ashton pioneer homes limited company number: …...at aph we have developed a performance dashboard...

Company number: 3383565

ASHTON PIONEER HOMES LIMITED

Consolidated Financial Statements

Year ended 31 March 2017

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CONTENTS

Information I

Report of the Board 2

Independent Auditor Report 21

Consolidated & Company Statement of Comprehensive Income 22

Consolidated Statement of Financial Position 23

Company Statement of Financial Position 24

Consolidated Statement of Changes in Reserves 25

Company Statement of Changes in Reserves 26

Consolidated Statemeat of Cash Flows 27

Notes to the Financial Statements 29


Information

THE BOARD

Chair David Postlethwaite (Council Nominee)

Deputy Chairs Jordan MesserStephen Greenwood (Independent)

Other Members Council NomineesGerald Patrick CooneyDavid Hugh McNallyJoyce Bowerman

TenantsHelen Ruth Bradbury

IndependentsJane Louise AthertonSheila Mary Tolley

SENIOR MANAGEMENT TEAM

Chief Executive/Company Secretary Antony Edward Deny

Director of Finance & Administration/ John AutyTreasurer

Director of Housing Services Peter Marland

REGISTERED OFFICE

Margaret HouseMargaret StreetAshton under LyneTameside0L6 7TH

AUDITOR PRINCIPAL LEGAL ADVISORS

Mazars LLP Trowers & Hamlins Brabners LLPOne St Pete?s Square 55, Princess Street Horton HouseManchester Manchester Exchange FlagsM2 3DE M2 4EW Liverpool

L2 3YL

PRINCIPAL BANKERS

HSBC Bank PLC4 Hardman SquareSpinningileldsManchesterM3 3EB

Ashton Pioneer Homes Limited is a Company limited by guarantee registered with Companies House (No. 3383565)under the Companies Act 2006 and with the Homes and Communities Agency (No. L4199).

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Report of the Board

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Report oF the Board

Why APH produces a Value for Money Self-Assessment

APH, like all housing associations is regulated by the Homes & Communities Agency (HCA). The role ofthe HCA is to make sure that housing associations are well governed, financially sound and provide agood service to residents. One of the key standards that they expect housing associations to meet is toprovide Value for Money (VfM). In order to demonstrate our commitment to this standard we publish aValue for Money Self-Assessment each year. This self-assessment is aimed at our tenants and residents,key stakeholders, Board members and staff. It sets out how we are doing in providing an economic,efficient and effective service for our tenants whilst also delivering on our core purpose.

How APH gets the information it needs to compare its performance with others.

APH is a member of both Acuity and Housemark. Throughout the report you will see mention ofHouseMark and how APH are ‘benchmarked’ against other housing associations. One of the ways inwhich APH measures the efficiency of the services we provide is through our membership of Acuity andHouseMark. HouseMark is a not-for-profit organisation that measures the performance and cost ofservices provided by housing associations nationally and compares them against other, similar housingassociations. This is called benchmarking. Acuity performs the same function but for smaller HousingAssociations (The Smalls’). Housemark benchmark eight different service areas, rating each area forcost and performance. APH are performing some well when compared to other Housing Associations andothers less so, The performance in these key areas can be seen on page 10.

What does the Housemark/Acuity report show?

The Housemark/Acuity report on provides detailed analysis of the data comparing APH with othersimilar organisations. HouseMark separates organisations into four groups dependent on performance. Ifthey were comparing eight housing associations the best two would be in the top group or ‘Upper Quartile’(or top 25%) and the two lowest ranked organisations would be in the bottom group or ‘Lower Quartile’(bottom 25%). You will see references to quartiles throughout the document.

What is Value for Money?

APH considers Value for money is all about getting the right balance between the costs of delivering ourservices together with how efficient and effective we are as an organisation, however, it is not just aboutsaving money, it is about getting the most out of the money we have to spend. We embrace this in orderto:

> Improve the quality of life for the residents by understanding their needs, promotingdiversity, ensuring high customer satisfaction and maximising involvement opportunities.

> Be a high quality, agile and efficient organisation that outperforms the Business Plan.

>To continuously improve by managing, developing, communicating and by sustaining ourassets to maximise potential.

This assessment highlights the VfM achievements in 2016/17 and plans for 2017/18 and beyond. Itdemonstrates how we are meeting the requirements of the Regulatory Standard set by the Homes &Communities Agency (HCA).

Our Strategic approach to Value for Money (VfM)

The Board’s Value for Money Strategy sets out how APH will deliver Value for Money and make best useof scarce and competing resources. The VfM strategy forms an integral part of our considered approachto operating the business and is now part of the culture of APH along with risk assessment, tenantinvolvement and tenant scrutiny, which are used to keep APH focussed on delivering the homes andenvironment required by our stakeholders, both current and future.

The strategy is a working tool which has evolved from just saving money, to areas of real improvement inprocurement and quality of services and directing resources to the right areas at the right time.

3


Report of the Board

Detailed budget, target setting and business planning are undertaken to assess the required outputswhich are monitored through a robust system of scrutiny, stress testing, debate and evidence gathering toassure APH is meeting Value for Money and stakeholder targets. APH takes a Zero Based Budgetingapproach — all costs are reviewed annually to ensure they remain accurate and appropriate.

The Board understands the importance and value of measuring its costs and performance against otherhousing providers. In order to measure this effectively APH participates in the independent HouseMarkbenchmarking service. The Board receives the HouseMark benchmarking comparisons each year alongwith management explanations of the results. This tracks changes in performance both year on year andrelative to other housing providers.

The 2016/17 Self-Assessment reflects the changes following the May 2015 general election and theGovernment’s Emergency budget in July. This brought a number of challenges to the sector. Firstly, theintroduction of a 1% rent reduction for four years effective from 2016. This will have a major impact on ourincome and will mean an additional cost of approx. £9m over the next 10 years. The extension of Right toBuy to our tenants will also have an impact.

These changes mean that we may need to make some tough decisions, but believe that we can adapt tothese new challenges and remain in a strong position for the future.

How we monitor Value for Money

We have a clear set of Financial Regulations, robust budget setting processes, effective contractprocurement practices and customer feedback policies. We also undertake substantial benchmarkingactivities. We compare our performance, both in terms of cost and quality of service through external,sector recognised benchmarking companies, Housemark and Acuity. At APH we have developed aPerformance Dashboard with a set of Key Performance Indicators (KPI’s) that are linked to theseperformance targets. Performance is reported to Board on a quarterly basis.

We have a number of mechanisms for monitoring and scrutinising our performance, involving a range ofstakeholders, including the Performance Group, Asset Group, Board, the Audit Committee and residentscrutiny and customer panels. In addition, there are a range of performance measures and internalmechanisms used by the officers of the business in undertaking their day to day operations.

Our organisation is designed to ensure the smooth flow of communication, from the Board through toindividual teams, and to make sure that potential improvements are identified early.

GB(OperationalManagers)

The organisation comprises:

Board ]

PerformanceGroup

4

‘1


Report of the Hoard

The Board and senior management team use a variety of processes to monitor and evaluate value formoney throughout the year which include:

- Annual budgets are approved by the Board which stipulates allocation of resources toachieve APH’s objectives

- Quarterly management accounts are reviewed by the Finance Director and Board

- Quarterly benchmarking activities are undertaken with Acuity (Smaller Associations)

- Quarterly KPI reports to Board showing performance against pre-set targets

- APH employs Internal Auditors, BDO, with reports reviewed by the Audit Committee

- The annual value for money self-assessment is approved by the Board

- Annual benchmarking activities are undertaken with Housemark

Benchmarking is a useful tool to assess our performance. It enables us to compare our results with otherhousing associations across a wide range of factors. It identifies areas of both good and poorperformance which highlights fields for improvement.

We compare ourselves against other similar associations both in the North West and nationally. We workcollaboratively in a small independent benchmarking group for the North West area.

To aid with the monitoring of our information we are a member of Housemark.Housemark are the most established provider of benchmarking data services to the social housing sectorwith over 950 housing associations currently members,

In the table below, we have selected what we believe are the Key Performance Indicators (KPIs) for the937 properties under management at the year end March 2017.

r Our Median Quartil Status

Process score Score e

Average re-let time— all re-lets (days) 946 Tibofl Green

Repairs completed at 1st visit 98.86 93.02 1 i?Green-—

_____

I

______

Rent collected from current & former tenants 99.00% 99.99% 4 fRed. flas%ofdue

-

_-_I__

Value I

[itisfacü&n’with service provided 86.9% 89.0% -- 3 Amber

Satisfaction with repairs & maintenance 82.2% 84.8% 3 Amber

Satisfaction with neighbourhood -- 82.9%89M% -. 3 Amber

Satisfaction rent provides VfM 82.8% 86.67% 3 Amber

Satisfaction service charges provide VfM 719% 75.O% - 3 Amber

People tf’’ —

Sickness absence avg days per employee - 7.23 F551 -

- 3 - Arnber

Business and Financial

Total CPP (cost per property) of Housing £62988 1393 17 4Management

5

11.73%

3.47% 2.6%

0.42% 46%

1.07%

0.65% 0.25%

During the year the new Sector Scorecard pilot was introduced.by the Efficiencies Working Group. Theyhave proposed 15 indicators that they believe will provide a rounded picture of associations’ businesses interms of efficiency and effectiveness. The table below shows the proposed indicators.

Business Development Outcomes Delivered Effective Asset Operating :‘Health (Capacity & Management Efficiencies

Supply)

Operating Units developed Customer satisfaction Return on capital Headline socialmargin (absolute) employed (ROCE) housing cost(overall) per unit

Operating Units developed Es invested in new Occupancy Rent collectedmargin (social (as % units housing supply (forhousing owned) every £ generatedlettings) from operations)

EBITDA MRI Gearing Es invested in Ratio of Overheads as(as % interest) communities (for responsive repairs % adjusted

every £ generated to planned turnoverfrom operations) maintenance

In line with this new reporting format we have attempted to compile the suggested information for theassociation which is shown in the table below:

Indicator Actual SPBM SPBMQuartile Median

Operating margin (overall) 28 2 25.38

FRS1O2 Operating margin (social housing lettings) 28 2 25.93


Report of the Board

Ourscore

Process

Total CPP (cost per property) of responsive £542.74

MedianScore

£659.11

Status

repairs and void works

Total CPP of major works & cyclical £2970.18* £908.00

Green

maintenance (* duo to render works)

Total overhead as % of turnover

Current tenant arrears as 0/ of due rent

Rent loss due to voids as % of rent due

Gross arrears as % of rent due (net of HB)

Rent written off %

15.24%

Quartile

2

4

2

2

Green

Amber

Green

Green

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Report of the Board

Indicator Actual SPBM SPBMQuartile Median

EBITDA MRI (as a percentage of interest) 11 N/A 220

Units developed during the period AprillO-Marchl7; all tenures 0.0 2 0.0

Units developed (as % of units owned) 0.0 2 0.0

Gearing (Sector Scorecard measure) 47 N/A 27

Es invested in new housing supply (for every £ generated from 0.0 Z.. 0.0operations) {; j

Es invested in communities (for every £ generated from operations) 0.0 2 0.0

Return on Capital Employed (ROCE) 6.65

Occupancy - GN 99.3 3 99.52

Ratio of responsive repairs to planned maintenance 0.12 N/A 0.59

Headline social housing cost per unit 0.0 N/A 4347

3.7

When we look at 2016-2017, the results of our activities in areas around Value for Money have generatedpositive returns for the Company, our tenants and stakeholders.

We set out below these results across the Company’s activities

Returns regarding the objectives set out in the Business Plan.

Business Plan Objective Returns

Negotiations are currently underway with ourTreasury Management consultants. We haveapproached the market and are consideringthe proposals received. We anticipatecompletion during the 1st half of the 201 7/18financial year.

Secure re-financing of APH loan facility

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Report of the Board

Make better use of Benchmarking Submitted first set of figures for the pilotinformation scheme of new Sector Scorecard (results

included in VfM statement)

Streamline KPIs to report on more Development of enhanced KPI reports torelevanUsignificant issues Board increasing ability to better direct the

focus of resources

Complete transition to Community This is still on-going but is targeted forBenefit Society completion in the 2’ quarter of 201 7/18

Make best use of newly acquired APH has now become a member of theExperian software to focus resources in ‘Rental Exchange’ program. This neworder to maximise income collection system is currently being set up and tested.

Tenants have all been notified of ourthrough tenancy support. Enhance role participation in the scheme. This will provideand effectiveness of Debtor Group invaluable information to assist with debt

recovery and income management.

Review repair response times in line with Emergency repair response time targetspeers. have been increased from 4 hours to 24

hours in line with our peer group. This hasreduced the necessity for out of hourscallouts facilitated by external contractors, inturn providing cost savings.

Ability of staff working 24/7 to attend tenantsIncreased use of Neighbourhood properties mitigates the need to employServices Assistants to complete minor external contractors at increased costs.repairs

Explore opportunities to further maximise Consider the introduction of chip and pinrent collection. machines for both office and mobile use

which will provide an additional option fortenants to make payments.

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Report of the Board

Return on Assets

APH recognises the importance of understanding the return on assets in order to achieve its strategicobjectives and to ensure that the use of our assets represents good value for money. Its a way of workingout what we get back from what we put into our business. APH’s largest asset is our stock base of 937homes. So how much are we actually spending on them and how much income do they generate for ourbusiness?

I Spend onbuying &

building our\jesf +

Cost ofimprovementsmade to theproperties

Depreciation

_________

charged todate for the

çJertiesf

U I. DUN 037 J1011 S. U IL ii AI.L, i: OF 4JN N\1 iN 4)1. H l(Il61” \CCO1 Ni S.

SO. WHAT’S OUR RETURN ON THIS INVESTMENT?

IN 2(11617 tills (,I% [S AN NN1 Al. HF I LRN

3.22%

Rent &Servicecharges

collected

Total costsincluding

repairs and

Surplus for

costs

the year2016/17 of

£584k

n:

.4

.4..

ON 01 R !%VF ‘Ii ‘.1

4 4’_,

F

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Report of the Board

Maintenance

The original planned works were reorganised by the necessity to carry out emergency works tothe render on two of our tower blocks at a cost of approx. £3m (2395k of which was spent inthe year).

As reactive and void works cannot be controlled in the same manner, a further £330,000 hasbeen invested in works to maintain the stock which came in under budget by £40,000.

Despite this our performance shows that our repair costs per property for cyclical repairs aregenerally in the lower range inmid=range which demonstrates

comparison with our peer group and for reactive repairs in theeffective cost management by our maintenance team.

Name ofOrganisation

Average weekly Costper property of

reactive maintenanceworks 2016-17

Average weekly Costper property of cyclical

maintenance works2016-17

Ashton PioneerHomes

Eldonians EBHA

Family HA

Wirral Methodist HA

People First

Crosby

Pierhead

£10.44

£11.26

£11.90

£10.07

£7.23

£6.44

£10.76

£4.48

£9.95

£5.65

£14.34

£32.04

£19.48

£9.23

Warrington HA £4.90 £3.42

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Report of the Board

Procurement

>The Company is a member of the Community Housing Associations (NW) Group(CHA(NW)) which helps us to achieve economies of scale through commissioningservices with other members of the group.

> The way in which we procure our day-to-day repairs service means that we can keep tightcontrol on our costs. We also use reliable local contractors who know our stock andtherefore achieve a good level of ‘right first time’ repairs. This keeps costs down andsatisfaction levels high.

> IT Lab are now providing the support of our network IT system which enables us tobenefit from a discount of 25% arising from membership of CHA(NW).

> Brabners are now providing our legal advisory services as part of a group agreementarising from membership of CHA(NW) which will produce economies of scale savings.

Operational

We have significantly reduced the number of jobs that we send out to third partycontractors to carry out repairs to our void properties. We have increased the staffnumbers in our maintenance team. Using in-house staff to complete these jobs hasresulted in cost savings due to reduced charge rates and VAT savings.

> In order to assist our Estate Services Team, our 24/7 Neighbourhood Services Assistantsare carrying out minor repairs rather than instructing a contractor, particularly out ofhours. In the year in excess of 500 jobs have been completed saving not only VAT butalso costing less in labour terms.

>We have made changes to our repair response times during the year, in line with ourpeers. The emergency repairs are now to be completed within 24 hours rather than 4hours. This has enabled us to reduce the number of out of hours call outs to contractorswhich has proved to be more economical.

>We have been concentrating on more efficient ways of working, using technologyavailable, to support front line staff to deliver a higher quality service in less time.Ipads and Iphones have been provided to facilitate remote working on the estate,improving staff effectiveness.

p

Weekly Operating Cost Weekly OperatingOperating SPBM* as a percentage SPBM* cost for SPBM*Cost per of turnover Management

—— unit2015 £62.31 £83.36 71.96% 73.56 £15.56 £19.62

%2016 £70.17 £87.33 64.62% 70.90 £12.81 £20.73

%2017 £71.93 £89.78 76.29% 74.11 £12.11 £17.23

%

*SPBM— Skills and Projects (Acuity) & Benchmarking (Housemark)

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Report of the Board

Treasury!Financial Capacity

> Utilising fully funded development opportunities such as the Empty Homes Initiative,retains any surplus within the Company to support future opportunities.

>At the end of the financial year we had borrowings of £9.35m from our fundersNationwide, this has been used to purchase and upgrade the homes that we own.

> We remain comfortably within covenants with our bankers. Due to the unexpected rendercosts incurred we have reviewed our business plan and established that there is anecessity to restructure our current borrowing arrangements. We have employed theDavid Tolson Partnership (DTP) to assist with this. We are confident that APH will beable to access further loan finance by re4inancing with GB Social Housing andSantander.

The 201 6/17 results below are stated in line with the financial reporting standard FRSIO2.

2018 2017 2016 2015 2014

(Flcast) (Actual) (Actual) (Actual) (Actual)

Number of Units in 940 937 929 928 919

Management

Turnover

Operating Surplus as % ofTurnover

£4.88m £4.82m

29.35%

£4.59m £4.41m £4.08m

19.60% 26.95% 31.13%

>The Linda Fletcher Centre (LFC), continues to provide a valuable service to thecommunity. It provides a useful resource for both tenants and community groups as wellas being utilised by staff to facilitate a drop-in facility.

>The digital inclusion programme continues to work well. The computers in the LFC andAPH reception provide much needed internet access to tenants who have no access atpresent. This will become even more beneficial once the DWP put the Universal Creditscheme is in full operation as all applications must be made on-line.

> During the year we carried out a Tenant Satisfaction Survey in conjunction with theCHA(NW) (Consortium). The final results were very positive. The Satisfaction Indexleague tables resulting from the survey show that APH are in the upper quartile with anoverall satisfaction rating of 83.7%.

Tenants

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Report of the Board

The league table below contains approximately 130 entries from other housing associations.

100%

EIconron91 .6%

Repairs and Maintenance ServiceVFM of Rent

VFM of Service Charges

82.2% 84.8%

82.8% 86.6%

80.0%

83.0%

73.9% 75.0% 71.0%

Business Plan 2017-2020

The 1% reduction in the rents of social landlords each year for four years substantially changed ourfinancial Business Plan. Compared to the ten year rent formula announced in 2014 by the previouscoalition government, which determined that rents would increase by the rate of CPI inflation plus 1%each year, this meant that over the life of our 30 year Financial Plan there would be a shortfall in rentalincome of approximately £9m. In order to address this we have further enhanced our establishedfinancial controls and restructured our planned maintenance programme. Due to the nature of ourtenancies we are in the process of converting the company to a Community Benefit Society which shouldsave approximately £1 am in Corporation Tax which will help to mitigate the impact of the rent reduction.

Every year we review our 30 year Finance Plan and make any necessary adjustments to ensure that ourCorporate Business objectives are accurately reflected. The Plan is approved by the Board followingconsideration and stress testing. The plan is tested across a range of scenarios that would push it tobreak point. This will consequently identify possible problem areas that may require greater focus.

90%

.{rcrdsbv Hotjstn:

86 5%

‘M..sflton Pioneer Horn63.7%

P1 ,rI,eod HotjsIflo: 763%

Overall Tenant Satisfaction of % SPBM Housemark

Overall service provided by Ashton Pioneer Homes 86.9% 89.0% 86.5%

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Report of the Board

As part of the Financial Plan process a detailed operational 3 year budget is prepared and approved byBoard prior to the start of each new financial year. Management accounts are presented to the Boardquarterly once reviewed by the Director of Finance & Administration.These accounts are then distributed to operational managers for monitoring to ensure that any variancesto budget can be identified and appropriate action taken.

The table below shows an extract from our 30 year Financial Plan

201612017 2018 Plan 2019 Plan 2020 Plan(Actual) (Forecast) (Forecast) (Forecast)(‘000’s) (‘000’s) (‘000’s) (‘000’s)

Turnover 4,818 4,660 4,671 4,656

Operating Surplus 1.414 1,106 1,007 1,225

Operating Surplus as a % of 29.35% 23.74% 21.56% 26.31%turnover

Surplus after interest 881 607 509 693

Surplus as a % of turnover 18.28% 13.03% 10.90% 14.88%

Benchmarking

Benchmarking is important to any business. It provides key comparisons with similar organisations,enabling understanding of strengths and weaknesses and underpinning evidence based approach toresource allocation, cost reduction and target setting.

As well as being a member of Acuity which is a benchmarking provider for smaller associations we arealso affiliated with HouseMark. HouseMark is the largest; most established provider of benchmarking dataservices to the social housing sector, with over 950 housing organisations currently members.

Utilising HouseMark allows us to compare our performance with that of our peer group. We have chosento benchmark against a broad spectrum of North West based providers. We want to be assured that ourperformance can stand comparison against any comparable organisation that customers might choose torent from, do business or work in partnership with.

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Report of the Board

The following table analyses how performance and cost for each of the key service areas compares with

both our Peer Group and Acuity (SPBM)

APH Peergroup Peergroup SPBM SPBMBu&ness Area Key perfbrmance indicator (KP1)

Adual Quartile median quartile medianScorn figure Scorn figure

Satidaction satlstactlon - oernII sorces - ON 890 3 9070 3 8900satisfaction - repairs and maintenance - SN 82.20 3 85.10 3 84.80

Allocations and Lettings Ae rn-let time - GM 9.46 18.25 17.00capacity Ae days lost due to sickness absence 7.23 3 660 3 5.51Income Management % rent collected - ON & HCP 99.00 99.95 99.99

current tenant arrears - ON & HVP 47 3 3.23 3 2.60Rent anars net of housing benefit - SN 1.0? 2 87 2 1.51Former tenant enoam - GN 8 HiOP 0.79 2 0.82 3 0.67% Rent written off- ON & HVP ThT 0.37 0.19Weekly Operating Cost per unit 1 93 I 60.88 89.96Opemting Cost as % of Tummor 7029 74.06A weekly management cost perdwel3nq 1211 1 I 15.571 17.50

Stock CondItion and Asset Management Repairs fixed on first isit 986) 1. j 93.04 93.02

Aerage end-to-end time for all macthe repaIrs 6.10 2 6.6, 2 6.60Value hr Money Cost per property of Housing Management 629 339.51 389.59

Cost per property of responshe repairs and crd works 542 74 “‘Th1 632.20 2 66400Cost per property - Major and cyclical works 2970.li 958.71 925 120eThead casts as a percentage of tummer 11.73 2 11 73 ,—. 1524Reacthe spend per property perweek 171 i1Th Icyclical maintenance spend per property per v,eek

.

114 1 L 2 65 1 L 3 82Majorworks spend per property perweek (11)0 1 I 9.90 I 1031Owtheads (repairs) spend per property perweek 3.39 2 4.60 2 5.05Voldworksspendperpropetyperweek 1 1 5h 204

Sector Scorecard Opaatir margin (oomll) 28.00 2 2657 2 25.38102 Operating marn (social houslrq lettlngs) 28.00 3 32.24 2 25.93Return on Capital Employed (ROCE) 6h 4.23 3.70Occupancy - ON 99.30 3 99 40 3 99.52

Conclusion

Quartile ranking

Top2 Second3 Third

Bottom

The Board have reviewed this Self-Assessment Statement and believe this demonstrates a clear, strong

commitment to and delivery of Value for Money which is embedded throughout the organisation.

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Report of the Board

The year under review

To provide a comprehensive range of services we have continued with a generic approach to housing managementso that tenants deal with our dedicated Customer Services team, Housing Services Officers and NeighbourhoodServices team (out of hours) for all tenancy management issues.

We have continued to provide up to date support to our tenants, including targeted advice together with othercommunity services in order to keep tenants informed about the effects of the ongoing Welfare Reforms, BedroomTax, Universal Credit and the future changes to Local Housing Allowances.

• The’Linda Fletcher Centre’ a base providing tenants with PC training and internet access is becoming increasinglypopular. Our Community Capacity worker supported by volunteers are on hand to offer advice and assistance to ourtenants as required.

• The re-rendering of two of the high rise tower blocks (Ryecroft House & Grosvenor House) has been completedduring the year. At a costs of approx. £2.4m this was a major project but necessary and which has made a significantimprovement to the integrity and appearance of the blocks.

• During the year 82 properties were re-let. Overall the average re-let time for all voids was 903 days.

Investing in new business opportunities

• During the year. to further diversify the business whilst employing our core skills and expertise, we commencedoperations on a competitively tendered contract with Tameside MBC for the delivery of CCTV, Security andFacilities Managementfor a multi-storey car park on Brook Street East..

• We have committed to the Empty 1-lomes Programme and through individual properties and potential multi-unitcommercial to residential conversions, have produced over 20 homes utilising grant from the HCA and AGMA, withothers under consideration.

• We intend to continue this programme in the future using the three year allocation from the Homes & CommunitiesAgency as well as seeking further opportunities through Continuing Market Engagement (CME) through AGMA IGMCA.

Improving service delivery and maintaining a strong financial position

• We have undertaken a fundamental review of our tenant satisfaction survey outcomes during the year. The results

have been assessed and were extremely positive. Our operational managers are now working on ways to maintain or

improve satisfaction rates even further.

• We have developed our use of the service from AlIpay in order to provide our tenants cth more varied, convenientand cost-effective methods to facilitate rent payments. As well as pre-existing methods, i.e. Direct Debit, StandingOrder or Cash, tenants can now make payment by debit’credit card over the telephone 24 hours per day, by internetor even using the Allpay app using a smanphone.

• We continue to promote the paperless office’ and have reduced the amount of paper in use by scanning documentsand reducing the amount of filing.

• Continual review of our treasury management procedures, effective drawdown of loans and the introduction ofefficient investment practices. This has, despite low interest rates. maximised interest receipts on available funds,resulting in incremental income of approx. £7k in the 2016/17 financial year.

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Report of the Board

The year ahead

Housing people in housing need

We have signed up to become a member of ‘The Rental Exchange’. This is an opt out scheme operated byExperian which allows housing associations to share credit information on both current and prospective tenants. Thiswill not only enable us to carry out credit checks but will also help timely paying tenants to build up or improve theircredit score.

• Keeping rents and other housing costs at affordable levels

• We will continue to give 2 weeks rent free at Christmas to ensure tenants have money in their pocket for the festiveperiod.

• We are investing significant hinds on renewing door entry and CCTV systems so as to provide a better service forour tenants.

• We are proposing to invest over £2million on re-cladding Portland House and Ellison House so as to substantiallyimprove both the aesthetics and insulation to the blocks.

• We are investigating the cladding on the remaining three blocks with a view to re-cladding these as soon as fundingis available.

• We will once again implement the 1% reduction in rents from the October rent review.

• We will maintain strict controls on Service Charges to avoid unnecessary increases.

1Iaximising rent collection and minimising rent losses

• We will seek to keep collection levels for rent arrears and bad debt at top quartile level despite the adverse impactof welfare reform changes.

In the forthcoming year we will be investing in new Telecommunications and IT equipment to enhance staffproductivity and make better use of cloud based technology.

• We will continue to seek value for money in our services and to benchmark their effectiveness, to maximise theimpact in our proactive and reactive rent / arrears processes. We will also be engaged in the sector scorecardindicators initiative.

Investing in new sustainable developments and business opportunities

• As part of the HCA’s Empty Homes Initiative we are engaged in a 3 year programme of refurbishment of emptyhomes during 2017/IS on homes and commercial to residential opportunities that have been empty for 6 months ormore. This will be pan financed by grants of up to an average of £10,000 per property. We will seek to obtainsimilar reductions as previous years on budgeted costs by using the tendered schedules / building contracts. We willalso be undertaking a fundamental review of our tenant satisfaction outcomes during the year ahead (2017/18) tomaintain or improve satisfaction rates.

Improving service delivery and maintaining a strong financial position

• We will continue to reduce our overheads as a percentage of adjusted turnover.

• We will implement oulcomes from the tenant expectation survey to identify’ service improvement priorities.

• We will review procedures to better capture value for money information for completion of the annual assessment.

17


Report of the Board

Ensuring scrutiny and resident involvement

• Following the disolution of the APH Scrutiny Panel (Pioneer Panel) we will be working to establish alternativeconsultative frameworks to ensure we can effectively engage with our tenants on service related matters,

• Ensuring committed involvement of Board and staff• We will continue to employ on 2 year contracts 2 modem apprentices at an average cost of £10,000 per annum soas to provide training and work experience for local young people and to provide an additional resource to deal withthe implications of welfare reform.

• APH will continue to engage with local educational and employment partners to offer employer support related towork experience opportunities to allow young people to better engage with the employment marketplace.

• APH will also be reviewing engagement in the Military Covenant with Tameside MBC to support ex-sen’iucepersonnel

Summary

Although these are significant achievements, there’s always room for improvements and we will ensure we willbuild on these achievements over the coming years through a continuous improvements programme.

FINANCIAL PERFORMANCE

The Nationwide Building Society continues to support the Company for the time being although we have negotiateda refinancing deal with GB Social Housing which will replace the Nationwide facility at significantly lower interestrates. The Group surplus for the year before taxation of £881,000 (2016; £335,000) is ahead of expectationscontained in the Company’s Business Plan.

After reviewing Business Plan forecasts, performance monitoring reports and making appropriate enquiries, theBoard is confident that the Group has adequate resources to continue in operational existence for the foreseeablefuture.

For tins reason, the Board believe the going concern basis is appropriate in preparing the financial statements.

STATEMENT ON THE GROUP’S SYSTEM OF INTERNAL CONTROL

The Board has overall responsibility for establishing and maintaining the whole system of internal control and forreviewing its effectiveness.

The Board recognises that no system of internal control can provide absolute assurance or eliminate all risk. Thesyslem of internal control is designed to manage risk and provide reasonable assurance that key business objectivesand expected outcomes will be achieved. It also exists to give reasonable assurance about the preparation andreliability of financial and operational information and the safeguarding of the Group and Company’s assets andinterests.

In meeting its responsibilities, the Board has adopted a risk-based approach to internal controls, which areembedded within the normal management and governance process. This approach includes the regular evaluationof the nature and extent of risks to which the Group is exposed and is consistent with the Tumbull principles.

The process adopted by the Board in reviewing the effectiveness of the system of internal control, together withsome of the key elements of the control framework includes:

Identification and evaluation of key risks

Management responsibility has been clearly defined for the identification, evaluation and control of significantrisks. There is a formal and on-going process of board’management review’ in each area of the Group and theCompany’s activities. This process is co-ordinated through a regular reporting framework by the Board-ledPerformance Group. The Executive team regularly considers reports on significant risks facing the Group and theChief Executive is responsible for reporting to the Board any specific and / or significant changes affecting keyrisks. There is also a corporate risk register and risk matrix which defines, prioritises and assesses risks and themitigation of risk across our business. A significant upgrade in the approach to Risk is planned in the new financialyear.

18


Report of the Board

- Monitoring and corrective action

A process of control self-assessment and regular management reporting on control issues provides hierarchicalassurance to successive levels of management to the Board. This includes a rigorous procedure for ensuring thatcorrective action is taken in relation to any significant control issues, particularly those with a material impact onthe financial statements.

Control environment and control procedures

The Board retains responsibility for a defined range of issues covering strategic, operational, financial andcompliance issues including treasury strategy and new investment projects. The Board has adopted anddisseminated to all members, the National Housing Federation’s “Excellence in Governance - Code for Membersand good practice guidance”. This sets out the Group and Company’s governance principles with regard to thequality, integrity and ethics adopted by the Board and business. It is supported by a framework of Standing Orders.policies and procedures with which both Board and employees must comply. These cover issues such as delegatedauthority, segregation of duties, accounting, treasury’ management, health and safety, data and asset protection andfraud detection and prevention.

)- Code of Governance

As stated, the Board have adopted the M-IF Code of Governance Excellence and have self-assessed theircompliance with that code during 2016/17 to identify any areas of non-compliance, namely;

- our current terms of office which are 3 terms of 4 years for Board members rather than the Coderecommended 3 x 3 years. This is due to our Board membership currently comprising 3 constituentgroups of 4 members and as such ensures smoother succession planning between Members.

- system of nomination to the Board via constituencies rather than skill based selection / appointments

A move to enhanced compliance along with a transition to a Community Benefit Society using the NEfF 2015Model Rules, is included in the Association’s “Modernising Governance” programme included in BusinessPlanning for the period of2016-18 through a process of Modemising Governance.

In advance of the transition ot the new CBS Model Rules, these areas of non-compliance will remain and have beennoted and approved by the Board as appropriate to the exigencies of the business during the re-financing and CBStransition period 2016-19.

.- Information and financial reporting systems

Financial reporting procedures include detailed budgets for the year ahead and forecasts for subsequent years.These are reviewed and approved by the Board. The Board also regularly review relevant key performanceindicators and benchmark data to assess progress towards the achievements of key business objectives, targets andoutcomes.

The internal control framework and the risk management process are subject to regular review of Internal Auditwho are responsible for providing independent assurance to the Board through its Audit Committee. The AuditCommittee considers internal control and risks at its meetings during the year.

The Board has received the Chief Executive’s annual report, has conducted its annual review of the system ofinternal controls and has taken account of any changes needed to maintain the effectiveness of risk management andthe internal controls process.

The Board confirms that there is an on-going process for identiing, evaluating and managing significant risksfaced by the Group and Company. This process has been in place throughout the year under review, up to the dateof the annual report and is regularly reviewed by the Board.

BOARDS AND COMMITTEES

The Board currently comprises 9 members, the details of which are set out on page 1. All members of the Boardserved throughout the year.

FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES

The Group and Company use conventional forms of working capital to finance their day to day activities and assuch the figures appearing in the accounts reflect the absolute value of amounts recoverable and payable. TheBoard receive regular reports on these figures in order to manage the Group and Company’s requirements.

19


Report of the Board

EMPLOYEES

The Group has also acknowledged its commitment to the disabled through its attainment of the three ticks, Positiveabout the Disabled accreditation.

The Group is coimnitted to equality for all of its employees, both at the recruitment stage and throughout theircontinuing professional development.

COMPLIANCE WITH THE HCA GOVERNANCE AND FINANCIAL VIABILITY STANDARD

The Board confirms that the parent Association complies with the requirements of the Governance and FinancialViability Standard for the year commencing 1 April 2016.

STATEMENT OF THE BOARD’S RESPONSIBILITIES IN RESPECT OF THE FINANCIALSTATEMENTS

Company Law requires the Hoard to prepare financial statements for each financial year which give a true and fairview of the state of affairs of the Group and Company and of the surplus or deficit of the Group and Company forthat period. In preparing these financial statements the Board are required to:

• Select suitable accounting poLicies and then apply them consistently;

a Make judgements and estimates that are reasonable and prudent;

• State whether applicable accounting standards have been followed;

• Prepare the financial statements on the going concern basis unless it is inappropriate.

The Board is responsible for keeping proper accounting records, which disclose with reasonable accuracy at anytime the financial position of the Group and Company and to enable it to ensure that the financial statements complywith the Companies Act 2006 and the Housing and Regeneration Act 2008. It is also responsible for safeguardingthe assets of the Group and Company and hence for taking responsible steps for the prevention and detection offraud and other irregularities, by establishing and maintaining a satisfactoiy system of control over the Group’saccounting records, cash holdings and all of its receipts and remittances.

STRATEGIC REPORT

No Strategic report is required as the Company satisfies the criteria as a small company as defined by theCompanies Act 2006.

STATEMENT OF THE BOARD’S RESPONSIBILITIES IN RESPECT OF THE FINANCIALSTATEMENTS

Insofar as the Board is aware there is no relevant audit information of which the Group’s auditor is unaware and theBoard has taken all steps that it ought to have taken to make itself aware of any relevant audit information and toestablish that the auditor is aware of that information.

AUDITORS

Mazars LLP are willing to continue in office, and a resolution to reappotht them will be proposed at the AnnualGeneral Meeting.

BY ORDER OF THE BOARD OF MANAGEMENT

eD. Postlethwaite

Chair

Date: \4 ec ctGG? 2o’7

20


CONSOLIDATED & COMPANY STATEMENT OF COMPREHENSIVE INCOMEFor the year ended 31 March 2017

We have audited the financial statements of Ashton Pioneer Homes Limited for the year ended 31 March 2017 whichcomprise the Consolidated and Company Statements of Comprehensive Income, the Consolidated and CompanyStatements of Financial Position, the Consolidated and Company Statements of Changes in Reserves, theConsolidated Statement of Cash Flows and the related notes. The financial reporting framework that has been appliedin their preparation is applicable law and United Kingdom Accounting Standards (United Kingdom GenerallyAccepted Accounting Practice) including FRS 102 “The Financial Reporting Standard applicable in the UK andRepublic of Ireland”.

Respective responsibilities of directors and auditor

As explained more ffilly in the Statement of the Board’s Responsibilities set out on page 20, the Board are responsiblefor 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 andInternational Standards on Auditing (UK and Ireland). Those standards require us to comply with the AuditingPractices Board’s (APB’s) Ethical Standards for Auditors. This report is made solely to the parent Company’smembers as a body in accordance with Chapter 3 of Part 16 of the Companies Act 2006 and the Housing andRegeneration Act 2008. Our audit work has been undertaken so that we might state to the parent Company’s membersthose matters we are required to state to them in an auditor’s report and for no other purpose. To the Ibllest extentpermitted by law, we do not accept or assume responsibility to anyone other than the parent Company and the parentCompany’s members as a body for our audit work, for this report, or for the opinions we have formed.

Scope of the audit of the financial statements

A description of the scope of an audit of financial statements is provided on the Financial Reporting Council’swebsite at www.frc.org.uk/auditscopeukprivate.

Opinion on the financial statements

In our opinion the financial statements:

• give a true and fair view of the state of the Group and parent Company’s affairs as at 31 March 2017 and of theGroup and parent Company’s surplus for the year then ended;

• have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practiceincluding FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland”; and

• have been prepared in accordance with the requirements of the Companies Act 2006, the Housing andRegeneration Act 2008 and the Accounting Direction for Private Registered Providers of Social Housing 2015,

Opinion on the other matters prescribed by the Companies Act 2006

In our opinion the information given in the Report of the Board for the financial year for which the financialstatements are prepared is consistent with the financial statements.

Matters on which we are required to report by exception

We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report toyou if, in our opinion:

• adequate accounting records have not been kept by the parent Company, or returns adequate for our audit have notbeen received from branches not visited by us; or

• the parent Company financial statements are not in agreement with the accounting records and returns; or• certain disclosures of directors’ remuneration specified by law are not made; or• we have not received all the information and explanations we require for our audit.• The directors were not entitled to prepare the financial statements in accordance with the small companies regime

and take advantage of the small companies exemption from the requirement to prepare a Strategic Report.

‘iiYDavid House (Partner)For and on behalf of Mazars LLPChartered Accountants and Statutory auditorOne St Peter’s SquareManchesterM2 3DE

Date:

_________________________________

21


CONSOLIDATED & COMPANY STATEMENT OF COMPREHENSIVE INCOMEFor the year ended 31 March 2017

Consolidated Company Consolidated Company2017 2017 2016 2016

Notes £‘OOO £‘OOO £000 £000

TURNOVER 2 4,818 4,780 4,592 4,571

Operating costs 2 (3,404) (3,372) (3,692) (3,672)

OPERATING SURPLUS 1,414 1,408 900 899

Interest receivable 4 7 7 22 22

Interest and financing costs 5 (540) (540) (587) (587)

Surplus before tax 881 875 335 334

Taxation 7 (297) (297) (66) (66)

SURPLUS FOR THE YEAR 6 584 578 269 268

Other comprehensive incomeActuarial profil’(loss) in respect ofpension schemes 18 30 30 179 179

Total comprehensive income forthe year 614 608 448 447

All amounts relate to continuing activities.

The notes on pages 29 to 52 form pan of these financial statements.

‘7


CONSOLIDATED STATEMENT OF FINANCIAL POSITION (COMPANY NO: 3383565)As at 31 March 2017

2017 2016Notes £‘OOO £‘OOO

FIXED ASSETSIntangible assets 10 - 7Housing properties Ii 18,846 17,291

11 18,846 17,298Other fixed assets 11 662 700

Total fixed assets 19,508 17,998

CURRENT ASSETSDebtors 12 475 472Cash at bank and short term deposits 13 2,070 3,614

2,545 4,086

Creditors amounts falling due in less than one 14 (2,189) (1,542)year

NET CURRENT ASSETS 356 2,544

TOTAL ASSETS LESS CURRENT 19,864 20,542LIABILITIES

Creditors: Amounts falling due after more than 15 9,350 10,100one yearPension liabilities 18 808 872Grants 15 6,881 7,359

NET ASSETS 17,039 18,331

CAPITAL AND RESERVESRevenue reserves 2,825 2,211

19,864 20,542

The notes on pages 29 to 52 form part of these financial statements.

The financial statements were approved by the Board of Management on 4 cC4Zk(bf-Q. 2c7and signed on its behalf by:

D Postlethwaite - Board Member A.E.Berry — Secretary

23


COMPANY STATEMENT OF FINANCIAL POSITION (COMPANY NO: 3383565)As at 31 March 2017

2017 2016Notes £000 £‘OOO

FIXED ASSETSIntangible assets 10 - 7Housing properties at cost II 18,836 17,291

11 18,846 17,298Other fixed assets II 662 700

Total fixed assets 19,508 17,998

CURRENT ASSETSDebtors 12 466 462Cash at bank and short term deposits 13 2,054 3,602

2,520 4,064Creditors amounts falling due in less than oneyear 14 (2,189) (1,539)

NET CURRENT ASSETS 331 2,525

TOTAL ASSETS LESS CURRENTLIABILITIES 19,839 20,523

Creditors:Amounts falling due after more than 15one year 9,350 10,100Pension liabilities 18 808 872Grants 15 6,881 7,359

17,039 18,33L

CAPITAL AND RESERVESRevenue reserves 2800 2,192

19,839 20,523

The notes on pages 29 to 52 form part of these financial statements.

The financial statements were approved by the Board of Management on 14 I]

and signed on its behalf by:

7tD Postlethwaite - Board Member A.E.Berry — Secretary

24


CONSOLIDATED STATEMENT OF CHANGES IN RESERVES *1

As at 31 March 2017

RevenueReserve Total

£‘OOO £‘OOO

At lS April 2016 2,211 2,211

Surplus for the year 584 584

Actuarial gain in respect of the pension scheme 30 30

Other comprehensive income 30 30

Total comprehensive income 614 614

At 3Pt March 2017 2,825 2,825


£‘OOO £‘OOO

At 1April 2015 1,763 1,763


Actuarial loss in respect of the pension scheme 179 179



At3lStMarch2Ol6 2,211 2,211

Reserves

Revenue Resen’e

The revenue reserve represents cumulative surpluses and deficits of the Group.

The note on pages 29 to 52 form part of the financial statements.

25


COMPANY STATEMENT OF CHANGES IN RESERVESAs atM March 2017


£000 £‘OOO

At IM April 2016 2,192 2,192


Actuarial gain in respect of the pension scheme 30 30



At 3 l’ March 2017 2,800 2,800


£000 £‘OOO

At IM April 2015 1,745 1,745


Actuarial loss in respect of the pension scheme 179 179


Tolal comprehensive income 447 447

AI3lMMarch2Ol6 2,192 2,192

Reserves

RL’VL’IIUL’ Reserve

The revenue reserve represents cumulative surpluses and deficis of the Company.

The note on pages 29 to 52 form pan of the financial statements.

26


CONSOLIDATED STATEMENT OF CASH FLOWSFor the year ended 31 March 2017

2017 2017 2016 2016Notes £‘OOO £‘OOO £‘OOO £‘OOO

NET CASH GENERATED FROM 2,502 1,629OPERATING ACTIVITIES

CASH FLOVS FROM INVESTINGACTIVITIESPurchase of property, plant and equipment 11 (2,739) (930)Proceeds from sale of property, plant andequipment 11Grants received 15 (124) 28Interest received 4 7

(2,856) (880)

NET CASH FLOWS FROM INVESTING (354) 749ACTIVITIES

CASH FLOWS FROM FINANCINGACTIVITIESInterest paid 5 (530) (587)Repayment of borrowings (650) (600)

NET CASH FLOWS FROM FINANCINGACTIVITIES (1,190) (1,187)

NET (DECREASE)? INCREASE IN CASHAND CASH EQUIVALENTS 13 (1,544) (438)

CASH AND CASH EQUIVALENTS ATBEGINNING OF YEAR 13 3,614 4,052

CASH AND CASH EQUIVALENTS ATEND OF YEAR 13 2,070 3.614

27


NOTES TO THE CONSOLIDATED STATEMENT OF CASH FLOWSFor the year ended 31 I4arch 2017

CASH FLOW STATEMENT NOTES

RECONCILIATION OF SURPLUS FOR THE YEAR TO NET CASHGENERATED FROM OPERATING ACTIVITES

2017 2016£‘OOO £000


Depreciation charges 843 726Pension contributions less expenses (44) -

Amortisation of grant (355) (254)Change in debtors (3) (4)Change in creditors 647 261Interest receivable (7) (22)Interest payable 540 587

2,502 1,629

1 April Cash flows 31 March2016 2017

£‘OOO £‘OOO £‘OOO

Change in net fundsCash in hand, at bank 3,614 1,544 2,070

Total 3,614 1,544 2,070

1 April Cash flows 31 March2016 2017

£‘OOO £‘OOO £‘OOO

Reconciliation of cash movementsShort term cash deposits 3,614 1,544 2,070

Total 3,614 1,544 2,070

28


NOTES TO THE FINANCIAL STATEMENTSFor the year ended 31 March 2017

PRINCIPAL ACCOUNTING POLICIES

Ashton Pioneer Homes Limited (“The Company”) is a private limited company incorporated under theCompanies Acts and is registered with the Homes and Communities Agency as a Registered Provider ofSocial Housing (RP) as defined by the Housing and Regeneration Act 2008.

The address of the registered office is Margaret House, Margaret Street, Ashton under Lyne, Tameside,OL67TH.

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

The principal accounting policies are summarised below. They have all been applied consistently throughoutthe year and to the comparative year.

Basis of accounting

The financial statements have been prepared under the historical cost convention, modified to includecertain items at fair value, in accordance with Financial Reporting Standard 102 (FRS 102) issued by theFinancial Reporting Council and comply with the Statement of Recommended Practice for registered socialhousing providers 2014 (SORP), the Housing and Regeneration Act 2008 and the Accounting Direction forprivate registered providers of social housing 2015.

Ashton Pioneer Homes Limited is a public benefit entity, as defined in FRS 102 and applies the relevantparagraphs prefixed ‘PBE’ in FRS 102.

FRS 102 allows a qualifying entity certain disclosure exemptions, subject to certain conditions, which havebeen complied with, including notification of, and no objection to, the use of exemptions by the Company’sshareholders.

In preparing the Company’s individual financial statements, the Company has taken advantage of thefollowing exemptions:

• from disclosing key management personnel compensation, as required by paragraph 7 of Section 33‘Related Party Disclosures’;

• from presenting a reconciliation of the number of shares outstanding at the beginning and end of theyear, as required by paragraph 12 of Section 4 ‘Statement of Financial Position’; and

• from presenting a statement of cash flows, as required by Section 7 ‘Statement of Cash Flows’.

On the basis that equivalent disclosures are given in the consolidated financial statements, the Company hasalso taken advantage of the exemption not to provide certain disclosures as required by Section 11 ‘BasicFinancial Instruments’ and Section 12 ‘Other Financial Instrument Issues’.

Basis of consolidation

The Group financial statements consolidate the financial statements of Ashton Pioneer Homes Limited, APHDevelopments Limited and Pioneer Homes Services Ltd at 31 March 2017. These are available from theregistered office address.

Turnover

Tumover represents rent and service charges receivable (net of rent and service charge losses from voids)and disposal proceeds of current assets such as properties developed for outright sale or shared ownershipfirst tranche sales at completion together with revenue grants from local authorities and the Homes andCommunities Agency and charitable fees and donations. Service charge income is recognised whenexpenditure is incurred as this is considered to be the point at which the service has been performed and therevenue recognition criteria met.

29

t



PRINCIPAL ACCOUNTING POLICIES (continued)

Intangible assets

Intangible assets are staled at historic cost or valuation, less accumulated amortisation and any provision forimpainnent. Amortisation is provided on all intangible assets at rates calculated to write off the cost orvaluation of each asset on a straight-line basis over its expected useful life.

Property, plant nnd equipment - housing properties

The useful economic lives of all tangible fixed assets are reviewed annually. The Group has reviewed theeconomic useful lives of its housing properties. Properties were transferred at negative value andrefurbishment works were completed prior to depreciation being charged.

Properties originally transferred from Tameside MBC are not yet reviewed for impairment due to theirhaving no value. New Build Properties completed since transfer are depreciated and reviewed forimpairment as appropriate.

I-lousing properties in the course of construction are stated at cost and not depreciated.

Housing properties are transferred to completed properties when they achieve practical completion.

Housing properties are stated at cost less accumulated depreciation and accumulated impairment losses.Cost includes the cost of acquiring land and buildings, directly attributable development costs andborrowing costs directly attributable to the construction of new housing properties during the development.Capitalisation ceases when substantially all the activities that are necessary to get the asset ready for use arecomplete.

Fixed assets and depreciation

Tangible fixed assets are stated at cost less accumulated depreciation. Major components of housingproperties, which have significantly different patterns of consumption of economic benefits, are treated asseparate assets and depreciated over their expected useful economic lives. Depreciation is charged on astraight line basis over the expected economic useful lives of the assets at the following annual rates:

Housing properties 1.66%Kitchens 5.00%Bathrooms 3.33%Lifts 2.50%Central heating/boilers 6.66%Roof 3.33%Windows and external doors 333%Wiring 3.33%External works 250%CCTV/door entry 6.66%Render 3.33%Freehold land is not depreciated.

Empty Homes are depreciated on a straight line basis over the shorter of their expected useful lives or thelength of the grant to which the empty home relates.

Improvements

Where there are improvements to housing properties that are expected to provide incremental future benefits,these are capitalised and added to the carrying amount of the property. The Group capitalises expenditure onhousing properties, which increases the net rental stream over the life of the property. An increase in the netrental stream may arise through an increase in the rental income, a reduction in future maintenance costs, ora significant extension of the life of the property.

Any works to housing properties which do not replace a component or result in an incremental future benefitare charged as expenditure in surplus or deficit in the Statement of Comprehensive Income.

Leaseholders

Where the rights and obligations for improving a housing property reside with the leaseholder or tenant, anyworks to improve such properties incurred by the Company is recharged to the leaseholder and recognised insurplus or deficit in the Statement of Comprehensive

30




Non-housing property, plant and equipment

Non-housing property, plant and equipment is stated at historic cost less accumulated depreciation and anyprovision for impairment. Depreciation is provided on all non-housing property, plant and equipment, otherthan investment properties and freehold land, at rates calculated to write off the cost or valuation, lessestimated residual value, of each asset on a straight-line basis over its expected useful life, as follows:

Property, plant and machinery 5.00%Computer equipment 33.33%Offices 2.00%Office equipment 20.00%Motor Vehicles 25.00%

Impairment of social housing properties

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

An assessment is made at each reporting date as to whether an indicator of impairment exists. If such anindicator exists, an impairment assessment is carried out and an estimate of the recoverable amount of theasset is made. Where the carrying amount of the asset exceeds its recoverable amount, an impairment loss isrecognised in surplus or deficit in the Statement of Comprehensive Income. The recoverable amount of anasset is the higher of its value in use and fair value less costs to sell. Where assets are held for their servicepotential, value in use is determined by the present value of the asset’s remaining service potential plus thenet amount expected to be received from its disposal. Depreciated replacement cost is taken as a suitablemeasurement model.

An impairment loss is reversed if the reasons for the impairment loss have ceased to apply and included insurplus or deficit in the Statement of Comprehensive Income.

Sale of housing properties

Housing property sales, other than any sales of first tranche shared ownership, are treated as sales of fixedassets and are shown as a separate item after the operating surplus in the Statement of ComprehensiveIncome.

Social housing and other grants

Where grants are received from government agencies such as the Homes and Communities Agency, localauthorities, devolved government agencies, health authorities and the European Commission which meet thedefinition of government grants they are recognised when there is reasonable assurance that the conditionsattached to them will be complied with and that the grant will be received.

Government grants are recognised using the accrual model and are classified either as a grant relating torevenue or a grant relating to assets. Grants relating to revenue are recognised in income on a systematicbasis over the period in which related costs for which the grant is intended to compensate are recognised.Where a grant is receivable as compensation for expenses or losses already incurred or for the purpose ofgiving immediate financial support with no future related costs, it is recognised as revenue in the period inwhich it becomes receivable.

Grants relating to assets are recognised in income on a systematic basis over the expected useful life of theasset. Grants received for housing properties are recognised in income over the expected useful life of thehousing property structure. Where a grant is received specifically for components of a housing property, thegrant is recognised in income over the expected useful life of the component.

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

31




Recycling of grants

Where there is a requirement to either repay or recycle a grant received for an asset that has been disposedof, a provision is included in the Statement of Financial Position to recognise this obligation as a liability.When approval is received from the finding body to use the grant for a specific development, the amountpreviously recognised as a provision for the recycling of the grant is reclassified as a creditor in theStatement of Financial Position.

For shared ownership staircasing sales, when fill staircasing has not taken place, the recycling of the grantmay be deferred if the net sales proceeds are insufficient to meet the grant obligation relating to the disposaland is not be recognised as a provision. On subsequent staircasing sales, the requirement to recycle the grantbecomes an obligation if sufficient sales proceeds are generated to meet the obligation and a provision isrecognised at this point.

On disposal of an asset for which government grant was received, if there is no obligation to repay the grant,any unamortised grant remaining within liabilities in the Statement of Financial Position related to this assetis derecognised as a liability and recognised as revenue in surplus or deficit in the Statement ofComprehensive Income.

Leased assets

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

Finance leased assets

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

Finance leases are capitalised at commencement of the lease as assets at the fair value of the leased asset or,if lower, the present value of the minimum lease payments calculated using the interest rate implicit in thelease.

Assets are depreciated over the shorter of the lease term and the estimated useful life of the asset. Assets areassessed for impairment at each reporting date.

The capital element of lease obligations is recorded as a liability on inception of the arrangement. Leasepayments are apportioned between capital repayment and finance charge, using the effective interest ratemethod, to produce a constant rate of charge on the balance of the capital repayments outstanding.

Operating leased assets

Leases that do not transfer all the risks and rewards of ownership are classified as operating leases.

Payments under operating leases are charged to surplus or deficit in the Statement of Comprehensive Incomeon a straight-line basis over the period of the lease.

Interest payable

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

32




Deferred taxation

Deferred tax is recognised in respect of all timing differences that have originated but not reversed at thedate of the Statement of Financial Position where transactions or events have occurred at that date that willresult in an obligation to pay more, or a right to pay less tax.

Deferred tax assets are recognised only to the extent that the Board consider that it is more likely than notthat there will be suitable taxable profits from which the future reversal of the underlying timing differencescan be deducted.

Deferred tax is measured on an undiscounted basis at the rates that are expected to apply in the periods inwhich timing differences reverse, based on tax rates and laws enacted or substantively enacted at the date ofthe Statement of Financial Position.

Pension costs

Local Government Pension Scheme

The company participates in a local government pension scheme which is a multi-employer scheme where itis possible for individual employers as admitted bodies to identi& their share of the assets and liabilities ofthe pension scheme. For this scheme the amounts charged to operating surplus are the costs arising fromemployee services rendered during the period and the cost of plan introductions, benefit changes, settlementsand cunailments. They are included as part of staff costs. The net interest cost on the net defined benefitliability is charged to revenue and included within finance costs. Re-measurement comprising actuarialgains and losses and the return on scheme assets (excluding amounts included in net interest on the netdefined benefit liability) are recognised immediately in other comprehensive income.

Defined benefit schemes are funded, with the assets of the scheme held separately from those of the Group,in separate trustee administered funds. Pension scheme assets are measured at fair value and liabilities aremeasured on an actuarial basis using the projected unit credit method. The actuarial valuations are obtainedat least triennially and are updated at each reporting date.

Multi-employer defined benefit pension scheme — Social Housing Pension Scheme

The compny also participates in an industry wide multi-employer defined benefit pension scheme where thescheme assets and liabilities cannot be separately identified for each employer. This is accounted for as adefined contribution scheme as there is insufficient information available to account for the scheme asdefined benefit. For this multi-employer scheme, there is a contractual agreement between the scheme andthe company that determines how the deficit will be funded and a liability is recognised in the Statement ofFinancial Position and the resulting expense in surplus or deficit in the Statement of Comprehensive Incomefor the present value of the contributions payable that arise from the agreement to the extent that they relateto the deficit.

Value added tax

Ashton Pioneer Homes Limited, API-I Developments Limited and Pioneer Homes Services Ltd are registeredfor VAT purposes as a group. Due to the low amounts able to be reclaimed the majority of amountsdisclosed in the financial statements are still inclusive of VAT.

Financial instruments

Financial instruments are classified and accounted for, according to the substance of the contractualarrangement, as financial assets, financial liabilities or equity instruments. An equity instrument is anycontract that evidences a residual interest in the assets of the Company afier deducting all of its liabilities.

Financial assets and financial liabilities are recognised when the Company becomes a party to thecontractual provisions of the instrument.

Financial assets carried at amortised cost

Financial assets carried at amortised cost comprise rent arrears, trade and other receivables and cash andcash equivalents. Financial assets are initially recognised at transaction value plus directly attributabletransaction costs. Afier initial recognition, they are measured at amonised cost using the effective interestmethod. Discounting is omitted where the effect of discounting is immaterial.

33



If there is objective evidence that there is an impairment loss, the amount of the loss is measured as thedifference between the asset’s carrying amount and the present value of estimated future cash flowsdiscounted at the financial asset’s original effective interest rate. The carrying amount of the asset is reducedaccordingly.

A financial asset is derecognised when the contractual rights to the cash flows expire, or when (he financialasset and all substantial risks and reward are transferred.

If an arrangement constitutes a financing transaction, the financial asset is measured at the present value ofthe future payments discounted at a market rate of interest for a similar debt instrument.

Financial liabilities carried at amortised cost

These financial liabilities include trade and other payables and interest bearing loans and borrowings.

Non-current debt instruments which meet the necessary conditions in FRS 102, are initially recognised attransaction value adjusted for any directly attributable transaction cost and subsequently measured atamortised cost using the effective interest method, with interest-related charges recognised as an expense infinance costs in the Statement of Comprehensive Income. Discounting is omitted where the effect ofdiscounting is immaterial.

A financial liability is derecognised only when the contractual obligation is extinguished, that is, when theobligation is discharged, cancelled or expires.

Cash and cash equivalents

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

Significant management judgements and key sources of estimation uncertainty

The preparation of the financial statements requires management to make judgments, estimates andassumptions that affect the application of policies and reported amounts of assets and liabilities, income andexpenses. The estimates and associated assumptions are based on historical experience and various otherfactors that are believed to be reasonable under the circumstances, the results of which form the basis ofmaking the judgments about carrying values of assets and liabilities that are not readily apparent from othersources. Actual results may differ from these estimates.

Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimatesare recognised in the period in which the estimate is revised and in any future periods affected.

Significant management judgements

The following are management judgements in applying the accounting policies of the Company that have themost significant effect on the amounts recognised in the financial statements..

Impairment ofsocial housing propertiesThe Company has to make an assessment as to whether an indicator of impairment exists. In making thejudgement, management considered the detailed criteria set out in the SORP.

Estimation uncertainty

The Company makes estimates and assumptions concerning the future. The resulting accounting estimateswill, by definition, seldom equal the related actual results.

34



2. TURNOVER, OPERATING COSTS AND OPERATING SURPLUSI2017

Cost of Operating OperatingTurnover sales costs surplus

£000 £‘OOO £‘OOO £000COMPANYSocial housing lettings 4,694 - 3,337 1,357

Other social housing activities 86 - 35 51Other

Total 4,780 - 3,372 1,408

2017Cost of Operating Operating

Turnover sales costs surplus£‘OOO £‘OOO £‘OOO £‘OOO

GROUPSocial housing lettings 4,694 - 3,337 1,357

Other social housing activities 86 - 35 51Other

Non social housing activities 38 - 32 6

Total 4,818 - 3,404 1,414


Turnover sales costs surplus£‘OOO £‘OOO £‘OOO £‘OOO

CU1 P&NVSocial housing lettings 4,504 - 3,616 888

Other social housing activitiesOther 67 - 56 11

Non social housing activities - - - -

Total 4,571 3,672 899


Turnover sales costs surplus£000 £‘OOO £‘OOO £000

GROUPSocial housing lettings 4,504 - 3,616 888

Other social housing activitiesOther 67 - 56 11

Non social housing activities 21 - 20 1

Total 4,592 - 3,692 900

35

ASIITON PIONEER HOMES LIMITED


3. INCOME AND EXPENDITURE FROM SOCIAL HOUSING LETTINGS

GROUP2017 GROUP

General 2017 GROUP COMPANY GROUPneeds Affordable 2017 2017 2016

housing housing Total Total ToniGROUP AND COMPANY

£‘OOO £000 £000 £‘OOO £‘OOO

INCOMERents receivable 3,551 126 3,677 3,677 3,601Service charges income 680 - 680 680 668Amortised government grant 282 73 355 355 254

Gross rent receivable 4,513 199 4,712 4,712 4,523Less rent losses from voids (18) - (18) (18) (19)

Net rents receivable 4,495 199 4,694 4,694 4,504

Total income 4,495 199 4,693 4,694 4,504

EXPENDITUREService charge costs 642 - 642 642 670

Management 733 138 872 872 1,022Routine maintenance 592 - 592 592 643Planned maintenance 240 - 240 240 492Major repairs expenditure 50 - 50 50 60Depreciation on [lousing Properties 792 - 792 792 657Property/Equipment written off 114 - 114 114 -

Bad debts 36 - 36 36 72

Operating costs 3,199 138 3,337 3,337 3,616

Operating surplus social housing lettings 1,296 61 1,357 1,357 888

Void losses (18) - (18) (18) (19)

4. INTEREST RECEIVABLEGROUP COMPANY

2017 2016 2017 2016£‘OOO £‘OOO £‘OOO £000

Bank interest receivable 7 22 7 22

5. INTEREST AND FINANCING COSTS

GROUP COMPANY2017 2016 2017 2016£‘OOO £‘OOO £‘OOO £‘OOO

Interest payable on loans 540 587 540 587

36



6. SURPLUS FOR THE YEAR

Surplus for the year is stated after charging/(crediting):

GROUP COMPANY

2017 2016 2017 2016£‘OOO £‘OOO £‘OOO £‘OOO

Depreciation of property, plant and equipment 843 726 843 726Amortisation of intangible assets - - - -

Amonisation of government grants (355) (254) (355) (254)Audit fees:-Statutorvaudit 13 12 13 12

- Taxation compliance services 3 1 3 1Operating lease rentals 14 15 14 15

7. TAXATION ON ORDINARY ACTIVITIESGROUP COMPANY

2017 2016 2017 2016£‘OOO £‘OOO £‘OOO £‘OOO

a) UK corporation tax at 19% (2016: 20%) 297 66 297 66

b) Tax charge per accounts

Reconciliation of current tax chargeSurplus before tax 881 335 875 334

Tax on surplus at standard CT rate of 19%(2016: 20%) 168 67 166 67Effects of:Fixed asset timing differences 188 135 188 135Depreciation in excess of capital allowancesUtilisation of tax losses and other deductions (5) (160) (5) (160)Other short term timing differences 1 1 1 1Expenses not deductible for tax purposes 13 41 15 41Income not taxable for tax purposes (81) (53) (81) (53)Amounts (charged)!credited direct to STRGL 13 35 13 35

Current tax (charge)/credit for the year 297 66 297 66

The company has an unrecognised deferred tax asset of £74k. The deferred tax asset has not beenrecognised on the grounds that it is not anticipated that it will ctystalise in the near Future.

There are no significant future taxation changes which would impact on the Company or Group.

37



8. STAFF COSTS (GROUP)

2017 2016£‘OOO £‘OOO

Wages and salaries 1,181 1,118Social security costs 104 92Other pension costs (see note 18) 165 135

1,450 1,345

The Full Time Equivalent number of staff who received emoluments, including pension contribution, in excessof60,000 were as shown below.

2017 2016Number Number

Salary Band £‘OOO60,000 — 69,99970,000 — 79,999 - -

80,000 — 89,999 - -

90,000 — 99,999

The average hill time equivalent number of employees was:

2017 2016Number Number

Full time equivalents 45 44

The basis of the calculation of the hill time equivalents was 35 hours per week

9. DIRECTORS’ REMUNERATION AND TRANSACTIONS (GROUP)

Key management personnel remuneration2017 2016

Directors who are executive staff members £‘OOO £‘OOO

Wages and salaries 215 214Social security costs 26Other pension costs 9 8

Board membersNo payments are made to members of the Board.

2017 2016£‘OOO £‘OOO

Remuaeration of the highest paid director,excludingpension contributions:

Emoluments 95 94

The Chief Executive is an ordinary member of the pension scheme. No enhanced or special temis apply.

38


NOTES TO THE FINANCIAL STATEMENTSFor the year ended 31 NIarch 2017

10. INTANGIBLE ASSETS

Sofflva reGROUP AND COMPANY Costs Total

£‘OOO £‘OOO

At 1 April 2016 7 7Additions -

Disposals (7) (7)-

AT3lMarch2Ol7 - -

KMORTISATION

AT 1 April 2016 & 31 March 2017 - -

NET BOOK VALUEAtIApril2Ol6 7 7

AT 31 March 2017 - -

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43



12. DEBTORS: AMOUNTS FALLING DUE WITHIN ONE YEARGROUP COMPANY

2017 2016 2017 2016£‘OOO £‘OOO £‘OOO £‘OOO

Rent arrears 180 204 180 204Provision for bad debts (82) (83) (82) (83)

Net rental arrears 98 121 98 121

Amounts owed by subsidiaries - 17Sales debtors 110 105 105 81Otherdebtors 20 21 20 21Prepayment and accrued income 247 225 243 222

475 472 466 462

No disclosure has been made of the net present value of rental arrears subject to repayment plans as theamount is considered to be insignificant.

13. CASH AT BANK AND SHORT TERM DEPOSITSGROUP COMPANY

2017 2016 2017 2016£‘OOO £‘OOO £‘OOO £‘OOO

Cash at bank 2,070 3,614 2,054 3,602

14. CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEARGROUP COMPANY

2017 2016 2017 2016£‘OOO £‘OOO £‘OOO £‘OOO

Trade creditors 294 334 294 334Accruals and deferred income 406 271 406 271Taxation 300 - 300Rents recieved in advance 67 62 67 62Other creditors 62 59 62 59Grants in Advance -

Housing Loans 750 650 750 650Disposal proceeds hind 310 162 310 162Other taxation and social security - 4 -

2,189 1,542 2,189 1,539

The loans are secured on freehold housing properties. Interest is payable at an average of 5.24%

The total accumulated amount of capital grant received or receivable at the balance sheet date is£9.6S4milIion.

44



15. CREDITORS: KMOUNTS FALLING DUE AFTER MORE THAN ONE YEARGROUP COMPANY

2017 2016 2017 2016£‘OOO £‘OOO £‘OOO £‘OOO

Other creditorsLoans 9,350 10,100 9,350 10,100Government grants 6,881 7,359 6,881 7,359Defined benefit pension scheme liability (note 18) 818 872 818 872

17,049 18,331 17,049 18,331

Ageing AnalysisIn one year or more but less than two years 900 750 900 750In two years or more but less than five years 6,000 4,700 6,000 4,700In five years or more 2,450 4,650 2,450 4,650

9,350 10,100 9,350 10,100

These loans are secured by specific charges on Ashion Pioneer Homes Limited’s housing properties andfloating charges on all of its assets and are repayable at varying rates of interest.

GRANTS (deferred income)

Owners Grants PropertyEMPTY HOMES GRANTS Amortisation Contributions Received Sales TOTAL

£‘OOO £000 £‘OOO £‘OOO £‘OOO

AtlApril2Ol6 - - - - 484Charge for the year (73) - - - (73)Owners Contributions - 9 - - 9Grants Received - - 30 - 30Disposals - - - - -

AT3I March2017 (73) 9 30 - 450

GOVERNMENT GRANTS

At 1 April 2016 - - - 6,875Charge for the year (282) - - - (282)Disposals - - - (162) (162)

AT 31 March 2017 (282) - - (162) 6,431

AT3I March 2017 (355) 9 30 (162) 6,881

GROUP COMPANY2017 2016 2017 2016£‘OOO £‘OOO £‘OOO £‘OOO

Disposals proceeds FundAt 1 April 162 222 162 222Inputs 148 - 148Recycling of grant - (60) - (60)

At3lMarch2Ol7 310 162 310 162

45



16. FINANCIAL COMMITMENTS

Capital commitments are as follows:

2017 2016£‘OOO £‘OOO

Contracted for but not provided for in these financial statements - 2,040Approved by the directors but not contracted for in these financial statements 2,000 571

2,000 2,611

17. FINANCIAL INSTRUMENTS

The Group’s income, expense, gains and losses in respect of financial instruments are summarised below:

2017 2016£‘OOO £‘OOO

Interest income and expenseTotal interest income for financial assets at amortised cost 7 22Total interest expense for financial liabilities at amonised cost (540) (587)

(533) (565)

The carrying values of the Group’s financial assets and liabilities are summarised by category below:

2017 2016£‘OOO £‘OOO

Financial assetsMeasured at amortised cost• Rent arrears and other debtors 98 121• Other debtors 377 176• Cash at bank and other short term deposits 2,070 3,614

2,545 3,911

Financial liabilitiesMeasured at amortised cost• Loans payable 10,100 10,750Measured at undiscounted amount payable• Trade and other creditors 294 334

Other creditors 1,146 53

11,540 11,137

46



18. PENSION OBLIGATIONS

General

Ashton Pioneer Homes participates in 2 pension schemes for its employees being the Social HousingPension Scheme and the Greater Manchester Pension Fund.

TPT Retirement Solutions - Social Housing Pension Scheme (SHPS)

The Company participates in the scheme, a multi-employer scheme which provides benefits to some 500non-associated employers. The scheme is a defined benefit scheme in the UK. It is not possible for theCompany to obtain sufficient information to enable it to account for the scheme as a defined benefit scheme.Therefore it accounts for the scheme as a defined contribution scheme.

The scheme is subject to the funding legislation outlined in the Pensions Act 2004 which came into force on30 December 2005. This, together with documents issued by the Pensions Regulator and Technical ActuarialStandards issued by the Financial Reporting Council, set out the framework for funding defined benefitoccupational pension schemes in the UK.

The scheme is classified as a ‘last-man standing arrangement’. Therefore the Company is potentially liablefor other participating employers’ obligations if those employers are unable to meet their share of the schemedeficit following withdrawal from the scheme. Participating employers are legally required to meet theirshare of the scheme deficit on an annuity purchase basis on withdrawal from the scheme.

A full actuarial valuation for the scheme was carried out with an effective date of 30 September 2014. Thisactuarial valuation was certified on 23 November2015 and showed assets of £3, l23m, liabilities of £4,446mand a deficit of £l,323m. To eliminate this funding shortfall, the trustees and the participating employershave agreed that additional contributions will be paid, in combination from all employers, to the scheme asfollows:

Deficit contributions

Tier I £40.6m per annumFrom 1 April 2016 to 30 (payable monthly and increasing by 4.7% each year on 1st April)Sepember 2020: -

Tier 2 £28,6m per annumFrom I April2016 to 30 (payable monthly and increasing by 4.7% each year on 1st April)çppber 2023:

_____________________________________——

Tier 3 £32.7m per annumFrom 1 April 2016 to 30 (payable monthly and increasing by 3.0% each year on 1st April)September2026: -—________ - -

Tier 4 £31 .7m per annumFrom 1 April2016 to 30 (payable monthly and increasing by 3.0% each year on 1st April)!ptember

2026:

_______——

- - - -

Note that the scheme’s previous valuation was carried out with an effective date of 30 September 2011; thisvaluation was certified on 17 December 2012 and showed assets of £2,062m, liabilities of £3,097m and adeficit of £1,035m. To eliminate this funding shortfall, payments consisted of the Tier 1, 2 & 3 deficitcontributions.

Where the scheme is in deficit and where the Company has agreed to a deficit funding arrangement, theCompany recognises a liability for this obligation. The amount recognised is the net present value of thedeficit reduction contributions payable under the agreement that relates to the deficit. The present value iscalculated using the discount rate detailed in these disclosures. The unwinding of the discount rate isrecognised as a finance cost.

18 PENSION OBLIGATIONS (Continued)

47

ASIITON PIONEER HOMES LIMITED


PRESENT VALUES OF PROVISION

RECONCILIATION OF OPEN[NG AND CLOSING PROVISIONS

Period Ending Period Ending31 March2017 3) March2016

(000s) (000s)

Provision at start olperiod 480 395

L’nwinding oithe discount factor (interest expense) 9 7

Delicit contribution paid (61) (48)

Remcasurcmcnts - impact of any change in assumptions 12 (3)

Remeasurements - amendments to the contribution schedule - 129

Provision at end of period 440 480

INCOME ANU EXPENDITURE IMPACT

Period Ending Period Ending31 March2017 31 March2016

(WOOs) (WOOs)

Interest expense 7

Remeasurements— impact of any change in assumptions 12 (3)

Remeasurements — amendments to the contribution schedule - 129

ASSUMPTIONS

31 March2017 31 March2016 31 March2015% per annum % per annum % per annum

Rate of discount I .33 2.06 1.92

The discount rates shown above are the equivalent single discount rates which, when used to discount the futurerecovery plan contributions due, would give the same results as using a Ml .4.4 corporate bond yield curve todiscount (he same recovery plan contributions.

48

ws



18 PENSION OBLIGATIONS (Continued)

The Greater Manchester Pensions Fund

The latest formal valuation of the Greater Manchester Pensions Fund Scheme was at 31 SI March 2016 withthe next formal valuation due as at 31’ March 2017. The financial assumptions underlying the valuationwere as follows:

2017 2016 2015 2014

Rate of increase in salaries 3.2% 3.5% 3.6% 3.9%Rate of inflatioa1increase in pensions 2.4% 2.2% 2.4% 2.8%Discount rate 3.5% 3.2% 4.3%Expected return on assets - - 3,2% 5.9%

The assets in the Scheme and the expected rate of return were:

Long-term Long-term Long-termrate of rate of rate ofreturn return return

expected expected expectedat Value at at Value at at Value at

2017 2017 2016 2016 2015 2015£000 £‘OOO £‘OOO

Equities 75% 1,108 73% 861 3.2% 845Bonds 16% 236 17% 201 3.2% 197Property 5% 74 6% 71 3.2% 69Cash 4% 59 4% 47 3.2% 46

1,477 1,180 1,157

Total market value of assets 1,477 1,180 1,157

Present value of scheme liabilities (1,845) (1.572) (1,671)

Net pension liability (368) (392) (514)

Analysis of the amount charged to operating surplus:2017 2016

£000 £‘OOO

Current service cost 37 43Past service cost -

Total operating charge 37 43

Analysis of the amount charged to interest and financing costs:2017 2016

£‘OOO £000

Expected return on Employer Assets (42) (38)Interest on pension scheme liabilities 56 54

Total operating charge 13 16

49



18 PENSION OBLIGATIONS (Continned)

Analysis of amount recognised in Other Comprehensive Income:

2017 2016£‘OOO £‘UOO

Assets gains I (losses) arising during the period 232 (7)Experience gains and losses on liabilities 121 12Changes in assumption underlying the present value of schemeliabilities (316) 174Changes in demographic assumptions (7)

Actuarial (loss) / surplus recognised in Other ComprehensiveIncome 30 179

Changes to Fair value of Assets:

Opening fair value of assets 1,180 1,157Interest income on plan assets 42 38Plan participants contributions II II

Employer contributions 44 40Benefits paid (32) (21)Return on assets excluding amounts included in net interest 232 (45)

Closing fair value of assets 1,477 1,180

Changes to Fair valnes of defined benefit obligation

Opening present value of liabilities 1,572 1,671Current service cost 37 43Interest cost on defined benefit obligation 55 54Plan participants contribution 11 11Benefits paid (32) (21)Changes in demographic assumptions 7Changes in financial assumptions 316 (174)Otherexperience (121) (12)Closing present value of liabilites 1,845 1,572

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Movement in deficit during the year:2017 2016

£‘OOO £‘OOO

Deficit in scheme at beginning of the year (392) (514)Movement in year:

Current service cost (37) (43)Interest Cost (55) (54)Contributions 44 40Net return on assets 274 (7)Actuarial gaiWOoss) (202) 186

Deficit in scheme at end of year (368) (392)

The pension charge during the year was £29,630 (2016: £29,388).

The estimated employer’s contribution for the year to 31 March 2018 will be approximately £30,000(20l7£30,000)

History of experience gains and losses2017 2016 2015 2014£000 £000 £000 £000

Actual return less expected return on assets -

(‘000’s) 274 (7) 59 (155)Experience gains and losses on liabilities -

(‘000’s) 121 12 7 200

Actuarial gains/(losses) recognised in OtherComprehensive Income - (‘000’s) 72 179 (126) 47

19. UNITS/BEDSPACESGROUP COMPANY

2017 2016 2017 2016Social Housing

Under development at the end of the year:Housing accommodation - 11 - II

Under management at the end of the year:Housing accommodation 937 929 937 929

937 940 937 940

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20. RELATED PARTLESThe Board has a tenant member namely, Helen Ruth Bradbury (Appointed 19 November 2015) whohold/held tenancy agreements on normal terms and cannot use her position to her advantage.

David Postlethwaite, Joyce Bowennan, Gerald Patrick Cooney and David Hugh McNally are nominees ofTameside MBC. All transactions with Tameside MBC are held at arms length and are made on normalcommercial terms.

APH Developments Limited, a company registered in England & Wales, is a wholly owned subsidiary ofAshton Pioneer Homes Limited, being controlled by the same Board members. At 31 March 2017 AshtonPioneer Homes Limited owed £ NIL (2016 : £NIL) to APH Developments Limited. Its accounts form part ofthese consolidated accounts and cover its activities in supporting Mhton Pioneer Homes in its developmentof new properties. APH Developments Limited is not registered with the Homes and Communities Agency.

Pioneer Home Services Ltd, a company registered in England & Wales, is a wholly owned subsidiary ofAshton Pioneer Homes Limited, being controlled by the same Board members. At 31 March 2017 AshtonPioneer Homes Limited owed £20 to Pioneer Homes Services Ltd, (2016 were owed by Pioneer HomesServices Ltd: £16,670). Its accounts form part of these consolidated accounts and cover its activities inhousing outside of the social environment. Pioneer Homes Services Ltd is not registered with the Homes andCommunities Agency.

21. OPERATLNG LEASE COMMITMENTS

Total future minimum lease payments under non-cancellable operating leases are as follows:

GROUP AND COMPANY

2017 2016Other £‘OOO £000Payments due:- within one year 14 13- between one and five years 28 40

42 53

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ashton pioneer homes limited company number: …...at aph we have developed a performance dashboard...

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