THAMES VALLEY HOUSING ASSOCIATION LIMITED Year ended 31 March 2015

FINANCIAL REPORT

2015

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‘I love the airiness, the space of this flat. Against everything else I was offered, it was the only flat I could breathe in. A lot of my friends live in studios, whereas I have my own bedroom here. I couldn’t wish for better as a single man.’

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For the last 3 years, Peter has been living in Air Sea Mews, Twickenham. He suffers with some long term health problems, and moved into this one-bed, social rent flat after his two sons left home and he needed to downsize.

4 ‘My stepfather lives four minutes down the road, and it’s a ten minute walk to my mother’s house. When my mother was ill, I was able to care for her, in the morning before work and in the evening when I got home, because of how close she lived to me. I am now caring for my stepfather. It’s been a godsend to be able to live so close to my family and has allowed me to care for them in old age.’

Elizabeth was raised in Twickenham, but lived most of her life in South Africa. She moved back to the UK three years ago and now lives in this socially rented flat in the borough of Richmond.

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CONTENTS

Thames Valley Housing Association Limited – Homes and Communities Agency Registration No. L0514. Registered under the Co-operative and Community Benefit Societies Act 2014 (17375R)

The Board of Thames Valley Housing Association Limited is pleased to present the audited consolidated financial statements of Thames Valley Housing Association Limited (“the Association”) and the Thames Valley Housing Association Group (“the Group”) for the year ended 31 March 2015.

Registered Office: Premier House, 52 London Road, Twickenham, Middlesex, TW1 3RP

Chair’s & Chief Executive’s Introduction 7-9

Board Members and Executive Management 10-12

Business and Financial Review 13-36

Report of the Independent Auditors on the Financial Statements 37

Income and Expenditure Account 38

Statement of Total Recognised Surpluses and Deficits 38

Balance Sheet 39

Consolidated Cash Flow Statement 40

Notes on the Financial Statements 41-74

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David Clayton-Smith, Chair & Geeta Nanda, OBE, Chief Executive

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CHAIR’S AND CHIEF EXECUTIVE’S INTRODUCTION

During and immediately after the general election, housing worked its way up the political agenda, and the voices of those poorly housed or whose family members are in need of housing became louder. As the housing crisis grows, our work at TVHA becomes ever more important, however the way we have to operate to deliver homes to meet that need is changing rapidly. With limited subsidy, increasing need, and the affordability gap growing, we have to rely on funds from elsewhere to produce these homes.

Over the last year we stepped up to the challenge and now have plans in place to grow more rapidly. We completed our affordable housing programme (2011-2015) to produce 864 new homes. Our partnerships with Galliford Try for market sale and Silver Arrow (part of Abu Dhabi Investment Authority) for market rent, have enabled us to build up a pipeline of new homes and profits to cross subsidise our affordable homes delivery.

We now have a committed pipeline of 579 new homes for market sale and around 600 for market rent with a growing pipeline of 1,500 affordable homes to be delivered as part of the 2015-18 programme. We are particularly pleased that last year we were successful bidders for a new key worker housing scheme with Frimley Hospital Trust for 87 new homes. In addition, we were successful through our partnerships with Galliford Try and Silver Arrow to win a bid for over 1,100 new homes in Canning Town through the GLA land release scheme. This scheme is comprised of one third of homes for market sale, one third for the private rented sector through Fizzy, our market rented arm, and one third for affordable housing.

In 2014, we launched one of our prize schemes in Horley helping the local authority regenerate the town centre. This scheme of 90 new apartments will include 75 for shared ownership. We have seen shared ownership sales significantly increase over the year and, with such high housing demand, an affordable entry into home ownership is essential. We also launched our new shared ownership plus initiative on schemes which allows new shared owners the opportunity to fix in today a price to buy additional shares into the future without the costs that go with it. Over 95% of new owners are keen to take up this offer.

Thames Valley Housing Association (TVHA) operates across London and the South East, where the shortage of affordable homes is most acute. Too few homes of all tenures are being built. This makes our role crucial in doing what we can to supply more homes, as well as ensuring those whom we house can sustain their ownership and tenancies in the coming years.

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We have had a record breaking year of helping 165 tenants into employment, 293 into training and signposted a further 905 through to support. ’

’ After 6 years, we finally saw the handover of new homes at Woking delivered through our PFI Joint Venture with Kier. The homes are spacious and have proved popular with the community. After years of work they have backed this green field development and the local school won a competition to name the roads after local war heroes.

We continued to progress our asset management strategy by finishing the redevelopment of our cluster homes and acquiring 355 new homes in Aylesbury from Sovereign Housing Association. This will firmly establish our base in Aylesbury where we have a mix of key worker, rented and shared ownership homes.

Last year also saw us launch our new repairs contract with Axis Europe Plc. After a good start we have spent the year bedding in the contract and dealing with the amalgamation. Whilst some areas of service slipped during this time, we have a defined plan to improve the service and take it back to the levels we set.

Our service improved last year through the launch of MyTVH; in particular we focused on improving our online payments process. We did this by working with service designers and residents through an agile development process which ensures we constantly review and monitor the process as we develop it.

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The result has been an amazing 52% of payments made over the phone transferring onto online payments and great feedback on the usability of the functions. We have a programme of investment and launch of new online services over the next few years, backed by improved technology for mobile working for our staff. We hope to see our residents rate access to our services as highly as they do their online banking services.

As we see reductions in the subsidy for our homes, we also see restrictions in welfare support for some of our residents. Our aim has been to free up staff resources to help people maximise their personal income either through welfare support or through employment support. We have had a record breaking year of helping 165 tenants into employment, 293 into training and signposted a further 905 through to support. Our links with employers and contractors have helped this process enormously.

We end the year in a financially robust position, our turnover increased to £88.2m, our surplus achieved was £20.3m and our operating margin was 43%. These excellent financial results have been helped by a strong property market with market and shared ownership sales and staircasing significantly contributing to revenue and surplus.

The year also ended with us saying goodbye to some old Board Members and welcoming new ones, as well as Executive Members. Jack Stephen, our Finance Director of 21 years, retired at the end of April 2015 and was replaced by Julian Turner, our Deputy Finance Director. Thames Valley Housing grows from strength to strength and continues to innovate every step of the way. We do this for the benefit of our residents. However, we could not do this without the endless energy and commitment of our staff and Board Members who are always ready to challenge what we do and how we do it to make us better. The next year will be equally challenging though we enter it in good shape and ready to expand.

Geeta Nanda, OBE Chief Executive

David Clayton-Smith Chair

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Executive Management Geeta Nanda Chief Executive

John Baldwin Housing and Neighbourhood Services Director

Guy Burnett Group Development Director

Jayne Hilditch Corporate Services Director

Julian Turner Finance Director (Appointed on 30 April 2015)

Steve Wood Group Commercial Director (Appointed on 5 January 2015)

Patricia Etter Group Company Secretary

Board Members David Clayton-Smith Chair (Appointed on 1 July 2014, appointed as Chair on 17 July 2014)

Ben Denton* Deputy Chair (Appointed as Deputy Chair on 6 November 2014)

John Baldwin Housing and Neighbourhood Services Director (Appointed on 6 November 2014)

Paul Bridge (Appointed on 4 December 2014)

Emma Cariaga Chair of Group Investment Committee

Kathryn Davis* (Appointed on 1 July 2014) Chair of Group Treasury Committee

Brian Hendon* Chair of Group Audit and Risk Committee

Grainia Long (Appointed on 30 April 2015)

Geeta Nanda Chief Executive

Julian Turner (Appointed on 30 April 2015)

John Garrity (Retired on 17 July 2014)

Frank Nelson (Resigned on 31 March 2015)

Maggie Rafalowicz (Resigned on 22 June 2014)

David Smith (Resigned on 22 August 2014)

Jack Stephen (Retired on 1 May 2015)

Peter Williams (Retired on 10 September 2014)

*Member of the Group Audit and Risk Committee

BOARD MEMBERS AND EXECUTIVE MANAGEMENT

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CHAIR – DAVID CLAYTON-SMITH, BA (Hons), CDipAF was appointed as Chair of the Common Board on 17 July 2014. David is Chair of the Governance, Remuneration & Nominations Committee and a Member of the Customer Services Committee. His career has encompassed product brands, retailing, consultancy, healthcare and the charity sector. He currently chairs the newly formed NHS Academic Health Science Network for Kent, Surrey & Sussex and is a Non-Executive Director at Frimley Health Foundation Trust. He was formerly Chair of both NHS Surrey and NHS Sussex. A former Chair of The Fairtrade Foundation in the UK David also spent two years as Chair of the Finance Committee and Treasurer on the Fairtrade International Board. With 30 years working in a wide and varied range of consumer markets he has direct experience of Board level responsibility for sales, marketing and buying functions in blue-chip organisations such as Courage, Boots and Halfords.

DEPUTY CHAIR – BEN DENTON, MRICS, BSc (Hons), Dip BA has served on the Board for three years. He was appointed Deputy Chair in 2014. He is a Member of the Group Audit & Risk Committee, Group Investment Committee and Group Treasury Committee. Ben is the Executive Director for Growth, Planning and Housing at Westminster City Council. Prior to this he worked for First Base Limited. Ben is also a Director and Treasurer of Future of London and a director of Hub Westminster.

JOHN BALDWIN, BA MCIH joined Thames Valley Housing as Housing & Neighbourhood Services Director in 2008. He was appointed to the Board on 6th November 2014 and is a Member of the Customer Services Committee. He has worked in the housing sector for over 25 years with roles including policy, supported housing and general needs. He has been Assistant Director for Westside Housing and Director of Housing Management at Notting Hill Housing Trust. John has previously served as Chair of Harlington and Rectory Housing Association.

PAUL BRIDGE, BA, MSC has served on the TVCHA Board for three years and was appointed to the Common Board on 6 November 2014 when the Common Board Structure was formed. He is Chair of the Customer Services Committee and a Member of the Governance, Remuneration & Nominations Committee and Group Investment Committee. Until May 2015 he was Director of Operations and Transformation for East Kent Housing and was previously Chief Executive of Homes for Haringey. Paul has worked in housing for over 17 years with senior experience in Housing Management, Development, Regeneration and technical roles. Paul is an elected Member of The Housing Forum Board and a founding Member and chair of the Bermondsey Group, a non aligned forum for senior housing professionals.

EMMA CARIAGA, BSc (Hons), DipTP has served on the Board for four years. She is Chair of the Group Investment Committee and a Member of the Governance, Remuneration & Nominations Committee. Emma is Residential Development Director at The British Land Company plc. Prior to this she worked for Land Securities. Emma is a trustee of the youth mental health charity, STEM4.

KATHRYN DAVIS, MA (Hons) (Oxon) was appointed to the Board on 1 July 2014 and is Chair of the Group Treasury Committee and a Member of the Group Audit and Risk Committee. A qualified solicitor, until 2013 Kathryn was a corporate partner at city law firm Slaughter and May, which she joined in 1987. Kathryn is the vice-chair of the governing board at Paddington Green Primary School, where she also chairs the Leadership & Management Committee and sits on the Achievement & Standards Committee.. She is an Independent Member of The Lord Chancellor’s Advisory Sub-Committee on Justices of the Peace for Central and South London.

BRIAN HENDON, FCA has served on the Board for five years and is Chair of the Group Audit and Risk Committee, a Member of the Governance, Remuneration & Nominations Committee and Group Treasury Committee. Brian is a Non Executive Director of Royal Berkshire NHS Foundation Trust and also holds positions as Non Executive Chairman in various private sector companies. Brian is a Chartered Accountant and has worked in the USA and UK in various Finance Director and Managing Director roles.

GRAINIA LONG, BA, MSC, CIH joined the Board in April 2015 and is a Member of the Customer Services Committee. Grainia has recently become Chief Executive of the Irish Society for the Prevention of Cruelty to Children. Prior to this she spent 8 years at the Chartered Institute of Housing initially as Director in Northern Ireland, then as Chief Executive of the Institute. She has also worked for Shelter and the Northern Ireland Equality Commission. She is a ministerial appointee to the Board of the Northern Ireland Human Rights Commission.

GEETA NANDA, OBE, BSc, PG DIP Housing, CIH, joined Thames Valley Housing in 2008. Geeta has worked in the housing sector for 26 years and joined Thames Valley Housing from Notting Hill Housing Group where she was Group Operations Director. Geeta was appointed to the Board in 2011 and is a Member of the Group Investment Committee. She is a Director of Fizzy Enterprises. She is a Non-Executive Director at McCarthy & Stone and is currently a Commissioner on the Fairness Commission for London.

JULIAN TURNER, FCA, BSc (Hons), joined Thames Valley Housing as Deputy Finance Director in 2014 and was appointed to the Board on 30th April 2015 when he was appointed Finance Director. He is a Member of the Group Treasury Committee and a Director of Fizzy Enterprises, Opal and Evolution vehicles. Julian worked for over 13 years in the financial services sector and is a qualified chartered accountant with extensive experience across structured finance, debt capital markets and commercial lending. Julian is a parent governor at his local primary school focused on the Resources Committee.

PROFILES OF BOARD MEMBERS

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PROFILES OF EXECUTIVE MANAGEMENT

CHIEF EXECUTIVEGEETA NANDA OBE

HOUSING & NEIGHBOURHOOD SERVICES DIRECTORJOHN BALDWIN

GROUP DEVELOPMENT DIRECTORGUY BURNETT, ICIOB, joined Thames Valley Housing in 2003 and has worked in the housing sector for 20 years, and in private sector organisations specialising in residential development and regeneration. He was Land & New Business Director at Thames Valley Housing until June 2014. Guy is a Director of Opal and a Member of the Chartered Institute of Building.

CORPORATE SERVICES DIRECTORJAYNE HILDITCH, BSc, CIPFA, joined Thames Valley Housing in 2011 and has worked in the housing sector for 20 years, initially in finance roles at Winchester District Housing Association and Servite Houses, and Corporate Services Director at Notting Hill Housing Trust. Prior to this, Jayne was Chief Operating Officer for a leading online job board.

FINANCE DIRECTOR JULIAN TURNER, FCA, BSc (Hons)

GROUP COMMERCIAL DIRECTOR STEVE WOOD, BSc(Hons), CEng, MICE, joined Thames Valley Housing in 2015. He was the Head of Station Development at Transport for London (TfL) having previously held roles at Wimpey Property Holdings, Spitalfields Group, Chelsfield and BAA. Steve is a Director of Opal, Fizzy and Evolution vehicles.

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In November 2014, the Boards of TVHA and TVCHA agreed to form a Common Board (the “Board”) to govern both associations. The Common Board considers all matters and makes all decisions affecting both associations. In order to protect the charitable objects of TVCHA and to preserve the integrity of TVCHA as a separate legal entity, where a conflict of interest arises between the two associations, three nominated Board Members subordinate their duty to TVHA to their duty to TVCHA and act wholly on TVCHA’s behalf for consideration of the relevant decision.

The Board has adopted a Code of Conduct which reflects the requirements set out in the National Housing Federation’s Code, “Excellence in Standards of Conduct: Code for Members”. The Board has also adopted the NHF Code of Governance – “Excellence in Governance”. The Board receives annual reports on compliance with both Codes. The Board fully complies with all provisions within the NHF Code of Governance.

The Board is responsible for the leadership of the Group and ensuring where appropriate risks are taken they are properly managed. The Board ensures that the Group has the necessary financial and staff resources to deliver its objectives and sets ethical and health and safety standards. The Board is fully involved in the Group’s Value for Money Strategy and reviews the Group’s performance against the HCA Standards annually. The Board reviews the skills profile of the members annually and on the retirement of members. All Non Executive Board Members are subject to re-election every three years, and are appraised annually. The Governance, Remuneration and Nominations Committee is responsible for an annual appraisal of the Chairs of TVHA and TVCHA.

Board structures are clear and include details of the timing and membership of the Board and its committees. During the year, the Board held eight board meetings and two strategy days. Minutes of the meetings of the Group Audit and Risk Committee, Governance, Remuneration and Nominations Committee, Group Investment Committee, Group Treasury Committee and Customer Services Committee are sent to the Board. Board members are provided with regular detailed briefings on the Group’s business and have access to a suite of key performance information. Board Members are able to obtain independent advice when they deem it appropriate. The Group Audit and Risk Committee has a right of access to all information within the Group. Board Members are encouraged to undertake further training and new board members have a tailored induction programme. Board members are remunerated at levels consistent with the Group’s scale of activities and sector norms.

BOARD AND COMMITTEE MEMBER ATTENDANCEThe number of principal Board and Committee meetings attended by each current director during the financial year was as follows:

CORPORATE GOVERNANCE

Common BoardMeetings &

Strategy Days

(10 meetings)

GroupInvestment Committee

(3 meetings)

Governance, Remuneration& Nominations

Committee(4 meetings)

Group Audit & Risk Committee

(4 meetings)

Group Customer Services

Committee

(3 meetings)

Group Treasury Committee

(4 meetings)

David Clayton-Smith 8/8 3/3 1/1

Ben Denton 10/10 3/3 3/4 2/4

John Baldwin 4/5 1/1

Paul Bridge 5/5 2/2 3/4

Emma Cariaga 8/10 3/3 4/4

Kathryn Davis 7/8 2/2 3/3

Brian Hendon 10/10 4/4 4/4 3/4

Geeta Nanda 10/10 2/2

Frank Nelson 7/10 2/3 1/1 4/4

Jack Stephen 8/10 4/4

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BOARD COMMITTEES

GOVERNANCE, REMUNERATION AND NOMINATIONS COMMITTEEThe Governance, Remuneration and Nominations Committee reviews and makes decisions relating to the governance of the Group, and, in particular, the appointment and remuneration of Board members and staff.

GROUP TREASURY COMMITTEEThe Group Treasury Committee considers and recommends to the Board the Group Treasury Strategy, Treasury Policy and approves borrowings, loans, derivative transactions and certain investments. Members are chosen for their expertise in treasury management and meet as and when required.

GROUP INVESTMENT COMMITTEEThe Group Investment Committee makes investment decisions, including for major new schemes, which otherwise would require Board approval and fall outside of the authority delegated to the Executive Directors. The Committee meets as and when required.

GROUP AUDIT AND RISK COMMITTEEThe Group Audit and Risk Committee’s primary role is to independently oversee and monitor the process for ensuring an effective internal control system is maintained together with reviewing the risk management systems, monitoring the integrity of the financial statements and providing oversight of the internal and external audit process. The Committee meets at least three times per year. On at least one occasion each year, the Committee meets separately with the external and internal auditors without the presence of Executives.

GROUP CUSTOMER SERVICES COMMITTEEThe Group Customer Services Committee scrutinises and makes decisions in relation to management and maintenance services provided to residents to ensure high service standards, efficient working and delivery of performance indicators across all tenures. The Committee includes Board Members and residents. It meets approximately four times per year.

THE GROUP’S VISION AND PRINCIPAL ACTIVITIESVisionOur vision is for everyone to have the chance to build their lives from a good home. We will support our residents by providing them with good quality affordable homes and investing in their communities.

Principal Activities The principal activities of the Group in Social Housing are:

} The management and development of social housing for people who cannot afford to purchase their own homes outright or rent a home in the private sector.

} The management and development of social housing is carried out by Thames Valley Housing Association Limited (“TVHA”) and its subsidiary, Thames Valley Charitable Housing Association Limited (”TVCHA”). Both associations are Registered Providers and development partners to the Homes and Communities Agency (HCA), and have preferred partner status with a number of local authorities to help create communities.

To assist in achieving its social objectives the Group also has significant activities in:

} The development and management of a portfolio of properties for market rent in London and the South East under the Fizzy Living brand focused in the private rental sector (“PRS”). At 31 March 2015, Fizzy Enterprises LLP, the investment vehicle for the market rent business, was owned 54% by Silver Arrow, an investment entity of Abu Dhabi Investment Authority, and 46% by TVHA.

} The development of housing for outright sale in the private market by way of investment in a joint venture with Galliford Try trading under the Opal brand name. Joint ventures are established on a 50/50 ownership basis between TVHA and Galliford Try.

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HOW WE PERFORMED AGAINST OUR STRATEGIC OBJECTIVES FOR THE YEAR

DELIVERING HIGH QUALITY AND EFFICIENT CUSTOMER SERVICE

This was the third and final year of our 2012/15 corporate plan,which focused on the following five strategic objectives:

} Delivering high quality and efficient customer service;} Increasing support services for residents;} Growing and diversifying the business;} Innovating within the housing sector;} Maintaining organisational capability.

Housing ManagementIn 2015 we focused on three key objectives:

1. Helping our tenants affected by welfare reform changes.

2. Improving our online services to tenants.

3. Improving all other services while absorbing a significant increase in our housing stock.

Our ongoing approach to managing the impact of the welfare reform changes has enabled us to support over 400 residents, protect rental income and maximise personal income. We provided direct support, signposting and advice to those tenants affected which has allowed us to better prepare for the roll out of Universal Credit which will be happening in our area of operation from 2015. Income collection has continued to remain strong with arrears at 4.6% (2014: 4.6%). Satisfaction with our overall service delivery was 77% (2014: 74%).

The launch and promotion of our new online service MyTVH is transforming the way in which residents contact us. This has significantly improved the rent payment process and over time will improve efficiency with lower transaction costs and fewer incoming payment calls. Over the coming year this online service will be extended to cover repairs ordering, further improving the service.

Over 400 new homes came into management in the last quarter of the year. This has increased our rented stock by 3% overall and has meant a greater focus on service delivery in Aylesbury, where the bulk of these new properties are situated.

We also took delivery of the first eight of our Woking PFI properties into management in Q4 2014, with 59 of the 224 PFI homes expected to be in management by the end of summer 2015.

Two blocks of shared housing have now been taken out of management and we are currently on site for change of use. One of these schemes is being upgraded into homes for sale through shared ownership and the other converted into affordable rented properties. We extended in the year four agreements with other landlords for the management of our outlying stock in Eastleigh, Winchester, Fareham and Vale of White Horse by a further three years thereby enabling us to concentrate our own services in our key management areas of operation.

Property and Asset ManagementProcurement and mobilisation of our new responsive repairs and voids service from Axis Europe Plc was completed in June 2014. This new service together with our MyTVH online service will allow residents to access our repairs service, track repairs and provide feedback at a time convenient to them.

Customer satisfaction with the new repairs service was 90% overall by year end. 100% of gas appliances were inspected in the year, and the planned and cyclical maintenance programmes delivered improvements to 1405 (Cyclical 852 + Planned 553) general needs homes. All of our housing stock meets the Decent Homes Standard.

We delivered our programme of stock condition surveys, including a comprehensive survey of all of our key worker accommodation. As a result, remedial works have been identified at certain keyworker properties and a provision has been raised to cover the expected costs.

Overall our stock has an energy performance rating of 71 = C. This places our stock in the top 10% of energy performance across all tenures of homes in the UK, including owner occupied homes.

We completed in the year energy efficiency improvements to two schemes that suffered from low energy performance, raising their energy performance rating from D to C. External wall insulation was applied to 39 homes on our Rafborough Estate. On a second scheme, Pipers Patch, we arranged for the gas network to be extended onto the scheme which allowed us to replace the electric heating and hot water systems with more efficient gas fired central heating. We also renewed the windows on the scheme to further improve the thermal performance.

Home OwnershipDuring the year we focused on delivering a better service to our residents. We have increased staffing resource in the home ownership team to address the increasing demands of the business and streamlined our approach to handling customer requests. Satisfaction with the overall service has remained consistent at 42% despite improved responsiveness (our mystery shopping results showed an improvement from 48% to 82%).

The MyTVH information technology project is also being rolled out in home ownership which will allow greater access to personalised

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‘I found out through researching online that I could get onto the property market with just a 5% deposit, which I had been able to save through living with my mum. I felt that shared ownership was the best option, especially with the opportunity for staircasing.’

After splitting up from her long-term boyfriend, Bunmi Odubanjo decided to save money for a shared ownership home. She bought a 50% share in a two-bedroom apartment from TVHA’s Serpentine development in Aylesbury, with a 5% deposit. Two years later, she had saved enough money to secure a mortgage that increased the share of her home to 100%.

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information for our residents. A separate piece of work has been completed looking at satisfaction with Shared Ownership across the sector.

We commenced a project in the year to improve management of our service charge processes to deliver greater assurance in this area both for the business and our customers. The objective is to improve customer satisfaction and offer better value for money. This comprehensive review will tackle administration, systems and process and be aligned to our online offer and user needs for staff and residents.

Key Worker and Student HousingThe majority of KPI targets for key workers and student housing were met. Rent arrears at year end were 0.6% against a target of 3% or less, and property voids were at 2.1% against a target of 5% or less. Resident satisfaction was high at 86.8% compared with an 82.0% target.

We have housed 861 new key workers in the last twelve months, most of which came from nominations made by one of our eight NHS Trust partners, and over 460 students at the University of Surrey in Guildford.

The total number of units of key worker and student accommodation in management is 2,082. We have recently expanded the portfolio by acquiring from the Frimley Health NHS Trust a 2 acre site for development of 87 homes for keyworkers.

The following table shows key performance indicates for key worker and student accommodation:

Performance Indicator 2014/15Outturn

2014/15Target

2013/14Outturn

Current Tenant Arrears (%) 0.6 3.0 0.9

Void Rate – Units Available For Letting (%) 2.1 5.0 1.9

Overall Tenant Satisfaction (%) 86.8 82.0 84.6

Case StudyTVHA staff planting

trees at the “1,000 trees” project, which was carried

out between our Hoylake close estate and

the M4.

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Residents’ Training and Employment InitiativesOur resident training and employment initiatives were significantly boosted this year by Big Lottery funding achieved through our associate company Academy for Housing.

This funding has helped us in the year to:

} Support 165 residents into employment;

} Provide training to 293 residents;

} Sign post 905 residents to access training and employment through partner organisations.

Employment opportunities have come about as a result of close partnership work with contractors, local businesses and other training and employment partners. We have also worked closely with local job centres who refer their long term unemployed to our work program for the tailored support it delivers to individuals who have the greatest difficulty getting into the job market.

An Example of How we Help get Residents Back to WorkDerek, one of our tenants was in rent arrears and getting to the point of eviction. He engaged with our training team from December 2013 and it was clear from the outset he was determined to get into work and try to turn his life around. An opportunity arose for an electrical apprenticeship with Axis, our repairs contractor, and Derek worked closely with our Training and Employment Officer who helped him with the application process and interview preparation. Derek was one of two candidates who were successful in securing an apprenticeship with Axis out of the 10 TVHA residents who interviewed for the role. He started the apprenticeship in September 2014, is enjoying it and looking forward to a successful career with Axis.

Community Investment StrategyThe Community Investment team works closely with residents and stakeholders to deliver a series of social initiatives. Through consultation processes, the team is able to identify the needs of a community and address some of their issues in a way that delivers maximum benefit. This may include paying grants to a local organisation to provide services needed by their community but also empowering residents to address issues in their own communities through support and training. Below are a number of examples of projects that have been delivered or funded this year.

Aik Saarth worked with the local Housing Officer to identify the priority areas for youth anti-social behaviour in our estates in Slough. The funding allowed Aik Saarth to train and develop young volunteers, who have started working with young people on our estates to facilitate conflict resolution.

Working with the Woodland Trust, Conservation Volunteers and Slough Borough Council, over 1,000 trees were planted in two days creating a barrier between our Hoylake Close estate and the M4 using a mix of species good at removing pollutants from the air.

Domestic Abuse Stops Here (DASH, formerly Women’s Aid) has completed its first programme of ten weekly sessions funded by us. They have a series of “Freedom Programme” sessions based around help and support for victims of, or those at risk from, domestic violence, focussing on confidence building and behaviour change techniques.

Our Community Investment team organised a presentation event for the Westfield School Road Naming competition. The children presented 60 different names, based on local history and ecology, to a panel including the Mayor of Woking, local residents and experts. The names selected were chosen by Woking Borough Council and the Mayor presented the children with certificates for their involvement. The Mayor named the event as one of her top three highlights of her tenure. As a follow up event, a plaque was unveiled on a nearby nature trail which named the school for their contribution.

Going GreenTo help reduce fuel bills and save energy, we have arranged for our residents to get personal advice on how to reduce their energy consumption. We offer what we call “green doctor” sessions to resident groups and individually in their homes showing them how to make their homes environmentally friendly and cheaper to run. Alongside this we also delivered a number of “go green” projects to enhance the green spaces in some of our communities. These projects emphasise that community gardening is a great way to build a sense of community, local spirit and pride.

SUPPORT FOR RESIDENTS

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Development of Affordable HousingIt has been another successful year for TVHA and its Consortium Partners who together over three years have completed 864 new affordable homes across London and the South East as part of the Affordable Homes Programme 2011-15, exceeding our original programme offer.

Working alongside our Private and Public Sector Partners we continue to pursue our ambitious growth targets and have a substantial development pipeline of circa 1,500 affordable homes to be developed over the coming years that will contribute towards the new Affordable Homes Programme 2015-18 in the South East and the Mayor’s Housing Covenant targets for 2015-18 in London.

Working In PartnershipWoking Private Finance Initiative (“PFI”)

Our non-HRA PFI housing scheme is being delivered in a joint venture with members of the Kier Group Plc. In line with the business plan, the first eight of the new PFI funded homes were delivered in Q4 2014 (with a further 59 expected to be delivered by summer 2015). Our pledges and commitments to local training and employment which are part of our PFI contract also became a reality. As well as exceeding our target number of on-site

apprenticeships, we have, in partnership with Woking Borough Council, approved funding for two organisations offering training and employment opportunities to local people. We have also approved funding to support local environmental initiatives for the benefit of local people.

Investment in Build

Our Opal joint venture with Galliford Try added a fourth scheme to its portfolio in the year, with the purchase of land in Bermondsey, LB Southwark to develop circa 170 new affordable and private sale homes.

After the year-end, a fifth Opal scheme was contracted at Silvertown Way in Canning Town for the purchase of land to develop over 1,100 units comprised of one third affordable, one third private sale and one third private rented sector through Fizzy.

The schemes in development are performing strongly and this part of the business is meeting its objective to generate profits from low-risk diversification to subsidise the development of new affordable housing.

GROWING AND DIVERSIFYING THE BUSINESS

INNOVATING WITHIN THE HOUSING SECTORFizzy Living

Fizzy Living (Fizzy) was launched in February 2012 with seed capital of £30m provided by TVHA. Fizzy is designed specifically to service the needs of

young professionals seeking accommodation in the private rented sector (PRS). Fizzy received in March 2014 a new capital commitment of up to £200m from Silver Arrow. In November 2014, Silver Arrow extended the capital commitment to Fizzy by a further £100m to cover the anticipated pipeline.

Fizzy has an existing portfolio of 246 apartments across 4 sites, all of which are fully let with stabilised income. During the year, £32.4m of senior debt from Pricoa Mortgage Capital was provided to these existing operational schemes. This was a key step in demonstrating the feasibility of the end to end business model for Fizzy.

Two further towers are under construction in Lewisham which will each bring a further 68 apartments to the portfolio. Completion is scheduled for January 2016 and January 2017 respectively. Fizzy has also purchased a site in Finchley to build out directly on a land-led basis.

Fizzy Services Management headcount has grown during the past year, and now includes a three person Acquisitions Team and a three person Development Management Team. A sales manager and sales administrator were hired in May 2015.

Whilst London is the main recipient of new PRS investment, a number of new entrants are concentrating on the less competitive regional cities such as Birmingham, Manchester, Liverpool and Leeds. Fizzy continues to target London and the South East and has

exchanged on a scheme with Opal for circa 350 units at Silvertown Way, Canning Town.

Our investment in Fizzy has achieved capital growth ahead of budget expectation, with the year end valuation showing annual growth of over 12.6%.

We believe this performance is largely to do with the clarity of Fizzy’s focus, which delivers a tailored solution to the housing needs of a defined demographic. This means that our share of the growing profits generated from this venture will be invested back into affordable housing to meet our social purpose. We anticipate Fizzy proceeding rapidly towards its goal of building a large portfolio of quality private rental accommodation.

Shared Ownership Interest in the shared ownership concept has continued to grow with enquiry volumes almost doubling from the previous year. This year we launched our flagship scheme “Russell Square” in Horley with 90 apartments (75 for shared ownership) which is one of our most ambitious schemes to date. Consumer reaction has been highly positive with excellent feedback on the quality and finish of the external materials and internal fittings used.

Our innovative approach to helping customers acquire more equity in their homes has begun to take shape, with 95% of all new low-cost home ownership customers in London deciding to opt for our new Shared Ownership Plus property purchase scheme rather than our previously standard shared ownership agreement, which provides additional value to customers.

21

Our StaffOur staff are fundamental to our ability to deliver our growth strategy and objectives. We have enhanced our recruitment strategy to include social networks such as Facebook and LinkedIn, to ensure we are reaching a broad range of candidates. We have also re-invigorated our approach to staff induction to ensure new staff buy in to the “TVHA” way from the start of their careers with us. Clear objectives and performance targets for all employees are reinforced through comprehensive performance management systems. We carried out a range of training and development activities this year, with a particular focus on use of new IT systems associated with the mobilisation of our new repairs contracts and other digital platforms.

Capacity to Finance GrowthWe have maintained and improved our organisational and financial capabilities to direct and fund our objectives and deliver sustained and ambitious expansion of both our core social housing and commercial investment over the next five years. Our balance sheet has been strengthened and fully committed loan finance is in place to cover all of our current, and the majority of projected funding requirements. With our diversification into commercial activities, the governance arrangements ensure continuing tight control and strategic direction over our expansion. A significant amount of the financial capacity for commercial business has been sourced from third party providers of equity and debt outside of the Group.

EQUALITY AND DIVERSITYThe Group promotes equality and celebrates diversity. We have a whole organisational approach to equality and diversity, and believe that no person should suffer disadvantage by reason of race, religion, faith, gender, sexuality, marital or civil partnership status, pregnancy or maternity, age, or disability. We tailor our services to the needs of all categories of our residents.

HEALTH AND SAFETYWe are committed to stretching Health and Safety targets, and employ an external firm of Health and Safety specialists (WYG) who report annually to the Board. Our Health and Safety procedures are subject to regular review by KPMG LLP, our Internal Auditor. Last year there were no reported RIDDOR accidents (Reporting of Injuries, Diseases and Dangerous Occurrences Regulations).

MAINTAINING ORGANISATIONAL CAPABILITY

Case StudyWe ran a leadership

programme to provide our managers the time and space

to grow their leadership skills. A second cohort will be

starting in autumn 2015.

22

External ContextThis new corporate plan is set in a period when demand for new homes of all tenures is high, where housing associations are being pushed to deliver more homes and where there are income volatility, rising costs and residents on low income whose real income growth is limited.

In response to these national needs we have defined five strategic objectives:

1. Delivering a great landlord service.

2. Supporting our residents and communities.

3. Growing our business through organic and inorganic opportunities.

4. Digital Transformation.

5. Maintaining our organisational capacity to deliver our services.

Whilst housing supply is an important issue for all political parties, we can see no feasible return to significant cash grant funding for the development of new social housing and a requirement for associations to support development through other subsidy. Associations have become a focal point for government after the election as it relies on the sector to increase supply through greater efficiency, asset sales and using capacity. We are working through the challenges introduced from the July 2015 budget, including the 1% rent reduction on affordable housing and associated loss of income in the future.

Our Group has responded to this and now operates a business model which places more reliance on sales revenue for subsidised expansion of social housing. Over the next three years we will deliver more housing by:

} Delivering the affordable housing development and commercial programmes in line with the growth and investment strategy.

} Delivering the business plan growth targets for developing units for outright sale through our Opal joint venture with Galliford Try.

} Delivering the business plan growth targets for a rapid expansion of Fizzy through Fizzy Enterprises LLP, an investment vehicle partly owned by TVHA and majority owned by Silver Arrow.

For those in the middle income group, accessibility to home ownership in the South East remains increasingly difficult. Whilst increases in the property market in London appears to be slowing, prices remain high and in the South East, prices are increasing fast. Shared ownership is in high demand in all areas, as it is an efficient way to access accommodation, cheaper than renting privately or owning your home outright.

Market rent continues to grow in our core areas and is likely to continue to grow for at least the next three years. The private rented sector backed by institutional investment is beginning to take off with Fizzy leading the way together with new entrants to the market. Local Authorities are beginning to see professionally managed private rental properties as part of their housing needs solution for local people.

NEW CORPORATE PLAN 2015/18

For those who rely on welfare benefits to support them, it is likely that welfare caps will tighten and the ability to pay increasing rents will be difficult particularly for larger families. Coupled with this is a withdrawal of support services for more vulnerable people where local authorities do not have a statutory duty as spending cuts bite. As the housing benefit bill has increased significantly over the past 15 years it remains a target for cuts. Over the life of this plan we will see the introduction of universal credit across our geographic area of operation. The payment of housing benefit directly to residents will have an impact on income collection and resource levels to collect the rent. It will also have an impact on those out of work as the aim of universal credit is to improve the position for those in work. Households out of work will potentially receive less than before.

We will increase efforts to support our residents and their communities and will:

} Develop the scale and approach to resident training and employment activities.

} Deliver an appropriate response to support those affected by welfare reform and Universal Credit in particular.

} Research and create a customer-facing affordability model for housing options.

} Consumers continue to demand greater accessibility, flexibility and personalisation in services. Technological advances mean that our customers increasingly compare our services and speed of delivery with banks and supermarkets. The development of good online services is now no longer just an option but a requirement. We will embed a transformation in how we deliver our services by creating and delivering a digital transformation strategy, such that this becomes the normal way of working and not a website project.

} Make MyTVH so good, that residents who can, choose to use it.

} Create tools that staff love, enabling real mobile working.

} Improving efficiency through customer design and access to information for front line staff.

Whilst tenant satisfaction across social housing, key worker renting and market rental remains high, shared ownership satisfaction rates are much lower across the sector although demand for the product is high. Therefore increasing our efforts to deliver a great landlord service is important and we will do this by:

} Developing a new customer services strategy to encompass digital change.

} Improving Leasehold service delivery.

} Delivering the target outcomes of the new repairs partnering contract with Axis.

} Embedding and evaluating a new resident scrutiny panel.

} Evolving our approach to measuring resident satisfaction and driving service improvement from this.

23

Digital technologies are changing the way we live and work. We will use these approaches to deliver online services to customers and improve operational efficiency. We will:

} Create a digital transformation strategy that sets out our objectives and approach.

} Make MyTVH, our online customer services, so good that people who can, choose to use it.

} Create tools that staff love, enabling real, effective, mobile working.

} Develop the digital skills and confidence in our staff body – including the skills needed to lead and manage effectively in the networked digital age.

} Enable more data-driven decision-making.

All of these objectives will be underpinned by a strategy of maintaining organisational capacity which depends on:

} Securing the funding required to enable the growth ambitions.

} Delivering the required return on assets and operating efficiencies as set out in our Asset Management Strategy.

} Ensuring a staff reward package, culture and professional development opportunities that attract and retain good quality talent.

} Ensuring that diversity and equality principles continue to be embedded across the organisation.

} Remodel office space to enable increased head count and new ways of working, without taking on more space.

Case StudyIn partnership with Slough Borough Council, we’ve been running Healthy Cooking Classes for residents to learn how to save money and cook healthier dishes for their families.

24

Value for money is delivered through:

} Providing good quality, efficient and effective services to residents;

} Our asset management strategy, which seeks to improve the performance of our assets;

} Using balance sheet strength and returns from diversified activities to increase the provision of affordable homes with less grant.

The Board has given priority to deliver value for money within the Association. We believe VFM will drive the development of more homes and provide good quality services that matter most to our residents. We can only do this by linking VFM into our key corporate objectives and business planning framework. Looking back over our last plan, we have achieved a great deal and outcomes are described in our value for money self-assessment which is published on our website (see link at the end of this section). However, we believe we can and should do more. Our corporate strategy 2015-2018 sets forward targets and indicators are being developed which will be reported in future assessments.

Our self-assessment demonstrates improvements in efficiency and a reduction in costs across most areas of the business. In social rented housing management costs were high when previously benchmarked, although performance is good. We have been particularly successful at lowering our overheads to focus investment in front line delivery and our operating margin is high. Our investment in employment and training has produced great results for our residents at little cost. Our self-assessment identifies those relatively high cost or low performance areas that will be addressed in our future strategy. The Board has focused on shared ownership satisfaction and a corporate review of both the service and product has been carried out. We believe our investment in online services will yield future improvements in reducing cost and improving service. Our new repairs contract is now in place and has focussed performance on service areas of most importance to our residents.

Our asset management strategy has delivered efficiencies by either disposing of or re-configuring poor performing stock. We have acquired stock in Aylesbury without a corresponding increase in staffing, which has improved economies of scale in our housing management service. Our cyclical and planned programmes will maintain retained stock at a high standard. We have reviewed our model for the financial appraisal of our stock and focus plans on reviewing existing estates for development potential.

The diversification of our business into commercial areas, including market sales and the private rented sector through Fizzy, enables cross-subsidy to support the development of additional homes, including affordable rented homes, with less reliance on grant from the public purse. Our partnerships are structured to protect the Group from the potential risks involved and make use of third party external leverage to achieve the desired scale to secure meaningful return whilst mitigating the overall risk to the Group from such activities.

New funding for the Group during the year has been sourced on a low cost value for money basis with £25m of nominal funding raised from Affordable Housing Finance, a subsidiary of THFC, at a rate of 2.92% fixed for 27 years.

Our full self-assessment can be viewed at the following link:

http://www.tvha.co.uk/wp-content/uploads/2015/09/Value-for-Money-2014-2015.pdf

VALUE FOR MONEY

25

Vicky and Martyn Cyder and their three children are amongst the first residents

to move into Kingsmoor Park, a development of 224

affordable homes in Woking.

‘My husband and I both work, but we couldn’t afford to buy a home, as it is so expensive in this area. Then

out of the blue our landlord gave us 28 days notice, so we had to move into temporary rented

accommodation. This was hugely expensive and left us struggling. This

house has come just at the right time. The children are delighted as they now

have decent sized rooms to play in.’

26

OUR PRINCIPAL RISKS AND HOW THEY ARE MANAGED

The Board received regular risk management reports from the Chief Executive throughout the year. These reports were also considered in detail by the Group Audit and Risk Committee and used to decide the year’s internal audit programme undertaken by KPMG LLP which provides further reassurance.

The Internal Control section of this report sets out the Group’s overall framework for internal control, setting the context for the identification, control and monitoring of the principal risks faced by the Group.

The principal risks to the Group at this time and how they are controlled are as follows:

RISK CONTROLS

Adverse impact of welfare benefit restrictions on ability to maintain satisfactory rent collection level

} Model potential impact of direct payments of benefits to tenants using customer profiling information.

} Review of rent collection and target risk groups identified through profiling and segmentation.

} Implement arrears, financial inclusion strategy and money advice procedures; provision for additional resources for welfare advice.

} Focus on internal and external resident employment and training initiatives to help residents into work.

} Review impact of funding restrictions on debt advice and support agencies, and review future service provision.

Potential adverse impact on business plan due to further extension of right-to-buy to housing association tenants

} A dedicated working group has been established to inform discussions and monitor the potential impact of Right to Buy on the Group’s business plan.

Increased exposure to commercial activities and potential sales downturn for our market sale and shared ownership schemes

} Our internal auditor (KPMG LLP) carried out a detailed review of how we monitor and control the risks from our commercial activities. This provided high assurance.

} The business plan has been updated with scenario plans in place to ensure that the business is protected and multi-variate stress testing is undertaken together with identification of appropriate mitigating actions.

} New skills have been recruited to the Board and the exposure to commercial activity is kept under constant review. Investments in commercial activities are reviewed and approved by specialist sub-groups of the Board.

} Detailed external legal, accounting and investment advice is obtained for all significant commercial investment.

} The commercial activities are ring-fenced to remove the risks to social housing assets.

Developers/Contractors become insolvent, putting development, housing maintenance and sales at risk

} Current market conditions arguably reduced this risk in 2014/15, though this is reviewed regularly.

} Appropriate bonds, warranties and guarantees are secured for development schemes. } All development payments are certified by our employers’ agents guaranteeing works

have been completed.} Credit assessments are produced for each contract.

Construction tender price inflation or claims for extra cost already affecting scheme viability

} Scheme approval process considers professional cost advice and includes a construction cost sensitivity analysis.

} S106 schemes are contracted on the basis of a fixed package price.} Delivery framework panel is in place.} Consideration of HCA/GLA delivery partner panel.

Cannot achieve growth targets due to property market conditions

} Regular monitoring by Board.} Scheme appraisal criteria and growth & investment strategy reviewed annually.

Rules relating to RCGF utilisation restrict TVHA’s development activities and inhibit growth

} Financial performance of development programme against long-term plan is regularly monitored.

} Regular reports to HCA and GLA.} The long term plan has been amended to reflect a lower anticipated level of RCGF usage.

27

RISK CONTROLS

Increase in pension deficit following triennial review. Pension liability is a strategic risk: where shortfall in funding impacts on I&E account

} Provision for pension shortfall is recognised in Business Plan.} Expansion plans take account of the known deficit funding provision.} The defined benefit final salary scheme will be closed to future accrual from April 2016.

Woking PFI: risk of failure to meet construction and performance targets

}Detailed risk assessment completed and updated monthly.} Project mobilisation plan and staffing resources in place.} Progress will be subject to internal audit review in 2014/15.} Software developed with early warning flags for any standards falling below delivery

requirements.} Output specification and performance standards all mapped back to procedures,

reporting, IT workflows and day to day management.

Inability to grow affordable housing due to a lack of capacity and increased reliance on sales of existing social housing assets

} Business planning shows the group can continue with its affordable programme.} Working with local authorities on joint developments.

Rent inflation for social and affordable rented housing differs from business plan assumptions.

}Long-term financial plan stress-tested for both inflationary and deflationary macro-economic conditions.

28

FINANCIAL REVIEW

OVERVIEW AND HEADLINE RESULTS The year has seen a strong financial performance by the Group with a reported surplus of £20.3m (2014: £8.3m) delivered by an increase in net rental income, shared ownership first tranche sales and staircasing out-performing budget, and profits from joint ventures.

INCOME AND EXPENDITURE

Turnover at £88.2m increased by £6.2m, 8% over the previous year. Rental and service charge income increased by £3m to £68.6m (2014: £65.6m) due to a combination of additional housing units and the annual inflation based rent increases. Low cost home ownership sales increased by £2.6m to £10.2m (2014: £7.8m) helped by both strong demand and a rising market. This was matched by an increase in cost of sales of £1.4m.

Operating costs increased in the year by £6.9m and a significant part of this was £4.5m relating to expected costs of remedial work at selected key worker sites. Operating surplus of £30.2m (2014: £32.4m) was slightly lower due to increased operating costs.

The sale of fixed assets delivered a surplus of £7.5m from staircasing sales (2014: £3.8m), due to a high level of leaseholders staircasing in the year. Share of profits and losses in joint ventures of £2.9m (2014: £0.3m) increased in the year in part reflecting the first profit distribution from Opal schemes delivered in partnership with Galliford Try.

Net interest payable decreased by £3m from £23.3m in 2014 to £20.3m in 2015. 2014 included lending costs relating specifically to Fizzy Group which are not recurring in 2015. The actual average cost of borrowing reduced from 4.48% in 2014 to 4.39% in 2015.

In 2014, fees comprised a fee payable to advisors upon the successful raising of Silver Arrow’s £200m equity investment in the Fizzy Group, and associated costs.

Charitable donations paid in the year total £1k to The Connection at St Martin-in-the-Fields, a charity which supports homeless people. In 2014 a total of £50k was paid to Academy4Housing to support their training programme and £1k to SPEAR, a local charity supporting the homeless to find accommodation.

2015£'000

2014£'000

Turnover 88,150 82,015

Cost of Sales (7,666) (6,290)

Operating Costs (50,242) (43,340)

Operating Surplus 30,242 32,385

Operating Surplus as a percentage of Turnover (%) 34.3% 39.5%

Surplus on Sale of Fixed Assets 7,499 3,858

Net Interest Payable (20,318) (23,325)

Share In Results Of Joint Ventures and Associates 2,890 325

Surplus On Ordinary Activities Before Taxation 20,313 13,243

Surplus as a percentage of Turnover (%) 23.0% 16.1%

Fees Related to the introduction of Equity to a Group Entity – (4,924)

Charitable Donation Paid – (51)

Tax on Surplus on Ordinary Activities – –

Reported Surplus/(Deficit) on Ordinary Activities 20,313 8,268

29

BALANCE SHEET

2015£'000

2014£'000

Housing Properties at Cost 1,100,497 1,033,355

Social Housing Grant (410,312) (413,159)

Depreciation (64,020) (55,071)

Net Housing Properties 626,165 565,125

Fixed Asset Investments 26,135 32,933

Net Investments in Joint Ventures 29,385 31,111

Homebuy Equity Loans 66,005 74,811

Grant on Homebuy Equity Loans (54,413) (61,438)

Debt (572,944) (482,293)

Stock 19,614 15,923

Cash 59,510 41,563

Other 14,970 (23,805)

Net Assets 214,427 193,930

Reserves 214,427 193,930

Property Revaluation Gains 431,657 421,069

The total cost of our investment in housing properties increased by £67.1m in the year to £1,101m. £83.3m of new housing stock was added in the year (2014: £27.5m), with 781 new properties completed and 472 properties under construction at year end.

Offsetting the investment in new housing properties was a £16.2m decrease in fixed assets due to further equity staircasing sales of our Low Cost Home Ownership (LCHO) properties and other disposals. In the year 208 units of LCHO properties staircased (2014: 113 units). This increased rate of staircasing has continued so far in this new financial year.

Fixed Asset Investments comprise the Group’s net investment in the Fizzy Enterprises private rental group which at year end was owned 46% by TVHA and 54% by Silver Arrow.

Net Investments in Joint Ventures decreased from £31.1m to £29.4m. This movement represents the repayment of loans and further investments in partnerships.

Social Housing Grant decreased in the year by £2.8m to £410m from £413m, as grant was recycled.

Debt increased at March 2015 by £90m to £572m (2014: £482m) with new funding drawn from AHF (£25m), Legal & General (£40m) and EIB (£25m undrawn).

Reserves increased by £20m to £214m which taken together with our Property Revaluation Gains of £432m (2014: £421m) resulted in gearing of 47%, which is the same as for the prior year due to increased borrowing.

30

HOUSING ASSETSThe Group owns, manages and administers 15,077 homes in total.

CASHFLOWA summary of the cashflow for the year is set out in the table below.

2015 £’000

2014 £’000

Operating Cashflow (18,186) 39,755

Net Interest Paid (20,816) (24,017)

Property Sales 26,382 14,145

Housing Properties (78,742) (27,503)

Social Housing Grant Received 1,286 5,053

Other 17,372 (24,942)

Loans Received 93,655 –

Loans Repaid (3,004) (14,434)

Increase/(Decrease) in Cash 17,947 (31,943)

Operating Cashflow decreased by £57.9m from £39.8m primarily due to new loans drawn for which cash was held by lenders on a secured basis as at year-end. Overall, cash increased by £17.9m as a result of new funding to support the development programme.

Expenditure on construction and purchase of housing properties increased by £51.2m from £27.5m to £78.7m, a reflection of the acquisition of properties from Sovereign Housing

Significant items within other cash received of £17.4m include investments in joint ventures, fixed assets investments and Homebuy loans redeemed.

❚ General Rented & Other Housing❚ Shared Ownership❚ Key Worker Loans❚ Key Worker NHS❚ Leaseholder❚ Student Accommodation❚ Market & Intermediate Rent❚ Fizzy

31

TREASURY

The Group is financed by a combination of revenue reserves, long-term loan facilities and social housing grant received either directly from Government or from Recycled Capital Grant Fund. Over time, the generation of commercial profits will make an important contribution to the funding mix.

Group priorities are to ensure that there is sufficient cash and liquidity to fund operations in accordance with the Treasury Policy, to protect against the impact of adverse movements in interest rates, to ensure loan covenants are comfortably met, and to prioritise the preservation of capital over financial returns when making investment decisions.

LOAN STRUCTUREAt 31 March 2015 drawn loans totalled £573m, with undrawn loan facilities of £25m. Drawn loan facilities include £56m of funding drawn at year-end for which cash is held as secured deposits. The undrawn loan facilities are fully secured and available for drawing. Cash held by the Group at the year end totalled £59.5m (£28m in Thames Valley Housing Association, £31.5m in Thames Valley Charitable Housing Association), leaving net debt for the Group at £513.5m (2014: £446.3m).

TREASURY AND BALANCE SHEET All existing debt and loan facilities are held with Thames Valley Charitable Housing Association with the exception of a £40m loan with Legal and General which is held with Thames Valley Housing Association. Thames Valley Housing Association’s facilities contain no Group-wide loan covenants.

The Group has capacity to fund its development programme and will continue to develop shared ownership and invest in other affordable housing for the foreseeable future. This is expected to be financed through a combination of operating cash flow and new borrowing.

TOTAL DRAWN LOANS OF THAMES VALLEY HOUSING ASSOCIATION GROUP BY LENDERBarclays Bank is the main lender to Thames Valley Housing Association Group with drawn loans totalling £214.6m. The remaining loan finance debt has been provided by various banks and building societies and the European Investment Bank through The Housing Finance Corporation.

❚ Barclays❚ Santander UK❚ HBOS❚ Nationwide Building Society❚ Legal & General❚ THFC❚ Dexia❚ Newcastle Building Society❚ Others

32

DEBT REPAYMENT PROFILEThe weighted average duration of drawn debt for the Group is 16.6 years. The treasury strategy ensures that the Group does not have to refinance material amounts of debt in any one year so that capital repayments as a percentage of total committed facilities in any one year are not more than 10%. An analysis of the capital repayment profile is shown below:

CASH AND LIQUIDITY MANAGEMENTThe Group maintained significant cash balances throughout the year to provide adequate and ongoing funding for the development programme. The Group’s cash management strategy is to hold cash equivalent to six months’ net cash requirement (and cash and liquidity for eighteen months’ net cash requirement). Cash balances during the year were held in short term deposit accounts and AAA rated money market funds.

CURRENCY RISKThe Group borrows and invests surplus cash only in sterling and therefore does not have currency risk in its normal course of business.

COUNTERPARY RISKThe Group operates a conservative counterparty risk management strategy that aims to minimise the risk of a financial loss, reputational loss or liquidity exposure resulting from a counterparty to any treasury transaction becoming insolvent. As at 31 March 2015 all cash investments were held with counterparties who meet the criteria of the Group’s treasury policy, and are rated A-2 and above by Standard and Poor’s Ratings.

INTEREST RATE MANAGEMENTAt the financial year end, 83% of debt was fixed (2014: 86%). The fixed percentage is forecast to remain at 83% by April 2016. The Group has no exposure to derivative margin calls. The weighted average cost of borrowing in the year for the Group was 4.39% (2014: 4.48%).

Capital Repayments (£’m)

300 –

250 –

200 –

150 –

100 –

50 –

0 – I I I I IWithin one year Between one andfive years

Between five andten years

Between ten andtwenty years

Greater thantwenty years

33

LOAN COVENANT COMPLIANCEThere are no Group-wide loan covenant requirements. Covenants relate to specific loans for TVCHA and TVHA.

Compliance with financial covenants are monitored on a monthly basis, reported to the Board quarterly and were comfortably met throughout the year and at the year end for all loan facilities. At the year end compliance was as follows:

SURPLUS ASSETS FOR FUTURE DEBT SECURITYThere are currently 1,491 unsecured completed housing properties in Thames Valley Charitable Housing Association available for charging as security for new debt facilities (of which 479 are already charged to Prudential). This is sufficient to secure an additional £120m of future new debt on the basis of an asset cover ratio of 125%. Over the next three years circa 1,125 new properties from the current affordable development programme are expected to complete (which are expected to be funded by existing secured debt). These properties will be surplus security available for charging in the future.

FUTURE FUNDING OPTIONSAt 31 March 2015, £84.4m (2014: £131.6m) of finance was available to the Group, comprising of £25m (2014: £90m) undrawn facilities and £59.5m (2014: £41.5m) of cash. An additional £56m of funding was drawn at year-end for which cash was held as secured deposits. This provides sufficient funding over the next 18 months for all committed developments.

GOING CONCERNThe Board is satisfied that no material or significant exposures exist other than as reflected in these financial statements and that the Group has adequate resources to continue operations for the foreseeable future. For this reason the going concern basis has continued to be used in preparing the financial statements.

80% –

70% –

60% –

50% –

40% –

30% –

20% –

10% –

0 –

200% –

180% –

160% –

140% –

120% –

100% –

80% –

60% –

40% –

20% –

0 –I II I2014/152013/14 2014/152013/14

❚ Actual Gearing ❚ Maximum Gearing ❚ Actual interest cover ❚ Minimum interest cover

34

INTERNAL CONTROL

The Board has complied with and adopted the National Housing Federation’s “Code of Governance”. The Board has also adopted a Group Code of Conduct, which reflects the requirements set out in the National Housing Federation’s Code, “Excellence in Standards of Conduct: Code for Members”.

The Board has responsibility for ensuring that a whole system of internal control is established and maintained and for reviewing its effectiveness. The Board recognises that no system of internal control can provide absolute assurance or eliminate all risk. The system of internal control is designed to manage risk and to provide reasonable assurance that key business objectives and expected outcomes will be achieved. It also exists to give reasonable assurance about the preparation and reliability of financial and operational information and the safeguarding of the assets and interests. In meeting its responsibilities, the Board has adopted a risk-based approach to internal controls which are embedded within the normal management and governance process. This approach includes the regular evaluation of the nature and extent of risks to which the Group is exposed.

Regular management reporting on control issues provides assurance to successive layers of management and to the Board. The arrangements include rigorous procedures, monitored by the Group Audit and Risk Committee, for ensuring that corrective action is taken in relation to any significant control issue.

The internal control framework and risk management process are subject to regular review by Internal Audit who are responsible for providing independent assurance to the Board via the Group Audit and Risk Committee. The Group Audit and Risk Committee considers internal control and risk at its meetings during the year. The internal audit function is externally resourced and reports directly to the Group Audit and Risk Committee. The internal audit programme is linked to the risk identification process.

As part of the system of internal control the Board has a strategy and policy on fraud and bribery covering prevention, detection and reporting and the recovery of assets. The Group has a Money Laundering Officer.

The Board has received the Executive Directors’ annual report on internal controls assurance, including arrangements for managing fraud and bribery; the annual review of the effectiveness of the system of internal control from the Group Audit and Risk Committee; and the annual Health & Safety report and has taken account of any changes needed to maintain the effectiveness of the risk management and control process. The Board confirms that there is an ongoing process for identifying, evaluating and managing significant risks faced by the Group. This process has been in place throughout the year under review, up to the date of the annual report, and is regularly reviewed by the Board. No failings or weaknesses were identified and there were no significant reported cases of fraud and bribery recorded in the fraud and bribery register. There were no incidents of money laundering reported in the year.

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

} Identification and evaluation of key risksManagement responsibility has been clearly defined for the identification, evaluation and control of significant risks. There is a formal and ongoing process of management review in each area of the activities. This process is co-ordinated through a regular reporting framework by the Executive, Senior Management Team, Investment Management and Health & Safety Groups which regularly consider reports on significant risks facing the Group. The Chief Executive is responsible for reporting to the Board any significant changes affecting key risks. Board papers include a section on risk management implications. The Group Audit and Risk Committee has a responsibility to ensure that appropriate disaster recovery and contingency plans are in place and are tested regularly.

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} Monitoring and corrective actionA process of control self-assessment and regular management reporting on control issues provides hierarchical assurance to successive levels of management and to the Board. This includes a rigorous procedure for ensuring that corrective action is taken in relation to any significant control issues, particularly those with a material impact on the financial statements. The Group’s Audit and Risk Committee has responsibility for reviewing the Group’s risk management systems.

A Performance Monitoring Unit oversees the production of a reporting suite of information which covers key performance indicators used to monitor the business. Performance outcomes are given a traffic light assessment and management responses are formally recorded for required control action.

} Control environment and control proceduresThe Board retains responsibility for a defined range of issues covering strategic, operational, financial and compliance issues including treasury strategy and new investment projects. The Group follows risk-averse policies to shield it from adverse movements in interest rates. The Board disseminates its requirements to all employees through the Thames Valley Housing Group’s policies with regard to the quality, integrity and ethics of its employees. It is supported by a framework of policies and procedures with which all employees must comply. These cover issues such as delegated authority, segregation of duties, accounting, treasury management, health and safety, data and asset protection, the requirements of the Bribery Act, fraud prevention, and detection and money laundering. The Group Audit and Risk Committee receives and considers internal audit reports which include recommendations to strengthen the control environment. The Group Audit and Risk Committee receives twice a year a Risk Management Review Report from the Chief Executive. The Board also receives quarterly Risk Management Review reports. The Group Audit and Risk Committee reviews the proportionality, independence and appropriateness of the Group’s whistleblowing policy and follow up action. It also receives annually, a report on the entries in the gifts and hospitality register and any instance of fraud or suspected instances of money laundering.

The Group Investment Committee considers and makes investment decisions which require Board approval and which fall outside of the Board Meeting cycle. The Group Investment Committee has delegated authority to consider and approve the funding of approved projects.

} Information and financial reporting systemsFinancial reporting procedures include a detailed budget for the year ahead with a monthly reporting cycle that identifies variance and forecasts for subsequent years with a comprehensive Business Plan for the next 30 years. The Business Plan incorporates a detailed multivariate stress testing of the financial plan. These are reviewed and approved by the Board. The Board also regularly reviews key performance indicators to assess progress towards the achievement of key business objectives, targets and outcomes.

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The Board is responsible for preparing financial statements in accordance with applicable law and United Kingdom Generally Accepted Accounting Practice for each financial year, which gives a true and fair view of the state of affairs of the Association and the Group and of the surplus or deficit for that period. In preparing those 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 accounting standards 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 presume that the Association and the Group will continue in business.

The Board is responsible for keeping proper accounting records which disclose with reasonable accuracy at any time the financial position of the Association and the Group and to enable it to ensure that the financial statements comply with the Co-operative and Community Benefit Societies Act 2014, the Co-operative and Community Benefit Societies (Group Accounts) Regulations 1969, the Housing and Regeneration Act 2008, the Accounting Direction for Private Registered Providers of Social Housing 2012 and Applicable Accounting Standards with special regard to the Statement of Recommended Practice; Accounting by Registered Social Housing Providers Update 2010. It has general responsibility for taking reasonable steps to safeguard the assets of the Association and to prevent and detect fraud and other irregularities.

SHARE CAPITALThe non executive Board Members of TVHA and TVCHA each hold one fully paid share of £1 in each Association which carries no rights to dividends or other income. The Group Company Secretary and Executive Management hold no interest in the Association’s share capital.

AUDITORS

Each of the current Board Members has taken all of the steps that they ought to have taken to make themselves aware of information needed by the Association’s auditors for the purpose of their audit and to establish that the auditors are aware of that information. No Member of the Board is aware of any relevant audit information of which the auditors are unaware.

A resolution to reappoint BDO LLP as auditors to Thames Valley Housing Association Limited will be proposed at the next Annual General Meeting.

BY ORDER OF THE BOARD

DAVID CLAYTON-SMITHChair

Date: 23rd July 2015

STATEMENT OF BOARD RESPONSIBILITIES

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TO THE MEMBERS OF THAMES VALLEY HOUSING ASSOCIATION LIMITED

We have audited the financial statements of Thames Valley Housing Association Limited for the year ended 31 March 2015 which comprise the consolidated and association income and expenditure accounts, the consolidated and association statement of total recognised surpluses and deficits, the consolidated and association balance sheets, the consolidated cash flow statement and the related notes. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice).

This report is made solely to the association’s members, as a body, in accordance with the Housing and Regeneration Act 2008 and Section 87 of the Co-operative and Community Benefit Societies Act 2014. 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 AuditorsAs explained more fully in the statement of board member responsibilities, the board members are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view. Our responsibility is to audit and express an opinion on the financial statements in accordance with applicable law and International Standards on Auditing (UK and Ireland). Those standards require us to comply with the Financial Reporting Council’s (FRC’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 FRC’s website at www.frc.org.uk/auditscopeukprivate.

Opinion On Financial StatementsIn our opinion the financial statements:

} give a true and fair view of the state of the group’s and parent association’s affairs as at 31 March 2015 and of the group’s and parent association’s surplus for the year then ended;

} have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and

} have been prepared in accordance with the requirements of the Co-operative and Community Benefit Societies Act 2014, the Co-operative and Community Benefit Societies (Group Accounts) Regulations 1969, the Housing and Regeneration Act 2008 and the Accounting Direction for Private Registered Providers of Social Housing 2012.

Matters On Which We Are Required To Report By ExceptionWe have nothing to report in respect of the following matters where we are required to report to you if, in our opinion:

} the information given in the Report of the Board for the financial year for which the financial statements are prepared is not consistent with the financial statements;

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

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

} the parent association financial statements are not in agreement with the accounting records and returns; or

} we have not received all the information and explanations we require for our audit.

BDO LLP, statutory auditorLondonUnited Kingdom

Date: 28th July 2015

BDO LLP is a limited liability partnership registered in England and Wales (with registered number OC305127).

NOTES ON THE FINANCIAL STATEMENTS } YEAR ENDED 31 MARCH 201538

STATEMENT OF TOTAL RECOGNISED SURPLUSES AND DEFICITS

INCOME AND EXPENDITURE ACCOUNT Group Association

Note 2015 2014 2015 2014 £’000 £’000 £’000 £’000

TURNOVER 2 88,150 82,015 46,793 36,267

Cost Of Sales 2 (7,666 (6,290 (17,072 (14,750

Operating Costs 2 (50,242 (43,340 (25,394 (17,252

OPERATING SURPLUS 30,242 32,385 4,327 4,265

Surplus/(Deficit) On Sale Of Fixed Assets 4 7,499 3,858 228 11

Share Of Profits/(Losses) Of Joint Ventures 28 2,902 354 – –

Share Of Losses Of Associates (12 (29 – –

Interest Receivable 7 1,616 1,512 1,473 1,341

Interest Payable 8 (21,934 (24,837 (1,657 (1,028

SURPLUS ON ORDINARY ACTIVITIES 9 20,313 13,243 4,371 4,589

Fees Related To The Introduction Of Equity To A Group Entity – (4,924 – (4,924

Surrender Of Loan Balance To Subsidiary – – – (2,141

Charitable Donation Paid 28 – (51 (7,494 (51

Tax On Surplus On Ordinary Activities 10 – – – (3,304

REPORTED SURPLUS/(DEFICIT) ON ORDINARY ACTIVITIES 22 20,313 8,268 (3,123 (5,831

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All amounts relate to continuing activities. There is no difference between the results disclosed in the Income and Expenditure accounts and those on an unmodified historical cost basis.

The notes on pages 41 to 74 form part of these financial statements.

Group Association

Note 2015 2014 2015 2014 £’000 £’000 £’000 £’000

REPORTED SURPLUS/(DEFICIT) ON ORDINARY ACTIVITIES 20,313 8,268 (3,123 (5,831

Surplus/(Deficit) On Revaluation Of Investment Properties 13 184 531 4 (31

Total Surplus/(Deficit) Recognised For The Year 20,497 8,799 (3,119 (5,862

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FINANCIAL STATEMENTS } YEAR ENDED 31 MARCH 2015

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NOTES ON THE FINANCIAL STATEMENTS } YEAR ENDED 31 MARCH 2015

BALANCE SHEET Group Association

Note 2015 2014 2015 2014 £’000 £’000 £’000 £’000 FIXED ASSETS

Housing Properties At Cost 11 1,100,497 1,033,355 87,820 94,573

Social Housing Grant 11 (410,312 (413,159 (4,599 (9,386

Depreciation 11 (64,020 (55,071 (1,764 (1,037 626,165 565,125 81,457 84,150

Fixed Asset Investments 11 26,135 32,390 – – Investments In Joint Ventures:

Share Of Gross Assets 28 63,555 36,518 – –

Share Of Gross Liabilities 28 (34,170 (5,407 – –

Other Fixed Assets 13 11,807 10,861 7,583 6,886

Homebuy Equity Loans Advanced 14 66,005 74,811 – –

Grant Received On Homebuy Equity Loans 14 (54,413 (61,438 – –

705,084 652,860 89,040 91,036

CURRENT ASSETS

Stock 15 19,614 15,923 56,946 34,320

Debtors:

Amounts Receivable Within One Year 16 66,435 7,000 58,392 35,352

Amounts Receivable After One Year 16 5,712 964 7,687 2,940

Cash At Bank And In Hand 59,510 41,563 27,935 5,613

151,271 65,450 150,960 78,225

CREDITORS

Amounts Falling Due Within One Year 17 (43,325 (28,148 (91,495 (64,873

NET CURRENT ASSETS 107,946 37,302 59,465 13,352

TOTAL ASSETS LESS CURRENT LIABILITIES 813,030 690,162 148,505 104,388

CREDITORS

Amounts Falling Due After More Than One Year 17 598,603 496,232 47,560 324

CAPITAL AND RESERVES

Non-Equity Share Capital 21 – – – –

Revenue Reserve 22 211,775 191,462 100,764 103,887

Investment Property Revaluation Reserve 22 2,652 2,468 181 177

813,030 690,162 148,505 104,388

These financial statements were approved and authorised for issue by the Board on 23 July 2015 and signed on its behalf by:

DAVID CLAYTON-SMITH BRIAN HENDON JULIAN TURNER PATRICIA ETTER Chair Chair, Group Audit & Risk Committee Finance Director Group Company Secretary

The notes on pages 41 to 74 form part of these financial statements.

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FINANCIAL STATEMENTS } YEAR ENDED 31 MARCH 2015

NOTES ON THE FINANCIAL STATEMENTS } YEAR ENDED 31 MARCH 201540

2015 2014

Note £’000 £’000 £’000 £’000

NET CASH (OUTFLOW)/INFLOW FROM OPERATING ACTIVITIES 23 (18,186) 39,755

RETURNS ON INVESTMENTS AND SERVICING OF FINANCE

Interest Received 2,244 906

Interest Paid (23,060) (24,923)

(20,816) (24,017)

(39,002) 15,738

CAPITAL EXPENDITURE AND FINANCIAL INVESTMENT

Proceeds From Sales Of Low Cost Home Ownership Subsequent Tranches And Right To Buy/Acquire 26,382 14,145

Construction And Purchase Of Housing Properties (78,742) (27,503)

Reduction Of Fixed Assets Investment 6,786 (32,962)

Purchase Of Other Fixed Assets (2,236) (25,333)

Disposal Of Other Fixed Assets 16 48,146

Social Housing Grant Received 1,286 5,053

Homebuy Loans Advanced (1) (260)

Homebuy Loans Redeemed 8,807 7,657

Investment In Joint Ventures 4,000 (22,190)

NET CASH OUTFLOW FROM CAPITAL EXPENDITURE AND FINANCIAL INVESTMENT (33,702) (33,247)

CASH OUTFLOW BEFORE FINANCING (72,704) (17,509)

FINANCING

Loans Received 93,655 –

Loans Repaid (3,004) (14,434)

NET CASH INFLOW/(OUTFLOW)FROM FINANCING 23 90,651 (14,434)

INCREASE/(DECREASE)IN CASH IN THE YEAR 23 17,947 (31,943)

The notes on pages 41 to 74 form part of these financial statements.

CONSOLIDATED CASH FLOW STATEMENT

FINANCIAL STATEMENTS } YEAR ENDED 31 MARCH 2015

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NOTES ON THE FINANCIAL STATEMENTS } YEAR ENDED 31 MARCH 2015

1. PRINCIPAL ACCOUNTING POLICIESThe financial statements have been prepared under the historical cost convention, as modified by the revaluation of investment properties, and in accordance with:

}The Co-operative and Community Benefit Societies Act 2014

}The Co-operative and Community Benefit Societies Act (Group Accounts) 2014.

}The Accounting Direction for Private Registered Providers of Social Housing 2012.

}Applicable Accounting Standards with special regard to the Statement of Recommended Practice; Accounting by Registered Social Housing Providers Update 2010.

Joint Ventures An entity is treated as a joint venture where the group holds a long-term interest and shares control under a contractual arrangement.

In the group accounts, interests in joint ventures are accounted for using the gross equity method of accounting. The consolidated income and expenditure account indicates the group’s share of the joint venture’s turnover and includes the group’s share of the operating results, interest, pre-tax results and attributable taxation of such undertakings based on audited financial statements. In the consolidated balance sheet, the group’s share of the identifiable gross assets (including any unamortised premium paid on acquisition) and its share of the gross liabilities attributable to its joint ventures are shown separately.

AssociatesAn entity is treated as an associated undertaking where the group has a participating interest and exercises significant influence over its operating and financial policy decisions.

In the group accounts, interests in associated undertakings are accounted for using the equity method of accounting. The consolidated income and expenditure account includes the group’s share of the operating results, interest, pre-tax results and attributable taxation of such undertakings based on audited financial statements. In the consolidated balance sheet, the interests in associated undertakings are shown as the group’s share of the identifiable net assets, including any unamortised premium paid on acquisition.

Investments in Subsidiaries Investments in subsidiaries are shown at cost.

Basis of ConsolidationThe consolidated accounts comprise the financial statements of Thames Valley Housing Association Limited and its subsidiary undertakings as listed in Note 28. Intra-group transactions are eliminated on consolidation. The consolidated financial statements have been prepared in accordance with FRS2 “Accounting for Subsidiary Undertakings”.

TurnoverTurnover represents rental income receivable (after deducting lost rent from void properties available for letting), first tranche sales of Low Cost Home Ownership housing properties developed for sale, service charges receivable, income from Homebuy activities, revenue grants from the HCA and proceeds from the sale of land and property.

Housing PropertiesHousing properties in the course of construction are stated at cost, and included in fixed assets. Properties under construction are transferred to completed housing properties when they are ready for letting.

If housing properties are being developed on behalf of other associations outside the Group under agency arrangements, the costs concerned are dealt with under current assets as properties held for resale.

Completed housing properties are stated at cost.

Separate disclosure of a valuation of the housing properties based on Existing Use Value for Social Housing (EUV-SH) and Market Value (MV) is also provided in note 12 on the financial statements.

Housing properties are subject to annual impairment reviews. This has been done on a portfolio basis in accordance with the way these properties are managed.

If housing properties have suffered impairment, the fall in value to the recoverable amount is recognised in the income and expenditure account after deducting any related Social Housing Grant.

Shared Ownership PropertiesUnder Shared Ownership arrangements, the Group disposes of a long lease to the occupier; the lease premium paid is for between 25% and 75% of the value. The occupier has the right to purchase further proportions up to 100%. A shared ownership property comprises two assets: that to be disposed of in the first tranche sale, which is recorded as a current asset and stated at the lower of cost and net realisable value; and that retained by the Group, which is recorded as a fixed asset in the same manner as for general needs housing properties held for rental.

Proceeds of sale for first tranches are accounted for as turnover in the income and expenditure account, with the apportioned cost being shown as cost of sales within operating results. Subsequent tranches sold (“staircasing”) are reflected in the income and expenditure account as a surplus or deficit on sale of fixed asset housing properties.

Shared Ownership properties are not depreciated.

NOTES ON THE FINANCIAL STATEMENTS } YEAR ENDED 31 MARCH 201542

Market Rented PropertiesMarket rented properties held as investments are revalued annually. Any excess deficit over cost is realised through the income and expenditure account to the extent that this represents a permanent diminution in value of the property. No depreciation is provided in respect of Market Rented Properties.

Pre-Contract CostsPre-contract costs are recognised as an asset only if they are directly attributable to specific contracts, can be separately identified, measured reliably and when there is virtual certainty that a contract will be obtained and is expected to result in future net cash inflows.

Government GrantsGovernment Grants (grant) are paid by the Homes and Communities Agency (HCA) or Greater London Authority (GLA) to subsidise the cost of housing properties and are included in fixed assets. Grant is repayable unless formally abated and waived although it can be recycled. Grant is recycled on disposal of a property and is credited to a Recycled Capital Grant Fund, which is included as a creditor due within one year or due after more than one year, as appropriate. If the Recycled Capital Grant Fund is not used within a three year period in principle it becomes repayable.

Grant which is received in advance of development costs being incurred is shown as a current liability.

Grants of a revenue nature are credited to the income and expenditure account in the period to which they relate.

Homebuy Equity Loans and Related GrantsLoans advanced by the Group are disclosed in the tangible fixed asset section of the balance sheet with the associated SHG.

The Group has advanced two types of Homebuy Equity Loans, “Open Market Homebuy” and “MyChoice Homebuy”. Under Open Market Homebuy, the Group received grant representing a percentage of the open market purchase price of a property in order to advance interest free loans of the same amount to a homebuyer. The homebuyer met the balance of the purchase price from a combination of personal mortgage and their own resources.

Under MyChoice Homebuy, the Association also issued a loan representing a percentage of the open market purchase price of the properties. 50% of this loan is funded from the Association’s own resources and the balance is funded by grant.

In the event that the property is sold, the Group recovers the equivalent loaned percentage value of the property at the time of the sale. The grant becomes recyclable when the loans are repaid up to the amount of the original grant and to the extent the proceeds permit. The Group is able to retain any surplus proceeds less sale costs attributable to the equivalent loaned percentage share of the value of the property. If there is a fall in the value of the property the shortfall of proceeds is offset against the grant. In the case of Open Market Homebuy, the Group can suffer no capital loss whereas in the case of MyChoice Homebuy, the Group could incur a loss if the shortfall exceeds the abated grant.

Finance CostsFinance costs are charged to the income and expenditure account over the term of the debt so that the amount charged is at a constant rate on the carrying amount. Finance costs include issue costs, which are initially recognised as a reduction in the proceeds of the associated capital instrument.

Finance costs are capitalised in housing properties under construction up to the date of practical completion using a weighted average cost of borrowing.

Expenditure On Completed PropertiesHousing properties have been split between their land and structure costs and a specific set of major components which require periodic replacement. The costs of replacement or refurbishment of such components are capitalised, and depreciated over the estimated useful economic lives of the components (excluding land and grant) at the following rates:

Kitchens 20 years

Bathrooms 30 years

Electrics and Plumbing 30 years

Doors 40 years

Lifts 20 years

Boilers 15 years

Windows 30 years

Roofs 80 years

Common parts 25 years

Structure 125 years Key Worker and Student property components are depreciated in accordance with lifecycles specific to contractual obligations with NHS Trusts and educational bodies.

Other Fixed AssetOther fixed asset depreciation is charged on a straight-line basis over the expected useful economic lives of the assets to write off the cost less estimated residual values at the following annual rates:

Office furniture and equipment 25%

Computer Hardware 33%

Computer Software 14%

Key workers and Student Accommodation furnishing and equipment 25%

Leasehold Improvements Over the lease period

Investment propertiesIn accordance with SSAP 19, investment properties are revalued annually to open market value and no depreciation is provided.

The aggregate surplus or deficit arising on revaluation is transferred to the revaluation reserve except where a deficit is deemed to represent a permanent diminution in value, in which case it is charged to the income and expenditure account.

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NOTES ON THE FINANCIAL STATEMENTS } YEAR ENDED 31 MARCH 2015

Stock and Work in ProgressUnder Right to Buy and Right to Acquire arrangements the Group sells properties to qualifying tenants. Surpluses and deficits arising are included in the surplus on sale of fixed assets in the income and expenditure account.

Stock and work in progress includes properties developed on behalf of subsidiary undertakings and other Registered Providers of Social Housing under grant agency arrangements.

Where properties have been developed on behalf of subsidiary undertakings, these assets are shown within stock and work in progress in the Association’s accounts but transferred to fixed assets on consolidation.

Stock and work in progress is stated at the lower of cost and net realisable value (NRV). NRV is based on the actual or estimated selling price less all further costs to completion and to be incurred in marketing, selling and distribution. Assessing NRV requires use of estimation techniques. In making this assessment, management considers publicly available information and internal forecasts of future sales activity.

In respect of Low Cost Home Ownership properties the cost figure shown within stock and work in progress is that apportioned to the first tranche sales element of the asset, based initially on scheme appraisals and updated where necessary.

Land Where land has been acquired it is held within current assets and carried at the lower of cost and net realisable value. Any write downs to net realisable value are included in cost of sales.

TaxationThe charge for taxation is based on the surplus for the year and takes into account taxation deferred.

Deferred tax balances are recognised in respect of all timing differences that have originated but not reversed by the balance sheet date except that:

}deferred tax is not recognised on timing differences arising on revalued properties unless the group has entered into a binding sale agreement and is not proposing to take advantage of rollover relief; and

}the recognition of deferred tax assets is limited to the extent that the group anticipates making sufficient taxable surpluses in the future to absorb the reversal of the underlying timing differences.

Recycled Capital Grant Fund and Disposal Proceeds FundFollowing certain relevant events, primarily the sale of dwellings, the Homes and Communities Agency (HCA) can direct the Group to recycle grant or to repay the recoverable capital grant back to the HCA. Where the grant is recycled the recoverable capital grant is credited to a Recycled Capital Grant Fund where it can remain for up to three years. Where the sale of dwellings arises under the Right to Acquire, the proceeds after deducting appropriate costs are credited

to a Disposal Proceeds Fund, where it can remain for up to three years. These funds are included as creditors due within one year or due after more than one year as appropriate to the circumstances.

Pension CostsThe Association participates in the industry-wide, multi-employer Social Housing Pension Scheme which is a defined benefit pension scheme. Retirement benefits to employees of the Association are funded by contributions from the Association and employees participating in the scheme. Payments are made to a fund administered by the Pensions Trust, an independent trust providing superannuation benefits for employees of a number of organisations. These payments are made in accordance with periodic calculations by consulting actuaries and are based on pension costs applicable across the various participating employers taken as a whole. The expected cost to the Association of pension contributions is charged to the income and expenditure account so as to spread the cost of pensions over the service lives of employees.

ProvisionsThe Group only provides for legal or contractual liabilities and constructive obligations which exist at the balance sheet date. The provisions are assessed at each Balance Sheet date in order to ensure that they are measured at the current best estimate at the balance sheet date of the expenditure required to settle the obligation.

Leased assetsRentals payable under operating leases are charged to the Income and Expenditure account on a straight line basis over the term of the lease

Leasing agreements that transfer to the Group substantially all of the benefits and risks of ownership of an asset are treated as finance leases and are capitalised as if they had been purchased outright within fixed assets. The asset and corresponding lease liability are initially recognised at the present value of the minimum lease payments. Subsequently, the finance lease liability is carried at amortised cost using the ‘effective interest method’, which allocates the interest expense over the period to maturity at a constant rate on the balance of the liability. The finance lease asset is depreciated in accordance with fixed asset depreciation policy.

VATA large proportion of the Group’s turnover comprises rental income which is exempt for VAT purposes and gives rise to a partial exemption claim. Expenditure is therefore shown inclusive of VAT. Recoverable VAT arising from partially exempt activities is credited to the income and expenditure account and is included under Other Social Housing Activities in Note 2.

Leasehold Sinking FundsUnexpended amounts collected from leaseholders for major repairs on leasehold schemes are included in creditors.

NOTES ON THE FINANCIAL STATEMENTS } YEAR ENDED 31 MARCH 201544

2. TURNOVER, COST OF SALES, OPERATING COSTS AND OPERATING RESULTS – GROUP

2015 2014

Turnover Cost of Operating Operating Turnover Cost of Operating Operating Sales Costs Surplus/ Sales Costs Surplus/ (Deficit) (Deficit) £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000

Social Housing Lettings (Note 3) 68,647 – (39,312) 29,335 65,652 – (32,523) 33,129

First Tranche Low Cost Home Ownership Sales 10,179 (7,666) – 2,513 7,782 (6,290) – 1,492

Income From Homebuy Loans 2,381 – – 2,381 979 – – 979

Right To Buy Leaseholder Activities 323 – (48) 275 330 – (561) (231)

Group Operating And Policy Costs – – (5,345) (5,345) – – (4,875) (4,875)

Property Development Costs – – (423) (423) – – (223) (223)

Other Social Housing Activities* 3,474 – (942) 2,532 2,753 – (1,225) 1,528

Non Social Housing Activities 3,146 – (4,172) (1,026) 4,519 – (3,933) 586

88,150 (7,666) (50,242) 30,242 82,015 (6,290) (43,340) 32,385

* This includes Social Housing Grant taken to income of £45k (2014: £113k). A net impairment charge of £358K is included in Operating Costs in 2015 (2014: £340k reversal of impairment charge).

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NOTES ON THE FINANCIAL STATEMENTS } YEAR ENDED 31 MARCH 2015

2. TURNOVER, COST OF SALES, OPERATING COSTS AND OPERATING RESULTS – ASSOCIATION

2015 2014

Turnover Cost of Operating Operating Turnover Cost of Operating Operating Sales Costs Surplus/ Sales Costs Surplus/ (Deficit) (Deficit) £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000

Social Housing Lettings (Note 3) 7,722 – (8,560) (838) 4,308 – (2,015) 2,293

First Tranche Low Cost Home Ownership Sales 10,179 (7,666) – 2,513 7,782 (6,290) – 1,492

Low Cost Home Ownership Sales 8,010 (5,895) – 2,115 9,629 (8,460) – 1,169

Outright Sales 3,890 (3,511) – 379 – – – –

Group Operating And Policy Costs – – (2,661) (2,661) – – (2,164) (2,164)

Development Services To Subsidiary 1,599 – (1,599) – 1,288 – (1,288) –

Property Development Costs – – (423) (423) – – (223) (223)

Other Social Housing Activities* 11,949 – (10,744) 1,205 12,207 – (10,764) 1,443

Non-Social Housing Activities 3,444 – (1,407) 2,037 1,053 – (798) 255

46,793 (17,072) (25,394) 4,327 36,267 (14,750) (17,252) 4,265

* Turnover includes Social Housing Grant taken into income of £4k (2014: £65k). A £172k reversal of impairment charges has been credited to Operating Costs in 2015 (2014: £340k reversal of impairment charges).

NOTES ON THE FINANCIAL STATEMENTS } YEAR ENDED 31 MARCH 201546

3. INCOME FROM AND EXPENDITURE ON SOCIAL HOUSING LETTINGS – GROUP

Rented Low Cost Key Worker Supported Total Total Properties Home Accommodation Housing 2015 2014 Ownership £’000 £’000 £’000 £’000 £’000 £’000

Rents Receivable 35,735 15,872 6,457 94 58,158 55,207

Service Charges Receivable 2,771 4,046 3,658 14 10,489 10,445

Net Rental Income 38,506 19,918 10,115 108 68,647 65,652

Expenditure On Social Housing Lettings

Management 3,306 753 886 1 4,946 4,036

Services 5,545 3,668 2,027 35 11,275 10,029

Routine Maintenance 5,353 706 685 11 6,755 6,339

Gas Servicing Contract 1,214 7 111 – 1,332 1,108

Major Repairs Expenditure 586 270 395 – 1,251 1,068

Bad Debts Provision (519) (515) (82) (10) (1,126) 369

Latent defects – 676 3,843 – 4,519 -

Depreciation Of Housing Properties 7,041 – 2,273 58 9,372 9,045

Impairment Provision – 358 – – 358 –

Other Costs 502 44 83 1 630 529

Operating Costs On Social Housing Lettings 23,028 5,967 10,221 96 39,312 32,523

Operating Surplus On Social Housing Lettings 15,478 13,951 (106) 12 29,335 33,129

Void Losses 123 2 94 – 219 302

Expediture To Works On Housing Properties

Amounts Expensed To The Income And Expenditure Account 1,251 1,068

Amounts Capitalised In Fixed Asset Housing Properties 4,309 3,984

5,560 5,052

47

NOTES ON THE FINANCIAL STATEMENTS } YEAR ENDED 31 MARCH 2015

3. INCOME FROM AND EXPENDITURE ON SOCIAL HOUSING LETTINGS – ASSOCIATION

Rented Low Cost Key Worker Total Total Properties Home Accommodation 2015 2014 Ownership £’000 £’000 £’000 £’000 £’000

Rents Receivable 654 979 3,688 5,321 3,056

Service Charges Receivable – 235 2,166 2,401 1,252

Net Rental Income 654 1,214 5,854 7,722 4,308

Expenditure On Social Housing Lettings

Management 121 65 445 631 306

Services 30 214 1,220 1,464 1,028

Routine Maintenance 31 36 413 480 286

Major Repairs Expenditure 9 11 153 173 71

Bad Debts Provision 3 (7) (18) (22) 24

Depreciation Of Housing Properties 255 – 1,763 2,018 286

Impairment Provision – 358 – 358 –

Other Costs 257 – (2) 255 14

Latent Defects – – 3,203 3,203 –

Operating Costs On Social Housing Lettings 706 677 7,177 8,560 2,015

Operating Surplus On Social Housing Lettings (52) 537 (1,323) (838) 2,293

Void Losses 9 1 10 20 24

Expenditure To Works On Housing Properties

Amounts Expensed To The Income And Expenditure Account 173 71

Amounts Capitalised In Fixed Asset Housing Properties 35 45

208 116

NOTES ON THE FINANCIAL STATEMENTS } YEAR ENDED 31 MARCH 201548

4. SURPLUS ON SALE OF FIXED ASSETS 2015 2014 Group £’000 £’000

Completed Housing Properties And Other Fixed Assets

Proceeds Of Sale Of Housing Property Assets 27,177 14,750

Costs of Sale Of Housing Property Assets (18,446) (10,771)

Abated Grant (414) 484

8,317 4,463

Incidental Selling Costs And Attributable Overheads (818) (605)

Surplus On Sale Of Fixed Assets 7,499 3,858

2015 2014 Association £’000 £’000

Completed Housing Properties And Other Fixed Assets

Proceeds Of Sale Of Housing Property Assets 2,100 919

Attributable Net Book Value Of Housing Property Assets (1,798) (966)

Abated Grant (51) 60

251 13

Incidental Selling Costs And Attributable Overheads (23) (2)

Surplus/(Deficit) On Sale Of Fixed Assets 228 11

49

NOTES ON THE FINANCIAL STATEMENTS } YEAR ENDED 31 MARCH 2015

5. DIRECTORS’ REMUNERATION AND EXPENSES – GROUP AND ASSOCIATION

For the purpose of this note, the Directors are the Board Members and the Executive Management as shown on pages 10 to 12. 2015 2014 £’000 £’000

Aggregate Emoluments Payable To The Executive Management (Including Pension Contributions And Benefits In Kind) 865 715

Aggregate Emoluments And Expenses Payable To The Non-Executive Directors:

Group 70 76

Association 70 64

Emoluments Payable To The Highest Paid Director, (Excluding Pension Contributions) Were As Follows:

Salary Including Benefits In Kind 189 167

The Chief Executive is a member of the SHPS Pension Scheme and no special arrangements apply. No further contributions are made in respect of any other pension arrangements of the Chief Executive.

2015 2014 £’000 £’000

Total Expenses Reimbursed To The Directors Not Chargeable To United Kingdom Income Tax:

Group 8 6

Association 8 6

Individual Emoluments Paid To The Non Executive Directors

Thames Valley Housing Association Limited 2015 2014

Current Board Members £ £

Emma Cariaga 8,500 7,500

Ben Denton 7,338 5,000

Brian Hendon 8,500 8,000

Paul Bridge 2,800 –

David Clayton Smith 15,000 –

Kathryn Davis 4,125 –

Past Board Members

John Garrity 4,000 12,000

Maggie Rafalowicz 1,375 5,000

Frank Nelson 8,500 5,000

David Smith 2,172 5,000

Peter Williams 4,474 8,000

Steve McAllister 2,000 –

Ken Robinson 2,000 –

Non Executive Directors remuneration constituted 0.1% of Group turnover.

NOTES ON THE FINANCIAL STATEMENTS } YEAR ENDED 31 MARCH 201550

6. EMPLOYEE INFORMATIONThe average number of employees (including the Executive Management) of the Group during the year expressed in full time equivalents based on a standard 35 hour working week was:

2015 2014 Number Number

Employees 240 211

Employee Costs (For The Above Persons): £’000 £’000

Wages And Salaries 9,434 8,009

Social Security Costs 918 761

Pension Costs (See Note 24) 1,094 920

11,446 9,690

Capitalised Salaries (348) (283)

11,098 9,407

Higher Paid EmployeesThe full time equivalent number of staff whose remuneration, including pension contributions, fell within each band of £10,000 from £60,000 upwards was: 2015 2014 Number Number £ £

210,001 – 220,000 2 –

200,001 – 210,000 – –

190,001 – 200,000 – –

180,001 – 190,000 – 1

170,001 – 180,000 – –

160,001 – 170,000 1 –

150,001 – 160,000 – 1

140,001 – 150,000 2 1

130,001 – 140,000 – –

120,001 – 130,000 – 1

110,001 – 120,000 2 1

100,001 – 110,000 2 3

90,001 – 100,000 4 5

80,001 – 90,000 5 3

70,001 – 80,000 6 3

60,000 – 70,000 10 4

34 23

51

NOTES ON THE FINANCIAL STATEMENTS } YEAR ENDED 31 MARCH 2015

Group Association

2015 2014 2015 2014 £’000 £’000 £’000 £’000

Interest Receivable On Deposits 256 209 52 98

Interest Receivable From Subsidiaries – – 1,421 1,243

Interest Receivable From Joint Ventures – 606 – –

Interest Receivable From Associates 762 63 – –

Other Interest 598 634 – –

1,616 1,512 1,473 1,341

7. INTEREST RECEIVABLE

8. INTEREST PAYABLE Group Association

2015 2014 2015 2014 £’000 £’000 £’000 £’000

On Bank Loans, Overdrafts And Other Loans:

Repayable Wholly Or Partly In More Than 5 Years 23,019 25,200 120 –

Interest Payable To Subsidiary Undertaking – – 2,298 1,182

Interest Payable And Accrued To The Recycled Capital Grant

Fund And Disposal Proceeds Fund 130 81 22 28

23,149 25,281 2,440 1,210

Interest Capitalised In Housing Property Costs (1,215) (444) (783) (182)

21,934 24,837 1,657 1,028

Interest is capitalised at a weighted average rate of 4.39% (2014: 4.48%) on the Group borrowing portfolio. Interest is capitalised at a rate of 5.00% on any Association borrowing from the subsidiary undertaking.

NOTES ON THE FINANCIAL STATEMENTS } YEAR ENDED 31 MARCH 201552

Group Association

2015 2014 2015 2014 Note £’000 £’000 £’000 £’000

Is Stated After Charging:

Depreciation 11, 13 11,523 11,167 3,434 1,668

Operating Lease Charges:

Land And Buildings 941 930 941 930

Other 170 151 170 151

Auditor’s Remuneration Excluding VAT:

In Its Capacity As External Auditors 60 69 27 26

In Respect Of Other Services:

Service Charge Audit Fees 73 72 – –

Tax Advice 66 114 66 114

Auditor’s remuneration is exclusive of VAT and related expenses.

9. SURPLUS ON ORDINARY ACTIVITIES BEFORE TAX

10. TAXATION

No direct charge to corporation tax arises on the results for the year (2014: £nil).

The current tax charge for the year differs to the standard rate of corporation tax in the United Kingdom of 21% (2014: 23%). The differences are explained below.

Group Association

2015 2014 2015 2014 £’000 £’000 £’000 £’000

Surplus/(Deficit) Per Accounts 20,313 13,243 (3,123) 4,589

Tax On Surplus/(Deficit) At Standard Rate Of Corporation Tax Of 21% (2014: 23%) 4,266 3,046 (656) 1,055 Effects Of:

Expenses And Provisions Not Deductible For Tax Purposes 13,395 572 1,179 572

Income Not Taxable For Tax Purposes (17,953) – (630) –

Differences Between Chargeable Gain And Surplus On Disposal – (887) – –

Capital Allowances In Excess of Depreciation (166) (282) (166) (282)

Group Relief Surrendered/(Claimed) – (760) (376) (760)

Utilisation of Losses Brought Forward (182) (508) – (508)

Other Timing Differences 21 (77) 21 (77)

Charitable Income – (1,104) – –

Unrelieved Tax Losses and Other Deductions Arising In The Period 326 – 111 –

Profit From Share In Partnership 915 – 628 –

Loss from Share in Partnership (622) – (111) –

– – – –

In 2014 the Association paid £3,304k to its subsidiary, TVHA Fizzy Holdings Limited, for tax losses paid at £1 for every £1 of losses.

53

NOTES ON THE FINANCIAL STATEMENTS } YEAR ENDED 31 MARCH 2015

11. TANGIBLE FIXED ASSETS – HOUSING PROPERTIES – GROUP

KEY WORKER RENTED PROPERTIES LOW COST HOME ACCOMMODATION OWNERSHIP

Completed Completed Under Completed Under Total Properties Held Properties Held Construction Properties Construction For Letting For Letting

Cost £’000 £’000 £’000 £’000 £’000 £’000

At 1 April 2014 99,350 602,751 20,039 304,000 7,215 1,033,355

Additions:

Acquisitions – 41,466 – 3,482 – 44,948

New Developments – – 16,138 – (12,413) 3,725

Works To Existing Properties 642 3,179 – 859 29,948 34,628

Schemes Completed – 19,894 (19,894) 8,819 (8,819) –

Change Of Tenure – (10,940) – 10,940 – –

Disposals:

Staircasing Sales – – – (13,978) – (13,978)

Right To Buy/Right to Acquire – (331) – – – (331)

Components Written Off (494) (1,356) – – – (1,850)

At 31 March 2015 99,498 654,663 16,283 314,122 15,931 1,100,497

Less: Social Housing Grant

At 1 April 2014 – 303,401 9,921 94,328 5,509 413,159

Social Housing Grant Received – 444 649 378 390 1,861

Social Housing Grant Recycled – 160 – – – 160

Schemes Completed – 6,701 (6,701) 1,556 (1,556) –

Change Of Tenure – (4,294) – 4,294 – –

Disposals:

Staircasing Sales – – – (4,592) – (4,592)

Right To Buy/Right To Acquire – (88) – – – (88)

Components Written Off – (82) – – – (82)

Eliminated On Disposal – (106) – – – (106)

At 31 March 2015 – 306,136 3,869 95,964 4,343 410,312

Less: Depreciation

At 1 April 2014 13,484 41,587 – – – 55,071

Charge For Year 3,018 7,058 – – – 10,076

Components Written Off (195) (30) – – – (225)

Eliminated On Disposal – (902) – – – (902)

At 31 March 2015 16,307 47,713 – – – 64,020

Net Book Value

At 31 March 2015 83,191 300,814 12,414 218,158 11,588 626,165

At 31 March 2014 85,866 257,763 10,118 209,672 1,706 565,125

NOTES ON THE FINANCIAL STATEMENTS } YEAR ENDED 31 MARCH 201554

11. TANGIBLE FIXED ASSETS – HOUSING PROPERTIES – ASSOCIATION

KEY WORKER RENTED PROPERTIES LOW COST ACCOMMODATION HOME OWNERSHIP

Completed Properties Completed Properties Completed Properties Total Held For Letting Held For Letting Held For Letting

Cost £’000 £’000 £’000 £’000At 1 April 2014 63,198 12,184 19,191 94,573

Additions:

Works To Existing Properties 10 – 25 35

Acquisitions – 7,194 – 7,194

Change Of Tenure – (12,184) 10,941 (1,243)

Transfers From/( To) Stock – – (10,942) (10,942)

Disposals:

Staircasing Sales – – (1,797) (1,797)

At 31 March 2015 63,208 7,194 17,418 87,820

Less: Social Housing Grant

At 1 April 2014 – 4,294 5,092 9,386

Change Of Tenure – (4,294) 4,294 –

Transfers From/( To) Stock – – (4,294) (4,294)

Disposals:

Staircasing Sales – – (493) (493)

At 31 March 2015 – – 4,599 4,599

Less: Depreciation

At 1 April 2014 – 1,037 – 1,037

Charge For The Year 1,764 206 – 1,970

Change of Tenure – (1,243) – (1,243)

At 31 March 2015 1,764 – – 1,764

Net Book Value

At 31 March 2015 61,444 7,194 12,819 81,457

At 31 March 2014 63,198 6,853 14,099 84,150

55

NOTES ON THE FINANCIAL STATEMENTS } YEAR ENDED 31 MARCH 2015

11. TANGIBLE FIXED ASSETS – HOUSING PROPERTIES – ASSOCIATION (continued)

Group Association

2015 2014 2015 2014 £’000 £’000 £’000 £’000

Net Book Value Of Housing Properties

Freehold 402,814 346,732 – –

Long Leasehold 216,157 218,393 74,263 84,150

Finance Leases 7,194 – 7,194 –

626,165 565,125 81,457 84,150

Group Association

2015 2014 2015 2014 £’000 £’000 £’000 £’000

Social Housing Grant

Total Accumulated Social Housing Grant At 31 March:

Capital Grants Received For Construction Of New Housing Units 410,312 413,159 4,599 9,386

Homebuy Grant Received And Recycled 54,413 61,438 – –

Total Accumulated Grant At 31 March 464,725 474,597 4,599 9,386

Accumulated Revenue Grant Received And Recognised Through The Income And Expenditure Account 17,824 17,759 11,512 11,504

Given the Group’s long held policy of capitalising the finance costs associated with carrying out development activity, it is not possible to disclose the aggregate amount of finance costs included in the cost of housing properties as required by FRS15.

The reduction in Fixed Asset Investments during the year primarily relates to the repayment of senior debt refinanced through third party senior debt provided to Fizzy entities.

The fixed asset investment at 31 March represents the Group’s investment in Fizzy Enterprises LLP. The investment is made up of a combination of debt and equity held by Thames Valley Housing Fizzy Holdings Limited, a group subsidiary.

Group Fixed Asset Investments Cost £’000

At 1 April 2014 32,390

Reduction in investment (6,213)

Share Of Loss Of Associate (42)

At 31 March 2015 26,135

NOTES ON THE FINANCIAL STATEMENTS } YEAR ENDED 31 MARCH 201556

12. VALUATION DISCLOSURE

Group Association

2015 2014 2015 2014 £’000 £’000 £’000 £’000

Completed Housing Properties At Valuation 1,033,620 974,370 77,516 84,350

Revaluation Surplus – Housing Properties 431,457 421,069 3,253 200

Based on the valuation conducted by JLL, Chartered Surveyors at 31 March 2015, the Group’s assets EUV-SH valuation is in excess of the carrying value of the properties.

In July 2015, the summer budget key announcements included reforms to the welfare system. Rents for social housing (including affordable rent) will be reduced by 1% a year for four years. The above valuation disclosure is made on the basis that rents during this four year period will increase by CPI+1 and therefore the valuation may be lower in the future.

For information purposes only, completed housing properties were revalued by JLL, Chartered Surveyors at Existing Use Value for Social Housing (EUV-SH) and Market Value (MV) in accordance with the current edition of the Royal Institution of Chartered Surveyors’ (RICS Valuation Standards PS5.1) Appraisal and Valuation Standards. EUV-SH means that the properties are assumed to be managed and owned by a Registered Provider of Social Housing which is committed to the provision of rented accommodation let at affordable rents, and that vacant units would be re-let at affordable rents rather than sold on the open market. Market Value means the estimated amount for which an asset or liability should exchange on the valuation date between a willing buyer and a willing seller in an arm’s length

transaction after proper marketing and where the parties had each acted knowledgeably, prudently and without compulsion.

The valuation basis used for this disclosure is that recommended by the Statement of Recommended Practice “Accounting by Registered Social Housing Providers Update 2010”. The discount rate in the valuation was 5.5% excluding the effect of inflation for rental income and 8% on estimated future staircasing sales.

If housing properties had been stated at EUV-SH, the amounts disclosed in the balance sheet in respect of completed housing properties and the revaluation reserve would have been as follows:

57

NOTES ON THE FINANCIAL STATEMENTS } YEAR ENDED 31 MARCH 2015

13. OTHER FIXED ASSETS – GROUP

Investment Leasehold Office Computer Scheme Total Property Office Furniture & Hardware & Furnishings & Completed Premises Equipment Software Equipment (Valuation) (Cost) (Cost) (Cost) (Cost)

£’000 £’000 £’000 £’000 £’000 £’000 Cost Or Valuation

At 1 April 2014 4,170 4,073 1,084 12,125 743 22,195

Additions – – 46 2,190 – 2,236

Disposals – – – (56) – (56)

Transfers – – – – – –

Revaluation Surplus 184 – – – – 184

At 31 March 2015 4,354 4,073 1,130 14,259 743 24,559

Depreciation

At 1 April 2014 – 1,721 836 8,034 743 11,334

Charge For Year 11 258 81 1,108 – 1,458

Disposals – – – (40) – (40)

At 31 March 2015 11 1,979 917 9,102 743 12,752

Net Book Value

At 31 March 2015 4,343 2,094 213 5,157 – 11,807

At 31 March 2014 4,170 2,352 248 4,091 – 10,861

Other Investment properties were valued by JLL, Chartered Surveyors, on the basis of their Market Value as at 31 March 2015. These valuations were undertaken in accordance with the Appraisal and Valuation Standards published by the RICS Valuation Standards PS5.1.

NOTES ON THE FINANCIAL STATEMENTS } YEAR ENDED 31 MARCH 201558

13. OTHER FIXED ASSETS – ASSOCIATION

Investment Leasehold Office Computer Total Property Office Furniture & Hardware & Premises Equipment Software (Valuation) (Cost) (Cost) (Cost)

£’000 £’000 £’000 £’000 £’000 Cost Or Valuation

At 1 April 2014 351 4,073 1,080 11,971 17,475

Additions – – 46 2,079 2,125

Disposals – – – (56) (56)

Revaluation Surplus 4 – – – 4

At 31 March 2015 355 4,073 1,126 13,994 19,548

Depreciation

At 1 April 2014 – 1,721 836 8,032 10,589

Charge For Year – 258 81 1,077 1,416

Disposals – – – (40) (40)

At 31 March 2015 – 1,979 917 9,069 11,965

Net Book Value

At 31 March 2015 355 2,094 209 4,925 7,583

At 31 March 2014 351 2,352 244 3,939 6,886

Investment properties were professionally revalued by JLL, Chartered Surveyors, on the basis of their Open Market Value as at 31 March 2015. These valuations were undertaken in accordance with the Appraisal and Valuation Standards published by RICS Valuation Standard PS5.1.

59

NOTES ON THE FINANCIAL STATEMENTS } YEAR ENDED 31 MARCH 2015

14. HOMEBUY EQUITY LOANS – GROUP

2015 2014 £’000 £’000

Homebuy Equity Loans Advanced

Opening Balance As At 1 April 74,811 82,208

Net Loans Redeemed During The Year (8,806) (7,397)

At 31 March 66,005 74,811

Grant Received On Homebuy Equity Loans

Opening Balance As At 1 April 61,438 67,667

Grant Recycled During The Year (7,025) (6,229)

At 31 March 54,413 61,438

Homebuy Equity Loans Funded By The Association 11,592 13,373

NOTES ON THE FINANCIAL STATEMENTS } YEAR ENDED 31 MARCH 201560

15. STOCK

The Association develops social housing for other registered housing associations and also for its subsidiary, Thames Valley Charitable Housing Association. The net cost of these developments is held as current assets up to the point of transfer.

Investments includes amounts which are secured cash deposits in relation to drawn funding for which security had not been provided by year-end for example.

16. DEBTORS Group Association

2015 2014 2015 2014 £’000 £’000 £’000 £’000

Amounts Receivable Within One Year

Rent And Service Charges 5,122 4,771 258 218

Provision For Bad Debts (1,158) (2,558) (26) (50)

3,964 2,213 232 168

Property Grants Receivable 723 559 5 316

Amounts Receivable From Leaseholders And Tenants 706 407 4 6

Due From Subsidiaries – – 29,643 33,113

Due from Associates 1,222 543 – –

Prepayments 1,335 935 1,327 935

Investments 55,482 684 25,677 –

Other Debtors 3,003 1,659 1,504 814

66,435 7,000 58,392 35,352

Amounts Receivable After One Year

Investments 5,046 44 7,021 2,020

Property Mortgages 666 920 666 920

5,712 964 7,687 2,940

Group First Tranche Land Developed 2015 2014 Low Cost Home Banking for Sale Ownership Total Total £’000 £’000 £’000 £’000 £’000

Gross Cost: Completed 2,337 – 495 2,832 2,491

Gross Cost: WIP 12,474 4,308 – 16,782 13,432

14,811 4,308 495 19,614 15,923

Association Developed First Tranche Land 2015 2014 for Subsidiary Low Cost Home Banking Ownership Total Total £’000 £’000 £’000 £’000 £’000

Gross Cost: Completed 31,347 2,071 – 33,418 24,249

Gross Cost: WIP 17,997 14,609 4,308 36,914 22,966

Grant: Completed (8,122) – – (8,122) (6,947)

Grant: WIP (5,264) – – (5,264) (5,948)

35,958 16,680 4,308 56,946 34,320

61

NOTES ON THE FINANCIAL STATEMENTS } YEAR ENDED 31 MARCH 2015

17. CREDITORS Group Association

2015 2014 2015 2014 £’000 £’000 £’000 £’000

Amounts Falling Due Within One Year

Loans (Note 18) 2,770 2,659 – –

Trade Creditors 1,187 2,369 599 1,395

Grant Due To Consortium Members – 1,326 – 1,326

Loan Interest Due 2,844 2,803 – –

Recycled Capital Grant Fund (Note 20) 10,274 3,847 3,423 3,847

Property Development Accruals And Retentions 4,727 2,526 2,143 1,515

Bank Overdraft 345 – 326 –

Rent Received In Advance 2,189 1,997 92 109

Estate Costs Accruals (Including Major Repairs) 2,688 1,626 157 65

Amount Due To Subsidiary Undertaking – – 75,460 52,139

Leaseholder Sinking Funds 4,793 3,869 169 147

Disposal Proceeds Fund (Note 19) 388 – – –

Taxation and Social Security 19 – – –

Grant Received In Advance 264 264 264 264

Equity Fee Accrual 3,060 3,338 3,060 3,338

Other Creditors And Accruals 7,777 1,524 5,802 728

43,325 28,148 91,495 64,873

Group Association

2015 2014 2015 2014 £’000 £’000 £’000 £’000

Amounts Falling Due After More Than One Year

Loans (Note 18) 570,174 479,634 40,000 –

Amounts Due Under Finance Leases 7,194 – 7,194 –

Disposal Proceeds Fund (Note 19) 167 388 – –

Recycled Capital Grant Fund (Note 20) 21,068 16,210 366 324

598,603 496,232 47,560 324

Other Creditors and Accruals includes a provision for expected costs of management of remedial work which will be undertaken on certain Keyworker schemes of £3.5m and £2.6m for the Group and Association respectively.

NOTES ON THE FINANCIAL STATEMENTS } YEAR ENDED 31 MARCH 201562

18. LOANS

Loans are secured by charges on selected properties of the Association and are repayable as follows:

Group Association

2015 2014 2015 2014 £’000 £’000 £’000 £’000

Loans Repayable By Instalments

In Five Or More Years 349,261 282,037 40,000 –

Between Two And Five Years 75,684 35,818 – –

Between One And Two Years 2,899 2,771 – –

427,844 320,626 – –

In One Year Or Less 2,770 2,659 – –

430,614 323,285 – –

Loans Not Repayable By Instalments

In Five Or More Years 146,444 165,607 – –

Between Two And Five Years 3,000 – – –

149,444 165,607 – –

In One Year Or Less – – – –

149,444 165,607 – –

580,058 488,892 – –

Loan Issue Costs (7,114) (6,599) – –

Total Loans 572,944 482,293 40,000 –

19. DISPOSAL PROCEEDS FUND – GROUP

2015 2014 £’000 £’000

At 1 April 388 662

Social Housing Grant Recycled In The Year 167 –

DPF Utilised On Major Repairs And Works To Existing Properties – (274)

At 31 March 555 388

Disclosed As:

Creditors Falling Due Within One Year 388 –

Creditors Falling Due After More Than One Year 167 388

555 388

None of the above Disposal Proceeds Fund is due for repayment to the HCA or GLA.

63

NOTES ON THE FINANCIAL STATEMENTS } YEAR ENDED 31 MARCH 2015

20. RECYCLED CAPITAL GRANT FUND

Group Association

2015 2014 2015 2014 £’000 £’000 £’000 £’000

At 1 April 20,057 16,164 4,171 9,313

Social Housing Grant Recycled In The Year 12,103 8,881 544 192

RCGF Utilised On New Build Housing Properties (948) (5,069) (788) (2,864)

Transfers With Properties Sold To Subsidiary Undertaking – – (160) (2,498)

Interest Credited To The Fund 130 81 22 28

At 31 March 31,342 20,057 3,789 4,171

Disclosed As:

Creditors Falling Due Within One Year 10,274 3,847 3,423 3,847

Creditors Falling Due After One Year 21,068 16,210 366 324

31,342 20,057 3,789 4,171

None of the above Recycled Capital Grant Fund is due for repayment to the HCA or GLA.

21. NON-EQUITY SHARE CAPITAL

2015 2014 £ £

Shares Of £1 Each Issued And Fully Paid

At 1 April 8 9

Shares Issued During The Year 3 –

Shares Cancelled During The Year (5) (1)

At 31 March 6 8

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

NOTES ON THE FINANCIAL STATEMENTS } YEAR ENDED 31 MARCH 201564

22. RESERVES

Revenue Investment Total Total Reserve Property 2015 2014 Revaluation Reserve £’000 £’000 £’000 £’000

Group

At 1 April 191,462 2,468 193,930 185,110

Surplus For The Year 20,313 – 20,313 8,268

Revaluation Surplus – 184 184 552

At 31 March 211,775 2,652 214,427 193,930

Association

At 1 April 103,887 177 104,064 109,926

Surplus For The Year (3,123) – (3,123) (5,831)

Revaluation Deficit – 4 4 (31)

At 31 March 100,764 181 100,945 104,064

65

NOTES ON THE FINANCIAL STATEMENTS } YEAR ENDED 31 MARCH 2015

23. NOTES ON THE CONSOLIDATED CASH FLOW STATEMENT

2015 2014 £’000 £’000

Reconciliation Of Operating Surplus To Net Cash (Outflow)/Inflow From Operating Activities

Operating Surplus 30,242 32,385

Equity Fees – (4,366)

Charitable Donations – (51)

Taxation – (558)

Depreciation 11,533 11,167

Change In Stock (3,691) (2,975)

Change In Debtors (64,562) 675

Change In Creditors 8,292 3,478

Net Cash (Outflow)/Inflow From Operating Activities (18,186) 39,755

2015 2014 £’000 £’000

Reconciliation Of Net Cash (Outflow)/Inflow To Movement In Net Debt

Increase/(Decrease) In Cash In The Year 17,947 (31,943)

Change In Net Debt Resulting From Cash Flows (90,651) 14,434

Net Debt At 1 April (440,730) (423,221)

Net Debt At 31 March (513,434) (440,730)

At Cash Flow Other At 1 April Changes 31 March 2014 2014 £’000 £’000 £’000 £’000

Analysis Of Changes In Net Debt

Cash At Bank And In Hand 41,563 17,947 – 59,510

Debt Due After One Year (479,634) (84,145) (6,395) (570,174)

Debt Due Within One Year (2,659) (6,506) 6,395 (2,770)

Change In Net Debt (440,730) (72,704) – (513,434)

NOTES ON THE FINANCIAL STATEMENTS } YEAR ENDED 31 MARCH 201566

24. PENSION COSTSSocial Housing Pension Scheme (SHPS)The Association participates in the Social Housing Pension Scheme (the Scheme). The Scheme is funded and is contracted-out of the State Pension scheme. The Scheme is a multi-employer defined benefit scheme.

The Association elected to operate a final salary structure with a 1/60th accrual rate for active members until 31 March 2007, the Career Average Revalued Earnings (CARE) with a 1/60th accrual rate benefit structure from 1 April 2007 to 31 March 2010 and the CARE with a 1/80th accrual rate for new entrants from 1 April 2010.

During the accounting period the Association paid contributions between the rates of 5% to 11.9%. Member contributions varied between 3% and 12.3%.

As at the balance sheet date there were 190 active members of the Scheme employed by The Association. 42 were members of the 1/60th Final Salary structure, 21 were members of the 1/60th CARE structure, 36 were members of the 1/80th CARE structure and 91 were members of the Defined Contribution Structure.

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. This is because the Scheme is a multi-employer scheme, where the assets are co-mingled for investment purposes, and benefits are paid out of total Scheme assets. Accordingly, due to the nature of the Scheme, the accounting charge for the period under FRS17 represents the employer contribution payable.

The Trustee commissions an actuarial valuation of the Scheme every three years. The main purpose of the valuation is to determine the financial position of the Scheme in order to determine the level of future contributions required, in respect of each benefit structure, so that the Scheme can meet its pension obligations as they fall due.

The last formal valuation of the Scheme was performed as at 30 September 2011 by a professionally qualified Actuary using the Projected Unit Method. The market value of the Scheme’s assets at the valuation date was £2,062 million. The valuation revealed a shortfall of assets compared with the value of liabilities of £1,035 million, equivalent to a past service funding level of 67.0%.

The Scheme Actuary is currently finalising the 2014 valuation but key provisional results have been confirmed. As at 30 September 2014, the market value of the Scheme’s assets was £3,123 million. There was a shortfall of assets compared with the value of liabilities of £1,323 million, equivalent to a past service funding level of 70%.

Growth PlanThe Association 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.

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.

During the accounting period under review, members selected the level at which they make contributions.

As at the balance sheet date there were 2 active members of the Plan employed by The Association. The Association has closed the Plan to new entrants.

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 out of the Plan’s total

67

NOTES ON THE FINANCIAL STATEMENTS } YEAR ENDED 31 MARCH 2015

assets. Accordingly, 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 2011 were completed in 2012 and have been formalised. The valuation of the Plan 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 £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%.

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

% per annum

Rate of return pre retirement 4.9

Rate of return post retirement:

Active/Deferred 4.2

Pensioners 4.2

Bonuses on accrued benefits 0.0

Inflation: Retail Prices Index (RPI) 2.9

Inflation: Consumer Prices Index (CPI) 2.4

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 Scheme Actuary has prepared a funding position update as at 30 September 2013. The market value of the Plan’s assets at that date was £772m and the Plan’s Technical Provisions (i.e. past service liabilities) was £927m. The update, therefore, revealed a shortfall of assets compared with the value of liabilities of £155m, equivalent to a funding level of 83%.

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 Plan 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 2011 valuation

was forwarded to The Pensions Regulator on 2 October 2012, 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.

When an employer withdraws from a multi-employer defined benefit pension scheme which is in deficit, the employer is required by law to pay its share of the deficit, calculated on a statutory basis (known as the buy-out basis). Due to a change in the definition of money purchase contained in the Pensions Act 2011 the calculation basis that applies to the Growth Plan will be amended to include Series 3 liabilities in the calculation of an employer’s debt on withdrawal.

The Growth Plan is a “last man standing” multi-employer scheme. This means that if a withdrawing employer is unable to pay its debt on withdrawal the liability is shared amongst the remaining employers. The participating employers are therefore, jointly and severally liable for the deficit in the Growth Plan. As at 30 September 2014 the total deficit calculated on the buy-out basis was £171,582m.

NOTES ON THE FINANCIAL STATEMENTS } YEAR ENDED 31 MARCH 201568

25. CAPITAL COMMITMENTS Group Association

2015 2014 2015 2014 £’000 £’000 £’000 £’000

Capital Expenditure Contracted For Not Included In The Financial Statements 40,187 36,349 21,070 21,450

Capital Expenditure Authorised Not Yet Contracted 51,314 2,433 41,485 1,090

91,501 38,782 62,555 22,540

The Group Expects To Finance The Above Commitments By:

Social Housing Grant Receivable 16,372 2,952 11,362 2,091

Loan Facilities, Low Cost Home Ownership First Tranche Sales, Low Cost Home Ownership Staircasing Sales And Other Cash Flows 75,129 35,830 51,194 20,449

91,501 38,782 62,556 22,540

26. FINANCIAL COMMITMENTS

Group Association

2015 2014 2015 2014 £’000 £’000 £’000 £’000

In Respect Of Low Cost Home Ownership First Tranche Development:

Contracted For Not Included In The Financial Statements 13,324 14,869 13,324 14,869

Authorised Not Yet Contracted For 27,657 727 27,657 727

40,981 15,596 40,981 15,596

At the end of March 2015, the Group had £25m (2014: £90m) of committed and undrawn loan facilities.

27. COMMITMENTS UNDER OPERATING LEASES

At 31 March 2015, the Group had annual commitments under non-cancellable operating leases as follows:

2015 2014

Land and Other Land and Other Buildings Buildings

£’000 £’000 £’000 £’000

Operating Leases Which Expire:

Within One Year 25 – – 2

In Two to Five Years – 5 – 29

After Five Years 927 149 926 106

952 154 926 137

69

NOTES ON THE FINANCIAL STATEMENTS } YEAR ENDED 31 MARCH 2015

28. RELATED PARTY TRANSACTIONSBoard MembersCurrently no Board Members are tenants/leaseholders. Where board members are tenants/leaseholders, their tenancies/leases are on normal commercial terms and are managed in line as with any other in the Group. They receive no favourable treatment in any respect for being members.

Subsidiary Undertakings, Joint Venture and Associate

Subsidiary Status Activity Holding

Thames Valley Charitable Housing Association Limited

Registered in England and Wales under the Co-operative and Community Benefit Societies Act 2014.

Housing Association 100%

TVHA Fizzy Holdings Limited Limited Company registered in England and Wales Holding Company 100%

TVHA Fizzy 2 Limited Limited Company registered in England and Wales Holding Company 100%

Fizzy Services Management LLP LLP registered in England and Wales Property Management 95%

Fizzy Brand Management LLP LLP registered in England and Wales Brand Management 95%

Joint Venture Interest

Opal Land LLP LLP registered in England and Wales Development and Sale of residential accommodation

50%

Opal (St. Bernard’s) LLP LLP registered in England and Wales Development and Sale of residential accommodation

50%

Opal (Earlsfield) LLP LLP registered in England and Wales Development and Sale of residential accommodation

50%

Opal (Grange Walk) LLP LLP registered in England and Wales Development and Sale of residential accommodation

50%

Evolution (Woking) Limited Limited Company registered in England and Wales Development and Management of residential accommodation

50%

NOTES ON THE FINANCIAL STATEMENTS } YEAR ENDED 31 MARCH 201570

28. RELATED PARTY TRANSACTIONS (continued)

Associate Interest

Fizzy Newco1 Ltd Limited Company registered in England and Wales Holding Company 46%

Fizzy Enterprises LLP LLP registered in England and Wales Property Development and Rental

46%

Fizzy One LLP LLP registered in England and Wales Holding Company 46%

Fizzy Two LLP LLP registered in England and Wales Holding Company (Dormant) 46%

Fizzy Canning Town LLP LLP registered in England and Wales Property Development and Rental

46%

Fizzy Epsom LLP LLP registered in England and Wales Property Development and Rental

46%

Fizzy Stepney Green LLP LLP registered in England and Wales Property Development and Rental

46%

Fizzy Poplar LLP LLP registered in England and Wales Property Development and Rental

46%

Fizzy Lewisham LLP LLP registered in England and Wales Property Development and Rental

46%

Fizzy Finchley LLP LLP registered in England and Wales Property Development and Rental

46%

Fizzy Silvertown Way A LLP LLP registered in England and Wales Property Development and Rental (Dormant)

46%

Fizzy Silvertown Way B LLP LLP registered in England and Wales Property Development and Rental (Dormant)

46%

Fizzy Sutton LLP LLP registered in England and Wales Property Development and Rental (Dormant)

46%

Fizzy Property Company B LLP LLP registered in England and Wales Property Development and Rental (Dormant)

46%

Academy 4 Housing Social Enterprise Company Limited by Guarantee in England and Wales

Training 25%

Subsidiary Undertakings, Joint Venture and Associate (continued)

71

NOTES ON THE FINANCIAL STATEMENTS } YEAR ENDED 31 MARCH 2015

The Group’s share of the Profit/loss after tax and net assets of the Joint Venture is as follows:

Opal Opal Opal Opal Evolution Total Total Land LLP (St Bernard’s) (Earlsfield) (Grange Walk) (Woking) 2015 2014 LLP LLP LLP Limited £’000 £’000 £’000 £’000 £’000 £’000 £’000

Summarised Income Statement

Revenue 1,325 10,504 3,406 2,779 5,004 23,018 6,821

Operating Costs (935) (7,767) (2,786) (2,221) (5,059) (18,768) (5,630)

Net Interest Payable (370) 1 (652) (31) (296) (1,348) (837)

Profit/(Loss) After Tax 20 2,738 (32) 527 (351) 2,902 354

Summarised Balance Sheet

Work In Progress 10,326 682 26,132 16,192 7,874 61,206 34,497

Current Assets 254 333 535 907 320 2,349 2,021

Creditors Amounts Falling Due Within One Year (1,113) (485) (1,794) (5,704) (421) (9,517) (1,643)

Creditors Amounts Falling Due After More Than One Year (4,508) – (13,837) – (6,308) (24,653) (3,764)

Net Assets 4,959 530 11,036 11,395 1,465 29,385 31,111

Transactions with Subsidiary Undertakings and Joint Ventures

The following transactions with the subsidiary undertakings are included in the Association’s financial statements. These transactions have been eliminated in the Group financial statements.

Thames Valley Charitable Housing Association Limited 2015 2014 Income £’000 £’000Management Costs 10,538 11,792

Expenditure

Charitable Donations Paid 7,494 –

Interest Payable 2,296 1,182

Balance Sheet Movements

Transfer Of Recycled Capital Grant Fund To/(From) Subsidiary Undertaking (160) (2,498)

Investments in Joint Ventures Group

2015 2014 £’000 £’000

At 1 April 31,111 7,961

Additions At Cost 14,112 22,796

Disposal (18,737) –

Share Of Profit In The Year 2,899 354

29,385 31,111

NOTES ON THE FINANCIAL STATEMENTS } YEAR ENDED 31 MARCH 201572

Transfer of Assets to Thames Valley Charitable Housing Association Limited 2015 2014 £’000 £’000Housing Properties 10,987 45,730

Housing Grants 5,055 78

At 31 March 2015 the amount due to Thames Valley Charitable Housing Association Limited was £75,460k. At 31 March 2014 the amount due from Thames Valley Charitable Housing Association Limited was £52,139k.

TVHA Fizzy Holdings LimitedIncome 2015 2014 £’000 £’000Interest Receivable – 1,243

Management and Development Services – 495

Interest Payable 1,639 –

Balance Sheet Movements

Loan to TVHA Fizzy Holdings Limited 28,550 33,056

At 31 March 2015, the amount due from TVHA Fizzy Holdings Limited was £28,550k (2013: £33,056k).

Fizzy Services Management LimitedIncome 2015 2014 £’000 £’000Management and Development Services 907 56

Interest Payable 51 –

At 31 March 2015, the amount due from Fizzy Services Management Limited was £1,601k (2014: £56k).

The following transactions with Joint Ventures are included in Group’s financial statements:

Opal Land LLP, Opal (St Bernard’s) LLP, Opal (Earlsfield) LLP and Opal (Grange Walk) LLP 2015 2014 £’000 £’000Loan To Opal Land LLP 5,028 5,028

Loan To Opal (St. Bernard’s) LLP – 5,026

Loan To Opal (Earlsfield) LLP 11,092 18,262

Loan To Opal (Grange Walk) LLP 10,868 –

Share of Revenue 18,014 3,952

Share of Operating Profit/(Loss) 3,250 515

Share of Interest Payable (1,052) (701)

At 31 March 2015 the amount due from Opal Land LLP was £5,590k (2014: £5,370k), Opal (St. Bernard’s) LLP was £5,280k (2014: £5,280k) and Opal (Earlsfield) LLP was £11,745k (2014: £18,447k) and Opal (Grange Walk) LLP was 11,021K and (2014:Nil)

Evolution (Woking) Limited 2015 2014 £’000 £’000Loan 1,925 1,925

Share of Revenue 5,004 2,869

Share of Operating Loss (351) (161)

Share of Interest Payable (296) (136)

At 31 March 2015 the amount due from Evolution (Woking) Limited was £1,925k (2014: £1,925k).

73

NOTES ON THE FINANCIAL STATEMENTS } YEAR ENDED 31 MARCH 2015

29. NUMBER OF HOMES OWNED, MANAGED OR ADMINISTERED BY THE GROUP

At Acquired, Transferred Disposals At 31 1 April Completed, March 2014 Transferred 2015 Number Number Number Number Number

General Needs 5,725 298 (53) (85) 5,885

Affordable Rent 67 102 – – 169

Supported Housing Bedspaces 19 – – – 19

Key Worker Accommodation 1,627 – – (8) 1,619

Student Accommodation 463 – – – 463

Low Cost Home Ownership 3,972 209 (60) (179) 3,942

Low Cost Home Ownership Leasehold 881 156 (20) – 1,017

Market Rent 29 4 – – 33

Intermediate Rent 74 3 – – 77

12,857 772 (133) (272) 13,224

Homes Administered For:

Open Market Homebuy Key Worker 911 – – (104) 807

Open Market Homebuy Non Key Worker 271 – – (29) 242

MyChoice Homebuy Key Worker 257 – – (26) 231

MyChoice Homebuy Non Key Worker 370 – – (55) 315

Mortgage Rescue Equity Loans 3 1 – – 4

Market Rent 246 – – – 246

Social Rent – 8 – – 8

14,915 781 (133) (486) 15,077

31 March 31 March 2015 2014 Number Number

Homes Under Construction

Affordable Rent 224 371

Low Cost Home Ownership 248 196

472 567

NOTES ON THE FINANCIAL STATEMENTS } YEAR ENDED 31 MARCH 201574

30. ACCOMMODATION MANAGED BY OTHERS

The following organisations manage accommodation on behalf of the Group:

Number of Units of Accommodation

2015 2014

Managing Agent:

Ability Housing 1 1

Kingfisher HVHS Housing Association Limited 138 138

Sovereign Housing Association Limited 285 285

Royal Horticultural Society 23 23

447 447

31. LEGISLATIVE PROVISIONS

Thames Valley Housing Association and its subsidiary undertaking, Thames Valley Charitable Housing Association Limited, are incorporated under the Co-operative and Community Benefit Societies Act 2014 and are Registered Providers of Social Housing registered with the Homes & Communities Agency under the Housing and Regeneration Act 2008. Thames Valley Charitable Housing Association Limited is an exempt charity registered under charitable rules.

75

NOTES ON THE FINANCIAL STATEMENTS } YEAR ENDED 31 MARCH 2015

Trenchard Close, a development of 17 homes in Hersham.

Premier House, 52 London Road, Twickenham, TW1 3RP Tel: 020 8607 0607 Fax: 020 8607 9923Email: info@tvha.co.uk Web: www.tvha.co.uk

© Thames Valley Housing Association 2015. No part of this publication can be reproduced without the permission from Thames Valley Housing Association.

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