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annual accounts
2012
FINANCIAL STATEMENTS 2012 | 1
The Fast Read
Who We Are
Why We Exist
What We Think
Who runs Family Mosaic
Board membership and advisors
Chairman’s statement
Our results
Operating and financial review
How we behave
Statement of responsibilities of the Board
Corporate governance
Report of the independent auditors to the members
Our 2012 financial statements
Income and expenditure account
Balance sheet
Cash flow statement
Notes to the financial statements
Where to find us
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64
Family Mosaic Housing
Consolidated financial statements
for the year ended 31 March 2012
Contents
2 | FAMILY MOSAIC HOUSING
For a summary digest of this annual report please read the next 3 pages.
The full story is on pages 7 to 63.
WHO WE ARE Family Mosaic is a leading housing association providing affordable homes
and Care and Support services to those on low incomes, or in need.
We have a wide range of services including:
Low cost affordable rented housing;
Shared Ownership schemes;
Support services for
Adults with learning disabilities;
Mental health;
Older people;
Young people;
Homeless singles;
Families.
We have over 23,000 properties, serve over 45,000 residents and support a further 8,000
people through our supported housing services.
It is important that we deliver quality homes and services, and we aim to be in the top quartile
performance amongst our peers in all the areas we operate in.
We have around 2,250 staff operating across London, Essex and the south of England.
WHY WE EXIST Our mission and values are:
5 Star Services – aiming beyond Government standards;
Big but Local – benefiting from being a large organisation but applying that at a local level;
We Can – demonstrating a can-do culture;
More Homes and Stronger Communities – growth through more new homes each year and expansion of
Supported Housing activities which add value to local communities.
We are a not for profit business. As such we reinvest all our surplus into our housing stock, and use our financial strength
to finance the construction of new homes.
We want our homes and communities to be the localities of choice and to that end we use all the skills and technology
we can harness to make it happen. We apply the highest design principles, as expressed in our Design Guide, to reduce
running costs and create desirable homes.
We are also driving efficiencies so we can invest the maximum possible in front line repairs, maintenance and services.
This applies to back office functions (where we have one of the lowest cost bases) and procurement, so we achieve value
for money and more works.
FINANCIAL STATEMENTS 2012 | 3
The fast read
The fast read
4 | FAMILY MOSAIC HOUSING
WHAT WE THINK We have a very strong financial position with plenty of funding and scope for growth.
2011–12 saw the introduction of the Government’s new Affordable Homes Programme which completely changes rent
setting, and funding for housing. We are increasing the amount of development for sale in order to keep rents low. Our
tenants are going to be affected by changes to how benefits are paid. We have produced a Welfare Reform strategy to
guide us in making sure we and our residents manage these changes. As part of that, we are in a pilot scheme with the
Department for Work and Pensions to test new arrangements around payments.
Budget cuts to care and support services will continue to impact the provision of these services.
HOW WE’RE DOING Financial summary
Operating surplus as % of turnover
26%
27%
Interest cover ratio
2.8
3.3
Arrears
5.1%
4.6%
Void turnaround time (days)
29
27
Number of new homes
889
1,111
Turnover
£165m
£181m9% change
Operating surplus
£43m
£48m11% change
Borrowings
£586m
£653m11% change
Gearing
41.2%
43.5%5.5% change
Net surplus before taxation
£34m
£38m12% change
The fast read
FINANCIAL STATEMENTS 2012 | 5
2012 RESULTS This was another good year for us. We reduced costs in our repair programmes and improved our operational efficiency.
As a result operating surplus increased from 26% to 27%.
CASH FLOW During the year we borrowed a further £67m from our loan book, which has been used to finance the delivery of new
homes. Our high operating surplus, combined with sales proceeds, helps keep our borrowing to a minimum. We improved
cash collection on rent arrears and debtors.
We ended the year with low gearing (compared to sector accepted averages) and £204m of borrowing facilities and cash
available for future funding.
On a simple basis the cash flows are as follows:
Surplus £38m
Spend on Charitable donations (£2m)
Development of new homes (£82m)
Improvements to our stock (£15m)
We had more cash at year end (£6m)
And increased borrowing by (£67m)
WHERE DOES THE RENT GO?
Management costs
Development/ Other services
Repairs and maintenance
Financing
Average rent £98 per week
£16
£29
£17
£36
6 | FAMILY MOSAIC HOUSING
FINANCIAL STATEMENTS 2012 | 7
Chair
Deputy Chair
Treasurer
appointed December 2011
appointed May 2012
resigned March 2012
resigned September 2011
resigned September 2011
Group Chief Executive
Group Development and Asset Management Director
Group Director of Corporate Services
Group Director of Research & Development
Group Finance Director
Group Operations Director
BankersBarclays Bank plc
1 Churchill Place
London,
E14 5HP
BOARDIan Peacock
John Owen
Mike Verrier
Barry McNamara
Brendan Sarsfield
Cath Shaw
Claire Tiney
Ian Vaughan
Janine Desmond
Keith Clancy
Pam Aujla
Richard Capie
Richard Stevens
Sam Hall
MANAGEMENT TEAM
Brendan Sarsfield
Dick Mortimer
John Gibbons
John Schofield
Ken Youngman
Yvonne Arrowsmith
COMPANY SECRETARYHeather Renton
REGISTERED OFFICEAlbion House
20 Queen Elizabeth Street, London, SE1 2RJ
Registered under the Industrial and Provident Societies Act, No: 30093R
Registered by the Homes and Communities Agency: L4470
ADVISORSAuditors KPMG LLP
1 Forest Gate
Brighton Road
Crawley, RH11 9PT
Who runs Family Mosaic
8 | FAMILY MOSAIC HOUSING
Family Mosaic aims to be a strong organisation helping those in greatest need.
The changes to the social housing sector which I described in my Statement last year are beginning to have an
effect on the way in which we provide housing and other services. Government grant for new building has fallen
sharply and that for fully subsidised rental properties has been cut particularly severely. These grant reductions,
delays in the new grant system being introduced and delays in land purchase and planning have led to a precipitate
fall in our new starts from over 1,100 units in 2010-11 to 160 in 2011-12. We expect the new build figure to recover,
but it is not going back to 1,100 homes unless funding from the government changes.
Constraints on local authority budgets have put pressure on supported housing contracts. Where we can make
efficiency improvements we will do so and thereby lower costs. However we are not prepared to cut service levels
below those we consider to be appropriate, nor will we cross subsidise supported housing from our general needs
housing business. If necessary we will not re-tender for contracts.
Financially we are in a strong position. Our surplus for the year was £38 million. This surplus is principally used to
reinvest in new properties for rent, though we also increased our community development budget from £1 million
to £2 million. We hope, through this increased community development spend, to help more of our tenants into
jobs and to build flourishing communities for the benefit of our own tenants and their neighbours. Gearing is low
at 44%, though this percentage is likely to rise as we fund more of our new build from our own resources rather
than Government grant, and interest cover is comfortable. We were pleased to receive a Aa2 credit rating from
Moody’s in March 2012.
During the year we acquired the ‘In Touch’ Supported Housing business from Hyde Housing Association. This
acquisition extends our activities throughout the South East region and helps to give our supported housing
business critical mass. The ‘In Touch’ business includes a Handyman service, which provides small scale repairs
and other similar jobs for tenants and others. We are considering whether such a service can be introduced into
other parts of Family Mosaic, in particular for our own tenants. Also during the year we sold our Temporary Housing
activity to Notting Hill Housing Trust. Your Board believes that the sale and purchase of businesses and properties to
and from other Housing Associations can improve the efficiency of both parties, to the long term benefit of residents
and service users, and we shall continue to search actively for these opportunities.
We have devoted considerable management resources to repairs performance. Tenant satisfaction, which is strongly
influenced by satisfaction with repairs, failed to improve as expected. During the year our repairs contract with
Morrisons came to an end. We are in productive discussions with Mears on amending their contract to our mutual
benefit and we are using a greater variety of contractors for specific work. The maintenance sector is operating on
low margins and we have to ensure we benefit from both savings and improved quality.
The social housing sector is a dynamic, rapidly changing one. While data is collected on many aspects of the sector,
there is little evidence of tenants’ likely reactions to the changes which are taking place. We have tried to address
this gap by producing research documents on Lifetime Tenancies; Affordable Rent and Personalisation. We hope that
these contributions will help inform the debate on these crucial questions.
Chairman’s statement
Chairman’s statement
FINANCIAL STATEMENTS 2012 | 9
Our staff often work in difficult and demanding conditions. Furthermore current economic conditions have put more
pressure on wages and other benefits. We are most grateful for the dedication which our staff show to those in their
care, who are often the most vulnerable and needy in society.
There were several changes to the Board in 2011-2012. Sam Hall retired after 7 ½ years as a tenant Member and
Richard Capie left to take up a post in New Zealand. I am extremely grateful to both Sam and Richard for their energy,
wisdom and counsel. Family Mosaic has benefitted greatly from their work. Barry McNamara and Janine Desmond both
joined us during the year. Barry has a great deal of experience of Family Mosaic having been a tenant for many years
and Janine brings expertise on the supported housing sector. We welcome both of them to the Board.
Ian Peacock
10 | FAMILY MOSAIC HOUSING
The Board presents this report and Financial Statements
for the year ended 31 March 2012. These results once
again show us as being financially strong. We use
our resources to reinvest in the business and realise
our ambitions.
DESCRIPTION OF THE BUSINESSAs a Group we own and manage 23,245 properties,
across 27 London Boroughs, and in Essex. These are
mostly provided at very low rents, made possible
through capital grants from government, and private
sale activity.
We have a significant Supported Housing business
providing nursing, care and support services to around
8,000 people. These are funded through Supporting
People, Health, Adult Social Care and other grants.
KEY OBJECTIVESOur vision is to provide
QUALITY HOMES and THRIVING COMMUNITIES.
OUR VALUES ARE CLEARCustomer Focus, Learning, Effective,
Ambitious, Responsive
WE HAVE FOUR KEY OBJECTIVES TO ENABLE THIS VISION TO BE MET:To have a WE CAN attitude.
To deliver a 5 STAR service.
To be BIG BUT LOCAL
MORE HOMES, STRONGER COMMUNITIES.
STRATEGYWe will continue to influence and lead sector thinking
on delivery and strategic issues. This will include
looking at the links to health, wealth and well being,
and increasing employment for our residents.
The sector has and is being subject to big changes,
and we are trying to react to these in a thoughtful
and considered way.
Our results – Operating and financial review
Recent reductions in the level of grant funding available
for new homes and the option to charge higher rents
on social housing, have changed the sectors’ dynamic.
This, combined with welfare reform changes, which
will have significant effects on our residents (including
in some cases their ability to pay), has resulted in
considerable debate as to how we deliver new homes,
what we charge for them, and indeed our purpose.
We have decided to maintain rents at ‘target’, rather
than move to the higher ‘affordable’ levels now
available. This has required a big change in our
development programme, which now includes
private sale to provide the subsidy previously coming
from government grant. Because of this increased
dependence on sales, and the higher borrowing to
support it, our new homes programme is much smaller
than previously, and we are more dependant on our
sales success to achieve it.
We are planning to deliver around 1,600 homes for
2012–15. Roughly half will be Social rent, the rest will
be Shared Ownership and private sale. The overall level
of new build is roughly half our previous targets.
We will monitor outcomes and amend our approach as
needed, particularly if we do not achieve expected sales
proceeds, since these are vital to our delivery model.
Our Care and Support business has been subject to cuts
in funding over the past few years. We believe that the
services we provide will continue to be needed in the
long term and will probably increase. That, combined
with the excellence of our services and our confidence
in our ability to manage these financially, has led us to
continue to target growth opportunities.
Repairs and maintenance are key to our customers.
We are introducing new partners and management
processes to improve service and satisfaction levels.
A trial Handyman type service aimed at low level
repairs and preventative maintenance is part of this.
OPERATING AND FINANCIAL REVIEW
FINANCIAL STATEMENTS 2012 | 11
We are targeting G15 top quartile performance for voids
and rent arrears. We have trialled back to back tenant
turnaround to minimise void periods with the intention
to roll it out across the business.
We have a clear strategy to manage Welfare Reform
changes to ensure our tenants can pay their rent and
sustain their tenancies. As part of that we are one of six
Government pilots across the country to trial parts of the
new Universal Credit system. This will run up to June
2013, followed by the staged introduction of the new
arrangements from October 2013.
Our management of service charges and leasehold
services has improved, and will continue,
through staffing and investment in new
systems and processes.
OPERATING AND FINANCIAL REVIEW
12 | FAMILY MOSAIC HOUSING
PERFORMANCE IN THE PERIODWe are pleased with the financial performance of
the Group.
Overall Net Surplus for the period was £38.4m before
tax, 12% up on the previous year.
Our Care and Support business had a tough year
dealing with Supporting People budget cuts. This
necessitated a restructure of pay and conditions to
our staff, the costs of which have been provided for
in the accounts. As part of our long term growth
strategy for this business we acquired In Touch,
a Care and Support business based in Kent, Sussex
and Hampshire. This reflects our belief in this market,
despite the current difficult trading conditions.
We sold our London based Temporary Accommodation
business at the year end, having decided that we were
sub scale in this area and that services would be better
provided by a larger player.
40000
60000
80000
100000
120000
140000
160000
180000
200000
2009/102008/92007/8 2011/122010/11
20500
21000
21500
22000
22500
23000
23500
UnitsIncome
£000s
Units and Income
Repairs costs reduced under our changed contracting
arrangements. Service levels have been less than
we’d have liked but are beginning to improve.
During the year our maintenance expenditure in total
(including capitalised expenditure) amounted to £1,664
per unit (2011: £1,857). Recoverable service charge cost
amounted to £377 per unit in the year (2011: £308).
We spent £156m on new homes in the year. This
represents a spend of £6,796 (2011: £5,029) per unit on
new supply.
During the year we drew down £67m on our loans to
fund our development programme bringing total loans
drawn down to £653m. This level of debt equates to
£28,636 per unit owned (2011: £26,497).
We continue to benefit from the low interest rate
environment, maintaining a high proportion of
variable rate loans to maximise this advantage.
Interest cover excluding disposals
20112010200920081.0
1.5
2.0
2.5
3.0
3.5
2012
OPERATING AND FINANCIAL REVIEW
FINANCIAL STATEMENTS 2012 | 13
FINANCIAL REVIEWThe Association’s investment in homes is financed
predominantly by long term loans, capital grants
and its own reserves.
We have loan facilities totalling £845m (2011:
£797m) with maturity dates running out to 2048
(2011: 2048).
Our major lenders are Barclays Bank, Lloyds TSB,
Nationwide and Santander. All bank debt is fully
secured against housing assets.
We have a Treasury policy which sets out, among
other things, how new loans can be raised, the
profiling of repayments and the exposure to variable
interest rates.
At year end variable interest rate loans were 43%
(2011: 37%) of our loan book. This is in line with
our policy, which is to have a maximum of 80%
fixed. We increased the variable element this year in
order to retain more flexibility, and we have again
benefited from low short term interest rates as a
result. One of the key decisions for us is when, or if,
to fix, so this is being monitored.
Our bank loans have a variety of covenant provisions
and definitions which are particular to the loan in
question. Financial covenants include interest cover
and gearing ratios.
Group Repayment analysis
less than 1 year 0.2%
between 1 and 5 years 5.2%
between 5 and 10 years 10.1%
between 10 and 20 years 44.7%
more than 20 years 39.8%
Our Gearing is 43.5% (2011: 41.2%) measured as
housing loans net of deferred loan issue costs
compared to reserves plus capital grants. This is
well within our financial covenants and fairly
conservative for the sector.
Interest cover is 3.3, again well above the minimum
required by our covenants, and up on the previous
years.
In anticipation of a potential capital market bond
issue, we had our business credit rated by Moody’s
during the year. We were scored as Aa2, among
the best in sector, and higher than many financial
institutions. At present we have adequate loan
facilities, having secured an additional £50m from
Clydesdale Bank in the year, so the timing of any
Bond issue remains to be agreed. This will be
determined by market conditions and our forecast
requirement for funds.
OPERATING AND FINANCIAL REVIEW
14 | FAMILY MOSAIC HOUSING
KEY INDICATORSMeasures Used By The BoardWe monitor our performance through the use of financial
and non financial indicators, which are produced
monthly. The following are the key indicators.
• Resident Satisfaction
• Operating Surplus
• Net surplus as a % of Income
• Current Arrears %
• Net Development Spend
• Central Overhead as a % of Income
• Management Cost per Unit per Week
Resident SatisfactionWe measure three components of satisfaction.
1 Overall General Needs satisfaction
2 Repairs satisfaction
3 Supported Housing satisfaction
Each month 200 residents are interviewed by an
independent specialist about the quality of our housing
management service. The results for the current year
showed that overall satisfaction for General Needs
tenants taken cumulatively over the year is 65%. This
is largely static compared to previous years, and we
believe is affected by repairs and issues with Service
Charge management. The last official STATUS survey (a
sector wide consultation done on the same basis by
all housing associations) in 2010 showed satisfaction
levels of 74% with Family Mosaic as a landlord.
A separate independent monthly tracking survey of 200
tenants who have received a Repair in the last month
shows satisfaction with this service at 73%. The official
STATUS survey in 2010 showed 68% satisfaction with this
service. Although this suggests that the repairs service
has improved, tenants who have recently received a
repair consistently rate the service more highly than
tenants as a whole, which is what STATUS measures.
In Supported Housing we measure overall satisfaction
by surveying every person who receives support
over the year. The overall average this year was 97%,
maintaining the excellent result achieved last year (97%).
The average of these three satisfaction surveys (i.e.
General Needs, Repairs, and Supported Housing) is a
lead driver for performance. A stepped target is set each
year which, if met, will allow performance bonuses to
be paid to all staff. The target this year was not met.
The table below shows this average tenant satisfaction
for the last five years, and shows a generally improving
trend, until this year. We believe we have actions in
place to improve this. The target for 2013 is 84%.
Operating SurplusThis measures our surplus before property disposals and
interest. It is used to measure controllable performance
at cost centre and department levels as well as for the
organisation as a whole, and we would expect to see
this increase over time. As a percentage of turnover our
operating surplus is 26.6%. We compare this against
the G15 group of fifteen leading London Housing
Associations which in 2011 reported an average of 23.3%.
Current Arrears % This measures the amounts of rent owed by current
tenants compared to their annual rent charge. Our
rent arrears reduced once again in 2012 in a tough
environment where income levels are declining
and benefit levels are changing. More changes are
coming in the future, as the Government seeks to
Operating Surplus Actual (£000’s)
2008 2009 2010 2011 2012£27,229 £25,537 £31,351 £43,150 £48,086
Resident Satisfaction
2008 2009 2010 2011 201277% 80% 82% 83% 82%
OPERATING AND FINANCIAL REVIEW
FINANCIAL STATEMENTS 2012 | 15
introduce Universal Credit and the direct payment
of benefits to tenants. We are part of a pilot
scheme to test out these new arrangements.
Our medium term target remains as 5% or less, which
we are pleased to report has now been achieved. In
2011 we were in the second quartile in the HouseMark
G15 peer group benchmarking report, the same as
the previous year, as other Associations also improved
their performance. In terms of cash collection, we
achieved 100% against a target of 100%. Our bad
debt costs equates to £30 per unit per year. We are
pleased to report that while arrears performance
improved, we actually had fewer evictions in the year.
Net Development SpendWe target and measure Net Development Spend in the
year, which is the total spent on new development,
less grants received less proceeds on new build sales
units. This is important because this sum predominantly
drives the funding requirement of the business. The
development team are tasked with managing within
the parameters set, to ensure the business stays within
banking covenants and the facilities available.
During the year net spend amounted to £96m (2011:
£56m). Our spend was up as we acquired new sites
and progressed significantly on existing schemes.
Grant funding is down and will continue to be
low as part of the new regime. Grant is now back
ended also, paid on completion not acquisition.
Central Overhead %We measure the cost of central corporate services (which
includes HR, Finance, I.T., Facilities, Communications,
Insurance and others) as a % of total income (excluding
first tranche shared ownership sales). This gives a
measure of relative efficiency. Our target is to remain at
10% or less and this was again achieved. Costs this year
included costs associated with the acquisition of In Touch.
In the HouseMark G15 benchmarking report for 2011
we were in the second quartile for low overheads.
This G15 report uses a slightly different measure
from ours above, but it gives a good indication of
how we compare. Our competitors have generally
been getting more efficient in this area, and we
recognise the importance of maintaining value for
money. We have initiated reviews of our central costs,
specifically around the resource required for Care and
Support, where the demands have been growing.
Management cost per Unit per WeekThis measure looks at the weekly cost of managing our
general needs units by comparing the direct costs of
managing those units, (such as housing management
staff) plus indirect costs in the form of an appropriate
share of central overheads, with the number of General
Needs units being managed. It is reported monthly and
allows us not only to target internal efficiency but also to
compare against others. We wish to remain as efficient
as possible and with as low a cost base as possible
commensurate with service quality to tenants and users.
Our cost per unit was among the lowest within the
G15 in 2011 (as disclosed in the published accounts)
well under the average of £20 per week, but some way
off the best performers at around £10/£11 per week.
Current Arrears %
2008 2009 2010 2011 20128.3% 6.9% 5.7% 5.1% 4.6%
Central Overhead %
2008 2009 2010 2011 20128.8% 9.5% 9.5% 9.2% 9.2%
Management Cost per Unit per Week
2008 2009 2010 2011 2012£13.57 £14.20 £15.43 £16.13 £16.41
OPERATING AND FINANCIAL REVIEW
16 | FAMILY MOSAIC HOUSING
HOUSING SERVICESThis year we continued to roll out personalisation
through our Neighbourhood Managers, offering greater
choice and control to our residents. This has meant that
we have been able to support more people with housing
moves, helping them link in with health and social
services and referring them to our tenancy support
team where needed.
We have continued to review value for money by
re-tendering our Estate gardening and cleaning services.
With input from residents we have been able to better
specify the service we wish them to receive. We now
have a contract manager in post to ensure that quality
services are being delivered.
Our Neighbourhood Managers have been reviewing
the way in which we carry out tenancy audits to stop
sub-letting of our properties, this will see a much more
targeted approach being adopted in future.
We increased the number of residents sitting on our
anti-social behaviour forum, this has given us a much
better insight into how this impacts on our residents,
and the tenant scrutiny panel carried out a review into
how we manage anti-social behaviour, both of these
initiatives will help us to provide more tailored services
in future.
In tough economic times we have tailored our
social and financial inclusion work to give greater
opportunities for our residents, we expanded our
employment and training services to give people
more opportunities for volunteering, work placements,
apprenticeships and employment, and have been
building community relationships through our
‘Greening communities’ and ‘Get connected’ projects.
Our volunteering service was recognised as providing
innovative opportunities by the Mayor of London.
We launched our Youth Academy and the Youth team
have worked with over 1,000 young people in the year;
this has led to some gaining employment and starting
their own businesses. They received an award for
innovation in youth services by the Tenant Participation
Advisory Service. We have also increased the number
of our welfare rights officers and now employ a licenced
debt advisor to support our residents through the
welfare reform changes impacting their benefits.
In terms of our housing we took an extra 500 units
into management and have helped a further 300 people
move from our transfer list. We also carried out a review
of our transfer list in terms of value for money and
agreed a change in criteria for tenants wanting to join
the list to enable the team to concentrate on reducing
overcrowding and under-occupation in our properties.
SUPPORTED HOUSING 2011/12 has been a difficult year for our Care and
Supported Housing services, with significant pressure
on public spending, and we have experienced cuts in
contract values for almost all of our services. These have
ranged from 6-17%. We have worked hard to ensure
that the cuts are not felt by our customers and that the
quality of services remains high. We embarked on a
full Terms & Conditions change process to ensure our
services are providing value for money and that all
of our care and support contracts are independently
financially viable.
Despite the pressure on budgets, we have been
successful in securing significant new business in the
year. The transfer of In Touch Care and Support brought
£14m worth of contracts into the Group and expanded
our area of operation into the South of England. We
were also successful in securing £1.9m of new business
for mental health in Hackney and Lambeth, Care
Navigator in Kent and have retained £3.9m of existing
contracts re-tendered in the year. On the negative side
we have lost £1.3m worth of contracts through re-
tendering including our long established TST service in
North London, Homelessness service in Southampton
and some of our Mental Health services in Lambeth.
OPERATING AND FINANCIAL REVIEW
FINANCIAL STATEMENTS 2012 | 17
We have been expanding our personalisation work,
increasing the choice and control our customers have
over the services they receive, with over 100 customers
now ‘purchasing’ their service through individual service
funds and personal budgets.
Due to the funding cuts we have had to carry out a large
re-organisation in Care and Support with significant
redundancy payments in the year, and this, alongside
the buy out option for terms and condition changes, has
meant losses on some contracts in the financial year.
The surplus on our properties has offset this.
SUBSIDIARIESCharlton Triangle has just embarked on a major re-
investment programme. This year has seen projects
commence on replacing lateral mains to all our blocks,
upgrading communal lighting, refurbishment of six lifts,
major fire safety improvements to all our blocks above
six stories and replacement of an old communal boiler in
Valiant House, a tower block of 93 flats.
Community development continues to be a major
strategic priority as we adapt our services to meet the
needs of residents in a changing and challenging
environment of welfare and housing reform. Our New
Leaf Centre opened in July 2011. Services being offered
include employment and training advice, volunteering,
health and well being courses with the Primary Care
Trust, welfare rights advice, debt advice, counselling
and reiki therapy. A local resident is now employed as
receptionist/ administrator, and the centre is proving
extremely popular with residents. Charlton Triangle was
also a key partner with Charlton Athletic Community Trust
in a successful bid to run local authority youth services
in the area and an expanded range of year round
activities is being rolled out in 2012 /13.
Value for money has been a theme throughout the year.
Our volunteering programme, where local residents gain
work experience in the local office, now means we rarely
have a need for temporary agency staff. Digitisation of
files and processes has also been a priority delivering
both service efficiencies and savings on office supplies.
Void turnaround has also been reduced significantly
with the successful implementation of a ’back to back’
lettings initiative and has seen some properties let on a
one day turnaround. More significantly, Charlton Triangle
continues to work with over 20 local partner agencies
enabling us to lever in a wide range of neighbourhood
services which go far beyond a traditional housing
management model.
Old Oak has concentrated on achieving value for
money this year with a thorough governance review to
understand what value the Old Oak Board can continue
to bring to the Old Oak Ward, now that the stock transfer
agreement from Hammersmith and Fulham has expired
and the regeneration programme is nearly complete. As
part of this process the Board has set out some proposals
that represent a new and coherent strategy for Old Oak
that will enable it to maximise the advantages it has as a
community based Association providing services beyond
pure housing management. The proposals link well with
Hammersmith and Fulham’s aspirations for Old Oak to
take the lead role in deprivation in the local area.
In addition to the governance review, Old Oak has
reviewed its ground maintenance services to obtain
better value for residents. The Board has looked to gain
economies of scale and share resources with Family
Mosaic Housing, by joining their procurement of new
cleaning and grounds maintenance contractors. The
grounds maintenance costs are now also charged to
the whole of the estate and not just Old Oak tenants,
in line with the original intentions of the stock transfer
agreement. Both of these initiatives have substantially
reduced the service charges to our tenants in line with
their requests.
The Community and Children’s Centre has also continued
to grow its services increasing revenue funding and
attendance figures, most notably with the development
of our new job club, senior and junior youth clubs, and
OPERATING AND FINANCIAL REVIEW
18 | FAMILY MOSAIC HOUSING
health service provisions. Working with our partners on
various initiatives and services, and by sharing resources,
we have been able to provide the Old Oak Ward with high
quality value for money services that actively engage and
help the communities within our Ward to thrive.
VALUE FOR MONEY The Board has adopted a Value for Money strategy, which
has been in place for two years. The approach is to ensure
all staff are aware of the need to deliver effective services,
which is a balance of service quality and cost. A range
of measures has been agreed to monitor our success,
including an overall value for money index. Pleasingly this
has shown an improving trend overall. Some individual
examples of outcomes during the year include – saving
through buying bulk waste containers instead of renting
from Local Authorities; a new process for rent statement
production (including an electronic version); bringing
some training in house that was previously outsourced;
and introducing Dulux paint packs for tenants to decorate
their own properties when moving in.
There is now a new regulatory code for assessment of our
Value for Money activities. Board and Management will be
reviewing our approach in light of this.
FACTORS THAT MAY AFFECT FUTURE PERFORMANCE• The government has introduced a programme
of welfare reforms, which will affect our tenants
financially. This may affect their ability to pay rent,
with consequent increases in bad debt losses.
We are putting resources in to help our tenants
manage the changes, and are part of a pilot
scheme being run by the Department for Work
and Pensions to test the new arrangements, where
we have partnered with Southwark Council.
• The ability to raise finance, either from banks or
in the capital markets, is by no means certain. We
are financially strong, have a good credit rating
and are well placed with potential funders. We
continue to manage relationships carefully to
maintain our strength as a lending proposition.
• As part of our new ‘Affordable Homes’
development programme, we are increasing
the number of units for sale, either as
Shared Ownership or for Private Sale. Our
ability to sell these units at the right price
is a risk to the business. Whilst we have
demonstrated our ability to do so, we continue
to monitor and manage this closely.
• Acquisition of land and properties for
development has risks. There are uncertainties in
development, with the risk that land purchased
may be overvalued, costs overrun or sales are
not achieved. As a result we can face write-offs
of cost and write-downs in value. Our scheme
and management assessment processes are
aimed at minimising such occurrences.
• Our Responsive repair service is largely
dependant on one contractor. This represents a
risk in delivery terms should that partner fail. We
monitor their position, and have back up options.
• Supported Housing is funded by grants
such as Supporting People. Grants have
been cut, which has affected the viability
of schemes. We have robust processes in
place to react to and manage such issues.
• Auto-enrolment of staff in pension schemes as
required by legislation may increase our costs,
as will funding deficits on existing pension
arrangements.
PENSION COSTSThe Association participates in the Social Housing
Pension Scheme (SHPS). This is a multi-employer
scheme, so we do not recognise any fund deficits in
our accounts. The Income and Expenditure charge
represents only the employer contributions payable. The
scheme has a funding deficit which increased following
the most recent revaluation and this led to increased
contribution rates.
Employees who joined us prior to 1 April 2010, if they
elected to join, are in the SHPS Career Average Earnings
OPERATING AND FINANCIAL REVIEW
FINANCIAL STATEMENTS 2012 | 19
based final salary scheme. Employees joining since
then have access to a defined contribution scheme,
also under the SHPS umbrella.
A number of employees are members of the NHS
pension scheme. We pay fixed contributions and the
Exchequer funds the scheme.
We also have a small number of employees in the Local
Government Pension Scheme under which funding
deficits or surpluses are recognised in our accounts.
PAYMENT OF CREDITORSOur policy is to pay suppliers in accordance with
contractual arrangements.
EMPLOYEESIt has been an important and eventful year for Family
Mosaic. We acquired the Supported Housing division
of Hyde Group, known as In Touch. This meant we
added a further 500 staff to the 1,700 already employed
by the Group.
In people management terms our year was also
defined by the project which changed the Terms and
Conditions for all Family Mosaic staff. This meant that
90 staff saw salaries go up, 400 saw their salaries
reduce and weekly hours were standardised at 37 ½
hours per week.
Our staff have remained focused and true to the
We Can spirit of service delivery, throughout this
period. We now look forward to a period of morale
building to move on from this eventful year to a
more stable period.
We are committed to equal opportunities for all
employees, and this is particularly central to our
success because of the diverse communities we serve.
We hold the status of Disability Symbol User by the
Department for Work and Pensions, recognising our
positive approach to employing disabled people.
We see communication as a big part of employee
relations. We do this in a number of ways, some
of which are ‘cascade’ bulletins which share the
issues of the day, successes and items from the
Management Team agenda, Group meetings, and
other social events.
Attracting and retaining good staff is key to our
success. We have HR policies and practices that
support this. Increasingly we are employing good
quality staff from outside the housing sector.
HEALTH AND SAFETYThe Board recognises its responsibilities on all
matters relating to Health and Safety. We have
appropriate policies, and provide staff training
and education through dedicated Health and
Safety officers.
BOARD MEMBERS AND MANAGEMENT TEAMMembers of the Board and Management Team are
set out on page 7.
Board Members are drawn from a wide background
bringing together professional, commercial and local
tenant experience to provide both challenge and
support to the Management Team. The Chief Executive
of the Association is a member of the Board.
Management Team members hold no interest in the
shares of the Association and act as Executives within
authority delegated by the Board.
We have insurance policies that indemnify Board
Members and Management Team against liability
when acting for the Association.
SERVICE CONTRACTSManagement Team are employed on the same terms
as other staff, their notice periods ranging from 3 to 6
months. Remuneration details are included in note 6
to the Financial Statements.
OPERATING AND FINANCIAL REVIEW
20 | FAMILY MOSAIC HOUSING
NHF CODE OF GOVERNANCEWe are pleased to report that Family Mosaic complies
with the principal recommendations of the NHF Code
of Governance (revised 2009), with the exception of
the fixed terms of appointment for Board Members
which will be clarified at the AGM in September 2012
with the proposal to adopt the National Housing
Federation 2011 Model Rules.
TENANT INVOLVEMENTWe have a wide range of ways that our tenants and
customers can participate in decision making across
the Group. These include a customer panel, forums
and groups, Panel Plus and a Scrutiny Panel. Panel
Plus is made up of tenant representatives from each of
the Regions we work in, and they have been formally
involved in policy changes and strategies in the last
year. The Scrutiny Panel are tenant representatives
charged with scrutinising the work we carry out, to
help us to continuously improve. They have carried
out three inspections in the last year; access and
customer care, anti-social behaviour and repairs.
We have a clear and simple complaints policy that we
issue to all tenants. During the year we received 1,082
(2011: 793) formal complaints. We attempt to resolve
all complaints as quickly as possible, however, 158
(2011: 96) remained outstanding at year end. We
continue to investigate and take action in respect of
these, with a view to resolving them professionally
and amicably.
INTERNAL CONTROLS ASSURANCEThe Board acknowledges that it has overall responsibility
for establishing and maintaining the whole system of
internal control and for reviewing the effectiveness of
the system of internal control, both for the Group and
for the Association.
The system of internal control is designed to manage,
rather than eliminate, the risk of failure to achieve
business objectives, and can only provide reasonable,
and not absolute, assurance against material
misstatement or loss.
The process for identifying, evaluating and managing
the significant risks faced by the Group is ongoing,
and has been in place throughout the year and up to
the date of approval of the annual report and financial
statements. The Board receives and considers reports
from management on these risk management and
control arrangements at meetings throughout the year.
The key elements of the internal control framework
include:
• Board approved terms of reference and
delegated authorities for all Committees
• clearly defined management responsibility
for the identification, evaluation
and control of significant risks
• robust strategic and business planning processes
• annual review of the Group’s risk map by the
Board, with updates at each Board meeting
• detailed financial budgets and
forecasts for subsequent years
• formal recruitment, retention, training
and development policies
• formal authorisation and appraisal procedures for
all significant new initiatives and commitments
• regular reporting of key performance indicators
to assess progress towards the achievement of
key business objectives, targets and outcomes
• Board approved whistle blowing and
anti-theft and corruption policies
• detailed policies and procedures in
each area of the Group’s work
• a programme of internal audits every year
We have a clear policy on fraud, which has been
approved by Board, and distributed to all staff. This
policy requires a register to be maintained of actual and
attempted fraud, with all cases reported to Board. We
have had two fraud cases reported, one in the year, and
one since year end.
OPERATING AND FINANCIAL REVIEW
FINANCIAL STATEMENTS 2012 | 21
The Board has ultimate responsibility for the system
of internal control but, within this, it has delegated
authority to the Risk Management and Audit Committee
to regularly review the effectiveness of the system of
internal control. The Board receives reports from this
Committee together with minutes of the meetings.
The means by which the Risk Management and Audit
Committee reviews the effectiveness of the system of
internal control include considering risk reports, internal
audit reports, management assurances and the external
audit management letter.
Failings or weaknesses identified from internal
audit reports and other work are reported with
recommendations to the Risk Management and Audit
Committee, and implementation plans are monitored.
The Risk Management and Audit Committee has
received the Chief Executive’s annual review of the
effectiveness of the system of internal control for the
Association and its subsidiaries, together with the
annual report of the internal auditor, and has reported
its findings to the Board.
GOING CONCERNAfter making enquiries the Board has a reasonable
expectation that the Group has adequate resources to
continue in operational existence for the foreseeable
future. For this reason, it continues to adopt the going
concern basis in the financial statements.
DISCLOSURE OF INFORMATION TO AUDITORSThe Board Members who held office at the date of
approval of this Board Report confirm that, so far
as they are each aware, there is no relevant audit
information of which the Association’s auditors are
unaware, and each Board Member has taken all the
steps that they ought to have taken as a Board Member
to make themselves aware of any relevant audit
information and to establish that the Association’s
auditors are aware of that information.
ANNUAL GENERAL MEETINGThe Annual General Meeting will be held on
20 September 2012.
AUDITORSA proposal to re-appoint KPMG LLP as auditors of
Family Mosaic Housing will be tabled at the forthcoming
Annual General Meeting.
THE FUTUREOur main objective is to continue to improve our
services. Most of our services are currently operating
at higher levels of service quality than in the past.
A key area for us is Leaseholder services and service
charge management generally, where we have made
significant progress which will continue. We will also be
ensuring our repairs and maintenance contracts provide
top quality service. Development of new homes will
continue, and with a greater requirement for sales to
subsidise low rent, sales risks will be managed closely.
We are also open to opportunities for stock transfers or
mergers that may arise.
A key part of our activities is to maintain our financial
strength. Accordingly we will be continuing our
approach of monitoring and managing income and
costs carefully.
The changes to welfare being introduced by the
Government will impact us and our tenants. We have
a strategy to deal with this including involvement in
a payments pilot with the Department for Work and
Pensions running
to June 2013.
HOW WE BEHAVE
22 | FAMILY MOSAIC HOUSING
HOW WE BEHAVE
FINANCIAL STATEMENTS 2012 | 23
STATEMENT OF THE BOARD’S RESPONSIBILITY IN RESPECT OF THE BOARD’S REPORT AND THE FINANCIAL STATEMENTS
The Board is responsible for preparing the Board’s
Report and the financial statements in accordance
with applicable law and regulations.
Industrial and Provident Society law requires the
Board to prepare financial statements for each
financial year. Under those regulations the Board
have elected to prepare the financial statements in
accordance with UK Accounting Standards.
The financial statements are required by law to give
a true and fair view of the state of affairs of the Group
and the Association and of the surplus or deficit for
that period.
In preparing these financial statements, the Board
is required to:
• select suitable accounting policies
and then apply them consistently;
• make judgements and estimates that
are reasonable and prudent;
• state whether applicable UK Accounting
Standards and the Statement of Recommended
Practice have been followed, subject to
any material departures disclosed and
explained in the financial statements; and
• prepare the financial statements on the
going concern basis unless it is inappropriate
to do so.
The Board is responsible for keeping proper
accounting records that disclose with reasonable
accuracy at any time the financial position of the
Group and the Association and enable them to ensure
that its financial statements comply with the Industrial
and Provident Societies Acts 1965 to 2003, the
Industrial and Provident Societies (Group Accounts)
Regulations 1969, the Housing and Regeneration
Act 2008 and the Accounting Requirements for
Statement of responsibilities of the Board
Registered Social Landlords General Determination
2006. The Board has general responsibility for taking
such steps as are reasonably open to it to safeguard
the assets of the Group and the Association and to
prevent and detect fraud and other irregularities.
The Board is responsible for the maintenance and
integrity of the corporate and financial information
included on the Association’s website. Legislation in
the UK governing the preparation and dissemination
of financial statements may differ from legislation in
other jurisdictions.
Ian Peacock
Chair of the Board
18 July 2012
HOW WE BEHAVE
24 | FAMILY MOSAIC HOUSING
CORPORATE GOVERNANCE The Board is committed to high standards of corporate
governance and has adopted the National Housing
Federation’s code of governance. Family Mosaic meets
the Homes and Communities Agency performance
standards relating to governance.
The organisation is managed and monitored by the
Board, a number of Committees (which are listed
below) and a Management Team. Membership of the
Board and Committees is principally of non-executive
members, drawn from all walks of life, including
relevant professionals and our tenants. Appointments
are made via selection panels. The non-executives
receive no remuneration for their services.
COMPOSITION OF THE BOARDThe Board consists of a maximum of twelve members.
The Chief Executive of the Management Team is a
member of the Board.
COMMITTEE STRUCTURE The Board has set up the following Committees to
facilitate the direction of the Association’s affairs:
FINANCE AND DEVELOPMENT COMMITTEEThis Committee consists of a maximum of eight
non-executive members, with Mike Verrier
(Treasurer and Board member) as Chair, and meets
at least three times a year.
The principal function of this Committee is to
assess, monitor and maintain the financial viability
of the Group, and oversee development activities.
RISK MANAGEMENT AND AUDIT COMMITTEEThis Committee consists of a maximum of five
non-executive members with Richard Stevens
(Board Member) as Chair and meets at least three
times a year. The Committee ensures that Family
Mosaic has in place and operates appropriate
controls to safeguard its assets and manage
risks. It recommends to the Board the annual
report and financial statements. It appoints
the internal auditors and recommends to the
Board the appointment of external auditors.
APPOINTMENTS AND REMUNERATION COMMITTEEThis Committee comprises three Board
members and meets at least once a year, and
as and when required. It has responsibility
for the Chief Executive’s remuneration
and appraisal, and the appointment of
Management Team and Board members.
MANAGEMENT TEAM This Team has executive responsibility for the day
to day running of the business, and its members
are listed on page 7.
Corporate governance
HOW WE BEHAVE
FINANCIAL STATEMENTS 2012 | 25
REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF FAMILY MOSAIC HOUSING We have audited the financial statements of Family
Mosaic Housing for the year ended 31 March 2012
set out on pages 26 to 63. The financial reporting
framework that has been applied in their preparation
is applicable law and UK Accounting Standards
(UK Generally Accepted Accounting Practice).
This report is made solely to the Association’s
members, as a body, in accordance with section
128 of the Housing and Regeneration Act 2008
and section 9 of the Friendly and Industrial and
Provident Societies Act 1968. Our audit work has
been undertaken so that we might state to the
Association’s members those matters we are
required to state to them in an auditor’s report and
for no other purpose. To the fullest extent permitted
by law, we do not accept or assume responsibility
to anyone other than the Association and the
Association’s members, as a body, for our audit
work, for this report, or for the opinions we
have formed.
RESPECTIVE RESPONSIBILITIES OF THE BOARD AND AUDITORAs more fully explained in the Statement of Board’s
Responsibilities set out on page 23, the Association’s
Board is responsible for the preparation of financial
statements which give a true and fair view. Our
responsibility is to audit, and express an opinion
on, the financial statements in accordance with
applicable law and International Standards on
Auditing (UK and Ireland). Those standards require
us to comply with the Auditing Practices Board’s
(APB’s) Ethical Standards for Auditors.
SCOPE OF THE AUDIT OF THE FINANCIAL STATEMENTSA description of the scope of an audit of financial
statements is provided on the APB’s website at:
www.frc.org.uk/apb/scope/private.cfm.
Report of the independent auditors
OPINION ON FINANCIAL STATEMENTSIn our opinion the financial statements:
• give a true and fair view, in accordance with
UK Generally Accepted Accounting Practice, of
the state of affairs of the Group and Association
as at 31 March 2012 and of the Group and
Association surplus for the year then ended; and
• have been properly prepared in accordance
with the Industrial and Provident Societies
Acts 1965 to 2003, the Industrial and Provident
Societies (Group Accounts) Regulations 1969,
the Housing and Regeneration Act 2008 and
the Accounting Requirements for Registered
Social Landlords General Determination 2006.
MATTERS ON WHICH WE ARE REQUIRED TO REPORT BY EXCEPTIONWe have nothing to report in respect of the following
matters where the Industrial and Provident Societies
Acts 1965 – 2003, the Industrial and Provident Societies
(Group Accounts) Regulations 1969, the Housing and
Regeneration Act 2008 and the Accounting Requirements
for Registered Social Landlords General Determination
2006 require us to report to you if, in our opinion:
• a satisfactory system of control over
transactions has not been maintained; or
• the Association has not kept proper
accounting records; or
• the financial statements are not in
agreement with the books of account; or
• we have not received all the information
and explanations we need for our audit.
D A Bowen (Senior Statutory Auditor)
for and on behalf of KPMG LLP, Statutory Auditor
KPMG LLP, Chartered Accountants,
1 Forest Gate, Brighton Road, Crawley, RH11 9PT
19 July 2012
Group Association
2012 £000
2011 £000
2012 £000
2011 £000
Turnover 3 180,587 165,366 166,658 159,218
Operating Costs 3 (132,501) (122,216) (119,602) (116,816)
Operating Surplus 3 48,086 43,150 47,056 42,402
Surplus on property sales 5 8,655 9,123 8,655 8,301
Net interest payable and similar charges 8 (18,327) (18,037) (17,622) (16,761)
Surplus on ordinary activities before taxation 9 38,414 34,236 38,089 33,942
Charitable Donations (2,000) (1,100) (2,000) -
Taxation on ordinary activities 10 - 3 - -
Surplus on ordinary activities after taxation 36,414 33,139 36,089 33,942
All activities are classed as continuing.
There is no material difference between the historical cost surplus for the year and the surplus for the year reported in the above Consolidated Income and Expenditure Account.
�������������� ��������������������������� Group Association
2012 £000
2011 £000
2012 £000
2011 £000
Surplus for financial year 36,414 33,139 36,089 33,942
Actuarial (loss)/gain on pension scheme25 (749) 1,631 (749) 1,631
Total Recognised Surpluses since last report 35,665 34,770 35,340 35,573
Reconciliation of Movements in the Association’s funds
2012 £000
2011 £000
2012 £000
2011 £000
Opening funds as previously stated 253,824 219,054 231,646 196,073
Total recognised surpluses relating to year 35,665 34,770 35,340 35,573
Closing Total Funds 289,489 253,824 266,986 231,646
Consolidated income and expenditure account
Financial statements for the year ended 31 March 2012
26 | FAMILY MOSAIC HOUSING
Group Association
2012 £000
2011 £000
2012 £000
2011 £000
Fixed Assets: Housing properties – net cost 11 2,053,146 1,917,638 1,972,327 1,852,610
Social Housing Grant 11 (1,172,142) (1,125,056) (1,141,729) (1,099,931)
881,004 792,582 830,598 752,679
Other tangible fixed assets 13 19,140 17,892 17,975 17,748
Investment in subsidiary 28 - - 3,585 11
Homebuy Loan - net 57 57 - -
900,201 810,531 852,158 770,438
Current Assets: Properties for sale 14 54,863 50,565 10,927 24,394
Debtors 15 34,914 23,184 102,540 65,893
Cash at bank and in hand 12,654 6,579 12,411 5,796
102,431 80,328 125,878 96,083
Creditors: Amount falling due within one year 16 (53,858) (47,700) (52,183) (45,987)
Net Current Assets 48,573 32,628 73,695 50,096
Total Assets Less Current Liabilities 948,774 843,159 925,853 820,534
Creditors: Amounts falling due after more than one year 17 658,536 589,263 658,118 588,816
Provisions for Liabilities and Charges 20 749 72 749 72
659,285 589,335 658,867 588,888
Capital and Reserves: Non equity share capital 21 - - - -
Reserves 22 289,489 253,824 266,986 231,646
289,489 253,824 266,986 231,646
948,774 843,159 925,853 820,534
The notes on pages 30 to 63 form an integral part of these financial statements.
The financial statements were approved by the Board on 18 July 2012 and signed on its behalf by:
Chairman Board Member Company Secretary
Consolidated balance sheet
Financial statements for the year ended 31 March 2012
FINANCIAL STATEMENTS 2012 | 27
Group
2012 £000
2011 £000
�������������������������� �����!������ 61,436 38,093
������������!����������������!���� ��������
Interest received 1,518 313
Interest paid (25,689) (23,329)
�����������������������������!����������������!���� �������� (24,171) (23,016)
Taxation and charitable donations
Corporation tax paid - -
Charitable donations (2,000) (1,100)
�������������������"����������������#���������� (2,000) (1,100)
���������"�������������������������!��������
Acquisition of subsidiary (1,324) -
Cash balance acquired in subsidiary 1,186 -
Acquisition and construction of housing properties (156,772) (120,659)
Purchase of other tangible fixed assets (2,692) (1,134)
Sales of housing properties and other fixed assets 19,880 15,120
Social Housing Grant received 43,430 48,419
��������������������������"���������� (96,292) (58,254)
Management of liquid resources (61,027) (44,277)
Financing
Housing loans received 68,700 17,672
Annual repayments of housing loans (1,598) (767)
������������������������ 67,102 16,905
INCREASE/(DECREASE) IN CASH IN THE PERIOD 6,075 (27,372)
Consolidated cash flow statement
Financial statements for the year ended 31 March 2012
28 | FAMILY MOSAIC HOUSING
�����������������������������!���������������#� Group
2012 £000
2011 £000
Increase / (Decrease) in cash and short term deposits 6,075 (27,372)
Increase in loans (67,102) (16,905)
Movement in net debt (61,027) (44,277)
Net debt at beginning of year (575,277) (531,000)
Net debt at end of year (636,304) (575,277)
��������������������� ����������������������������������� �����!����� Group
2012 £000
2011 £000
Operating surplus 48,086 43,150
Depreciation movement 15,973 11,590
Goodwill movement 1,000 -
Impairment movement 750 (1,992)
Increase in debtors (5,455) (16,987)
Increase in creditors 1,082 2,332
������������������������ �����!����� 61,436 38,093
Analysis of net debt Group
As at 1 Apr 2011
£000
Cash Flow £000
As at 31 Mar 2012
£000
Cash and short term deposits 6,579 6,075 12,654
Debt due within 1 year (803) (275) (1,078)
Debt due after 1 year (581,053) (66,827) (647,880)
(575,277) (61,027) (636,304)
Consolidated cash flow statement – continued
Financial statements for the year ended 31 March 2012
FINANCIAL STATEMENTS 2012 | 29
LEGAL STATUSThe Association is registered under the Industrial and Provident Societies Acts 1965 to 2003 and is registered with the Homes
and Communities Agency as a social landlord.
ACCOUNTING POLICIESThe following accounting policies have been applied in dealing with items which are considered material in relation to the
financial statements.
Basis of accountingThe financial statements are prepared under the historical cost convention and in accordance with applicable accounting
standards, with special regard to the Statement of Recommended Practice: ‘Accounting by Registered Social Housing
Providers: update 2010’ (the ‘SORP’), and comply with the Accounting Requirements for Registered Social Landlords General
Determination 2006. The SORP was adopted in the year, but had no material impact.
Basis of consolidationThe consolidated accounts incorporate the financial statements of Family Mosaic Housing and its subsidiaries. Please see
note 28 for details of the subsidiaries.
The acquisition method of accounting is used for acquisitions, whereby the purchase consideration is allocated to the
identifiable assets acquired and liabilities assumed on the basis of fair value at the date of acquisition. The results of any
acquisitions are brought into the financial statements from the date of acquisition.
Where the fair value of consideration paid exceeds the fair value of the net assets acquired, the difference is treated as
purchased goodwill. This is amortised over its useful economic life.
TurnoverTurnover comprises rental income receivable in the year, revenue grants, recharges to other Associations, first tranche
proceeds from Shared Ownership and income from service charges. All income is recognised on a receivable basis.
Pension costsThe expected cost of providing pensions is charged to the income and expenditure account in order to spread the cost over
the service lives of employees in such a way that the pension cost is a substantially level percentage of current and expected
future pensionable payroll.
Housing propertiesFreehold housing properties are stated at cost. The cost of housing properties is their purchase price together with any costs
of acquisition, including the incidental costs of development, interest capitalised up to the date of practical completion and
directly attributable development costs.
The major separate components that make up a housing property are accounted for separately. Housing properties are split
between the structure and those major components which require periodic replacement. Expenditure to replace, enhance
or refurbish major components is assessed against life cycle costing principles, and is depreciated in line with the useful
1
2
Notes to the financial statements for the year ended 31 March 2012
30 | FAMILY MOSAIC HOUSING
economic life of the component to which it relates.
If the components have an estimated life in excess of 10 years they are capitalised and depreciated over their useful life. If
the useful life is less than 10 years costs are charged directly to the income and expenditure account.
Costs of responsive repairs and planned cyclical maintenance are, to the extent that such cost does not relate to replacing a
component, recognised in the income and expenditure account as incurred.
Shared Ownership Shared Ownership properties are split proportionately between current and fixed assets based on the element relating to
expected first tranche sales. The first tranche proportion is classed as a current asset until sold. Sales proceeds are then
included in turnover. The unsold balance is classed as a fixed asset with any subsequent sale treated as a disposal of the
fixed asset. In mixed tenure schemes which include shared ownership, profits arising from first tranche sales are first applied
to reduce any subsidy required on general needs rented housing and thus credited to the cost of those housing properties.
Profits over and above the subsidy requirement or on stand alone shared ownership schemes are recognised in the income
& expenditure account.
Depreciation and Impairment Depreciation is charged so as to write down the value of freehold housing properties, other than freehold land, to their
estimated residual value on a straight line basis over their remaining expected useful economic lives as follows:
• housing properties 120 years
• building envelope and structure 30 years
• bathrooms and kitchens 15 years
• heating systems 10 years
Properties held on long leases are depreciated over their estimated useful economic lives or the life of the lease if shorter.
Depreciation is not charged on shared ownership assets.
Impairment reviews are carried out on an annual basis in accordance with FRS 11 ‘Impairment of fixed assets and goodwill’.
Where necessary appropriate write downs are made.
Social Housing Grant (SHG)Social housing grant (SHG) is receivable from the Homes and Communities Agency and is utilised to reduce the capital
costs of housing properties, including land costs. SHG due from the Homes and Communities Agency or received in advance
is included as a current asset or liability. SHG received in respect of revenue expenditure is credited to the income and
expenditure account in the same period as the expenditure to which it relates.
SHG is subordinated to the repayment of loans by agreement with the Homes and Communities Agency. SHG released on
sale of a property may be repayable but is normally available to be recycled and is credited to a Recycled Capital Grant Fund
or Disposal Proceeds Fund and included in the balance sheet in creditors.
ACCOUNTING POLICIES – continued2
Notes to the financial statements for the year ended 31 March 2012
FINANCIAL STATEMENTS 2012 | 31
Other tangible fixed assets Other fixed assets are included at cost to the Association less depreciation, which is provided on a straight line basis over
the periods shown below.
• Freehold office premises 50 years
• Leasehold office premises remaining life of lease
• Renewable energy assets 20 years
• Other fixed assets from 3 to 25 years
InvestmentsInvestments are shown at cost.
Leases Rents payable under operating leases are charged to the income and expenditure account on a straight-line basis over the
lease term. Rental income under operating leases is credited to the income and expenditure account as it falls due.
AgenciesThe transactions incurred directly by agencies managing the Association’s hostels are not consolidated in the financial
statements.
Provisions for liabilities and chargesThe Association makes provision for dilapidations to leasehold office accommodation where the lease has expired.
Stocks of properties for resale Shared Ownership first tranche sales, completed properties for outright sale and property under construction are valued at
the lower of cost and net realisable value. Cost includes acquisition and development cost together with interest payable.
Net realisable value is based on estimated sales price after allowing for further costs of completion and disposal.
Sale of housing properties Sales of housing properties are taken into account on the completion date. Where houses are sold, the surplus or deficit in
the income and expenditure account is calculated by comparing sales proceeds and the carrying amounts.
Temporary Accommodation Temporary Accommodation licences properties from local authorities. Expenditure on properties (including that on bringing
properties up to a satisfactory standard initially) is written off over the agreed licence period.
VATMembers of the Family Mosaic Housing Group are registered as a VAT group excluding Family Mosaic Thurrock Limited and
Family Mosaic Housing Services Limited. A large proportion of Family Mosaic’s income comprises rental income, which is
exempt for VAT purposes and gives rise to a partial exemption calculation. Expenditure is therefore shown inclusive of VAT.
Recoverable VAT arising from partially exempt activities is credited to the income and expenditure account.
ACCOUNTING POLICIES – continued2
Notes to the financial statements for the year ended 31 March 2012
32 | FAMILY MOSAIC HOUSING
Interest payable The cost of raising loans is amortised over the period of the loan. The deferred cost is offset against the liability and
included within creditors: amounts falling due after more than one year, in accordance with FRS 26 ‘Financial instruments:
measurements’.
The actual interest payable on these loans is charged to the income and expenditure account together with amortisation
charges. Interest on loans to finance specific developments is capitalised to the date of practical completion of the scheme.
Estimates Provision is made for debts where there is a risk of non-recovery. Former tenants’ arrears are provided for in full.
TaxationFamily Mosaic Housing along with Old Oak HA, Charlton Triangle Homes HA and In Touch have charitable status and
therefore are not subject to Corporation Tax on surpluses derived from their charitable activities.
All other subsidiaries are subject to Corporation Tax. These
subsidiaries include Family Mosaic Home Ownership
Limited, Family Mosaic Housing Services Limited,
Family Mosaic Thurrock Limited and Family Mosaic
Housing Development Company Limited. The
charge for taxation is based on the
surplus for the year and takes into
account taxation deferred because
of timing differences between
the treatment of certain items for
taxation and accounting purposes.
Where possible taxable subsidiaries
will make gift aid payments to
mitigate Corporation Tax.
Deferred tax liabilities are recognised,
without discounting, in respect of
all timing differences between the
treatment of certain items for taxation
and accounting purposes which have
arisen but not reversed by the balance
sheet date, except as otherwise required
by FRS 19. Deferred tax assets are only
recognised if management believe they
will crystallise in the foreseeable future.
ACCOUNTING POLICIES – continued2
Notes to the financial statements for the year ended 31 March 2012
FINANCIAL STATEMENTS 2012 | 33
Notes to the financial statements for the year ended 31 March 2012
34 | FAMILY MOSAIC HOUSING
3
2012 Turnover
£000
2012 Operating
costs
£000
2012 Operating Surplus/ (deficit)
£000
2011 Turnover
£000
2011 Operating
costs
£000
2011 Operating Surplus/ (deficit)
£000
Group
Social housing lettings 4 155,971 110,565 45,406 138,680 97,781 40,899
Other social housing activities
First tranche Shared Ownership sales 18,696 17,262 1,434 20,053 17,528 2,525
Leaseback schemes - - - 995 139 856
Care Homes providing Nursing Care 3,363 3,967 (604) 3,781 3,745 36
Other 452 707 (255) 329 1,467 (1,138)
Non-social housing activities
Commercial rental income/Other 484 - 484 652 855 (203)
Market Sales/other development income 1,621 - 1,621 876 701 175
Total 180,587 132,501 48,086 165,366 122,216 43,150
Association
Social housing lettings 4 141,702 98,215 43,487 131,575 94,372 37,203
Other social housing activities
First tranche Shared Ownership sales 18,696 17,262 1,434 20,053 17,528 2,525
Leaseback schemes - - - 995 139 856
Care Homes providing Nursing Care 3,362 3,965 (603) 3,781 3,745 36
Gift aid from subsidiaries 1,650 - 1,650 1,854 - 1,854
Other 747 160 587 396 1,032 (636)
Non-social housing activities
Commercial Income 484 - 484 564 - 564
Lease extension premia 17 - 17 - - -
Total 166,658 119,602 47,056 159,218 116,816 42,402
PARTICULARS OF TURNOVER, COST OF SALES, OPERATING COSTS AND OPERATING SURPLUSES/(DEFICITS)
Notes to the financial statements for the year ended 31 March 2012
FINANCIAL STATEMENTS 2012 | 35
Group
Housing Accom
£000
Supported Housing
£000
Shared Ownership
Accom
£000
Temporary Accom
£000
Residential Care
Homes
£000
2012
Total
£000
2011
Total
£000
Rent receivable 87,503 12,144 6,697 4,575 49 110,968 103,567
Service and Support income
4,851 5,656 545 427 - 11,479 9,516
Gross rental income 92,354 17,800 7,242 5,002 49 122,447 113,083
Voids (619) (540) (57) (328) (6) (1,550) (1,669)
Net rental income 91,735 17,260 7,185 4,674 43 120,897 111,414
Supporting people income - 33,337 - - - 33,337 25,695
Other revenue grants - - - 2 1,735 1,737 1,571
Turnover from social housing lettings 91,735 50,597 7,185 4,676 1,778 155,971 138,680
Support services and recoverable service charges
6,031 24,705 43 321 1,477 32,577 31,666
Management 14,427 16,526 2,915 844 337 35,049 25,072
Routine maintenance 8,226 1,560 27 691 12 10,516 12,573
Planned maintenance 10,657 1,631 (1) 235 39 12,561 14,212
Bad debts 414 395 34 (154) - 689 1,199
Property lease charges 350 319 - 2,245 23 2,937 4,089
Depreciation of housing properties
12,097 1,862 41 461 25 14,486 9,670
Goodwill write-off - 1,000 - - - 1,000 -
Impairment of housing properties
750 - - - - 750 (700)
Operating costs on social housing lettings 52,952 47,998 3,059 4,643 1,913 110,565 97,781
Operating �������$%������&���social housing lettings
38,783 2,599 4,126 33 (135) 45,406 40,899
% 42.3% 5.1% 57.4% 0.7% (7.5%) 29.1% 29.5%
Operating cost per unit – General Needs £3,131
PARTICULARS OF INCOME AND EXPENDITURE FROM SOCIAL HOUSING LETTINGS 4a
Notes to the financial statements for the year ended 31 March 2012
36 | FAMILY MOSAIC HOUSING
Association
Housing Accom
£000
Supported Housing
£000
Shared Ownership
Accom
£000
Temporary Accom
£000
Residential Care
Homes
£000
2012
Total
£000
2011
Total
£000
Rent receivable 82,992 12,144 6,697 4,575 49 106,457 96,872
Service and Support income
4,495 4,178 545 427 - 9,645 9,012
Gross rental income 87,487 16,322 7,242 5,002 49 116,102 105,884
Voids (540) (540) (57) (328) (6) (1,471) (1,575)
Net rental income 86,947 15,782 7,185 4,674 43 114,631 104,309
Supporting people income - 25,334 - - - 25,334 25,695
Other revenue grants - - - 2 1,735 1,737 1,571
Turnover from social housing lettings 86,947 41,116 7,185 4,676 1,778 141,702 131,575
Support services and recoverable service charges
5,107 24,654 43 321 1,476 31,601 30,902
Management 15,594 7,392 2,126 865 348 26,325 24,964
Routine maintenance 7,770 1,560 27 691 12 10,060 11,640
Planned maintenance 9,216 1,631 (1) 235 39 11,120 13,241
Bad debts 358 270 34 (154) - 508 1,092
Property lease charges 350 315 - 2,245 23 2,933 4,089
Depreciation of housing properties
11,526 1,862 41 464 25 13,918 9,144
Goodwill write-off - 1,000 - - - 1,000 -
Impairment of housing properties
750 - - - - 750 (700)
Operating costs on social housing lettings 50,671 38,684 2,270 4,667 1,923 98,215 94,372
Operating �������$%������&���social housing lettings
36,276 2,432 4,915 9 (145) 43,487 37,203
% 41.7% 5.9% 68.4% 0.2% (8.1%) 30.7% 28.3%
Operating cost per unit – General Needs £3,310
PARTICULARS OF INCOME AND EXPENDITURE FROM SOCIAL HOUSING LETTINGS 4b
Notes to the financial statements for the year ended 31 March 2012
FINANCIAL STATEMENTS 2012 | 37
Group
2012 £
2011 £
Maintenance expenditure 1,664 1,857
Management cost – General Needs 856 841
Service charges 337 308
Overhead costs 633 585
% %
Overhead costs as a percentage of income 9.2 9.2
SURPLUS ON PROPERTY SALES
Group
Sales Proceeds
£000
Cost of Sales £000
2012 Surplus
£000
2011 Surplus
£000
Sales of properties 9,734 2,973 6,761 7,492
Sale of properties to other RPs 3,020 3,172 (152) (187)
Staircasing of shared ownership properties 5,005 2,959 2,046 1,818
Total 17,759 9,104 8,655 9,123
Association
Sales Proceeds
£000
Cost of Sales £000
2012 Surplus
£000
2011 Surplus
£000
Sales of properties 9,734 2,973 6,761 7,492
Sale of properties to other RPs 3,020 3,172 (152) (187)
Staircasing of shared ownership properties 5,005 2,959 2,046 996
Total 17,759 9,104 8,655 8,301
SPEND PER SOCIAL HOUSING UNIT4c
5
Notes to the financial statements for the year ended 31 March 2012
38 | FAMILY MOSAIC HOUSING
DIRECTORS EMOLUMENTS AND LOANSThe remuneration paid to the directors (who for the purposes of this note include the members of the Board and the
Management Team) was as follows:
2012 £000
2011 £000
Total emoluments to directors and former directors (including salaries, fees, expense allowances chargeable to UK tax, and other benefits)
819 941
Emoluments (excluding pension contributions) payable to the highest paid director 184 172
Total expenses reimbursed not chargeable to income tax 8 13
No members of the Board (except the Chief Executive) received any emoluments. The Chief Executive is an ordinary
member of the SHPS scheme. Contributions to this scheme are made as per the pension costs note.25
The Chief Executive’s salary equates to £7.92 per unit owned and/or managed (2011: £7.37)
The emoluments (excluding pension contributions) of the Management Team are as follows:
2012 £000
2011 £000
Brendan Sarsfield Group Chief Executive 184 172
Ken Youngman Group Finance Director 141 129
Yvonne Arrowsmith Group Operations Director 133 125
Dick Mortimer Group Development & Asset Management Director 132 121
John Schofield Group Director of Research & Development 104 102
John Gibbons Group Director of Corporate Services 76 101
6
Notes to the financial statements for the year ended 31 March 2012
FINANCIAL STATEMENTS 2012 | 39
EMPLOYEE INFORMATION
Staff numbers Group Association
2012 2011 2012 2011
The average monthly number of employees (including Directors) employed in the year was:
2,191 1,730 1,794 1,708
Full Time Equivalents 1,573 1,277 1,276 1,256
Employee costs Group Association
2012 £000
2011 £000
2012 £000
2011 £000
Wages and salaries 49,128 42,004 41,582 41,255
Social security costs 4,078 3,492 3,496 3,427
Pension costs 1,648 951 1,557 923
Redundancy and compensation for loss of office 333 830 229 830
55,187 47,277 46,864 46,435
Average salary per employee £24,905 £25,926
Number of staff paid over £60,000 p.a. Salary Bandings Number of Staff
2012 2011
£60,000 - £69,999 15 19
£70,000 - £79,999 7 5
£80,000 - £89,999 3 4
£90,000 - £99,999 3 1
£100,000 - £109,999 1 2
£110,000 - £129,999 - 3
£130,000 - £139,999 2 -
£140,000 - £149,999 1 -
£180,000 – £190,000 1 1
The gross salary of the highest earner represents 13 times that of the lowest earner (2011: 11 times)
7
Notes to the financial statements for the year ended 31 March 2012
40 | FAMILY MOSAIC HOUSING
NET INTEREST PAYABLE AND SIMILAR CHARGES
Group Association
2012 £000
2011 £000
2012 £000
2011 £000
Interest receivable 1,519 313 1,448 1,800
Interest payable on loans and overdrafts 25,619 23,337 24,189 22,956
Other finance costs of pension scheme 71 (8) 71 (8)
25,690 23,329 24,260 22,948
Less: capitalised (5,844) (4,979) (5,190) (4,387)
19,846 18,350 19,070 18,561
Net interest payable 18,327 18,037 17,622 16,761
Interest is capitalised at 4.35% per annum on the net costs of projects under construction.
SURPLUS ON ORDINARY ACTIVITIES
Group Association
The surplus is stated after charging:
2012 £000
2011 £000
2012 £000
2011 £000
Depreciation of tangible assets 1,446 1,848 1,436 1,839
Depreciation of housing properties 14,528 9,742 13,958 9,215
Operating lease charges 3,231 4,392 3,231 4,392
Auditors’ remuneration:
Audit of the financial statements 67 64 67 64
Audit of subsidiary financial statements 40 26 - -
Other services:
Tax Compliance 12 9 5 9
Tax advice 20 33 4 33
Sundry assurance 33 29 28 29
9
8
Notes to the financial statements for the year ended 31 March 2012
FINANCIAL STATEMENTS 2012 | 41
TAXATION ON ORDINARY ACTIVITIESFamily Mosaic Housing is an exempt charity and not therefore liable to Corporation Tax on charitable activities.
Group Association
2012 £000
2011 £000
2012 £000
2011 £000
UK Corporation Tax charge - - - -
Removal of tax provision relating to prior years - (3) - -
Tax charge/(credit) - (3) - -
Factors affecting tax charge for the current period
The tax charges for both periods are different to the standard rate of corporation tax of 26% (2011: 28%). The differences are
explained below.
Surplus on activities before tax and after charitable donations
36,414 33,136 36,089 33,942
Tax charge at 26% (2011: 28%) 9,468 9,278 9,383 8,825
Exempt activities of charitable entity (9,546) (9,648) (9,383) (8,825)
Disallowed expenses - 1 - -
Depreciation in excess of capital allowances - 2 - -
Surplus on property sales in excess of chargeable gain - (31) - -
Tax effect of Joint Venture profits 12 60 - -
Charges on income in relation to prior periods 7 95 - -
Unrelieved tax losses and other deductions arising in the period
59 243 - -
Corporation tax charge/(credit) - - - -
A deferred tax asset is only recognised
on losses arising if management
believe they will crystallise in the
foreseeable future.
10
Notes to the financial statements for the year ended 31 March 2012
42 | FAMILY MOSAIC HOUSING
FINANCIAL STATEMENTS 2012 | 43
Notes to the financial statements for the year ended 31 March 2012
HOUSING PROPERTIES Group
Cost
Social housing
properties held for letting £000
Social housing
properties under
construction £000
Completed shared
ownership housing
properties £000
Shared Ownership
under construction
£000
Total
£000
At 1 April 2011 1,615,242 144,016 173,424 50,188 1,982,870
Schemes completed in the year 110,138 (110,138) 46,424 (46,424) -
Additions 29,828 101,626 - 53,621 185,075
Disposals (15,500) - (20,106) - (35,606)
Reclassification (25,838) (3,771) 30,167 (558) -
At 31 March 2012 1,713,870 131,733 229,909 56,827 2,132,339
DEPRECIATION
At 1 April 2011 60,641 - 79 - 60,720
Charge for the year 14,629 - (79) - 14,550
Disposals (1,339) - - - (1,339)
At 31 March 2012 73,931 - - - 73,931
IMPAIRMENT
At 1 April 2011 - 1,750 567 2,195 4,512
Charge for the year - 500 - 250 750
At 31 March 2012 - 2,250 567 2,445 5,262
SOCIAL HOUSING GRANT
At 1 April 2011 930,150 91,380 78,901 24,625 1,125,056
Schemes completed in the year 56,576 (56,576) 19,325 (19,325) -
Additions - 35,198 - 22,194 57,392
Disposals (9,049) - (1,257) - (10,306)
Reclassification (9,818) (2,582) 16,531 (4,131) -
At 31 March 2012 967,859 67,420 113,500 23,363 1,172,142
NET BOOK VALUE
At 31 March 2012 672,080 62,063 115,842 31,019 881,004
At 1 April 2011 624,451 50,886 93,877 23,368 792,582
Interest of £5,844,000 has been capitalised in the year to 31 March 2012 (2011: £4,979,000). The additions to housing
properties during the year include £15,508,000 (2011: £16,320,000) in respect of improvement to the existing property
stock. The spend per social housing unit on completed social rented schemes was £6,796 (2011: £5,029).
11
Notes to the financial statements for the year ended 31 March 2012
44 | FAMILY MOSAIC HOUSING
Association
Cost
Social housing
properties held for letting £000
Social housing
properties under
construction £000
Completed shared
ownership housing
properties £000
Shared Ownership
under construction
£000
Total
£000
At 1 April 2011 1,547,885 144,520 173,423 49,343 1,915,171
Schemes completed in the year 110,138 (110,138) 46,424 (46,424) -
Transfers to/from group entities (2,379) (4,468) - (4,691) (11,538)
Additions 26,656 103,846 - 49,681 180,183
Disposals (15,451) - (20,105) - (35,556)
Reclassification (25,838) (3,771) 30,166 (557) -
At 31 March 2012 1,641,011 129,989 229,908 47,352 2,048,260
DEPRECIATION
At 1 April 2011 57,970 - 79 - 58,049
Charge for the year 14,037 - (79) - 13,958
Disposals (1,336) - - - (1,336)
At 31 March 2012 70,671 - - - 70,671
IMPAIRMENT
As at 1 April 2011 - 1,750 567 2,195 4,512
Charge for the year - 500 - 250 750
At 31 March 2012 - 2,250 567 2,445 5,262
SOCIAL HOUSING GRANT
At 1 April 2011 905,026 91,379 78,901 24,625 1,099,931
Schemes completed in the year 56,576 (56,576) 19,325 (19,325) -
Transfers to/from group entities (1,022) - - - (1,022)
Additions - 34,925 - 18,185 53,110
Disposals (9,033) - (1,257) - (10,290)
Reclassification (9,818) (2,582) 16,531 (4,131) -
At 31 March 2012 941,729 67,146 113,500 19,354 1,141,729
NET BOOK VALUE
At 31 March 2012 628,611 60,593 115,841 25,553 830,598
At 1 April 2011 584,889 51,391 93,876 22,523 752,679
Interest of £5,190,000 has been capitalised in the year to 31 March 2012 (2011: £4,387,000). The additions to housing properties
during the year include £12,773,000 (2011: £14,985,000) in respect of improvement to the existing property stock.
HOUSING PROPERTIES – continued11
Notes to the financial statements for the year ended 31 March 2012
FINANCIAL STATEMENTS 2012 | 45
ACCOMMODATION IN MANAGEMENT Group Association
2012 2011 2012 2011
Social housing:
General needs 17,034 16,637 15,433 15,032
Supported housing 2,463 2,361 2,463 2,361
Shared ownership 2,918 2,680 2,918 2,525
Temporary Accommodation 112 425 112 425
Care Homes providing Nursing Care 93 109 93 109
Total units in management 22,620 22,212 21,019 20,452
Accommodation managed by others 625 525 1,242 1,142
OTHER TANGIBLE FIXED ASSETS Group
Freehold office
premises £000
Leasehold office
premises £000
Renewable Energy Assets £000
Other fixed
assets £000
Total
£000
COST
At 1 April 2011 16,133 178 - 5,961 22,272
Additions 173 - 1,029 1,490 2,692
Disposals (8) (105) - (2,634) (2,747)
At 31 March 2012 16,298 73 1,029 4,819 22,219
DEPRECIATION
At 1 April 2011 937 101 - 3,342 4,380
Charge for year 288 14 - 1,144 1,446
Disposals (8) (105) - (2,634) (2,747)
At 31 March 2012 1,217 10 - 1,852 3,079
NET BOOK VALUE
At 31 March 2012 15,081 63 1,029 2,967 19,140
At 1 April 2011 15,196 77 - 2,619 17,892
12
13
Notes to the financial statements for the year ended 31 March 2012
46 | FAMILY MOSAIC HOUSING
OTHER TANGIBLE FIXED ASSETS – continued
Association
Freehold office
premises £000
Leasehold office
premises £000
Other fixed
assets £000
Total
£000
COST
At 1 April 2011 16,133 177 5,598 21,908
Additions 173 - 1,490 1,663
Disposals (8) (105) (2,536) (2,649)
At 31 March 2012 16,298 72 4,552 20,922
DEPRECIATION
At 1 April 2011 937 114 3,109 4,160
Charge for year 288 2 1,146 1,436
Disposals (8) (105) (2,536) (2,649)
At 31 March 2012 1,217 11 1,719 2,947
NET BOOK VALUE
At 31 March 2012 15,081 61 2,833 17,975
At 1 April 2011 15,196 63 2,489 17,748
PROPERTIES FOR SALE
Group Association
2012 £000
2011 £000
2012 £000
2011 £000
First Tranche Shared Ownership completed 569 - 569 -
First Tranche Shared Ownership under construction 11,963 13,267 9,560 12,850
Open market properties for sale – Cost 65,613 56,327 1,208 11,731
Open market properties for sale – Grant (23,282) (19,029) (410) (187)
54,863 50,565 10,927 24,394
14
13
Notes to the financial statements for the year ended 31 March 2012
FINANCIAL STATEMENTS 2012 | 47
DEBTORS
Group Association
2012 £000
2011 £000
2012 £000
2011 £000
a) Amounts due within one year
Rental debtors 8,652 8,661 8,044 8,175
Less: provision for bad debts (3,948) (4,084) (3,616) (3,885)
4,704 4,577 4,428 4,290
Trade debtors 2,155 2,051 1,349 1,840
Other debtors 4,353 1,653 4,311 1,634
Prepayments and accrued income 2,584 2,525 2,037 2,525
Grant receivable 20,521 12,378 20,521 12,377
Amount owed by subsidiaries - - 50,114 28,082
34,317 23,184 82,760 50,748
b) Amounts due after more than one year
Amount owed by subsidiaries - - 19,183 15,145
Other debtors 597 - 597 -
34,914 23,184 102,540 65,893
CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR
Group Association
2012 £000
2011 £000
2012 £000
2011 £000
Housing loans 1,078 803 1,078 803
Recycled Social Housing Grant 1,874 - 1,874 -
Trade creditors 7,195 9,080 7,195 9,080
Other creditors 13,845 12,259 12,015 11,574
Deferred consideration 500 - 500 -
Accruals and deferred income 28,753 25,114 26,880 24,016
Disposal Proceeds Fund 613 444 507 309
Amount owed to subsidiary undertaking - - 2,134 205
53,858 47,700 52,183 45,987
Housing loans are secured by fixed charges on the Association’s housing properties.
16
15
Notes to the financial statements for the year ended 31 March 2012
48 | FAMILY MOSAIC HOUSING
CREDITORS: AMOUNTS FALLING DUE AFTER MORE THAN ONE YEAR
Group Association
2012 £000
2011 £000
2012 £000
2011 £000
Housing loans 652,334 585,494 652,334 585,494
Less: deferred loan issue costs (4,454) (4,441) (4,454) (4,441)
647,880 581,053 647,880 581,053
Recycled Social Housing Grant 5,114 4,271 5,114 4,271
Disposals Proceeds Fund 5,542 3,939 5,124 3,492
658,536 589,263 658,118 588,816
Housing loans repayable by instalments:
Between one and two years 1,664 958 1,664 958
Between two and five years 17,130 12,661 17,130 12,661
In five years or more 585,298 528,548 585,298 528,548
Housing loans repayable other than by instalments 48,242 43,327 48,242 43,327
Housing loans are secured by fixed charges on the Association’s housing properties. Interest is payable at rates ranging from
0.95% to 12.84%.
Debt per unit owned at the end of the year was £28,636 (2011: £26,497).
At 31 March 2012 the Group had loan facilities of £845m (2011: £797m).
17
Notes to the financial statements for the year ended 31 March 2012
FINANCIAL STATEMENTS 2012 | 49
RECYCLED GRANT FUND
Group Association
2012 2011 2012 2011
£000 £000 £000 £000
Opening Balance 4,271 7,319 4,271 3,999
Inputs to reserve:
Grants recycled 2,689 2,360 2,689 2,360
Interest accrued 28 37 28 37
New build - (5,146) - (5,146)
Major repairs and works to existing stock - (299) - (299)
Transfer from other Group companies - - - 3,320
Closing Balance 6,988 4,271 6,988 4,271
Part of the fund is repayable within one year and part is due after more than one year. Disclosure of the closing balance is
shown in both the Notes 16 & 17.
DISPOSAL PROCEEDS FUND
Group Association
2012 £000
2011 £000
2012 £000
2011 £000
Opening Balance 4,383 4,783 3,801 4,495
Inputs to reserve:
Grants recycled 2,171 3,298 2,096 2,957
Interest accrued 28 28 24 28
Works to existing stock - (544) - (544)
Purchase and development of properties for letting (444) (3,182) (444) (3,182)
Transfers from other Group Company - - 135 47
Other movements 19 - 19 -
Closing balance 6,155 4,383 5,631 3,801
Part of the fund is repayable within one year and part is due after more than one year. Disclosure of the prior year balance
is shown in both notes 16 and 17.
18
19
Notes to the financial statements for the year ended 31 March 2012
50 | FAMILY MOSAIC HOUSING
PROVISIONS FOR LIABILITIES AND CHARGES
Group and Association
Pension Liability Total 25
£000
Pension Liability
Main Scheme
£000
Pension Liability
Supporting People
Scheme £000
At 1 April 2011 72 94 (22)
Movement in year 677 617 60
At 31 March 2012 749 711 38
NON EQUITY SHARE CAPITAL
Group and Association
Shares £
Opening Balance 85
Shares cancelled in the year (32)
Shares issued in the year -
Closing Balance 53
The shares are all issued and fully paid shares of £1 each. Each member of the Board is entitled to hold one share of £1 in the
Association. The shares have limited rights. They carry no entitlement to dividend, they are not repayable and do not participate
in a winding up. They carry an entitlement to vote at the Association’s Annual General Meeting and Special General Meetings.
RESERVESThe Association plans its financial affairs to ensure that each year revenue income exceeds revenue expenditure. This policy
ensures that the Association has a margin of safety to manage unexpected expenditure or shortfalls in income. The annual
surpluses ensure that Family Mosaic is able to meet its commitment to providers of private finance and to continue to provide
social housing. Unlike commercial organisations, the Association’s rules prevent the distribution of reserves. Instead, these are
applied to furthering our aims and objectives. In particular they are invested in our housing stock. As at 31 March 2012 the
Group and Associations’ reserves were as follows:
Revenue Reserves Group Association
£000 £000
At 1 April 2011 253,824 231,646
Surplus for year 36,414 36,089
Actuarial loss on pension scheme liability (749) (749)
At 31 March 2012 289,489 266,986
21
20
22
Notes to the financial statements for the year ended 31 March 2012
FINANCIAL STATEMENTS 2012 | 51
LEASE COMMITMENTS The total rental due under operating leases in the next 12 months is as follows:
Group Association
2012 £000
2011 £000
2012 £000
2011 £000
Leases which expire:
Within one year 191 1,812 191 1,812
Between two and five years 395 616 395 616
Over five years 1,000 844 1,000 844
1,586 3,272 1,586 3,272
CAPITAL COMMITMENTS
Group Association
2012 £000
2011 £000
2012 £000
2011 £000
Capital expenditure that has been contracted for but has not been provided for in the financial statements 120,381 285,387 98,430 222,170
Capital expenditure that has been authorised by the Board but has not yet been contracted for 71,034 5,170 16,379 5,170
The commitments will be met out of existing and new loan facilities, grants, and sales proceeds. These Group total
commitments of £191,415,000 represent 21% of our total tangible fixed assets at year end. (2011: £290,577,000, 36%). The
Group has grants of £31m (2011: £74m) to offset against these commitments, while the Association has £28m (2011: £69m).
PENSIONSSocial Housing Pension Scheme Family Mosaic Housing participates in the Social Housing Pension Scheme (SHPS). The Scheme is funded and is contracted
out of the State Pension Scheme.
It is not possible in the normal course of events to identify on a consistent and reasonable basis the share of underlying
assets and liabilities belonging to individual participating employers. This is because the Scheme is a multi-employer
scheme where the Scheme assets are co-mingled for investment purposes, and benefits are paid from total Scheme assets.
Accordingly, due to the nature of the Scheme, the accounting charge for the period under FRS17 represents the employer
contribution payable.
25
23
24
Notes to the financial statements for the year ended 31 March 2012
52 | FAMILY MOSAIC HOUSING
The Trustee commissions an actuarial valuation of the Scheme every three years. The main purpose of the valuation is to
determine the financial position of the Scheme in order to address the level of future contributions required so that the
Scheme can meet its pension obligations as they fall due.
The last formal valuation of the Scheme was performed as at 30 September 2008 by a professionally qualified actuary
using the projected unit method. The market value of the Scheme’s assets at the valuation date was £1,527 million.
The valuation revealed a shortfall of assets compared with the value of liabilities of £663 million, equivalent to a past service
funding level of 69.7%.
The Scheme actuary has prepared an actuarial report that provides an approximate update on the funding position of
the Scheme as at 30 September 2010. Such a report is required by legislation for years in which a full actuarial valuation
is not carried out. The funding update revealed an increase in the assets of the Scheme to £1,985 million and indicated
a reduction in the shortfall of assets compared to liabilities to approximately £497 million, equivalent to a past service
funding level of 80%.
The Scheme’s 30 September 2011 valuation is currently in progress and will be finalised by 31 December 2012. The results
of the valuation will be included in next year’s disclosure note. Early indications show an increasing deficit, which will need
to be considered.
Pensions Trust – Growth PlanFamily Mosaic Housing also participates in the Pensions Trust’s Growth Plan (the Plan). The Plan is funded and is not
contracted out of the state scheme. The Plan is a multi-employer pension plan.
Contributions paid into the Plan up to and including September 2001 were converted to defined amounts of pension
payable from Normal Retirement Date. From October 2001 contributions were invested in personal funds which have a
capital guarantee and which are converted to pension on retirement, either within the Plan or by the purchase of an annuity.
The rules of the Plan allow for the declaration of bonuses and / or investment credits if this is within the financial capacity
of the Plan assessed on a prudent basis. Bonuses / investment credits are not guaranteed and are declared at the discretion
of the Plan’s Trustee.
The Trustee commissions an actuarial valuation of the Plan every three years. The purpose of the actuarial valuation is to
determine the funding position of the Plan by comparing the assets with the past service liabilities as at the valuation date.
Asset values are calculated by reference to market levels. Accrued past service liabilities are valued by discounting expected
future benefit payments using a discount rate calculated by reference to the expected future investment returns.
The rules of the Plan give the Trustee the power to require employers to pay additional contributions in order to ensure
that the statutory funding objective under the Pensions Act 2004 is met. The statutory funding objective is that a pension
scheme should have sufficient assets to meet its past service liabilities, known as Technical Provisions.
PENSIONS – continued25
Notes to the financial statements for the year ended 31 March 2012
FINANCIAL STATEMENTS 2012 | 53
If the actuarial valuation reveals a deficit, the Trustee will agree a recovery plan to eliminate the deficit over a specified
period of time either by way of additional contributions from employers, investment returns or a combination of these.
The rules of the Plan state that the proportion of obligatory contributions to be borne by the Member and the Member’s
Employer shall be determined by agreement between them. Such agreement shall require the Employer to pay part of such
contributions and may provide that the Employer shall pay the whole of them.
Family Mosaic paid contributions at the rate of nil% during the accounting period. Members paid contributions at a rate they
determine under additional voluntary conditions.
As at the balance sheet date there were 12 active members of the Plan employed by Family Mosaic. Family Mosaic continues
to offer membership of the plan to its employees.
It is not possible in the normal course of events to identify on a reasonable and consistent basis the share of underlying
assets and liabilities belonging to individual participating employers. The Plan is a multi-employer scheme where the assets
are co-mingled for investment purposes, and benefits are paid from the total plan assets. According, due to the nature of the
Plan, the accounting charge for the period under FRS17 represents the employer contribution payable.
The valuation results at 30 September 2008 were completed in 2009 and have been formalised. The valuation of the
scheme was performed by a professionally qualified actuary using the Projected Unit Method. The market value of the Plan’s
assets at the valuation date was £742 million and the Plan’s Technical Provisions (i.e past service liabilities) were £771
million. The valuation therefore revealed a shortfall of assets compared with the value of liabilities of £29 million, equivalent
to a funding level of 96%.
The financial assumptions underlying the valuation as at 30 September 2008 were as follows:
% p.a.
Investment return pre retirement 7.6
Investment return post retirement
Actives/Deferreds 5.1
Pensioners 5.6
Bonuses on accrued benefits 0.0
Rate of price inflation 3.2
In determining the investment return assumptions the Trustee considered advice from the Scheme Actuary relating to the
probability of achieving particular levels of investment return. The Trustee has incorporated an element of prudence into the
pre and post retirement investment return assumptions such that there is a 60% expectation that the return will be in excess
of that assumed and a 40% chance that the return will be lower than that assumed over the next 10 years.
The preliminary triennial valuation results as at 30 September 2011 were received in March 2012 but, as the valuation will not be
finalised until later this year, this disclosure note must still refer to the 2008 valuation results as the last completed valuation.
PENSIONS – continued25
Notes to the financial statements for the year ended 31 March 2012
54 | FAMILY MOSAIC HOUSING
PENSIONS – continued
The Scheme actuary’s preliminary result for 30 September 2011 shows that the Plan’s assets at that date were £780m and
the Plan’s Technical Provisions (i.e. past service liabilities) were £928m. The valuation therefore revealed a shortfall of assets
compared with the value of liabilities of £148m, equivalent to a funding level of 84%.
If an actuarial valuation reveals a shortfall of assets compared to liabilities the Trustee must prepare a recovery plan setting
out the steps to be taken to make up the shortfall.
The Pensions Regulator has the power under Part 3 of the Pensions Act 2004 to issue scheme funding directions where
it believes that the actuarial valuation assumptions and / or recovery plan are inappropriate. For example the Regulator
could require that the Trustee strengthens the actuarial assumptions (which would increase the scheme liabilities and
hence impact on the recovery plan) or impose a schedule of contributions on the Plan (which would effectively amend the
terms of the recovery plan). A copy of the recovery plan in respect of the September 2008 valuation was forwarded to The
Pensions Regulator on 18 December 2009, as is required by legislation.
Following a change in legislation in September 2005 there is a potential debt on the employer that could be levied by the
Trustee of the Plan and the Pensions Act 2011 has more recently altered the definition of Series 3 of the Growth Plan so that
a liability arises to employers from membership of any Series except Series 4. The debt is due in the event of the employer
ceasing to participate in the Plan or the Plan winding up.
The debt for the Plan as a whole is calculated by comparing the liabilities for the Plan (calculated on a buy-out basis i.e. the
cost of securing benefits by purchasing annuity policies from an insurer, plus an allowance for expenses) with the assets of
the Plan. If the liabilities exceed assets there is a buy-out debt.
The leaving employer’s share of the buy-out debt is the proportion of the Plan’s liability attributable to employment with
the leaving employer compared to the total amount of the Plan’s liabilities (relating to employment with all the currently
participating employers). The leaving employer’s debt therefore includes a share of any ‘orphan’ liabilities in respect
of previously participating employers. The amount of the debt therefore depends on many factors including total Plan
liabilities, Plan investment performance, the liabilities in respect of current and former employees of the employer, financial
conditions at the time of the cessation event and the insurance buy-out market. The amounts of debt can therefore be
volatile over time.
Family Mosaic Housing has been notified by the Pensions Trust of the estimated employer debt on withdrawal from the Plan
based on the financial position of the Plan as at 30 September 2011. As of this date the estimated employer debt was £0.2m.
Local Government Pension SchemeFamily Mosaic Housing also is one of a number of employers that participates in the Local Government Pension Scheme,
which is a defined benefit scheme based on final pensionable salary. There are 39 active members, 15 deferred members
and 8 pensioners in the main scheme, plus 5 active members in a separate supporting people scheme.
This scheme is closed to new members of staff. Family Mosaic Housing Association’s contribution rate over the accounting
period was 19% of Pensionable Pay for the main scheme and 15% for the supporting people scheme.
25
Notes to the financial statements for the year ended 31 March 2012
FINANCIAL STATEMENTS 2012 | 55
The fund is valued every three years and the most recent actuarial valuation was carried out as at 31 March 2010. Liabilities
are valued on an actuarial basis using the projected unit method which assesses the future liabilities discounted to their
present value.
The principal assumption used by the actuaries for FRS17 purposes were:
31 March 2012 31 March 2011 31 March 2010
% p.a. Real% % p.a. Real% % p.a. Real%
Price Increases (RPI) 3.3 - 3.5 - 3.9 -
Salary Increases 4.7 1.4 5 1.5 5.4 1.5
Pension Increases 2.5 -0.8 2.7 -0.8 3.9 -
Discount Rate 4.6 1.3 5.5 1.9 5.5 1.5
CPI has been assumed at 0.8% below RPI.
PENSIONS – continued
LOCAL GOVERNMENT PENSION SCHEME – continued
25
Notes to the financial statements for the year ended 31 March 2012
56 | FAMILY MOSAIC HOUSING
PENSIONS – continued
AssetsThe return on the Fund, on a bid value basis, for the year to 31 March 2012 is estimated to be 8% for the main scheme and
8% for the supporting people scheme.
Local Government Pension Scheme, Main Scheme
The estimated employer asset share (bid value) is as follows:
31 March 2012 31 March 2011
£000 % £000 %
Equities 2,990 57 2,738 55
Gilts 105 2 647 13
Cash 52 1 100 2
Other 2,098 40 1,494 30
Total 5,245 100 4,979 100
The expected return on assets was as follows.
Asset Class 1 April 2012 % p.a
1 April 2011 % p.a.
1 April 2010 % p.a.
Equities 6.3 7.4 7.5
Gilts 3.3 4.4 4.5
Cash 3.0 3.0 3.0
Other 6.3 7.4 7.5
Assets and liabilities on the balance sheet of Family Mosaic Housing are analysed below:
Net Pension Asset as at 31 March 2012 £000
31 March 2011 £000
31 March 2010 £000
Present Value of Funded Obligation 5,941 5,060 6,446
Fair Value of Scheme Assets (bid value) 5,245 4,979 4,186
Net liability 696 81 2,260
Present value of unfunded obligation 15 13 16
Net liability in Balance Sheet 711 94 2,276
25
Notes to the financial statements for the year ended 31 March 2012
FINANCIAL STATEMENTS 2012 | 57
Local Government Pension Scheme , Main Scheme – continued
The balance sheet amounts for the previous four years were as follows:
Amounts for the current and previous four periods 31 March 2012 £000
31 March 2011 £000
31 March 2010 £000
31 March 2009 £000
31 March 2008 £000
Defined Benefit Obligation (5,956) (5,073) (6,462) (3,289) (3,340)
Scheme Assets 5,245 4,979 4,186 2,456 2,619
%������& (711) (94) (2,276) (833) (721)
Experience adjustments on scheme liabilities 1 786 - - (311)
Experience adjustments on scheme assets 38 152 736 (441) 329
Amounts recognised in Income and Expenditure and reconciliations of reserve movement:
Year to 31 March 2012
£000
Year to 31 March 2011
£000
Current service cost 107 153
Interest on obligation 276 313
Expected return on Scheme assets (341) (322)
Past service cost - (580)
Total 42 (436)
Actual return on Scheme assets 380 238
The actuarial losses/gains recognised are as follows:
Actual return less expected return on scheme assets 38 (83)
Experience (loss)/gain (1) 1,021
Changes in assumptions underlying the present value of the Scheme liabilities (724) 651
Actuarial (loss)/gain recognised (687) 1,589
Employer Contributions 112 157
Net movement in reserves 617 (2,182)
PENSIONS – continued25
Notes to the financial statements for the year ended 31 March 2012
58 | FAMILY MOSAIC HOUSING
PENSIONS – continued
Local Government Pension Scheme, Supporting People Scheme – continued
Assets and liability on the balance sheet of Family Mosaic Housing in respect of the Supporting People Scheme
are as follows:
Employer Asset share – Bid Value – Supporting People Scheme
31 March 2012 31 March 2011
£000 % £000 %
Equities 209 57 173 55
Gilts 7 2 41 13
Cash 4 1 6 2
Other 147 40 94 30
Total 367 100 314 100
Assets and liabilities on the balance sheet of Family Mosaic in respect of the supporting people scheme are as follows:
Net Pension Asset as at 31 March 2012 £000
31 March 2011 £000
Present Value of Funded obligation 405 292
Fair Value of scheme assets (bid value) 367 314
Net liability/(asset) in Balance Sheet 38 (22)
The balance sheet amounts for the current and previous two periods were as follows:
Net Pension Asset as at 31 March 2012 £000
31 March 2011 £000
31 March 2010 £000
Defined Benefit obligation (405) (292) (305)
Scheme Assets 367 314 272
Surplus/(Deficit) (38) 22 (33)
Experience adjustments on Scheme assets 2 (5) 43
25
Notes to the financial statements for the year ended 31 March 2012
FINANCIAL STATEMENTS 2012 | 59
Local Government Pension Scheme, Supporting People Scheme – continued
Amounts recognised in Income and Expenditure and reconciliation of reserve movement:
Year to 31 March 2012
£000
Year to 31 March 2011
£000
Current service cost 24 29
Interest on obligation 17 21
Expected return on Scheme assets (23) (20)
Past service cost - (24)
Total 18 6
Actual return on Scheme assets 25 288
The actuarial losses/gains recognised are as follows:
Actual return less expected return on scheme assets 2 (5)
Changes in assumptions underlying the present value of the Scheme liabilities (64) 47
Actuarial (loss)/gain recognised (62) 42
Employer Contributions 20 19
Net movement in reserves 60 (55)
NHS Pension We have 48 staff who are members of the NHS Pension Scheme. Staff pay between 5% and 6.5% in contributions and we
as the Employer pay 14%.
The NHS Pension Scheme does not have a real pension fund but as a statutory scheme benefits are fully guaranteed by the
Government. Contributions from both members and Employers are paid to the Exchequer which meets the cost of scheme
benefits. The Exchequer also pays for the cost of increasing benefits each year by the rate of inflation. This extra cost is not
met by contributions from scheme members and Employers.
CONTINGENT LIABILITIES At 31 March 2012 there were £nil of contingent liabilities in respect of claims arising in the ordinary course of business.
(2011: £nil).
PENSIONS – continued
26
25
Notes to the financial statements for the year ended 31 March 2012
60 | FAMILY MOSAIC HOUSING
RELATED PARTY TRANSACTIONSOne member of the Board during the year was an employee of the London Borough of Hackney, a local authority having
nomination rights over tenancies for certain Group properties. This member has now resigned. All transactions with the
council are on normal commercial terms and no advantage is provided by this position.
Tenants who are members of the Board have tenancies which are on normal commercial terms and as such their position
does not afford them any additional benefits compared with other tenants.
SUBSIDIARY UNDERTAKINGS
Group Association
2012 £000
2011 £000
2012 £000
2011 £000
Investment in assets and liabilities - - 824 -
Investment in shares - - 2,761 11
- - 3,585 11
Family Mosaic Housing exerts dominant influence over the affairs of:
Charlton Triangle Homes
This is a company registered under the Companies Act and also with the Charity Commission and the Homes & Communities
Agency. The Association took the transfer of 1,246 properties from the London Borough of Greenwich on 29th March 1999
and has undertaken a substantial programme of repairs, improvement and upgrade of the properties transferred. At the
current date over 1,000 properties have been refurbished and 173 new homes have been built. Family Mosaic Housing
exercises control through nominees on the Board.
Old Oak Housing Association
This is a company registered under the Companies Act, the Charity Commission and the Homes & Communities Agency. The
Association was established initially to manage 669 properties transferred to Family Housing Association on the 17th March
1999. The properties which were transferred were subject to refurbishment over a five year period. The original programme
of works has now been completed and the properties are to remain in the ownership of Family Mosaic, though further works
will be done on properties where tenants declined to have work done under the original programme. Family Mosaic Housing
exercises control through nominees on the Board.
Family Mosaic Home Ownership
This is a not-for-profit Registered Provider formed in 1989 under the Industrial and Provident Societies Act, specialising
in the development and sale of shared ownership homes and homes for sale on the open market. The appointment and
dismissal of all Board Members is controlled by Family Mosaic Housing.
28
27
Notes to the financial statements for the year ended 31 March 2012
FINANCIAL STATEMENTS 2012 | 61
In Touch
This is a charity registered with the Charity Commission and under the Companies Act. In Touch was acquired in 2011 from
the Hyde Group and manages care and support contracts and Home Improvement Agencies across the south of England,
complementing Family Mosaic’s Care and Support business. Family Mosaic controls the appointment of the Trustees.
Service Charge Management Companies
Family Mosaic Housing has a majority shareholding in three small companies which exist to administer service charges on
three estates where there are owner-occupiers in addition to Family Mosaic tenants.
Harris Lodge Residents Company Ltd (Private Company limited by share guarantee with no share capital).
Oxley Close (Number Two) Residents Company Ltd (Family Mosaic Housing owns 91% of the share capital).
Maple Lodge Residents Company Ltd (Family Mosaic Housing owns 94% of the share capital).
Family Mosaic Housing Development Company Ltd
A development trading company limited by shares (£2,760,000 share capital).
Family Mosaic Thurrock Limited
A development company limited by guarantee (no shares).
Family Mosaic Housing Services Limited:
A trading company limited by shares (£1,000 share capital).
Family Mosaic Housing acquired In Touch with effect from 31 July 2011 for cash consideration of £1,324k, with up to a
further £500k of contingent consideration payable after one year.
Net Assets acquired £000
Debtors 1,824
Cash at bank and in hand 1,186
Creditors (2,186)
824
Goodwill 1,000
1,824
���������#'
Cash 1,324
Deferred consideration 500
Total consideration 1,824
SUBSIDIARY UNDERTAKINGS – continued28
Notes to the financial statements for the year ended 31 March 2012
62 | FAMILY MOSAIC HOUSING
The Board has considered the fair value of the assets acquired and has concluded that this is equal to their book value.
During the year, the above acquisition contributed £9,480k of the Group’s income, £8,892k of expenses and £588k of
operating surplus.
In Touch made a deficit after tax of £68k in the year ended 31 March 2012 (2011: £55k deficit), of which a £410k deficit arose
in the period from 1 April 2011 to 31 July 2011. The summarised statement of financial activities for the period from 1 April
2011 to the effective date of acquisition is as follows:
£000
Total incoming resources 4,992
Net incoming resources before charitable donations (160)
Charitable donations (250)
Net incoming resources after charitable donations (410)
There were no recognised gains or losses in the period ended 31 July 2011 other than the deficit of £410k above.
The goodwill of £1,000k arising on the acquisition was fully written off in the year reflecting the short term nature of the
contracts acquired with In Touch.
INCORPORATIONThe Association is registered with the Homes and Communities Agency and prepares its financial statements under the
Accounting Requirements for Registered Social Landlords General Determination 2006. It is incorporated under the Industrial
and Provident Societies Act 1965 and registered in England.
SUBSIDIARY UNDERTAKINGS – continued28
Notes to the financial statements for the year ended 31 March 2012
FINANCIAL STATEMENTS 2012 | 63
29
64 | FAMILY MOSAIC HOUSING
Head Office Albion House
20 Queen Elizabeth Street
London
SE1 2RJ
Pitsea Pembroke House
11 Northlands Pavement
Pitsea
Essex
SS13 3DX
Charlton Triangle Homes9-10 Cedar Court
Fairlawn
Cherry Orchard Estate
London
SE7 7EH
Old Oak HAOld Oak House
43-45 Erconwald St
London
W12 0BP
In Touch
Frederick House
42 Frederick Place
Brighton
BN1 1EA
Where to find us
www.familymosaic.co.uk
Telephone: 020 7089 1000
Paintings by Christopher Corr
Concept and Design by
Andrew Kingham & Matthew Grenier