost-efficient homes, ensures we continue to demonstrate our commitment to producing VFM housing solutions. It also allows us to demonstrate our commitment to providing VFM in the local economy, our commitment to our communities, and our commitment to job creation.

Case study two Investment in our communities and transforming people’s lives

As part of Accord’s commitment to our customers and our communities, resource has been diverted into a number of initiatives focused on increasing the employability of resources, supporting new social enterprises and delivering a number of initiatives aimed at increasing community cohesion.

Accord has diverted £67,000 of existing staffing budget resource into Money Advisor posts. Money Advisors support our customers in managing household finances and help them to understand and meet their financial obligations. In 2013/14, the Money Advisors helped customers secure £142,000 of benefit entitlement to help them meet financial commitments, including rents due to Accord.

£230,000 of existing resource has been invested in Accord’s AddVentures. AddVentures helps to support the creation and development of local enterprise. In 2013/14, AddVentures provided support to establish 12 successful social enterprise businesses and also secured funding for a number of local young entrepreneurs to undertake an extended visit to Amsterdam where they would receive coaching and training to enhance their business development and entrepreneurial skills.


£116,000 of existing resource continues to be committed to Customer Engagement services. The Customer Engagement team works closely with our customers and communities to ensure we understand their thoughts, needs and concerns and work alongside customers to enhance our communities.

An investment of £349,000 in the creation and development of the Transformation team (including Jobs and Skills Coaches) has been made as Accord identifies the need to work with our customers to increase their work readiness and help them into training or permanent employment. In 2013/14, the advisors helped nine people find permanent employment and many more have received

Accord’s ROLE (Recruitment, Opportunity, Learning Employment) programme was launched in 2013/14 which provides Accord customers and their families training and apprenticeship opportunities in the social care sector. In 2013/1,4 Accord worked alongside 50 customers to provide coaching, training and apprenticeship opportunities in the first year of the programme. In total £762,000 of existing resources has been diverted into community enhancements and helping people to improve their life chances.

Community money advisors

Accord AddVentures

Customer Engagement services

Transformation team (including jobs and skills coaches)

Total investment in communities and transforming people’s lives

Investment in communities and transforming people’s lives

£67,000

£230,000

£116,000

£349,000

£762,000

This investment in community activities has also afforded the Group the opportunity to lever significant external funding a Provider typically wouldn’t have been able achievement. Recent achievements include:

Cabinet Office funding for a Social Incubator Fund aimed improving the life opportunities of young people in Birmingham and the Black County

ERDF funding aimed at supporting local businesses deliver a large scale retrofit programme to the Group’s housing stock

Accord has been appointed as the lead delivery agent for the City Deal programme for the Black Country. This funding has been secured from DCLG and the Cabinet Office as part of a five year programme to increase employment opportunities for the people of the Black Country.

Funding levered through investment in community activities

Funding levered through investment in community activities

£1.0m

£1.5m

£2.8m

£5.3m

Case study three Accord’s commitment to environmental matters

Accord Group is aware that VFM and a commitment to eco-friendly business practices go hand-in-hand. Accord’s commitment to environment and eco matters is demonstrated in the Group achieving the ISO14001 environment quality management systems accreditation and the EMAS European Standard for environmentally friendly practices. By committing to these initiatives Accord has managed to achieve improved performance with respect to environment performance measures and also VFM in the following ways:

u Revised waste management practices

u Reduced paper usage

u Significantly reduction energy consumption (11% over the period 2010 – 2013)

u ‘Green’ energy sources procured for all group electricity contracts.

54 Accord Group

Our achievementsRealising VFM Accord’s commitment to achieving VFM aligns with the delivery of corporate objectives. The Group’s top level objectives are outlined in the Business Plan:

1. Meeting Need 2. Great Housing and Great Services 3. Good to Great

VFM achievementsHighlighted below are a number of VFM achievements identified during 2013/14. Each of these achievements have been cross referenced back to the 2013/14 corporate objectives to demonstrate how VFM is embedded and how it contributes to the successful delivery of the Group’s objectives.

In 2013/14 the Group realised Returns on Assets of £23.7m, and VFM achievements totalling £4.35m.

Return on assetsDuring 2013/14 Accord Group invested a total of £36.1m in new and existing homes. During the same period, net private finance of £12.4m was drawn to contribute to this investment programme. The remaining balance of the investment programme, £23.7m, was from funds generated as returns on our existing assets and resources. See section 6 for further information. (Meets corporate objectives 1, 2 and 3)

Insourced construction services2013/14 saw the commencement of the Group’s insourced construction team. The team’s first project achieved cost efficiencies of £400,000, representing around 20 per cent of the approved budget. Through insourcing construction services, the Group is able to directly contribute to job creation in the local building economy and associated trades. These new homes were constructed using the closed panel timber frame system produced at Accord’s LoCaL Homes factory in Walsall. Not only does LoCaL Homes provide a number of employment and training opportunities to local people, it also produces highly thermally efficient homes which much less energy to heat in colder weather. This approach ensures we are able to provide VFM in the construction and delivery of new homes, whilst providing VFM for the customers who will live in these homes. (Meets corporate objectives 1, 2 and 3)

Procurement – goods and servicesDuring 2013/14, £1.301m savings were secured through the Group’s strategic approach to procuring contracted goods and services, including a mixture of both cashable savings and cost avoidance. The benefit of these savings will be realised in 2013/14 – 2015/16 period. Specific to 2013/14 £205,000 of procurement savings was secured. (Meets corporate objectives 2 and 3)

Procurement - IS/IT servicesProcurement of bought in Information Technology services have identified a total of £129,000 in VFM savings and efficiencies in 2013/14. These savings were generated through new approaches in the procurement of IT consumables, data storage and through adopting significantly more power efficient IT infrastructure equipment. (Meets corporate objective 3)

Corporate Asset Management – productivity increases: Through improved use of mobile technology, the productivity of asset management colleagues complete stock condition surveys has increased by 46 per cent. (Meets corporate objective 3)

ERDF grant funding attractedERDF (European Regional Development Funding) will provide £1.5 Million external funding for a minimum of 250 whole house retrofits, a smart grid to 50 properties and six demonstrator units of near to market technologies. (Meets corporate objectives 2 and 3)


Caldmoreaccord localityHousing services, money advisors: Two colleagues fulfilling the Money Advisor role have secured a total of £142,000 in cash benefits to our customers and services users in 2013/14. (Meets corporate objectives 1, 2 and 3)

Caldmoreaccord locality – transformation services, jobs and skillsIn 2013/14, Jobs and Skills coaches were successful in supporting nine people into permanent jobs generating income totalling £90,000 for these individuals. (Meets corporate objectives 1, 2 and 3)

Caldmoreaccord Locality - former tenant arrears collectionIn 2013/14, a total of £109,000 of former tenant arrears were collected. Since the partnership began in April 2012, around £200,000 of arrears from former tenants has been recovered. (Meets corporate objective 2 and 3)

Caldmoreaccord locality – expansion of the in-house Maintenance teamIn April 2013, the in-house Maintenance team took over the delivery of previously outsourced work in the Caldmoreaccord locality. Insourcing these services has identified savings of around £120,000 per annum. (Meets corporate objectives 2 and 3)

Finance/Treasury Services – debt managementFinancial benchmarking undertaken in the year identified that Accord’s managed treasury portfolio of loans attracts competitive rate of average interest costs. The benchmarking highlighted Accord’s average interest rate achieved savings of £2.4m per annum when compared to the average rates in the benchmarking cohort. (Meets corporate objective 3)

Investment in the local community and the local economy – big issuesDuring 2013/14, an additional £440,000 of existing resource was committed to be re-diverted into the Big Issues fund. Big Issues work is focused on social, neighbourhood and community matters. Funds are set aside each year as contributions to the delivery of the Big Issues work-streams. It is important to note that this is not an additional cost to the business, but amounts which have been identified through the effective management of existing resources throughout the Group. To date around £1.5m budget has been allocated to the Big Issues highlighting the ongoing importance of this work to the Group. (Meets corporate objectives 1, 2, and 3)

Redditch Community Homes: Photo Voltaic (‘PV’) energyPV panels have been installed on 59 newly built environmentally friendly homes in Redditch. Under the feed-in-tariff, annual income from solar energy fed back into the grid will be generated totalling around £20,000 per annum. (Meets corporate objectives 1 and 3)

Social return on investmentAshram and Fry have both developed externally accredited Social Return on Investment Models. The outcome identified that every £1 invested Ashram’s in core activities generated £5.12 of social value added. Fry Housing Trust conducted the same review on its Employment and Skills Services and found that for every £1 invested, £10.75 of social value was added. (Meets corporate objectives 1, 2 and 3)

Socially responsible energy and utilities procurementDuring 2013/14, the Group energy supply contract was re-procured. This re-procurement exercise not only saved a predicted £600,000 over the next two years, but also guarantees that energy procured by the Group continues to be Green Energy, generated by environment responsible methods. (Meets corporate objectives 2 and 3)

56 Accord Group

Our future VFM plansWe remain at heart a social business, one which provides homes and services for those in need. We will continue to do this and also use the return on our assets and investments to develop services, ensure high quality and deliver VFM.

We will continue to build more new homes and we will ensure we maintain and enhance existing homes. The key objectives in the business plan have VFM entrenched and we also have the following key areas where we will drive value for our customers and stakeholders:

u We will undertake a review of the reorganisation of our operational services to ensure those services are delivering effectively for customers and in a way which clearly demonstrates good VFM aiming for c£300k savings in 2014/15

u We will undertake future work to 300 units to upgrade the energy efficiency ratings to improve running costs for those customers

u We will undertake a further review of our care and support dedicated housing stock to identify key actions for the future and determine whether any of the units should be modified, redeveloped or sold, particularly where there is uncertainty around future commissioning of services

u We will combine our assets management operation with our building, development and regeneration team to ensure a more integrated approach to asset development and management

u We will carry out further procurement activities which will realise a further £400 to £500k of procurement savings, particularly in the supply of products and services in relation to asset management

u We will review our external contractors and supply chain and further develop in-sourcing and growth of the in-house team, Homes and Gardens

u We will undertake a review of the Local Homes Factory to ensure it has delivered good VFM since it’s commencement of operation in 2012

u We will realise further synergy savings of £400k across our Group wide care and support operations

u We will realise further synergies and savings for Heantun to the value of £120k in back-office services as a result of Heantun joining the Accord Group

u We will carry out a detailed review of commercial buildings and rationalise office space as well as reduce office costs by 25 per cent in order to invest in new services for customers

u We will increase the income stream through Matrix Housing partnership by the delivery of further development services.

The Accord Group is proud to deliver consistently good services – we must now deliver great services across all our areas of operation. We know that we can do this and that we must do this efficiently. Moving to mobile working, retraining colleagues, bringing in new services will ensure we take responsibility for our business and our support to customers and local communities. Most importantly, we shall ensure we use our asset base responsibly to enable us to deliver our strategic objectives and carry out our business resourcefully and professionally.

58 Accord Group

Report of the Board and Operating Financial review

Overview of businessThe Group recognises that its primary objective is to provide homes and services to people in need, whilst at the same time ensuring that sufficient income is generated from its activities to meet its operating costs, interest costs and funding covenants. Our Business Strategy provides a clear balance between growth and excellent customer service. Our strong track record of prudent financial management will ensure that we continue to meet the needs of existing customers as well as building new homes. By adopting a rigorous approach to financial planning we are better placed to meet the needs of our business. Our finances are managed through the annual budget process and delivery against key performance targets.

During the year, the Group has built on its strengths to maintain its position as a leading, effective and innovative housing group. We have continued to manage our resources efficiently to ensure we meet the demands of today whilst building for the challenges of tomorrow. The year ended 31 March 2014 has continued to see additional provision of social housing and further consolidation of a sound financial position. The Group’s surplus for the year before tax was £3.635 million (2013: £3.003 million). Our financial performance remains strong. Turnover of £100.7 million represented, a 10.1 per cent increase on the prior year. The operating surplus was £15.871 million in 2013/14, compared to £15.682 million in 2012/13. This continuing strong performance has enabled Accord to further strengthen its financial position and continue its sustained investment in both properties and services.

Increasing surpluses of £0.632 million (21.0 per cent) from 2013, demonstrates the Group’s ability to translate growth in income into growth in overall bottom line surpluses. In successfully delivering these services, the Group continues to highlight its commitment and focus on its core business for people in need through the provision of general needs, sheltered and supported housing, care and support services and the provision of low cost home ownership solutions. In addition to providing services to over 40,000 people in the Midlands, we now also serve customers in the North, North West and North East of England and provide around 65,000 hours of care services each week.

The development of new homes to provide affordable social housing remains a fundamental objective for the Group. As a housing provider we recognise the contribution that a wider range of tenures can make to the achievement of balanced, sustainable communities. There were 11,068 units in management at 31 March 2014:

Group Group 2014 2013 Property Numbers Property Numbers

General needs housing 7,101 7,203Affordable rents 427 174Supported housing 1,324 1,314Residential care homes 275 287Shared ownership accommodation 1,207 1,180Other 734 748

Total 11,068 10,906


Turnover Operating Surplus/(Deficit) Year 2014 2013 2014 2013 £000 £000 £000 £000Total

General needs housing 34.594 31.901 14.315 14.144Supported housing 11.031 11.495 1.843 2.332Domiciliary care services 30.610 26.136 (0.442) 0.275Residential care homes 7.336 7.460 0.095 (0.028)Shared ownership accommodation 1.959 1.867 0.683 0.618First tranche shared ownership 2.004 0.565 (0.069) (0.014)Other 13.154 11.975 (0.554) (1.645)

Total 100.688 91.399 15.871 15.682

The table shows the Group has a diverse portfolio of properties, which are located across the West Midlands. The Group’s housing stock is a combination of new build and refurbished properties, which have been added since the Group’s inception some 40 years ago. Stock condition reports have confirmed that the housing stock is well maintained, and that all Group subsidiaries are fully compliant with the requirements of the Decent Homes Standard.

Total expenditure on repairs and maintenance in the year was £14.942 million (2013: £12.782 million) of which £4.043 million of repairs have been capitalised in the year (2013: £3.192 million). This demonstrates the Group’s on-going commitment to investing in its existing stock and the impact of increased capitalisation under component accounting.

Group turnover and operating surplus/(deficit) by activity are shown below:

In the year, 34.3 per cent of income was derived from general needs (2013: 34.9 per cent). During the year, the Group received £5.084 million (2013: £5.320 million) from local authority administered Supporting People budgets, which are continuing to diminish; this represents 10.4 per cent of total income from care related services (2013: 11.8 per cent). Since the acquisition of Direct Health Group Limited in 2012 the focus of the Group’s primary source of income continues to be from the provision of care related services. Across the Group we continue to monitor the financial viability of the care and support business closely at an Executive level. Group-wide interest payable increased to £13.242 million (2012: £11.498 million) as debt increased from £303.224 million to £326.495 million. Our increased debt position highlights our commitment to the development of new homes and the regeneration of the communities we serve.

60 Accord Group

TURNOVER - GROUP

SURPLUS - GROUP

OPERATING SURPLUS - GROUP

100,00090,00080,00070,00060,00050,00040,00030,00020,00010,0000

16.0

15.0

14.0

13.0

12.0

11.0

10.0

4.0

3.5

3.0

2.5

2.0

1.5

2012

/13

2012

/13

2012

/13

2013

/14

2013

/14

2013

/14

2010

/11 (

rest

ated

)20

10/1

1 (r

esta

ted)

2010

/11 (

rest

ated

)

2011

/12

2011

/12

2011

/12

£100.7m increase 10%

£15.9m increase 0.2

million

£3.6m increase 20%


2014 2013 2012 2011 £m £m £m £m For the year ended 31 March (restated) Group Income and Expenditure Account Turnover 100.688 91.399 63.286 61.797Operating surplus 15.871 15.682 12.489 13.180Interest payable and similar charges 12.635 13.242 11.498 10.756 Surplus for the financial year 3.635 3.003 1.711 2.456

Consolidated Balance Sheet Housing assets at cost 677.958 649.675 627.527 612.514Social housing and other capital grants 257.059 252.459 247.696 247.210Net investment in new housing during year 21.134 15.823 16.624 16.646Net current (liabilities)/assets (0.979) 0.218 13.495 9.627Total assets less current liabilities 419.651 402.694 376.394 360.692Loans outstanding 339.808 326.495 303.244 287.597Reserves 84.660 81.046 78.046 76.348

Corporate PerformanceSurplus before interest as a percentage of turnover 16.1% 17.4% 19.7% 21.3% Surplus before interest as a percentage of gross rents 29.5% 30.1% 25.0% 27.1% Interest Cover 166.6% 158.4% 141.3% 151.4% Gearing 49.6% 49.7% 48.0% 43.5% EBITDA (£m) 23.544 23.267 17.209 16.998 EBITDA as a percentage of turnover 23.4% 25.5% 27.2% 27.5% Average cost of finance 4.01% 4.48% 4.15% 4.27% Group CEO pay as a percentage of turnover 0.2% 0.2% 0.2% 0.2% Group CEO pay per employee £54 £43 £111 £103

GROUP HIGHLIGHTS: FOUR YEAR SUMMARY

62 Accord Group

General NeedsYear 2013/14 2012/13 2011/12 2010/11

Accord Group% of rent debit in arrears 2.58 3.35 2.48 4.51% of rent debit lost due to voids 1.10 0.72 0.75 0.82Average re-let time (days) 28 31 16 18

Accord Housing Association% of rent debit in arrears 1.95 2.04 2.00 2.71% of rent debit lost due to voids 1.15 0.92 0.68 1.21Average re-let time (days) 29 27 20 27

Supported HousingYear 2013/14 2012/13 2011/12 2010/11

Accord Group% of rent debit in arrears 1.61 2.32 2.10 4.61% of rent debit lost due to voids 7.29 5.86 5.75 5.10 Average re-let time (days) 33 34 34 23

Accord Housing Association% of rent debit in arrears 1.14 0.39 1.33 5.91% of rent debit lost due to voids 4.91 4.13 3.63 2.33 Average re-let time (days) 69 54 34 27

Year 2013/14 2012/13 Accord Group% first time fix repairs completed 92.2 74.2% customer satisfaction in respect of repairs 99.0 94.7% repairs appointments kept 97.2 96.5

Accord Housing Association% first time fix repairs completed 91.5 74.9% customer satisfaction in respect of repairs 99.1 94.5% repairs appointments kept 97.4 96.6

KEY OPERATIONAL INDICATORS

During the year the Group-wide Corporate Asset Management team was formed. As part of the commencement of this team, a new set of centric key performance indicators have been introduced. These indicators represent a departure from the traditional KPIs for a repairs service. The indicators were developed in conjunction with our customers and measure aspects of the service which they consider to be most important to them.

The Group’s average creditor payment period at 31 March 2014 was 30 days (2013: 31 days).


DevelopmentAccord leads the Matrix housing partnership which continues to deliver successfully its significant 2011-2015 HCA Affordable Housing Programme. Accord is delivering over 600 new homes as part of this programme. As at 31 March 2014, Accord and the Matrix partners were ahead of development commitments agreed with the HCA.

The Group continues to build on its strong reputation and proven track record in both the development of general needs and supported housing. This development programme will be financed by a mixture of Social Housing Grants and our own reserves. A key part of this is the development and maintenance of sound working relationships with our many local authority and other key stakeholders. Throughout 2015-18, Accord Group will also deliver a confirmed substantial number of new homes through the HCA’s Affordable Homes Guarantee Programme.

Operations at Accord’s LoCaL (Low Carbon Living) Homes factory remain strong. The factory produces high quality, energy efficient wood frame homes from sustainable materials which continue to supply Accord’s development programme. The factory is based in Walsall, with the significant majority of employees being social housing tenants who all receive thorough training in a new vocation. 2013/14 production targets delivered new homes for the Beaconview, Bushbury, Greenfields and Whitworth Close developments with further programmed production for 2014/15 to support the completion of the current programme.

Capital structureTotal funds including long-term creditors at the end of the period amounted to £418.431 million (2013: £402.694 million), of which £84.583 million (2013: £80.983 million) comprised the income and expenditure account reserve. The increase compared to 2013 is largely due to an increase in tangible fixed assets, social housing grant, investments increased borrowing and the surplus for the year. Long-term borrowings at the end of the period have increased to £334 million from £322 million in 2013. Balance sheet gearing of the Group at the year-end is 49.6% (2013: 49.7%) and remains comfortably within our funding covenants. All other members of the Group comply with their funding covenants, including those covenants introduced under the Group funding facility. The Group has access to undrawn borrowing facilities of £63.0 million, and has substantial unutilised security on its balance sheet. These facilities ensure that we remain in a strong position to fund future growth plans and investment opportunities. The net movement in cash for the year was an inflow of £2.530 million (2013: £18.314 million outflow) reflecting the net impact of our development programme, increased borrowing, higher debt management costs and increased growth linked to new developments and services. The average interest rate for the year stood at 4.01% (2013: 4.48%). Interest cover for the Group stands at 166.6% (2013: 158.4%) and remains comfortably within our funding covenants.

Treasury management and controlTreasury activities are controlled by the Group Finance Director with the assistance of external consultants as required, and are carried out in accordance with policies approved by the Board. The purpose of the treasury management function within the Group is to ensure that adequate cost-effective funding is available at all times and that exposure to financial risk is minimised. The key risks managed by the treasury function are interest rate risk and liquidity risk. Treasury management activity is subject to review by internal auditors on a regular basis. External review from Treasury specialists was also sought in the year. Treasury activity is closely monitored on a regular basis and compliance with covenant conditions continues to be met with no breaches in the year. Quarterly monitoring information and management accounts are submitted in accordance with funder and regulatory requirements. Cash flow requirements are monitored through ongoing cash flow forecasting. It is our policy to balance the cash held by repaying debt as far as possible, while ensuring sufficient access to funding to cover investment and business development plans. This is achieved by the use of detailed cash flow forecasts covering the short, medium and long-term, together with a substantial programme of short-term investment, and use of revolving facilities.

64 Accord Group

Interest rate exposure is managed via the use of interest rate fixings. The Group’s policy is that between 60% - 80% of its total borrowing should be at fixed rates of interest. At the year-end, 63% (2013: 66%) of the Group’s borrowings were at fixed rates of interest; this rate will increase as additional fixing of debt is planned during 2014/15. Accord has not used stand-alone derivative financial instruments to manage its interest rate exposure during the year. However, Accord does have the Wider Rule Change and approval from the Homes and Communities Agency to use stand-alone derivative financial instruments, and has facilities in place with three funding institutions to utilise these instruments. Continuity of funding is ensured by arranging for short-term borrowings and committed facilities and by limiting the amount of debt repayable in any one year. Year-end undrawn committed Group facilities were £63.0m (2013: £79.5 million), and with a maximum amount of £45 million for Accord Housing Association (2013: £52.5 million). Group wide interest payable decreased to £12.635 million (2013: £13,242 million), and debt increased from £326.495 million to £339.808 million. Our increased debt position highlights our commitment to the development of new homes and the regeneration of the communities we serve. The Group’s main financial covenants are in respect of loan gearing and interest cover. The Board believes that the financial covenants entered into are appropriate for the Group’s operations. The table below provides an analysis of when the debt falls due for repayment.

Debt Repayment

2014 2013 Group £m £m

0 – 1 year 4.191 2.958

1 – 2 years 7.190 4.91

2 – 3 years 6.094 7.040

3 – 5 years 13.965 12.568

5 – 10 years 63.436 53.490

10 – 15 years 89.080 85.738

15 – 20 years 77.881 71.361

20 – 25 years 65.017 68.977

25 – 30 years 12.874 20.067

Over 30 years 0.080 0.105

Total 339.808 326.495

Accord Group interest rate

management

Fixed debt 63%

Variable debt 37%

Risk managementThe management of risk is acknowledged as being fundamentally important to the Group. Risks are continually assessed to measure their significance and reported to the Board. Policies and procedures are adapted to ensure appropriate action is taken to safeguard the Group’s residents and assets. Our approach to risk management includes the following:

u A formal framework setting out how we identify and manage opportunities and risk, which sets out clear responsibilities of staff, Management Team and the Board

u Risk maps which set out the risks of failing to meet business objectives, together with controls and actions needed to manage risks

u Internal audit using a risk based approach for the audit programme

u “Project Approval Panel” to assess the business case for major new projects and initiatives

u Appraisal and regular staff reviews which are aligned to managing risk

u Sensitivity analysis of the key areas of risk built into our financial forecasts

u Activity limits set where required.


u Formal project management procedures in place in relation to the development of new homes

u Business continuity plans and disaster recovery plans

u Regular assessment of the local housing market

u Regular review of the key risks facing the Group by the Executive and Board

u Regular review of risk appetite by the Board.

u Risk scenario planning.

The Group-wide Risk Management Strategy is subject to regular review and update. The emphasis remains on ensuring risks and opportunities are continuously monitored, understood and evaluated. This supports effective and strategic decision-making and ensures the Group is able to adapt to changing circumstances. As part of our risk management framework, the Group operates a comprehensive risk management process which incorporates all subsidiaries and major group functions. Risk management informs our business planning cycle and in the current economic climate proactive risk management becomes an increasingly important management tool.

The Group Risk Management Strategy was approved by the Group Board in 2013. Quarterly risk management updates are subject to review by the Group Resources and Audit Committee. The Executive Board formally reviews risk on a monthly basis. This supports effective and strategic decision-making and ensures the Group is able to adapt to changing circumstances. The Group’s emphasis remains on ensuring risks and opportunities are continuously monitored and evaluated. Key risks facing the Group as outlined in the Business Plan include:

Residual risk score 2014





1-5

1-5

1-5

1-5

1-5

8

6-10

6-10

6-10

6-10

6-10

16

12

12

12

11-16

11-16

11-16

11-16

11-16

16+

16+

16+

16+

16+






9

9

15

12

15

Risk: Loss of care funding/or care contract renewalKey controls and risk reduction include: New Care and Support Strategy implemented with new model for delivery of care going forward. Financial performance monitored monthly. Close monitoring of new delivery model by Quality team. Care and Support New Business team.

Risk: Housing services - arrears escalate significantlyKey controls and risk reduction include: Arrears action group to monitor and update policies and procedures. Authorisation for evictions and write-offs set up. Income management policy review undertaken by the welfare reform action group.

Risk: Housing Services - void propertiesKey controls and risk reduction include: Difficult to Let Strategy in operation. Void policies and procedures in place. Liaison with local authorities and demographic research undertaken. Incentives for clean properties at termination introduced.

Risk: Welfare reform changes/end of direct payments/ erosion of income streamsKey controls and risk reduction include: Welfare reform action group set up with robust action plan to manage the changes. Comprehensive intelligence gathering of customer. Financial inclusion group set up to monitor risks. Effective robust management policy and practices. Jobs and skill coaches in place.

Risk: Poor performing KPI’s e.g. voids and lettingsKey controls and risk reduction include: Performance improvement review undertaken. Monitoring and reporting to Exec and Boards on regular basis with performance collation and dashboard with set targets.

66 Accord Group

In addition to Accord’s key risks outlined above, wider risks facing the sector include:

Accounting changes The sector is preparing itself for the implementation of new accounting standards as part of the next SORP release. Final consultation was undertaken in May 2014 with the new SORP expected to be released late in 2014. The new SORP is still expected to be applicable for the 2016 year end.

Pension scheme liabilitiesUnder the new SORP, it is likely that past service deficit contributions in respect of defined benefit pension fund for multi-employer schemes will be required to be brought ‘on Balance Sheet’. The economic performance of pension assets has deteriorated significantly due to the downturn in economic conditions, resulting in pension scheme liabilities exceeding the value of these assets significantly.

Value-for-moneyThere is a clear expectation from the HCA, that Providers clearly demonstrate value-for-money which is clearly linked to corporate objectives and return on assets. The effective and transparent application of finite resources is increasingly important under the current regulatory focus.

Financial markets: interest rates, inflation and deflation Performance of the financial markets can impact on business performance – both rent increases and debt management costs can be directly influenced by economic market movements.

Contraction of the public sectorPublic spending and associated public services continue to face funding pressure. In light of this it is increasingly important that the social housing and care sectors position themselves appropriately in context of these pressures.

Availability and pricing of funding from the banking sectorThe type and nature of new funding for the social housing sector continues to change. Bank finance continues to be a source of short to medium-term funding with ‘private placement’ finance becoming increasingly available to the sector. Accord has sufficient finance and funding in place to fulfil our current development commitments as part of the 2011-2015 HCA affordable homes programme. Additional funding will be secured in early 2015 to fulfil future strategic development aspirations.

Human Resources: staff recruitment and retentionThe ability to recruit and retain skilled carers is an ongoing pressure for all providers in the care and support business. This can impact on both the cost and consistency of service delivery and is therefore a risk which is closely monitored on an ongoing basis.

Health and safetyThe Board acknowledges its duty of care to employees, tenants and residents in respect of all matters relating to health, safety and the environment. A dedicated member of staff, operating under the supervision of the Group Finance Director, regularly reviews and updates relevant policies and procedures, supervises risk assessments and provides staff with training and support on health and safety issues. During 2013/14, a number of health and safety audits have been undertaken to ensure compliance with the required standards and legislation is maintained.


Internal controlThe Board has overall responsibility for the Group’s system of internal control and for reviewing its effectiveness. Such a system of internal control is designed to manage rather than eliminate the risk of failure to achieve business objectives, and can only provide the Governing Board with reasonable and not absolute assurance against material misstatement or loss. The Board confirms that there is an ongoing process for identifying, evaluating and managing the significant risks to the achievement of the Group’s strategic objectives. The process has been in place throughout the year to 31 March 2014 and up to the date of approval of the Financial Statements and Annual Report. The effectiveness of this process has been reviewed regularly by the Group Resources and Audit Committee which met four times in 2013/14. The main policies which the Board has established, and which are designed to provide effective internal control, are summarised below.

On behalf of the Board, the Group Resources and Audit Committee has reviewed the effectiveness of the system of internal control in existence in the Association for the financial year and the period to the date of approval of the financial statements. The Group Resources and Audit Committee received the annual report on internal control assurance and have conducted its review of effectiveness of the risk management and control process. A number of internal audit reviews have been undertaken in accordance with the approved Internal Audit Plan approved by the Group Resources and Audit Committee on behalf of the Board. No weaknesses were found in internal controls, which resulted in material losses, contingencies, or uncertainties, which require disclosure in the financial statements or in the external auditors’ report on the financial statements.

Internal auditThe Board has delegated responsibility for overseeing the adequacy and effectiveness of the Group’s internal control system to the Group Resources and Audit Committee. The Group’s internal audit team reports directly to the Group Resources and Audit Committee. An annual assurance report is produced by the internal auditor summarising the systems audit programme and confirming that the Group has a satisfactory internal control system in place. Management assurances are received by the Group Resources and Audit Committee to confirm that recommendations have been implemented as agreed. Subsequent internal audit reviews are undertaken to check recommendations have been properly implemented. Quarterly Management Accounts are presented to the Committee for review and scrutiny.

Risk managementThe Board and Group Resources and Audit Committee oversee the risk management cycle which governs the ongoing process of establishing and communicating responsibilities, identifying risks and providing a framework to enable the organisation to minimise losses and maximise opportunities. Strategic risks are identified through a continuous risk assessment exercise, whilst operational risks are identified through the internal audit and best value process.

External auditThe work of the external auditors provides assurance through the interim and final audit visits and the provision of an audit strategy, audit report and management letter. Regular meetings are held with the external auditors to provide an update on changes in the business and to discuss strategic and technical matters.

Quality management systemsThe quality of the Group’s management systems is acknowledged in its review by the Internal Auditor and Investors in People accreditation. The Group also complies with a number of other recognised quality management systems including Investors in Excellence, ISO14001 and ISO20001 (related to Environmental and Information Technology quality management systems respectively).

Regulatory reportsThe Group reports to the Homes and Communities Agency through a range of regulatory returns all of which were submitted on time. The Executive Board ensures that regulatory matters are dealt with promptly and efficiently, co-ordinates the self-monitoring system operated by the Board, and monitors compliance with performance standards.

68 Accord Group

Performance indicatorsKey performance indicator reports are produced regularly for the Group and are reported through the Executive Board to the various Boards/Committees. These reports include performance monitoring on housing management, care quality compliance, maintenance, development, customer satisfaction, staff and financial results.

FraudThe Group has a rigorous approach to fraud as set out in the Fraud Strategy and Policy. An annual fraud report is reviewed by the Group Resources and Audit Committee. This includes an analysis of the fraud and losses register for the year and how surrounding controls have been improved.

The Group Resources and Audit Committee meets with the members of the Executive Board, the internal auditors and external auditors to review specific reporting and internal control matters and to satisfy itself that the systems are operating effectively.

The Governance Committee ensures that the Group attains the highest standards of effective governance.

EmployeesThe strength of the Group lies in the quality and commitment of its employees. Our ability to meet our business objectives and commitments to tenants in an efficient manner depends on the contribution of employees throughout the Group. We are committed to equal opportunities for all employees and will not discriminate on the grounds of disability or impairment, gender, sexual orientation, race or religious beliefs. The Group demonstrates its commitment to equality in all aspects of employment, including recruitment, career development, training, promotion and welfare. We have achieved ‘Investors in People’ recognition and successfully retained this status, which demonstrates our commitment to training and developing our employees to a high level. The Group continues to be committed to consulting with employees and keeping them informed on matters affecting them and on the progress of the Group. This is carried out in a number of ways including a formal forum for consultation, departmental meetings and a variety of newsletters.

FairnessThe Accord Group will treat all people fairly and with respect, recognising and responding to their individuality. The Group’s policies reflect its commitment to fairness and the value it places on diversity in all aspects of its work. We will:

u Focus on the needs of each individual in providing employment, homes and services

u Listen to and understand our customers, asking people what help, support and/or guidance they feel they need to access our services

u Ensure our people treat each other and our customers with respect to build the trust, care and commitment necessary to deliver an excellent service to all

u Monitor and demonstrate how successful we are in acting fairly, making a difference and in meeting the needs of our local communities

u Always aim to exceed the requirements of the law and our regulators, as well as adopting a person centred approach

u Be an excellent organisation, demonstrating our accountability and promoting fairness for all.


Accord Group’s commitment to environmental mattersAccord remains committed to being at the forefront on delivering innovative service delivery solutions which impact favourably on our environment and communities. As part of this commitment we have accomplished a number of key achievements:

u The Accord Group became one of the first housing associations in the country to obtain the ISO14001 Environmental Management Standard. This accreditation was recertified following a successful stringent audit process.

u The Accord Group is the first housing association to achieve the much more demanding European Eco Management and Audit Scheme (EMAS) standard

u Environmental factors are considered are all key project investment decisions considered by the Group’s Project Approval Panel

u Accord successfully achieved approval to our revised EMAS statement which embraces the latest requirements of the initiative to EMAS III

u We are already committed to the development of low and zero carbon homes with our partnership with a Norwegian manufacturer of timber framed homes that are generally 50 per cent more efficient when compared to traditionally built homes. High quality, highly efficient timber frame homes are also being produced at Accord’s LoCaL Homes factory. LoCaL homes have been produced, built and lived in by our customers. These homes will continue to supply Accord’s 2011-2015 Affordable Homes development programme and beyond.

Statement of responsibilities of the boardThe Board is responsible for preparing the Report of the Board and the financial statements in accordance with applicable law and regulations. Industrial and Provident Societies Acts and registered social landlord legislation requires the Board to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable laws). Under the Industrial and Provident Society legislation the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs and surplus or deficit of the association and group for that period. In preparing these financial statements, the directors are required to:

u Suitable accounting policies and then apply them consistently

u Make judgments and accounting estimates that are reasonable and prudent

u State whether applicable UK Accounting Standards and the Statement of Recommended Practice (SORP) Accounting by Registered Housing Providers Update 2010), have been followed, subject to any material departures disclosed and explained in the financial statements.

The Board is responsible for keeping proper accounting records which disclose with reasonable accuracy at any time the financial position of the group and association and enable it to ensure that the financial statements comply with the Industrial and Provident Societies Acts 1965 to 2002, the Housing and Regeneration Act 2008 and the Accounting Direction for Private Registered Providers of Social Housing 2012. It is also responsible for safeguarding the assets of the association and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

The Board is responsible for the maintenance and integrity of the corporate and financial information on the Group’s website. Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

70 Accord Group

Disclosure of information to auditors In so far as each of the directors is aware:

u There is no relevant audit information of which the association’s auditors are unaware; and

u The directors have taken all steps that they ought to have taken to make themselves aware of any relevant audit information and to establish that the auditors are aware of that information.

Accounting policiesThe principal accounting policies are set out in note 1 to the financial statements. The most critical accounting policies in terms of impact on the financial statements are the treatment of capital grants, capitalised interest, the capitalisation of development staff costs within housing properties and the calculation of housing property depreciation. These policies have remained largely unchanged during the year.

Going concernThe Board has reviewed the 2014/15 Association and Group budget, five year financial plan, borrowing facilities, funding requirements and forward projections. At 31 March 2014, the Group has £63m of available funding facilities in place which is more than sufficient to meet the Group’s strategic growth ambitions and development plans. The 2014/15 forecasts Group surpluses of £3.8 million, with further growth projected over the life of the business plan. On the basis of this review, the Board is satisfied that the Association and Group is a going concern and has continued to adopt the going concern basis in preparing the financial statements.

Charitable donationsThe Association made donations to charitable organisations of £16,501 during the year (2013: £17,385).

AuditorsA resolution for the re-appointment of Grant Thornton UK LLP as auditors of Accord Housing Association and its Subsidiaries will be proposed at the 2014 Annual General Meeting.

On behalf of the Board

Mr B. Blower, MBE (Chairman) Lakhbir Jaspal (Deputy Group Chief Executive) Date: 24 July 2014 Date: 24 July 2014


Independent auditor’s report to the members of Accord Housing Association LimitedWe have audited the financial statements of Accord Housing Association Limited for the year ended 31 March 2014 which comprise the consolidated and association income and expenditure accounts, the consolidated and association balance sheets, the consolidated cash flow statement 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 housing association’s members, as a body, in accordance with regulations made under Section 9 and 13 of the Friendly and Industrial and Provident Societies Act 1968. Our audit work has been undertaken so that we might state to the housing association’s members those matters we are required to state to them in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the housing association and the housing association’s members as a body, for our audit work, for this report, or for the opinions we have formed.

Respective responsibilities of the board and auditorsAs explained more fully in the Statement of Responsibilities of the Board (set out on page 67), 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.

Scope of the audit of the financial statementsA 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

Opinion on financial statementsIn our opinion the financial statements:

u give a true and fair view of the state of the association’s affairs and group affairs as at 31 March 2014 and of the group’s and parent’s income and expenditure for the year then ended; and

u have been properly prepared in accordance with Industrial and Provident Societies Acts 1965 to 2002, 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 exceptionWe have nothing to report in respect of the following matters where the Industrial and Provident Societies Acts 1965 to 2002 requires us to report to you if, in our opinion:

u a satisfactory system of control over transactions has not been maintained; or

u the parent association has not kept proper accounting records; or

u the financial statements are not in agreement with the books of account; or

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

Grant Thornton UK LLP

Statutory Auditor, Chartered Accountants Milton Keynes, England 4 August, 2014

72 Accord Group

INCOME AND EXPENDITURE ACCOUNT

Notes Group Group Association Association 2014 2013 2014 2013 £000 £000 £000 £000

Turnover 100,688 91,399 48,456 44,439 Operating costs (82,744) (75,138) (34,171) (31,939) Cost of sales (2,073) (579) (2,073) (579)

Operating surplus 2 15,871 15,682 12,212 11,921 Surplus on sale of fixed assets 4 316 405 85 347 Interest receivable and similar income 11 55 5 48 Interest payable and similar charges 5 (12,635) (13,242) (9,408) (9,906) Exceptional Item 8 72 103 473 -

Surplus for the financial year before taxation 8 3,635 3,003 3,367 2,410Taxation 19 (21) (3) - -

Surplus for the financial year after taxation 20 3,614 3,000 3,367 2,410

All amounts relate to continuing activities. The notes on pages 76 to 104 form an integral part of the Financial Statements.

All recognised surpluses and deficits have been included in the income and expenditure account.

The Financial Statements were approved by the Board of Management on 24 July, 2014 and signed on its behalf by:

CHAIRMAN BOARD MEMBER BOARD MEMBER


GROUP BALANCE SHEET



The notes on pages 76 to 104 form an integral part of the Financial Statements.

Notes 2014 2013 £000 £000 £000 £000 Intangible fixed assetsGoodwill 29 23,999 25,555

Tangible fixed assets Housing properties less depreciated costs 645,718 621,535Social housing and other grants (257,059) (252,459)

9 388,659 369,076Other fixed assets 10 7,889 7,759Investments 11 83 86 Current assets Properties for sale 12 2,650 5,633 Stock and work in progress 13 894 1,068Debtors 14 13,865 13,805Cash at bank and in hand 6,612 3,741

24,021 24,247 Creditors: Amounts falling due within one year 15 (26,220) (24,029)

Net current (liabilities)/assets (2,199) 218

Total assets less current liabilities 418,431 402,694

Creditors: Amounts falling due after 16 333,771 321,648more than one year

Capital and reserves Share capital 18 - -Revenue reserves 20 84,583 80,983Designated reserves 20 25 11Consolidation reserves 20 43 43Minority Interest reserve 20 9 9

418,431 402,694

74 Accord Group

ASSOCIATION BALANCE SHEET




Notes 2014 2013 £000 £000 £000 £000

Tangible fixed assets Housing properties less depreciated costs 461,305 444,240Social housing and other grants (173,783) (170,267)

9 287,522 273,973

Other fixed assets 10 5,224 5,536Investments 11 29,120 29,123 Current assets Properties for sale 12 2,650 5,633 Stock and work in progress 13 894 1,068Debtors 14 8,188 7,651Cash at bank and in hand 2,815 965

14,547 15,317 Creditors: Amounts falling due within one year 15 (19,461) (17,618)Net current (liabilities)/assets (4,914) (2,301)

Total assets less current liabilities 316,952 306,331Creditors: Amounts falling due after 16 265,720 258,466more than one year

Capital and reserves Share capital 18 - -Revenue reserves 20 51,232 47,865

316,952 306,331


CONSOLIDATED GROUP CASHFLOW STATEMENT

Notes 2014 2013 £000 £000 £000 £000 Net cash inflow from operating activities 21a 26,937 22,748

Returns on investments and servicing of financeInterest received 11 55

Exceptional item re: Icelandic bank/loan 8 72 103 breakage costs

Interest paid (14,380) (14,114)

Net cash outflow from returns on (14,297) (13,956) investments and servicing of finance

Corporation tax paid 2 (21)

Capital expenditure and financial investmentAcquisition and construction of housing properties (27,402) (29,223)Social housing grant received 21d 4,253 7,430Purchase of other fixed assets (2,740) (1,852)Sales of housing properties 2,366 2,231Investments 3 3

Acquisition of Direct Health Group Limited, - (29,037) net of cash

Net cash acquired with Direct Health Group - 237 Limited, acquisition

Net cash outflow from capital expenditure (23,520) (50,211)Cash outflow before movement of liquid (10,878) (41,440) resources and financing

Management of liquid resourcesFinancingLoans received 16,500 28,818Loans repaid (3,092) (5,692)

Net cash inflow from financing 21b 13,408 23,126Increase/(decrease) in cash 21c 2,530 (18,314)


76 Accord Group

Notes to the

FINANCIAL STATEMENTS


1. Principal Accounting Policies

Basis of AccountingThe financial statements have been prepared in accordance with applicable Accounting Standards, the Statement of Recommended Practice ‘Accounting by Registered Social Landlords’ 2010 and on the historical cost basis. Accounting policies are consistently applied and have remained unchanged from the prior year. A summary of accounting policies is set out below.

Basis of consolidationThe consolidated accounts incorporate the financial statements of Accord Housing Association Limited and all of its subsidiary undertakings. Accord Group acquired Direct Health Group Limited on 18 June 2012. Direct Health Group Limited’s financial performance information is included in the consolidated financial statements from the date of acquisition.

Turnover and revenue recognitionTurnover represents rental and service charge income receivable, fees receivable, revenue grants from the Homes and Communities Agency and other public authorities and sale proceeds from first tranche shared ownership sales. Income is recognised from the point when properties are first let. Income from first and subsequent tranches sales, and properties built for sale is recognised at the point of legal completion of the sale. Revenue grants are receivable when the conditions for receipt when the conditions for receipt of agreed grant funding have been met. Charges for care and support services funded are recognised as they fall due under contractual arrangements.

Sale of housing propertiesWhere properties built for sale are disposed of during the year, the disposal proceeds are included in turnover, and the attributable costs included in cost of sales. The surplus or deficit on disposal of housing properties held as fixed assets, including second or subsequent tranches of shared ownership properties, is accounted for on the face of the income and expenditure account. Where any Social Housing Grant (SHG) to be recycled or repaid is less than the SHG relating to the disposal, the difference is treated as abated SHG and included as a component of the surplus or deficit on disposal.

Supported housing managed by agenciesSocial Housing Grant claimed and capital expenditure incurred on hostels owned by the Association are included in the balance sheet of the Association. The treatment of other income and expenditure is determined by whether day to day financial risk has been substantially transferred or retained by the Association. Where risk has been retained by the Association all the hostel’s income, expenditure, assets and liabilities are included in the Association’s financial statements. Where risk has been substantially transferred to the agency, the Association’s financial statements include only the income, expenditure, assets and liabilities arising directly from Association’s operations.

Value added taxThe Association and the subsidiaries are Value Added Tax (VAT) registered but a large proportion of their income (rents and service charges) is exempt from VAT, giving rise to a partial exemption calculation. This significantly restricts recovery of VAT incurred. Expenditure is therefore shown VAT inclusive.

DerivativesThe Group uses interest rates swaps to reduce its exposure to future increases in the interest rate on floating rate loans. The notional principal is not reflected in the group’s balance sheet. Payments made under swaps are accrued over the payment period on a straight-line basis and adjusted against interest payable on the loans.

Loan expensesExpenses incurred in raising loan finance are recorded as a deduction from gross proceeds of the loan and charged to the income and expenditure account over the loan term. Loan termination costs are charged to the income and expenditure account in the year that they are incurred.

78 Accord Group

Supporting People (SP) subsidy incomeSupporting People funding was introduced on 1 April 2003 and replaces Supported Housing Management Grant. Supporting People contracts are entered into with local authorities and are of two types:

u Block subsidy is determined for each tenancy based on support needs, or

u Block gross is a fixed sum payable, determined by the number of qualifying bed spaces and subject to minimum occupancy levels as agreed with local authorities.

Housing properties, impairment and property improvementsDuring the year ended 31 March 2012, the Group adopted full component accounting in relation to the capitalisation and depreciation of its completed housing property stock. Previously the Association depreciated housing properties over the estimated useful life of the asset as a whole.

From 1 April 2011, all housing properties have been split between their land, structure costs and their major components which require periodic replacement. Refurbishment or replacement of such major components is capitalised and depreciated over the estimated useful life of the component. The estimated useful economic life for each component has been arrived at based on the Association’s experience of component replacement. The Association will continue to monitor and review the useful economic lives of all components and make revisions where sustained material changes arise.

Estimated useful economic life for each component:

Improvements to properties are works, which result in an increase in the net rental income, such as a reduction in future maintenance costs, or result in a significant extension of the useful economic life of the property in the business. All other major repairs expenditure is charged to the income and expenditure account for the year.

Housing properties in the course of construction are stated at cost and are not depreciated. Housing properties are transferred to completed properties when they are ready for letting and are stated at cost less depreciation.

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 fixed asset and included in housing properties at cost, less any provisions needed for depreciation or impairment.

The Association reviews its properties for impairment on an annual basis. Any permanent diminution in the carrying value of these properties is charged to the Income and Expenditure Account.

Donated landLand donated by local authorities and others is added to cost at the market value of the land at the time of the donation. Where the land is not related to specific development and is donated by a public body an amount equivalent to the increase in value between market value and cost is added to other grants. Where the donation is from a non-public source, the value of the donation is included as income.

Social housing and similar grantsWhere developments have been financed wholly or partly by Social Housing Grant, the cost of those developments has been reduced by the amount of grant receivable. Social Housing Grant is credited to the income and expenditure account to the extent that it is claimed in respect of development administration costs which are not capitalised. When a Social Housing Grant funded property is sold, the grant becomes ‘recyclable’ and is transferred to a recycled capital grant fund until it is reinvested into a replacement property.

Building

Kitchen

Bathroom

Boiler and central heating

Windows and doors

Lifts (where applicable)

125 years

20 years

30 years

20 years

35 years

20 years


Social Housing Grant may be repayable in certain circumstances, such as when a property is no longer used for social housing. When Social Housing Grant becomes repayable, it is included as a current liability until it is repaid. The repayment of Social Housing Grant is generally subordinated to the repayment of housing loans as agreed with the Homes and Communities Agency.

Fixed assets and depreciation: non-housing propertiesDepreciation is charged on a straight-line basis over the expected useful economic lives of fixed assets to write off the cost less estimated residual value at the following annual rates:

Where there is evidence of impairment, fixed assets are written down to recoverable amount, with the impairment being charged to the Income and Expenditure Account.

Stock, work in progress and finished goodsStock, work in progress and finished goods relates to activities at Accord’s LoCaL Homes factory. Raw materials used in the construction of timber frame homes/panels are valued at the lower of cost and net realisable value. Work in progress is valued on the basis of direct costs, including raw materials and labour, incurred in bringing part complete timber frame panels to their present location and condition. Finished goods comprise completed timber frame panels ready for despatch and construction which are valued at the contracted transfer value.

Capitalisation of interest and development administration costsInterest on borrowings is charged to housing properties under construction up to the date of completion of each scheme. The interest charged is either on borrowing specifically for a scheme or on net borrowings, to the extent that they are deemed to be financing a scheme based on the Group’s weighted average cost of capital in 2013/14 of 4.01% (2013: 4.48%). This treatment applies irrespective of the original purpose for which the loan was raised. Staff costs, which are directly attributable to bringing housing properties into working conditions for their intended use, are capitalised.

Other long-term creditorsOther long-term creditors include the costs of arranging long term funding. These amounts are amortised over the period of the underlying financial instrument.

LeasesRentals paid under operating leases are charged to the Income and Expenditure Account on a straight line basis over the lease term.

Properties for saleShared 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.

Freehold offices

Furniture and equipment

Computer equipment

Leasehold improvements

50 years

6 years

6 years

6 years

80 Accord Group

GoodwillGoodwill arises on business combinations in respect of acquisitions and represents the difference between the consideration given and the fair value of the net assets of the acquired subsidiary or business. Goodwill is amortised over the deemed useful life (20 years) of the value of the net assets of the subsidiary or business acquired. The Association reviews goodwill for impairment on an annual basis. Any permanent diminution in the carrying value is charged to the Income and Expenditure Account.

Recycled capital grant fundGrants repayable on property disposals are calculated in accordance with relevant Homes and Communities Agency procedures and included within a recycled capital grant fund. Interest is credited to the fund and calculated on a daily basis with the interest rate being determined by the level of total deposits. The fund can be used in the same manner as a new project funded with social housing grant with certain permitted uses. It is intended to use the fund in the provision of either new social housing for rent and/or housing for sale on shared ownership terms or to supplement the major repair programme. Grants are repayable in certain specific circumstances including where the Homes and Communities Agency concludes that the Group is unlikely to use the fund for a permitted purpose within three years. The fund is included within long-term creditors.

Disposal proceeds fundNet proceeds from the disposal of property under voluntary purchase grant and statutory right to acquire legislation and regulations are included within a disposal proceeds fund. Interest is credited to the fund and calculated on a daily basis with the interest rate being determined by the level of total deposits. The fund can be applied for specific purposes ranging from acquisition of dwellings for letting, to repairs or improvement of vacant dwellings or buildings otherwise subject to demolition. The fund may be repayable at the discretion of the Homes and Communities Agency, in certain specific circumstances. The fund is included in long-term creditors.

Pension costsThe Group primarily operates a money purchase pension scheme, the costs of which are written off to the Income and Expenditure account in the period to which they relate. There are a very limited number of employees who participate in a multi employer defined benefit scheme to which the Association contributes, the cost of which is written off to the Income and Expenditure Account on an accruals basis. Contributions to the defined benefit pension scheme are calculated as a percentage of pensionable salaries of the employees, determined in accordance with actuarial advice. It is not possible to identify the share of underlying assets and liabilities belonging to individual participating employers.


Year 2014 2013

Social housing lettings General needs housing 34,594 (20,279) - 14,315 31,901 (19,357) - 12,544Supported housing 11,031 (9,188) - 1,843 11,495 (9,163) - 2,332Residential care home 7,336 (7,241) - 95 7,460 (7,488) - (28)Shared ownership 1,959 (1,276) - 683 1,867 (1,249) - 618

Total social housing 54,920 (37,984) - 16,936 52,723 (37,257) - 15,466

Other social activitiesSupporting people contract income 2,296 (2,250) - 46 2,396 (2,286) - 110Development administration - (50) - (50) - (11) - (11)Management administration 957 (705) - 252 806 (691) - 115First tranche shared ownership sales 2,004 - (2,073) (69) 565 - (579) (14)Other 180 (539) - (359) 191 (237) - (46)

Total social housing activity 5,437 (3,544) (2,073) (180) 3,958 (3,225) (579) 154 Non-social housing activityRegistered nursing homes 477 (639) - (162) 531 (649) - (118)Market rents 458 (416) - 42 576 (549) - 27 Domiciliary care services 30,610 (31,052) - (442) 26,136 (25,861) - 275 Other 8,786 (8,277) - 509 7,475 (6,941) - 534 Amortisation of goodwill - (832) - (832) - (656) - (656)

Total non social housing activity 40,331 (41,216) - (885) 34,718 (34,656) - 62Total 100,688 (82,744) (2,073) 15,871 91,399 (75,138) (579) 15,682 Surplus on the sale of housing properties 316 405Interest receivable and similar income 11 55Interest payable and similar charges (12,635) (13,242)Exceptional item 72 103

Surplus for the financial year 3,635 3,003 before taxation

Turn

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Cost

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(def

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0

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2. TURNOVER, OPERATING COSTS, COST OF SALES AND OPERATING SURPLUS: GROUP

2013 data has been restated to reflect a reallocation of certain costs to ensure consistency in values reported.

82 Accord Group

2. TURNOVER, OPERATING COSTS, COST OF SALES AND OPERATING SURPLUS: ASSOCIATION

Year 2014 2013

Social housing lettings General needs housing 20,462 (12,296) - 8,166 18,754 (11,831) - 6,923Supported housing 6,694 (5,269) - 1,425 6,686 (4,878) - 1,808Residential care home 6,979 (6,794) - 185 6,958 (6,901) - 57Shared ownership 1,607 (1,068) - 539 1,546 (1,050) - 496

Total social housing 35,742 (25,427) - 10,315 33,944 (24,660) - 9,284

Other social activities Supporting people contract income 66 (66) - - 82 (83) - (1)Development administration - (50) - (50) - (10) - (10)Management administration 2,318 (1,204) - 1,114 2,162 (894) - 1,268First tranche shared ownership sales 2,004 - (2,073) (69) 565 - (579) (14)Other 446 (275) - 171 440 (35) - 405

Total social housing activity 4,834 (1,595) (2,073) 1,166 3,249 (1,022) (579) 1,648 Non-social housing activity Registered nursing homes 476 (639) - (163) 531 (649) - (118)Other 7,404 (6,510) - 894 6,715 (5,608) - 1,107

Total non social housing activity 7,880 (7,149) - 731 7,246 (6,257) - 989Total 48,456 (34,171) (2,073) 12,212 44,439 (31,939) (579) 11,921 Surplus on the sale of housing properties 85 347Interest receivable and similar income 5 48Interest payable and similar charges (9,408) (9,906)Exceptional item 473 -

Surplus for the financial year 3,367 2,410

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3. INCOME AND EXPENDITURE FROM SOCIAL HOUSING LETTINGS: GROUP

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Rent receivable net of identifiable service charges 32,269 5,011 1,236 1,259 39,775 37,413 Service income 2,312 4,485 2,335 699 9,831 9,696 Charges for support services 13 1,535 3,765 1 5,314 5,614

Net rental income 34,594 11,031 7,336 1,959 54,920 52,723Turnover from social housing lettings 34,594 11,031 7,336 1,959 54,920 52,723

Management (5,417) (1,315) (619) (329) (7,680) (8,293)Services (2,245) (3,729) (2,342) (667) (8,983) (9,051)Care and support - (2,010) (3,888) - (5,898) (5,863)Routine maintenance (6,385) (1,018) (204) (96) (7,703) (7,359)Planned maintenance (2,160) (235) (96) (78) (2,569) (2,231)Rent losses from bad debts (340) (79) (4) (1) (424) 14Depreciation on housing properties (3,732) (802) (88) (105) (4,727) (4,474)

Operating costs on social housing lettings (20,279) (9,188) (7,241) (1,276) (37,984) (37,257)Operating surplus on social housing lettings 14,315 1,843 95 683 16,936 15,466

Void losses 491 717 74 - 1,282 1,157

2013 data has been restated to reflect a reallocation of certain costs to ensure consistency in values reported.

84 Accord Group

3. INCOME AND EXPENDITURE FROM SOCIAL HOUSING LETTINGS: ASSOCIATION

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Rent receivable net of identifiable service charges 18,953 3,066 1,165 940 24,124 22,330Service income 1,497 2,093 2,227 666 6,483 6,227Charges for support services 12 1,535 3,587 1 5,135 5,387

Net rental income 20,462 6,694 6,979 1,607 35,742 33,944Turnover from social housing lettings 20,462 6,694 6,979 1,607 35,742 33,944

Management (3,530) (353) (557) (174) (4,614) (5,307)Services (1,411) (2,031) (2,224) (630) (6,296) (6,178)Care and support - (1,427) (3,647) - (5,074) (4,765)Routine maintenance (3,500) (642) (194) (92) (4,428) (3,952)Planned maintenance (1,546) (158) (84) (77) (1,865) (1,541)Rent losses from bad debts (203) (35) (4) (1) (243) (201)Depreciation on housing properties (2,106) (623) (84) (94) (2,907) (2,716)

Operating costs on social housing lettings (12,296) (5,269) (6,794) (1,068) (25,427) (24,660)Operating surplus on social housing lettings 8,166 1,425 185 539 10,315 9,284

Void losses 307 359 74 - 740 649


Group Group Association Association 2014 2013 2014 2013 £000 £000 £000 £000 On loans repayable within five years - - - -On loans repayable in more than five years 13,485 13,036 10,345 9,894

13,485 13,036 10,345 9,894 Add: Other interest payable and similar charges 493 1,073 276 841Less: Capitalised in respect of housing properties (1,343) (867) (1,213) (829)

12,635 13,242 9,408 9,906

5. INTEREST PAYABLE AND SIMILAR CHARGES

Group Group Association Association 2014 2013 2014 2013 £000 £000 £000 £000 Sale proceeds 2,252 1,947 838 1,219Grant abated 286 233 139 189Cost of sale (1,931) (1,653) (743) (895)Incidental sale expenses (291) (122) (149) (166)

Surplus on sale 316 405 85 347

4. SURPLUS ON SALE OF HOUSING PROPERTIES

86 Accord Group

Remuneration Expenses £000 £000

Barrie Blower, MBE 14 -Akshay Parikh 8 -Ghulam Shabar 6 -Bruce Gilbert, OBE 7 6Shahana Khan 6 -Bill Hartnett - -Margaret Cope Resigned March 2014 6 -Derek Leyland Resigns July 2014 6 -Barry Picken Resigns September 2014 6 -

Total 59 6

6. DIRECTORS’ EMOLUMENTS

Remuneration totalling £59,000 was paid to Non-Executive Members of the Group Board in the year, as outlined in table below:

Group-wide non-Executive Members received remuneration totalling £118,716 (2013: £100,663) during the period which includes the amounts disclosed in the table above.

The Directors are defined as the members of the Group Board, the Group Chief Executive and any member of the executive management team. The Group Chief Executive is an ordinary member of the Association’s pension scheme. No enhanced or special terms apply to his membership and he has no other pension arrangements to which the Association contributes.

2014 2013 £000 £000 (restated)

Aggregate emoluments payable to directors (including pension contribution and benefits in kind) 1,288 1,165 Emoluments payable to the highest paid director, the Group Chief Executive Officer, (excluding pension contributions but including benefits in kind) Amounts restated in 2013 include an element of backdated pay. Salary 165 150 Other benefits 17 14 Group Chief Executive Officer total emoluments as a percentage of turnover 0.2% 0.2% Group Chief Executive Officer total emoluments per employee £54 £43


7. EMPLOYEE INFORMATION

Group Group Association Association 2014 2013 2014 2013 Persons FTE Persons FTE Persons FTE Persons FTE

Office staff, care support workers, wardens, caretakers and cleaners 3,378 2,371 3,824 2,900 975 797 1,031 843

Staff costs (for the above persons) £000 £000 £000 £000 Wages and salaries 47,287 41,183 18,132 17,592 Social security costs 3,379 2,731 1,200 1,110 Other costs (incl. Pension) 1,463 1,117 816 681

Total 52,129 45,031 20,148 19,383

The average number of persons employed during the year was:

2014 (No.)

£70,001 to £80,000 1£90,001 to £100,000 1£100,001 to £110,000 1£110,001 to £120,000 2£120,001 to £130,000 1£150,001 to £160,000 -£160,001 to £170,000 1£170,001 to £180,000 1£190,001 to £200,000 1

2014 2013 £000 £000

Total expenses reimbursed to the directors excluding board members 12 11 expenses above not chargeable to United Kingdom income tax

6. DIRECTORS’ EMOLUMENTS CONTINUED

The full time equivalent number of executive staff who received emoluments:

In addition, 15 members of senior management received emoluments in excess of £60,000 (including pension contribution and benefits in kind).Four of these senior managers received emoluments of between £60,001 - £70,000, eight between £70,001 - £80,000, two between £100,001 - £110,000 and one between £140,001 - £150,000.

88 Accord Group

8. OPERATING SURPLUS FOR THE FINANCIAL YEAR

Group Group Association Association 2014 2013 2014 2013 £000 £000 £000 £000 Operating surplus for the financial year is stated after charging:

Depreciation on housing properties: Depreciation charge – social housing (Note 3) 4,727 4,474 2,907 2,716Depreciation charge – other social housing (Note 2) 89 89 705 644Depreciation charge – non-social housing (Note 2) 21 21 12 12 Total depreciation charge 4,837 4,584 3,624 3,372 Less: write off component disposals (451) (438) (366) (292)

Depreciation Charge (Note 9) 4,386 4,146 3,258 3,080 Depreciation on other tangible fixed assets 1,688 1,940 1,092 1,074Auditors’ remuneration (excluding VAT) - in their capacity as auditors 85 82 23 25- in respect of other services 95 1 91 -Surplus on disposal of tangible fixed assets 316 405 85 347 other than development for outright salesOperating lease payments 881 452 270 267Repairs and maintenance expenditure 10,263 9,590 6,293 5,493

In addition £4.679 million of repairs expenditure has been capitalised in the year (2013: £3.192 million).

An exceptional item has been reported in the Group Income and Expenditure account totalling £72k. This balance relates to ongoing dividend income in Caldmore as funds lost in the Icelandic banking failure continue to be recovered. In 2013 £103k was recovered and reported as an exceptional item.


Cost At 1 April, 2013 589,064 26,413 30,855 - 2,026 1,317 649,675Additions - works to existing properties 3,996 - - - 47 - 4,043 Additions - new properties 668 26,253 (14) - - - 26,907 Tenure reclassification (2,876) 5,339 (2,463) - - - - Flexible tenure - buybacks 169 - (169) - - - -Schemes completed in the year 12,295 (13,611) 1,316 - - -Disposals (2,307) - (354) - (6) - (2,667)

At 31 March, 2014 601,009 44,394 29,171 - 2,067 1,317 677,958 Social housing grant and other grants At 1 April, 2013 236,442 5,851 8,575 - 1,426 165 252,459Received and receivable during year 107 5,666 - - - - 5,773Flexible tenure - buybacks 18 - (18) - - - -Schemes completed in year 2,187 (2,547) 360 - - - -(Repaid)/abated on disposals (1,083) - (90) - - - (1,173)

At 31 March, 2014 237,671 8,970 8,827 - 1,426 165 257,059 Depreciation At 1 April, 2013 26,544 - 1,117 - 359 120 28,140Charge for year 4,231 - 117 - 26 12 4,386Eliminated in respect of disposals (258) - (27) - (1) - (286)

At 31 March, 2013 30,517 - 1,207 - 384 132 32,240 Net book value at 31 March, 2014 332,821 35,424 19,137 - 257 1,020 388,659Net book value at 31 March, 2013 326,078 20,562 21,163 - 241 1,032 369,076

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9. TANGIBLE FIXED ASSETS: HOUSING PROPERTIES - GROUP

90 Accord Group

9. TANGIBLE FIXED ASSETS: HOUSING PROPERTIES - ASSOCIATION

Cost At 1 April, 2013 404,430 26,389 27,262 - 1,278 1,317 460,676Additions - works to existing properties 3,189 - - - 47 - 3,236Additions - new properties 309 17,899 (11) - - - 18,197Tenure reclassification (2,876) 5,339 (2,463) - - - -Flexible tenure - buybacks 169 - (169) - - - -Schemes completed in year 12,366 (13,682) 1,316 - - - -Disposals (922) - (338) - (6) - (1,266)

At 31 March, 2014 416,665 35,945 25,597 - 1,319 1,317 480,843 Social housing grant and other grants At 1 April, 2013 156,618 5,325 7,060 - 1,099 165 170,267Received and receivable during year 107 3,835 - - - - 3,942Flexible tenure - buybacks 18 - (18) - - - -Schemes completed in year 2,187 (2,547) 360 - - - -(Repaid)/abated on disposals (346) - (80) - - - (426)

At 31 March, 2014 158,584 6,613 7,322 - 1,099 165 173,783 Depreciation At 1 April, 2013 15,287 - 1,016 - 13 120 16,436Charge for year 3,126 - 105 - 15 12 3,258Eliminated in respect of disposals (128) - (27) - (1) - (156)

At 31 March, 2014 18,285 - 1,094 - 27 132 19,538 Net book value at 31 March, 2014 239,796 29,332 17,181 - 193 1,020 287,522Net book value at 31 March, 2013 232,525 21,064 19,186 - 166 1,032 273,973

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Work to existing properties Group Group Association Association 2014 2013 2014 2013 £000 £000 £000 £000 Revenue 10,263 9,590 6,293 5,493

Amounts capitalised: – Improvements 636 - 280 - – Replaced components 4,043 3,192 3,236 2,141

14,942 12,782 9,809 7,634

9. TANGIBLE FIXED ASSETS: HOUSING PROPERTIES CONTINUED

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Cost At 1 April, 2013 4,968 413 10,373 15,754 3,231 413 6,686 10,330Additions 104 - 1,630 1,734 105 - 591 696Transfer of engagements 1,006 - - 1,006 1,006 - - 1,006 Disposals - - (5) (5) - - (5) (5)

At 31 March, 2014 6,078 413 11,998 18,489 4,342 413 7,272 12,027 Other Grants At 1 April, 2013 107 306 - 413 107 306 - 413 Transfer of engagements 908 - - 908 908 - - 908

At 31 March, 2014 1,015 306 - 1,321 1,015 306 - 1,321 Depreciation At 1 April, 2013 1,212 22 6,348 7,582 607 22 3,752 4,381 Charge for year 97 16 1,575 1,688 65 16 1,011 1,092 Transfer of engagements 14 - - 14 14 - - 14 Eliminated in respect of disposals - - (5) (5) - - (5) (5)At 31 March, 2014 1,323 38 7,918 9,279 686 38 4,758 5,482

Net book value at 31 March, 2014 3,740 69 4,080 7,889 2,641 69 2,514 5,224

Net book value at 31 March, 2013 3,649 85 4,025 7,759 2,517 85 2,934 5,536

AssociationGroup

10. TANGIBLE FIXED ASSETS: OTHER

On 17 March 2014 the assets and liabilities of Walsall Housing Regeneration Community Housing Association were transferred into Accord Housing Association through a Deed of Undertaking.

92 Accord Group

11. INVESTMENTS

Group Group Association Association 2014 2013 2014 2013 £000 £000 £000 £000 At beginning of year 86 89 29,123 89 Addition in the year (see note 30) - - - 29,037 Repaid during year (3) (3) (3) (3)

At end of year 83 86 29,120 29,123

See Note 26 for a list of subsidiary undertakings and joint ventures.

Group Group Association Association 2014 2013 2014 2013 £000 £000 £000 £000 Properties under construction 2,650 5,633 2,650 5,633 Completed properties - - - -

2,650 5,633 2,650 5,633

Group Group Association Association 2014 2013 2014 2013 £000 £000 £000 £000 Raw materials 29 95 29 95 Finished goods 865 973 865 973

894 1,068 894 1,068

12. PROPERTIES FOR SALE

13. STOCK AND FINISHED GOODS


Group Group Association Association 2014 2013 2014 2013 £000 £000 £000 £000

Housing and other loans 4,191 2,958 3,328 2,108Bank overdraft 450 109 123 - Trade creditors 8,170 9,337 5,847 6,868 Amounts owing to subsidiary undertakings - - 850 1,013 Corporation tax 17 13 - - Social Security and other taxes 463 522 340 388 Other creditors 10,243 8,429 7,077 5,569 Accruals and deferred income 2,671 2,661 1,881 1,672 Recycled capital grant fund 15 - 15 -

26,220 24,029 19,461 17,618

Group Group Association Association 2014 2013 2014 2013 £000 £000 £000 £000 Arrears of rent and service charge 2,348 2,207 1,309 1,202Provision for bad and doubtful debts (1,177) (1,075) (670) (609)

1,171 1,132 639 593 Social Housing Grant receivable 1,788 1,839 1,788 1,839 Corporation tax debtor - 19 - - Amounts owing by subsidiary undertakings - - 530 518 Other debtors and prepayments 10,906 10,815 5,231 4,701

13,865 13,805 8,188 7,651

14. DEBTORS

15. CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR

11. INVESTMENTS

94 Accord Group

Group Group Association Association 2014 2013 2014 2013 £000 £000 £000 £000 Loans repayable by instalments fall due as follows:Between one and two years 7,190 4,191 6,139 3,328 Between two and five years 20,059 19,608 15,605 16,247 In five or more years 308,368 299,738 245,735 240,616

335,617 323,537 267,479 260,191

Floating borrowings 124,150 110,563 99,573 89,385 Fixed borrowings 215,658 215,932 171,234 172,915

339,808 326,495 270,807 262,300

% % % %Weighted average interest rate 4.01 4.484 3.83 4.07

Years Years Years YearsWeighted average time for which rate is fixed 9.3 10.4 5.9 9.1

Group Group Association Association 2014 2013 2014 2013 £000 £000 £000 £000 Housing loansRepayable by annual instalment 335,617 323,537 267,479 260,191

Total housing loans 335,617 323,537 267,479 260,191Financing costs capitalised (3,334) (3,429) (2,688) (2,778)

Net housing loans 332,283 320,108 264,791 257,413 Recycled capital grant fund (note 17) 1,488 1,540 929 1,053

333,771 321,648 265,720 258,466

The Association has arrangements in order to hedge against the long-term risk of an increase in variable interest rates under its principal loan facility. As an Industrial and Provident Society with charitable objectives and a registered provider of social housing with the Homes and Communities Agency, the Association does not trade for profit and is regulated by the HCA which has issued extensive guidelines on the use of derivative instruments by providers of social housing. The Association has applied this guidance in entering into 14 cancellable swap transactions totalling £89.5 million with the Royal Bank of Scotland Plc. The rates of interest range from 2.63% to 5.39% and maturity dates range from December 2014 to March 2029.

16. CREDITORS: AMOUNTS FALLING DUE AFTER MORE THAN ONE YEAR

The loans are secured by specific charges on the Association’s and Group’s housing properties.


Group Group Association Association 2014 2013 2014 2013 £000 £000 £000 £000 Corporation tax 21 3 - -

Group Group Association Association 2014 2013 2014 2013 £000 £000 £000 £000

Fund at beginning of year 1,540 1,185 1,053 569 Transferred to fund during year 1,295 592 287 696 Interest credited to fund 9 7 6 4 Utilised during the year (1,341) (244) (402) (216) Repaid during year - - - -

Fund at end of year 1,503 1,540 944 1,053

Group Group Association Association 2014 2013 2014 2013Shares of £1 each issued and fully paid Number Number Number Number At beginning of year 30 22 30 22 Issued during year - 9 - 9 Surrendered during year - (1) - (1)

At end of year 30 30 30 30

The share capital of the Association consists of shares with a nominal value of £1 each which carry no rights to dividends or other income. Shares in issue are not capable of being repaid or transferred. When a shareholder ceases to be a member, this person’s share is cancelled and the amount paid up thereon becomes the property of the Association. Therefore all shareholdings relate to non-equity interests.

The taxation liability arises solely from bchs.

17. RECYCLED CAPITAL GRANT FUND AND DISPOSAL PROCEEDS FUND

Withdrawals from the recycled capital grant fund were used for the purchase of properties under the flexible tenure scheme. Withdrawals from the disposal proceeds fund were used for the development of new housing scheme for letting.

18. SHARE CAPITAL

19. TAXATION

96 Accord Group

2014 2013 £000 £000 Operating surplus 15,871 15,682Depreciation charges and amortisation of finance costs 7,644 7,143(Increase)/decrease in debtors (129) 522Increase/(decrease) in creditors 3,098 (599)Disposals 453 -

Net cash flow from operating activities 26,937 22,748

a) Reconciliation of operating surplus to net cash inflow from operating activities

21. CASH FLOW STATEMENT

Group At 1 April, 2013 80,983 11 43 9 81,046Surplus for the year 3,614 - - - 3,614 Transfer to income and expenditure account (14) 14 - - -

At 31 March, 2014 84,583 25 43 9 84,660

Association At 1 April, 2013 47,865 - - - 47,865 Surplus for the year 3,367 - - - 3,367

At 31 March, 2014 51,232 - - - 51,232

Although under its rules the Group does not trade for profit, its financial affairs are planned so that each year income exceeds expenditure. The annual surplus is vital to enable the Group to meet its commitments to providers of private finance, continue to raise further private finance and have reserves to provide for unexpected situations. The Board or the Committees of each Group member regularly review the Group’s finances to determine the minimum amount of reserves required for day to day management and to provide for the future. Any amounts over and above this minimum are invested in the provision of social housing. The Group’s reserve is not cash backed. Designated reserves relate to Fry Housing Trust’s Benevolent fund only, there are no other designated reserves in the Group.

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20. RESERVES


At 31 March, Cash Flow At 1 April, 2014 2013 £000 £000 £000

Cash at bank and in hand 6,612 2,871 3,741

6,612 2,871 3,741 Bank overdraft (450) (341) (109)Debt due within one year (4,191) (1,233) (2,958)Debt due after one year (332,283) (12,175) (320,108)

(330,312) (10,878) (319,434)

2014 2013 £000 £000 Increase/(decrease) in cash in the year 2,530 (18,314)Cash inflow from debt increase (13,408) (23,126)

Cash inflow from management of liquid resources (10,878) (41,440)Net debt at 1 April, 2013 (319,434) (277,994)

Net debt at 31 March, 2014 (330,312) (319,434)

b) Reconciliation of net cash flow to movement in net debt

c) Analysis of changes in net debt

2014 2013 £000 £000 Balance at beginning of year 252,872 248,109Cash inflow from capital grant funding 4,253 7,430Movement in debtors/creditors (net) 1,087 (2,083)Abated/(repaid) on disposals 123 (236)Transfer from/(to) grant funding 45 (348)

Balance at end of year 258,380 252,872

d) Analysis of changes in capital grant funding

98 Accord Group

22. PENSION COSTSThe Association operates a SHPS defined contribution pension scheme in respect of auto-enrolment which commenced 1 October 2013. The assets of the scheme are held separately from those of the Association. The contributions of the Association varied between 1% and 7% and employees varied between 1% and 4% of pensionable earnings. The total employer cost of pension contributions for the year was £43,402. The number of employees in the pension scheme at the year-end was 609.

The defined contribution pension scheme with AEGON was closed to new entrants during the financial year. The contributions of the Association varied between 1% and 12% and employee contributions varied between 1% and 7% of pensionable earnings. The total employer cost of pension contributions for the year was £529,268 (2013: £616,967). Contributions payable are charged to management expenses as they fall due. The number of employees in the pension scheme at the year-end was 150 (2013: 166).

The Direct Health Group contributes to money purchase pension schemes for the benefit of certain directors and employees. The assets of the schemes are held separately from those of the group in independently administered funds. The pension contributions payable for the financial year ended 31 March 2014 were £120,912 and an amount of £76,269 was owing to the schemes at the year end.

Ashram Housing Association, Caldmore Area Housing Association and Accord Housing Association, following the transfer of engagement, participate in the Social Housing Pension Scheme (the Scheme). The Scheme is funded and is contracted-out of the State Pension scheme. SHPS is a multi-employer defined benefit scheme. Employer participation in the Scheme is subject to adherence with the employer responsibilities and obligations as set out in the ‘SHPS House Policies and Rules Employer Guide’. The Scheme operated a single benefit structure, final salary with a 1/60th accrual rate until 31 March 2007. From April 2007 three defined benefit structures have been available, namely:

u Final salary with a 1/60th accrual rate


u Career average revalued earnings (CARE) with a 1/60th accrual rate.

From April 2010 a further two defined benefit structures have been available, namely:


u Career average revalued earnings (CARE) with a 1/80th accrual rate.

A defined contribution benefit structure was made available from 1 October 2010. An employer can elect to operate different benefit structures for their active members and their new entrants. An employer can only operate one open defined benefit structure at any one time. An open benefit structure is one which new entrants are able to join. Ashram Housing Association currently operates final salary with a 1/60th accrual rate, Caldmore Area Housing Association and Accord Housing Association operate final salary with a 1/60th accrual rate and Career average revalued earnings (CARE) with a 1/60th accrual rate. Ashram Housing Association and Caldmore Area Housing Association closed their final salary with 1/60th accrual rate to new contracts in previous accounting periods. Accord Housing Association also closed its final salary and career average related earning schemes with 1/60th accrual rate to new entrants in previous accounting periods.

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 determine the level of future contributions required, in respect of each benefit structure, so that the Scheme can meet its pension obligations as they fall due. From April 2007 the split of the total contribution rate between member and employer is set at individual employer level, subject to the employer paying no less than 50% of the total contribution rate. From 1 April 2010 the requirement for employers to pay at least 50% of the total contribution rate no longer applies. The actuarial valuation assesses whether the Scheme’s assets at the valuation date are likely to be sufficient to pay the pension benefits accrued by members as at the valuation date. Asset values are calculated by reference to market levels. Accrued pension benefits are valued by discounting expected future benefit payments using a discount rate calculated by reference to the expected future investment returns.


During the accounting period the following contributions were paid:

u Ashram Housing Association paid contributions at the rate of 9.25% and made past service deficit contributions of £52,140 (2013: £29,784). Member contributions varied between 11.05% and 13.05%. As at the balance sheet date there were 3 active members of the Scheme (2013: 3). The annual pensionable payroll in respect of these members was £149,159 (2013: £146,810).

u Caldmore Area Housing Association paid contributions of 6.95% (CARE scheme) and 9.25% (Final salary scheme) and made past service deficit contributions of £250,836 (2013: £138,972). Member contributions varied between 11.05% and 13.05% CARE scheme and Final salary scheme. As at the balance sheet date there were 22 active members of the Scheme (2013: 32). The annual pensionable payroll in respect of these members was £560,118 (2013: £773,793).

u Accord Housing Association paid contributions of 6.95% (CARE scheme) and 9.25% (Final salary scheme) and made past service deficit contributions of £88,200 (2013:£39,540). Member contributions varied between 11.05 % and 13.05% CARE scheme and Final salary scheme. As at the balance sheet date there were 13 active members of the Scheme (2013:17). The annual pensionable payroll in respect of these members was £665,663 (2013: £571,995).

It is not possible in the normal course of events to identify on a reasonable and consistent basis the share of underlying assets and liabilities belonging to individual participating employers. The Scheme is a multi-employer scheme, where the assets are co-mingled for investment purposes, and benefits are paid out of 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 2011 by a professionally qualified Actuary using the Projected Unit Method. The market value of the Scheme’s assets at the valuation date was £2,062 million. The valuation revealed a shortfall of assets compared with the value of liabilities of £1,035 million, equivalent to a past service funding level of 67.0%.

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%. The financial assumptions underlying the valuation as at 30 September 2011 were as follows:

Valuation discount rates

Pension increases

Pre-retirement

Pre 88 GMP

Pensioner post-retirement

Excess over GMP

Non pensioner post-retirement

Post 88 GMP

Pensionable earnings-growth

Price inflation

% p.a.

% p.a.

7.0

0.0

4.2

2.4

4.2

2.0

2.5 for 3 years, then 4.4

2.9

100 Accord Group

From 1 April 2013 to 30 September 2020

From 1 October 2020 to 30 September 2023

From 1 April 2013 to 30 September 2026

A cash amount(*) equivalent to 7.5% of Members’ Earnings per annum (payable monthly and increasing by 4.7% per annum each 1 April)

A cash amount(*) equivalent to 3.1% of Members’ Earnings per annum (payable monthly and increasing by 4.7% per annum each 1 April)

£30,640,000 per annum (payable monthly and increasing by 3% per annum each 1 April; first increase on 1 April 2014)

(*) The contributions of 7.5% will be expressed in nominal pound terms (for each Employer), increasing each year in line with the Earnings growth assumption used in the 30 September 2008 valuation (i.e. 4.7% per annum). The contributions of 3.1% will be calculated by proportioning the nominal pound payment at the time of the change. Earnings at 30 September 2008 (for each Employer) will be used as the reference point for calculating these contributions.

Benefit structure

Pre-retirement

Pre-retirement

Pre-retirement

Pre-retirement

Pre-retirement

Pre-retirement

Final salary with a 1/60th accrual rate


Career average revalued earnings (CARE) with a 1/60th accrual rate




Long-term joint contribution rate

(% of pensionable salaries)

19.4

16.9

18.1

14.8

14.0

9.7

If an actuarial valuation reveals a shortfall of assets compared to liabilities the Trustee must prepare a Recovery Plan setting out the steps to be taken to make up the shortfall. Following consideration of the results of the actuarial valuation, it was agreed that the shortfall of £1,035 million would be dealt with by the payment of deficit contributions as shown in the table below:

Expenses for death-in-service insurance, administration and Pension Protection Fund (PPF) levy are included in the contribution rate. The valuation was carried out using the following demographic assumptions:

u Mortality pre-retirement – 41% SAPS S1 Male/Female All Pensioners (amounts), Year of Birth, CMI_2009 projections with long term improvement rates of 1.5% p.a. for Males and 1.25% p.a. for Females.

u Mortality post retirement – 97% SAPS S1 Male/Female All Pensioners (amounts), Year of Birth, CMI_2009 projections with long term improvement rates of 1.5% p.a. for Males and 1.25% p.a. for Females.

The long-term joint contribution rates required from April 2013 from employers and members to meet the cost of future benefit accrual were assessed at:


The deficit contributions are in addition to the long-term joint contribution rates as set out in the table above. The next formal valuation of the Scheme will begin later this year and will give an update on the financial position as at 30 September, 2014. The results of this valuation will be available in Spring 2016. Employers that participate in the Scheme on a non-contributory basis pay a joint contribution rate (i.e. a combined employer and employee rate).

Employers that have closed the defined benefit section of the Scheme to new entrants are required to pay an additional employer contribution loading of 2.5% to reflect the higher costs of a closed arrangement. A small number of employers are required to contribute at a different rate to reflect the amortisation of a surplus or deficit on the transfer of assets and past service liabilities from another pension scheme into SHPS. New employers 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 new employers joining the Scheme between valuations up until 1 April 2010 do not contribute towards the deficit until two valuations have been completed after their date of joining. New employers joining the Scheme after 1 April 2010 will be liable for past service deficit contributions from the valuation following joining. Contribution rates are changed on the 1 April that falls 18 months after the valuation date. A copy of the Recovery Plan, setting out the level of deficit contributions payable and the period for which they will be payable, must be sent to The Pensions Regulator. The Regulator has the power under Part 3 of the Pensions Act 2004 to issue scheme funding directions where it believes that the actuarial valuation assumptions and/or Recovery Plan are inappropriate. For example the Regulator could require that the Trustee strengthens the actuarial assumptions (which would increase the Scheme liabilities and hence impact on the Recovery Plan) or impose a schedule of contributions on the Scheme (which would effectively amend the terms of the Recovery Plan).

As a result of pension scheme legislation there is a potential debt on the employer that could be levied by the Trustee of the Scheme. The debt is due in the event of the employer ceasing to participate in the Scheme or the Scheme winding up. The debt for the Scheme as a whole is calculated by comparing the liabilities for the Scheme (calculated on a buy-out basis i.e. the cost of securing benefits by purchasing annuity policies from an insurer, plus an allowance for expenses) with the assets of the Scheme. If the liabilities exceed assets there is a buy-out debt. The leaving employer’s share of the buy-out debt is the proportion of the Scheme’s liability attributable to employment with the leaving employer compared to the total amount of the Scheme’s 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 Scheme liabilities, Scheme 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 buy-out market. The amounts of debt can therefore be volatile over time.

The assets and liabilities of the Moseley and District Churches Housing Association Plan were novated into Accord Housing Association on 1 May 2012 following its transfer of engagements.

Group Group Association Association 2014 2013 2014 2013 £000 £000 £000 £000 Capital expenditure that has been contracted for but has not been provided for in these financial statements 24,712 19,338 18,817 15,306 Capital expenditure that has been authorised by the Board of Management but has not yet been contracted for 12,479 24,062 12,479 16,380

23. CAPITAL COMMITMENTS

102 Accord Group

Accord Housing Association Limited’s Group structure comprises:

% Share Subsidiary Capital Owned Nature of Business

Accord Care Services Limited N/A Not yet trading

Accord Group Treasury Limited 100% Group Treasury Vehicle

Ashram Housing Association Limited 76% Charitable Housing Association

Birmingham Co-operative Housing Services Limited N/A Non-Charitable Housing Association

Caldmore Area Housing Association Limited 100% Charitable Housing Association

Fry Housing Trust Limited N/A Charitable Housing Association

Redditch Co-operative Homes Limited N/A Registered Charity and Housing Association

Catherine Walker Almshouse N/A Almshouse Charity

Direct Health Group Limited 100% Provision of care services

Direct Health (UK) Limited 100% Provision of care services

At Your Service (Care) Limited 100% Provision of care services

Joint VentureParkmore Services Limited N/A Dormant company

New Homes Plus N/A Not yet trading

Walsall Housing Regeneration Community Association N/A Social Economic Regeneration

All the above companies are registered in England and Wales. Where appropriate shareholdings are reflective of any permitted voting rights.

26. GROUP STRUCTURE

Group Group Association Association 2014 2013 2014 2013 £000 £000 £000 £000 Operating leases which expire:Less than one year 213 97 86 80Between one and five years 204 355 150 187Over five years 34 - 34 -

Total 451 452 270 267

The Group has contingent liabilities in respect of 7 flats disposed of under the “Right to Buy” provisions of the Housing Acts. Liability could arise for any defects discovered within 10 years, which had not been notified to the tenant before the lease was granted. The Association is not aware of any material defects.

As at 31 March, 2014 the Group and Association had annual commitments under operating leases as set out below.

24. COMMITMENTS UNDER OPERATING LEASES

25. CONTINGENT LIABILITIES


All inter Association charges relate to the recovery of common costs in the usual course of business. Exemptions under FRS8 regarding the disclosure of intercompany and related party transactions have been applied.

27. RELATED PARTY TRANSACTIONS

28. HOUSING STOCK

Group Group Association Association 2014 2013 2014 2013 Number Number Number Number Social housingGeneral needs housing: social rent 7,025 7,127 4,719 4,780Affordable rents 427 174 266 85Long leasehold 78 78 64 64Supported housing and housing for older people 1,324 1,314 981 970Residential care homes 275 287 260 260Shared ownership accommodation 1,205 1,178 1,076 1,046Other 657 654 174 174

Total social housing 10,991 10,812 7,540 7,379 Non-social housingRegistered nursing homes 11 11 11 11Market rent 66 83 - -

Total non-social housing 77 94 11 11 Grand total 11,068 10,906 7,551 7,390 Being:Owned and managed 9,975 9,667 6,187 5,959Managed only 835 826 418 394Owned but managed by others 258 413 946 1,037

11,068 10,906 7,551 7,390 Housing under development 347 331 240 284

The number of units at the year end was:

104 Accord Group

29. GOODWILL

Cost

At 1 April, 2013 and 31 March, 2014 26,754 Amortisation At 1 April, 2013 (1,199)Charge for the year (1,556) At 31 March, 2014 (2,755)

Total as at 31 March, 2014 23,999Total as at 31 March, 2013 25,555

Group£000

In June 2012, the Group acquired 100% of the share capital of Direct Health Group Limited and its subsidiary undertakings for a total consideration of £27.9m plus costs directly associated with the acquisition. An intangible asset, goodwill, has arisen on the difference between the price paid for the business and the fair value of the net assets and is being amortised over 20 years. Goodwill acquired and amortised in the current year includes goodwill which existed previously in Direct Health and related to previous acquisitions. Goodwill amortisation charged in the current year has also been pro-rated to reflect the post-acquisition period only.

Heantun Housing Association Limited and its subsidiaries have agreed to join the Accord Group following approval from the Homes and Communities Agency. Accord Housing Association will adopt acquisition accounting from 30 June, 2014 which was the date of transfer. The financial impact will be incorporated into the 2014/15 Group Financial Statements.

30. POST BALANCE SHEET EVENT

178 Birmingham Road,West Bromwich,

West Midlands, B70 6QG

Telephone: 0300 111 7000Email: [email protected]

Visit: accordgroup.org.ukTweet: @theaccordgroup

Like: facebook.com/accordgroupWatch: youtube.com/theaccordgroup

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