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Peabody Trust (92IA)

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Thursday 23 July, 2009

Peabody Trust

Annual Financial Report

RNS Number : 1778W
Peabody Trust
23 July 2009
 



Report and Financial Statements

31 March 2009

PEABODY



Charity registration: 206061

Tenant Services Authority registration: L0014





Grant Thornton UK LLP

Hemel Hempstead 




Operating and financial review                                                                                    1

Board statement of internal control                                                                           14

Independent auditor's report                                                                                      16

Peabody income and expenditure account                                                                 17

Consolidated income and expenditure account                                                         18

Statement of total recognised surpluses and deficits                                                19

Reconcilliation of movements in Group's and Peabody's funds                               19

Peabody balance sheet                                                                                               20

Peabody cash flow statement                                                                                     21

Consolidated balance sheet                                                                                        22

Consolidated cash flow statement                                                                              23

Notes to the accounts                                                                                                  24


 

BOARD, EXECUTIVE OFFICERS AND ADVISORS


Members of the Board of Governors 

Pam Alexander 

Chair of the Board, and Member of the Nominations & Remuneration Committee

Fred Calcott 

Chair of the Tenant Liaison Committee and Member of the Resident & Community Committee - resigned 31 December 2008

Peter Doyle 

Chair of the Audit & Risk Committee, Member of the Finance Committee and, until 23 October 2008, the Property Committee

Ngaire Drake 

Member of the Property Committee

Dudley Fishburn 

Vice-Chair of the Board, Chair of the Finance Committee, Chair of the Nominations & Remuneration Committee and Member of the Audit & Risk Committee

Karl King 

Member of the Property Committee

Hattie Llewelyn-Davies 

Chair of the Resident & Community Committee and Member of the Nominations & Remuneration Committee until 26 November 2008, and Member of the Resident & Community Committee since 26 November 2008

Christopher Strickland 

Chair of the Property Committee and Member of the Nominations & Remuneration Committee

Marc Hume 

Member of the Resident & Community Committee - resigned 10 November 2008

Marisa Cassoni

Member of the Property, Finance, and Audit & Risk Committees

Tim How 

Chair of the Resident & Community Committee and Member of the Nominations & Remuneration Committee since 26 November 2008, and Member of the Finance and Audit & Risk Committees

Millie Banerjee 

Member of Resident & Community Committee - appointed 24 September 2008

Claudette Forbes 

Member of the Resident & Community Committee and, since 4 February 2009, the Property Committee - appointed 26 November 2008

June Welcome 

Member of the Resident & Community Committee - appointed 4 February 2009


Co-opted Committee Members

Danny McLoughlin 

Finance Committee - appointed 24 September 2008

Neil Gardiner 

Property Committee

Ian Nash 

Property Committee - appointed 24 September 2008

Liz Peace 

Property Committee

June Welcome 

Property Committee - appointed 24 September 2008 and resigned 3 February 2009

Margaret Kerss 

Resident & Community Committee - resigned 14 May 2008

Janet McLagan

Resident & Community Committee - resigned 14 May 2008

Ian Parkes 

Resident & Community Committee

Kirk Mitchell 

Resident & Community Committee

Anne Dillette

Resident & Community Committee - appointed 24 September 2008

Edwina Fraser 

Resident & Community Committee - appointed 24 September 2008


Executive Officers

Stephen Howlett 

Group Chief Executive

Catriona Simons 

Group Finance Director

David Lavarack 

Corporate Services Director

Sean Gallagher 

Property Director - resigned 5 January 2009

Keith Carter 

Interim Property Director - appointed 7 January 2009

Stephen Burns 

Director of Community Services

Sandra Skeete 

Customer Services Director

  BOARD, EXECUTIVE OFFICERS AND ADVISORS


Auditors                                                      Company Secretary

Grant Thornton UK LLP                                               Graham Lawrence

Chartered Accountants & Registered Auditors

Bryanston Court

Selden Hill

Hemel Hempstead

HP2 4TN


Bankers                                                       Registered Office

Coutts & Co                                                                     45 Westminster Bridge Road

440 Strand                                                                         London SE1 7JB

London WC2R 0QS


Solicitors                                                      Registration Details

Lewis Silkin                                                                        Tenant Services Authority Registration - L0014

5 Chancery Lane                                                               Charity Commission Registration - 206061

Clifford's Inn                

London EC4A 1BL


Rollits Solicitors

Rowntree Wharf

Navigation Road

York YO1 9WE


Trowers & Hamlins

Sceptre Court

40 Tower Hill

London EC2N 4DX



  OVERVIEW

Founded in 1862 as the Peabody Donation Fund, Peabody Trust ('Peabody') is now one of London's oldest and largest charitable housing associations with over 17,500 properties across the capital. It has its own Act of Parliament stipulating Peabody's objectives to work solely within London for the relief of poverty.  The Peabody Group (The Group) works with government and a whole range of voluntary, private and public sector partners to bring services to our residents and others in communities where we work.

The Group consists of two registered social landlords, Peabody and CBHA, and a number of smaller trading companies.

Peabody's portfolio comprises a significant number of properties in central London. Most are in central and inner London, with over 5,750 properties built before 1900 and 2,300 of these built before 1875. The majority of our homes are on estates with open, communal green spaces. There are also a number of street properties.  Peabody also acquired three local authority estates in Islington, Hackney and Barnet between 1998 and 2000 comprising 2,271 homes.

The Group has four key areas of activity, benefiting directly and indirectly both its residents and the wider London population:

  • The provision of rented housing for people who are unable to afford to rent or buy in the open market;

  • The provision of supported housing and care for those who need additional support;

  • The provision of low cost home ownership, particularly shared ownership; and

  • The delivery of community regeneration activities such as the provision of learning opportunities and access to ICT training and accreditation.

Peabody has a dedicated Community Services directorate established to tackle poverty at its roots - poor education, low skills and lack of opportunity. Working on and around our estates in some of the most deprived areas of London, the team is well placed to reach the most excluded and to ensure that services are accessible by taking support right into the heart of the community. The directorate also provides support services to those who need them, both Peabody residents and others. 

KEY MISSION, VISION AND PUBLIC BENEFIT

Peabody's mission is to make London a city of opportunity for all by ensuring as many people as possible have a good home, a real sense of purpose and a strong feeling of belonging:

A good home: a place that is safe, warm, clean, light, well maintained and evokes personal pride

A real sense of purpose: regular endeavour through work, learning, caring for others, personal development or volunteering. Pursuits that people look forward to because it makes them feel valued.

A strong feeling of belonging: active involvement in the neighbourhood and the spirit of togetherness and friendliness that goes with it. 

Opportunity is a platform that takes us beyond homes into personal community development and it is these three things that Peabody strives to be famous for.

Peabody and CBHA are subject to the Charities Act 2006, including the obligation to demonstrate, explicitly, that their aims are for the public benefit.  Peabody's Board of Governors (the Board) is satisfied that through the provision of affordable housing and the delivery of community regeneration activities, the Group actively creates social and financial opportunities and so relieves poverty in London, to the benefit of the Group's residents and other customers and, indirectly, the London population at large. Although the principal focus of the Group is the provision of affordable and quality housing, a non-exhaustive list of other opportunities and benefits facilitated and promoted by the Group are set out in this report and the financial statements.

THE CONTEXT IN WHICH WE OPERATE

The global economic downturn continues to have a significant impact on the housing sector. New build programmes have slowed; funds have become more expensive; sales have fallen; and the social housing model, reliant upon cross subsidy, has not withstood these pressures.  

The economic backdrop also creates a difficult environment for our residents and customers throughout our three year business plan period. They face an increased cost of living, rising levels of unemployment and greater economic uncertainty.

This environment also, however, presents opportunities for well managed and financially strong housing providers.

The regulatory landscape within which we operate has undergone the most significant change for many years during this financial year. The Housing and Regeneration Act 2008 has created two new bodies:

Homes and Communities Agency (HCA), which provides funding for affordable housing, brings land back into productive use and improves the quality of life by raising standards for the physical and social environment.

Tenant Services Authority (TSA), a new regulator for providers of affordable housing. The TSA place more emphasis on tenants, strive to increase choice and challenge providers to improve services and performance. The TSA will have more extensive powers and is working towards a new set of regulatory standards.

The London Housing Agenda is led by the Mayor; his draft housing strategy outlines plans for delivering 30,000 new socially rented homes in London between 2008 and 2011. Greater prominence and power is given to Local Authorities, with which individual borough-based housing investment targets will be agreed. This, combined with the introduction of Comprehensive Area Assessments, will place renewed importance on our strategic partnerships and relationships with Local Authorities. With ambitious targets for reducing carbon emissions, the desire for 'greener' homes and environmental improvements in housing continues to feature strongly at national and regional policy level.

London faces a changing demographic profile and steady increases in youth and elderly population will shape the services provided by the sector.

BUSINESS DRIVERS

Informed by our Mission and the changing market context, two business drivers will shape the focus and emphasis of Peabody's activities over the next three years.

Putting our customers first

Customers tell us every day what we need to do to improve our services. We believe that the way to improve customer service is to listen, understand and do what is important for them. This means having a workforce that is professional and competent with the interpersonal skills to deliver high quality services to our customers. It also means having systems that assist in the development of a deeper knowledge of our customers and their needs to support profiling and more informed business decisions.


Maintaining strong financial capacity

The current economic environment is challenging for our sector and especially for our residents and other customers both in terms of their aspirations for home ownership and access to employment.  

Peabody is a strong and financially sound organisation.  We will continue to strengthen our financial capacity by continuously improving our efficiency and operational effectiveness.  

We will ensure the long term viability of the organisation and seek to generate increased capacity for growth:

  • in those service areas that our residents most value and communities most need

  • in the provision of new homes

We will use our financial capacity and strength to take advantage of growth opportunities where these are in the long term interests of our residents and customers.


BUSINESS PLAN PRIORITIES

The objectives and strategy of Peabody are set out in a rolling three year business plan that is reviewed annually and approved by the Board. The business planning process includes an assessment of strengths and weaknesses, opportunities and threats, which are discussed between the Executive team and the Board of Governors.  

The 2009/12 plan builds on the 2008/11 plan with the business objectives required to deliver against our purpose being distilled into four priority areas:

  • excellent customer services

  • thriving communities

  • desirable homes

  • a first class organisation

Success in executing our objectives over the next three years will be measured through:

  • feedback from our customers: achieving an 10% increase in satisfaction

  • feedback from our stakeholders: achieving a reputation for listening and acting 

  • peer group benchmarking: achieving top quartile performance 

  • assessment by regulator: achieving recognised improvement since our last audit 


Peabody Behaviours

The way in which we achieve our objectives is as important as the objectives themselves.  Peabody behaviours which apply to staff at every level:

  • customer focussed - delivers excellent customer service

  • results focussed - gets things done

  • collaborative - works effectively with others

  • can do - positive and helpful

  • principled - trustworthy and fair

  • continuously improving - always looking to get better

These behaviours form an integral part of the assessment of performance for all staff and will guide the way in which we deliver our plans. For those responsible for the direction and development of others, we have designed a set of Management Expectations, grouped into four categories:

  • leads a team

  • manages people

  • manages delivery

  • manages change

This will form part of the performance assessment of managers.

Through comprehensive customer care training commissioned from Mary Gober International in 2008/09, we are now entering the next phase of our journey towards service excellence.

  PERFORMANCE AND DEVELOPMENT

Senior management and the Board monitor achievement of Peabody's objectives by measuring performance against the targets that are set out below. The Board agrees targets each year that are designed to manage development and deliver continuous service improvement. We use a range of indicators to monitor achievement of the organisation's objectives in each of Peabody's 4 priority areas.

Operational performance over the last 3 years against a number of the key indicators is shown in the table below:

Key performance information

2009 

(Actual)

2009 

(Target)

2008

2007

Excellent Customer Service





Overall Satisfaction (per STATUS survey)

66.5%

65.0%

56.0%

56.0%

Resident Satisfaction with views taken into account (per STATUS survey)

53.1%

65.0%

34.0%

34.0%

Percentage of repair appointments kept by PMP

85.4%

85.0%

87.2%

83.9%

Percentage of calls answered by Peabody Direct contact centre

93.0%

95.0%

89.9%

87.1%

Complaints resolved at Stage 1

77.7%

90.0%

79.0%

84.0%

Complaints resolved at Stage 2

70.1%

80.0%

59.0%

N/A

Thriving Communities





Number of people into jobs

340

300

269

331

Number of people accessing training opportunities

1,588

850

965

713

Number of Activate London beneficiaries

8,397

7,800

N/A

N/A

Desirable Homes 





Percentage of properties compliant with the DECENT standard

90.6%

88.0%

85.1%

80.6%

Average days to re-let a general needs dwelling

40

28

34

46

Void loss as % of rent & service charges receivable

0.7%

0.7%

1.9%

1.7%

Percentage of emergency repairs completed within target

86.1%

95.0%

93.4%

97.6%

Percentage of urgent repairs completed within target

94.4%

90.0%

93.7%

87.7%

Percentage of routine repairs completed within target

88.9%

90.0%

90.5%

80.2%

Percentage of properties with a valid gas safety certificate

99.1%

100.0%

98.2%

98.0%

First Class Organisation





Gross current tenant arrears as % of rent and service charges receivable

6.1%

6.2%

6.8%

7.7%

Operating margin

19.5%

12.0%

21.4%

25.4%

Voluntary staff turnover

11.3%

15.0%

14.1%

9.45%

Staff attendance level

97.2%

96.0%

96.4%

96.7%


SUMMARY OF OPERATIONAL PERFORMANCE

Excellent Customer Service

Following a new STATUS survey which was conducted in late 2008, resident satisfaction has shown a considerable positive trend, whilst not yet at the levels that Peabody aspires to achieve, this improvement reflects the significant focus of the organisation in recent years on putting customers at the heart of everything that Peabody does and the significant increase in investment in frontline service activities.

Performance of Peabody's contact centre and complaints handling and resolution activities will be pivotal to achieving further improvements to Customer Satisfaction. Performance of the contact centre has been showing steady improvement with a benchmarking exercise planned for June 2009 to compare our performance with our peers, and exchange of best practice with best performers in the sector is already taking place.

The percentage of complaints resolved at stage 1 (78%) and at stage 2 (70%) is disappointing and behind target. There is significant organisational focus on improving performance in this area with a number of initiatives currently underway which are expected to deliver tangible improvements.

Thriving Communities

This year has been another successful year for our Community Initiatives department with both the numbers of people assisted into jobs (340) and the number of people benefiting from our training opportunities (1,588) exceeding the targets set for the year. A total of 548 young people have benefited from the Youth Programme in 2008/09, ahead of the target of 500.  Peabody's youth clubs/homework clubs continue to be well attended, and activities are ongoing to encourage participation by young people. Funding has been secured for a Youth4Youth programme for 2009/10, working with three partners to develop our Youth Forums and nationally a Young Social Housing Tenants Alliance.

Further to the award of Lottery Funding for Activate London projects both the number of Activate projects taking place (51) and the number of beneficiaries benefiting from the projects (8,397) exceeded target for the year. 

During the year £840,339 was received from the Big Lottery for the Activate London programme, £27,573 from the Big Lottery for the Media Club and Youth Committee for residents and £384,618 was received from Tower Hamlets Council for the Linkage Plus Programme.

Desirable Homes

Meeting the DECENT homes standard was a significant challenge for Peabody given the age profile of its stock, however following the significant investment programme over recent years over 90% of the stock now meets the standard with an additional 1,400 homes brought up to standard during the year.  

The average time taken to re-let a general needs unit failed to meet target but has demonstrated a positive trend in the second half of the year following the letting of a number of properties in the early months of the year that had previously been void for a long period. Rent lost through dwellings being vacant and available to let throughout the year fell only narrowly short of target at 0.71%. Performance is expected to continue to improve into the new financial year.

Performance of Peabody's repairs service is critical to the service received by our customers and the quality of our homes. The total number of repairs completed in 2008/09 showed an increase on previous years (39,375 in 2008/09 compared to 35,659 in 2008/09). Performance of the service is measured for each category of repair against standard response times. Urgent repairs showed an improvement on previous years despite an increase in the number of jobs categorized as urgent. Emergency repairs completed within target did not achieve our target, there were a higher number of emergency gas repair jobs during the winter months which stretched the service. The percentage of Peabody properties with a valid gas safety certificate rose to over 99% during 2008/09.

A strategic review of Peabody's maintenance service has recently been commissioned with recommendations being submitted to the Board of Governors in May 2009. Work to agree the future strategy will be completed during 2009/10 with a target date of April 2010 for any new delivery arrangements to be in place.

First Class Organisation

Peabody achieved better performance across the key indicators in this area than was targeted. Current tenant rent arrears as a percentage of annual rent roll was 6.1% at the end of the year which continued the improving trend of recent years.  Peabody achieved its budget for the year achieving an operating margin of 19.5%. 


REGULATION AND GOVERNANCE

As a social landlord, the Group is regulated by the Tenant Services Authority (the successor body to the Housing Corporation, which was abolished on 30 November 2008). The Group is registered with the TSA and complies with its Regulatory Code. Peabody and CBHA are also both registered charities, regulated by the Charity Commission. The TSA assesses performance in respect of viability, governance and management, and the HCA regulates development activity and other schemes which it funds. A 'traffic light' system is used to measure compliance and throughout 2008/09 the Group had a full set of green lights.

During July 2006, Peabody was inspected by the Audit Commission and achieved a one star rating with promising prospects for improvement. Our business plan focuses on ensuring that Peabody continues to improve the services it provides to its customers.

The Board of Governors of Peabody (the Board) is the incorporated body of trustees of the charity and as such it is Peabody's ultimate governing body. The Board comprises up to 12 non-executive directors who normally meet seven times per year. All Board Members give their time voluntarily and receive training as appropriate to support them in their roles. Present and former Board Members are listed on page 1 of these financial statements. 

The maximum permitted term of office for Board Members is limited to three terms of three years and thereafter a maximum of three terms of one year each. 

Peabody is managed by an Executive Team headed by the Chief Executive and supported by directors of community services, corporate services, customer services, finance and property. The Executive Team attends all meetings of the Board.  Peabody's Executive Officers are not members of the Board and, although for the purposes of salary disclosure they are referred to as directors, they are not regarded as directors for legal purposes. The Executive Officers meet on a fortnightly basis under the chair of the Chief Executive in order to manage Peabody's affairs in accordance with the framework set by the Board. The Executive Officers are listed on page 1 of these financial statements.

The Group is eligible for exemption from the Financial Services Authority's requirements relating to corporate governance disclosures but Board Members have elected to provide the majority of applicable disclosures. These are set out in the appropriate parts of this report and the financial statements. 

Subsidiary Entity Boards

CBHA is regulated by and registered with the TSA. The Board of Trustees of CBHA comprises two Peabody Board Members and three Peabody Executive Officers, as nominated by the Peabody Board. The Trustees are supported by a local Board and a range of functional committees. The governance arrangements for CBHA are subject to a wide-ranging review, which will from 2009/10 further increase the role of CBHA's residents in the strategic management and over-sight of the charity.

The non-charitable entities within the Group each have a Board of Directors comprising both Peabody Board Members and Executive Officers. This is in accordance with regulatory guidance and good practice, which recommend that the membership of subsidiary entity boards should not replicate the main governing body. 

Delegation and Functional Committees

The Peabody Board is supported by five functional committees, each of which meets four times per year (with the exception of the Nominations and Remuneration Committee, which meets twice per year). The membership of these committees comprises Board Members and Co-opted Members. Each of these committees has clear terms of reference and delegated authority. They report back to the Board at each Board meeting, where their recommendations are considered fully and approved as appropriate.

The Audit and Risk Committee is responsible for overseeing internal audit, external audit, and control and risk management. The Finance Committee oversees and reports to the Board on Peabody's financial performance, treasury matters and financial statements. The Resident and Community Committee is responsible for overseeing the provision of services to Peabody's current and prospective tenants, leaseholders and other customers. The Property Committee is responsible for overseeing effective asset management and the control and delivery of development and stock investment programmes. The Nominations and Remuneration Committee advises the Board on appointments to the Board and Committees, and remuneration issues, including senior staff salaries and human resource policies.

RISK MANAGEMENT 

The main risks faced by the Group are considered by the Executive Team with the Board as part of the business planning process. The Group has taken steps to ensure that it identifies factors that may affect future performance. Peabody's Risk and Risk Management Strategy identifies the key risks facing Peabody and strategies for monitoring and mitigating them. An Officer Risk Panel, which meets quarterly, also plays an active part in embedding a culture of risk awareness and risk management amongst staff. 

The Group considers the following to be key risks during the business plan period:


Key Risk Identified

Risk Mitigation Activities

Reduced availability of debt in the current financial markets

Forward funding totalling £60 million is in place, secured at competitive margins.

Higher cost of new debt in the current financial markets

Sufficient available and secured facilities to meet Peabody's medium term funding requirements thus limiting the impact of high margins on new debt.

Key Risk Identified

Risk Mitigation Activities


The impact of volatility in inflation with the possibility of deflation in 2009/10

Prudent financial planning assumptions have been applied by the Group which anticipate zero inflation at September 2009.

The financial plan and budgets have been stress tested with contingency planning completed to deal with any further deterioration in assumptions. 

Continuation of the significant and sustained downturn in the London housing market leading to a fall in demand for and prices of property

Regular review of financial planning assumptions to ensure a prudent approach is taken.

Investment programmes are flexible.

Scheme appraisal for potential new schemes factors in economic conditions.

Any potential land purchases are strictly appraised.


Further details of the Group's risk management activities are provided in the Governors' statement on internal control.


CUSTOMER AND EMPLOYEE INVOLVEMENT AND DIVERSITY

The Group has developed policies for customer and employee involvement, as well as for sustainability.

Customers 

Peabody seeks to involve residents and customers in the design and delivery of its services. It has developed a menu of involvement so that residents can become involved as much as they want and in a way that they choose. 

This year Peabody has been implementing the first year of our Customer Involvement Strategy 2008/11 which states that we involve residents to:

  • ensure accountability;

  • deliver thriving communities and;

  • improve services.


We continue with our efforts to embed involvement across our activities, placing our customers at the heart of everything we do. The key change is that this strategy focuses on outcomes rather than processes of involvement. It is making our involvement structures more widely accessible and is enabling us to ensure that involvement methods suit our customers and are directed towards achieving positive outcomes for residents, communities and Peabody.  

Our keys objectives around customer involvement are to:

  • ensure that customers have equal opportunities to take part in involvement;

  • develop market intelligence about our customers;

  • develop a range of involvement methods to suit identified customer needs;

  • develop resources and training to facilitate involvement;

  • provide feedback to customers on how their involvement has made a difference and brought about change;

  • agree with customers service standards for their involvement;

  • develop a range of ways for our customers to agree service standards, influence corporate decision making and hold us to account;

  • ensure our customers can influence decisions made over investment in and development of homes and neighbourhoods;

  • consider with customers the value for money of involvement;

  • agree neighbourhood plans and targets with customers.


The Strategy and associated action plan explain how we will achieve the desired outcomes, timelines and the benchmarks for success. The work carried out during the first year includes:

  • developing a menu of opportunities for customers to be involved in improving services, customer service, homes and communities. The highlight being the move towards resident focussed self-regulation through the development of the Resident Review Committee backed up by a Customer Inspection Team, these have both been set up and have carried out a pilot inspection of the Customer Service Charter.

  • strengthening the role of Resident Associations and Community Groups by working with them to develop local plans, to tackle issues important to them as well as explore devolved budgets and management opportunities. This work has begun, Neighbourhood Managers have been trained to work with resident groups, 33 local plans have been developed and a code of excellence for resident groups. 

  • developing ways for the customer's voice to be heard at the strategic level, by providing mechanisms and training for customer involved up to Governor level;  we have redefined the role of resident groups in the governance structure and are changing the Terms of Reference accordingly.

  • community initiatives that will build up the capacity of our residents to engage with us and the community as a whole. We are working with community groups to develop proper agreements over the running of community facilities and have employed a youth participation worker to ensure that young people are having a say.  We are exploring models of self management with community groups.


Employees

The Group considers that employee involvement is essential to its success and uses a variety of methods to inform, consult and involve its employees which includes a staff forum. Union representation is recognised through the Joint Negotiating Committee (JNC), Joint Consultative Committee (JCC) and the Staff Consultation Group (SCG).

The Group has a comprehensive learning and development policy and retains the Investors in People accreditation.

Equality and Diversity 

The Group is committed to achieving equality of opportunities and values diversity. Its policies and strategies reflect this. The Group recognises that its ability to meet the diverse needs of both the individuals and the communities it serves relies on its diverse workforce. The Group makes efforts to extend its commitment through its governance structures and through its use of suppliers and contractors.  

Peabody's commitment to diversity is reflected in our attitude towards our employees. We respect everyone who works for us as an individual through fair policies and practices, which are designed to include everyone's perspective and expertise. We actively engage with staff through our Diversity Forum. Applications for employment from disabled persons are given fair and full consideration, having regard to their particular skills and abilities. In the event of employees becoming disabled, every effort is made to retain them in continued employment within the Group. By doing so, Peabody can empower every individual to contribute to the overall success of the organisation.

Health and Safety

The Group recognises and accepts its legal and moral responsibilities, as defined in the Health and Safety at Work Act 1974 and other legislation to ensure, as far as reasonably practicable, the health, safety and welfare of all of its employees, customers and other persons who may be affected by the way it carries out its activities.


FINANCIAL PERFORMANCE

The financial position and results for the year are set out on pages 17 to 56 of these statements. The financial statements have been prepared in accordance with the relevant provisions of the Peabody Donation Fund Act 1948 as amended by the Charities (The Peabody Donation Fund Act) Order 1997, Schedule 1 to the Housing Act 1996 and the Accounting Requirements for Registered Social Landlords General Determination 2006.

Performance in the period

Peabody made a surplus for the year after tax of £34.2 million for the year (2008: £31.5 million). The consolidated results for the Group, which include the results of those entities detailed in note 26 to these financial statements, show a surplus for the year after tax of £35.1 million (2008: £33.5 million).  An operating margin of 20% has been achieved by the Group with an operating surplus after financing costs (but before property sales) of £3.2 million achieved.  The benefit of refinancing the 2018 and 2023 fixed priced bonds in the previous two years together with the impact of falling interest rates has led to a year-on-year fall in annual interest costs of £2.4 million.

The significant fall in the value of the stock market during the year has resulted in Peabody's equity portfolio falling in value. The portfolio is now valued at £1.4 million below original cost with this fall in value reflected in the income and expenditure account for the year.

During the year Peabody sold its 529 properties in Croydon to London & Quadrant Housing Trust and 102 properties which were void and economically unviable, generating a total surplus of £30.8 million. In addition Peabody generated a surplus on the sale of properties under the preserved right to buy and from shared ownership staircasing transactions of £2.1 million.

CBHA sold 2 properties during the year under the preserved right to buy, and completed 1 shared ownership staircasing transaction, generating a surplus of £0.3 million. 

All of Peabody's surpluses are re-invested in the Charity.  

During 2008/09 £37.7 million was invested in existing homes with an additional £10.0 million invested in the delivery of new homes. At the end of the year over 90% of Peabody's stock met the Decent Homes Standard with an additional 1,400 homes made Decent during the year. All of the properties owned and managed by CBHA meet the Decent Homes Standard.

Treasury Management

The Group's Treasury Management Strategy and Policy is updated and submitted annually to the Group's Finance Committee for approval. Treasury Management performance, which includes ongoing review of the loan portfolio and compliance with financial covenants, is reviewed quarterly by the Committee. 

At 31 March 2009 the Group complied with all financial covenants in place.

Financing

During the year £96 million of new funding was secured with the Group having total available facilities of £530 million at the end of the year of which £375 million (gross of capitalised arrangement fees) had been drawn. 

Interest

In accordance with the Group's Interest Rate Management Strategy, and in order to mitigate the risk of rises in variable interest rates, at 31 March 2009 79% of the Group's debt was at fixed rates.  

As at 31 March 2009 the Group's weighted average cost of capital was 4.48%.

Liquidity

The Group's Treasury Management Policy dictates that the Group's available cash should not at any time fall below the forecast outflow for the next calendar month and sufficient facilities should be in place to fund its business and service objectives for the forthcoming year. The Group has been compliant with this policy throughout 2008/09. The Group has sufficient committed facilities available to meet known requirements until 31 March 2009 and for the foreseeable future.

At the year end the Group held cash balances totalling £51.3 million of which £28 million was held on term deposits of up to 3 months at average rates of 1.64%.

Reserves

The Board of Governors has reviewed the reserves of the Group taking into consideration the nature of income and expenditure streams and has concluded that the level of reserves shown at 31 March 2009 is commensurate with the performance and investment profile of a housing charity. 

  

Group Highlights - five year summary






For the year ended 31 March

2009

2008 

2007

2006

2005



(restated)





£m

£m

£m

£m

£m

Group income and expenditure account






Total turnover

101.2

102.9

98.7

98.5

86.9

Income from social housing lettings

89.3

85.5

82.0

78.4

72.9

Depreciation & amortisation of housing properties

9.9

9.6

9.8

7.6

6.0

Interest payable

19.4

21.8

25.3

34.4

34.5

Redemption penalties

-

37.0

52.3

5.2

1.2

Operating surplus

20.3

22.2

25.0

25.7

24.3

Surplus before tax (excluding redemption penalties)

35.1

70.6

43.7

32.7

18.4

Surplus/(deficit) after interest and tax

35.1

33.6

(8.6)

27.6

18.4







Group balance sheet






Tangible fixed assets, at depreciated cost

995.9

999.3

986.9

964.4

924.8

Social Housing Grant

(421.3)

(437.8)

(449.8)

(445.0)

(423.8)

Net current assets

32.7

21.7

6.9

38.2

(2.6)

Indebtedness 

372.0

382.6

375.1

364.5

363.8

Total reserves

224.9

197.0

157.8

161.8

135.5







Key financial performance information







%

%

%

%

%

Group Operating Surplus as a % of turnover

20

22

25

26

28

Total loans as % of capital grants plus reserves (Gearing)

58

60

63

66

65

Earnings Before Interest Tax Depreciation and Amortisation (EBITDA) as a % of interest payable excluding loan redemption penalties

183

150

143

125

118




 







STATEMENT OF BOARD RESPONSIBILITIES

The Board is responsible for preparing the Annual Report and the financial statements. The Board has chosen to prepare accounts for Peabody and the Group in accordance with United Kingdom Generally Accepted Accounting Practice (UK GAAP). Housing Association legislation requires the Board to prepare such financial statements for each financial year which give a true and fair view of the state of affairs of Peabody and of the Group and of the surplus or deficit of Peabody and the Group for that period and comply with UK GAAP and the Peabody Donation Fund Act 1948 as amended by the Charities (The Peabody Donation Fund) Order 1997, Schedule 1 to the Housing Act 1996 and the Accounting Requirements for Registered Social Landlords General Determination 2006. In preparing these financial statements, the Board is required to:

  • select suitable accounting policies and then apply them consistently;

  • make judgments and estimates that are reasonable and prudent;

  • state whether applicable accounting standards have been followed, and

  • prepare the financial statements on the going concern basis unless it is inappropriate to presume that Peabody 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 Peabody, for safeguarding the assets, for taking reasonable steps for the prevention and detection of fraud and other irregularities.

NHF Excellence in Governance, Code for Members

We are pleased to report that the Group complies with the fundamental aspects of the NHF's Excellence in Governance, Code for Members.


Donations 

The Group donated £Nil during the year (2008: £2,380) and made no political donations.

Going Concern

After making all reasonable enquiries, the Board have a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future. For this reason they continue to adopt the going concern basis in preparing the accounts.

Disclosure of Information to Auditors

At the date of making this report each of Peabody's Board Member, as set out on page 2, confirm the following:

  • so far as each Board Member is aware, there is no relevant information needed by  Peabody's auditors in connection with preparing their report of which  Peabody's auditors are unaware

  • each Board Member has taken all the steps that he ought to have taken as a Board Member in order to make himself aware of any relevant information needed by Peabody's auditors in connection with preparing their report and to establish that Peabody's auditors are aware of that information.


External Auditors

Grant Thornton UK LLP were appointed as auditors to the Group during the year and have expressed their willingness to continue in office. Accordingly a resolution is to be proposed for the re-appointment of Grant Thornton UK LLP as auditors of the Group.

Statement of Compliance

In preparing this Operating and Financial Review and Board report, the Board has followed the principles set out in the SORP 2008. 


Approved by the Board on 16 July 2009 and signed on their behalf by:



Pam Alexander                            Stephen Howlett

Chair                                            Chief Executive


BOARD STATEMENT ON INTERNAL CONTROL

The Board acknowledge their ultimate responsibility for ensuring that the Group has in place a system of internal controls that is appropriate to the various business environments in which it operates. This system is designed to manage rather than eliminate the risk of failure to achieve business objectives, and can only provide the Board with reasonable and not absolute assurance against material misstatement or loss.

The Group Board has established a comprehensive framework to assess the effectiveness of the system of internal controls. The Board is supported in its responsibilities by the Audit and Risk Committee with the Group's report and the statement on internal controls being presented to the Audit and Risk Committee for consideration and recommendation to the Group Board.

The internal control framework covers all systems within the Peabody Group and gains assurance from many sources such as internal audit, external audit, Audit and Risk Committee, external regulation and the assurance provided by management. This is then supported by the ongoing risk management process which is embedded in the Group. This process ensures that the risks faced by the entities within the Group are identified, controls are in place to effectively manage these risks and these controls are regularly reviewed and checked for compliance.

The processes in place for identifying, evaluating, and managing the significant risks faced by the Group is ongoing throughout the year and is reviewed regularly by the Audit and Risk Committee on behalf of the Board.

The following key elements of internal control have been in place for all or part of the financial year 2008/9:

  • The Audit and Risk Committee meets quarterly with the Group's Chief Executive, Finance Director, Assistant Director of Internal Audit, and the external auditors. Other members of Executive Team attend when appropriate. The Audit and Risk Committee reviews management letters from the external auditors dealing with any significant control matters raised. The internal and external auditors both have direct access to the Audit and Risk Committee. The Audit and Risk Committee performs a review of the effectiveness of the internal control environment which includes the following:

  • A summary of the main policies which the Board has established and which are designed to provide effective internal control;

  • A summary of the process and key sources of evidence utilised by the Board in reviewing the effectiveness of the Group's system of internal controls; and

  • Confirmation that the Board has reviewed the fraud register, and has reflected the information contained within it in its review.

  • The Group's internal audit function reports directly to the Audit and Risk Committee and provides a major source of assurance for the Board that the internal control and risk management practices are operating effectively. The Internal Audit function provides reports which detail status with regard to implementation of previous recommendations. The internal audit function also provides assurance to the Board that the Group has an anti fraud policy in place.  

  • The Group has a risk management strategy which is reviewed on an annual basis and is reported to and approved by the Audit and Risk Committee. The Audit and Risk Committee receive reports on all high ranking risks on a rolling quarterly basis, in addition to reports concerning risks which have crystallised during the quarter.

  • The Group has an Officer Risk Panel comprising senior staff which meets quarterly to consider key risks and risk management reports. The minutes of these meetings and risk monitoring reports are submitted to Audit and Risk Committee for information.

  • The Group has a Project Approval Committee which meets monthly to approve all investment decisions involving capital programme expenditure and to review the ongoing management and control of capital projects.

  • A framework of control risk self assessment is in operation which is a key source of management assurance. Senior members of staff of all Group entities are required to provide written representations on internal controls assurance, confirming compliance or identifying non-compliance regarding key aspects of the internal controls framework.

  • Reviews of external audit reports following the interim and final audit visits together with the audit planning document, audit report on the annual financial statements, and the management letter help support the process of continual review of the internal control environment. Senior members of the Finance team meet with the external auditors on a regular basis to provide an update on any changes in the business and to discuss strategic and technical matters.

  • The Group reports to the Tenant Services Authority (TSA) through a number of regulatory returns with the Executive Team ensuring that regulatory matters are dealt with promptly and efficiently. The Executive Team meets on a biannual basis with the TSA regulatory team. The Group's operations are also subject to independent inspection by the Audit Commission to ensure effectiveness, economy and efficiency of service delivery.

BOARD STATEMENT ON INTERNAL CONTROL

  • Key performance indicators, covering housing management, maintenance, lettings, community initiatives, complaints handling, customer satisfaction, human resources and financial results, are reported to the Executive Team and Leadership Team on a monthly basis. Key performance indicators for CBHA are reported monthly to CBHA's management team and are reported to each meeting of the CBHA Trustees (which includes members of the Peabody Executive Team). KPIs for both Peabody and CBHA are reported quarterly to the Group's Board. The Group has a comprehensive system of financial reporting with the annual budgets and long term financial plans being reported to and approved by the respective Boards.

The Board, through the reports of the Audit and Risk Committee, has reviewed the effectiveness of the system of internal control in existence in the Group for the year ended 31 March 2009 and until 16 July 2009. Although control weaknesses have been identified during the year these weaknesses have not resulted in material losses.



 

INDEPENDENT AUDITORS REPORT

We have audited the Group and Association financial statements of Peabody for the year ended 31 March 2009 which comprise the Peabody and consolidated income and expenditure accounts, the Peabody and consolidated statements of total recognised surpluses and deficits, the Peabody and consolidated balance sheets, the Peabody and consolidated cash flow statements, and the related notes 1 to 29. These financial statements have been prepared under the accounting policies set out therein.

This report is made solely to the Board, as a body, in accordance with Schedule 1 paragraphs 16 to 18 of the Housing Act 1996. Our audit work has been undertaken so that we might state to the Board Members those matters we are required to state to them in an auditors' report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than Peabody and the Board as a body, for our audit work, for this report, or for the opinions we have formed.

Respective Responsibilities of the Board and Auditors

The Board's responsibilities for preparing the Annual Report and the financial statements in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice) are set out in the statement of Board responsibilities.

Our responsibility is to audit the financial statements in accordance with relevant United Kingdom legal and regulatory requirements and International Standards on Auditing (UK and Ireland).

We report to you our opinion as to whether the financial statements give a true and fair view in accordance with the relevant framework and are properly prepared in accordance with the Peabody Donation Fund Act 1948 as amended by the Charities (The Peabody Donation Fund Act) Order 1997, Schedule 1 to the Housing Act 1996 and the Accounting Requirements for Registered Social Landlords General Determination 2006 We also report to you if, in our opinion, the Operating and Financial Review is not consistent with the financial statements, if the Group has not kept proper accounting records, if we have not received all the information and explanations we require for our audit, or if information specified by law regarding Board Members' and Directors' remuneration and transactions with Peabody and other members of the Group is not disclosed.

We read the other information accompanying the financial statements and consider whether it is consistent with the audited financial statements. The other information comprises only the Operating and Financial Review and Board Statement on Internal Control. We consider the implications for our report if we become aware of any apparent misstatements or material inconsistencies with the financial statements. Our responsibilities do not extend to any other information.

Basis of Audit Opinion

We conducted our audit in accordance with International Standards on Auditing (UK and Ireland) issued by the Auditing Practices Board. An audit includes examination, on a test basis, of evidence relevant to the amounts and disclosures in the financial statements. It also includes an assessment of the significant estimates and judgments made by the governors in the preparation of the financial statements, and of whether the accounting policies are appropriate to the circumstances of Peabody and the Group, consistently applied and adequately disclosed.

We planned and performed our audit so as to obtain all the information and explanations which we considered necessary in order to provide us with sufficient evidence to give reasonable assurance that the financial statements are free from material misstatement, whether caused by fraud or other irregularity or error. In forming our opinion we also evaluated the overall adequacy of the presentation of information in the financial statements.

Opinion

In our opinion:

  • the financial statements give a true and fair view, in accordance with United Kingdom Generally Accepted Accounting Practice, of the state of the Group's and Peabody's affairs as at 31 March 2009 and of the Group's and Peabody's surplus for the year then ended; and

  • the financial statements have been properly prepared in accordance with the Peabody Donation Fund Act 1948 as amended by the Charities (The Peabody Donation Fund Act) Order 1997, Schedule 1 to the Housing Act 1996 and the Accounting Requirements for Registered Social Landlords General Determination 2006.





Grant Thornton UK LLP

Chartered Accountants and Registered Auditors

Hemel Hempstead

16 July 2009


PEABODY INCOME AND EXPENDITURE ACCOUNT

Year ended 31 March 2009





Note



2009

£'000


Restated

2008

£'000







TURNOVER

2(a)


94,130


93,399

Operating costs

2(a)


(75,737)


(73,393)







OPERATING SURPLUS



18,393


20,006







Surplus on sale of fixed assets

28


32,914


66,263

Interest receivable and other income

7


3,590


4,050

Change in value of investments

13


(1,360)


-

Interest payable and similar charges

8

(19,296)


(21,777)


Cost of early redemption of loans

8

-


(37,031)








Total interest payable



(19,296)


(58,808)







Surplus on ordinary activities before and after taxation for the financial year


21



34,241



31,511








The notes on pages 24 to 56 form part of these financial statements.  


These financial statements were approved by the Board on 16 July 2009 and signed on their behalf by:





Pam Alexander                            Stephen Howlett

Chair                                             Chief Executive


  CONSOLIDATED INCOME AND EXPENDITURE ACCOUNT

Year ended 31 March 2009





Note



2009

£'000


Restated

2008

£'000







TURNOVER

2(a)


101,228


102,893

Operating costs

2(a)


(80,902)


(80,691)







OPERATING SURPLUS



20,326


22,202







Surplus on sale of fixed assets

28


33,251


67,455

Interest receivable and other income

7


2,241


2,691

Change in value of investments

13


(1,360)


-

Interest payable and similar charges

8

(19,369)


(21,761)


Cost of early redemption of loans

8

-


(37,031)








Total interest payable



(19,369)


(58,792)







Surplus on ordinary activities before and after taxation for the financial year


21



35,089




33,556  








The notes on pages 24 to 56 form part of these financial statements.  


These financial statements were approved by the Board on 16 July 2009 and signed on their behalf by:





Pam Alexander                            Stephen Howlett

Chair                                            Chief Executive




Peabody

Group

Peabody

Group



Note


2009

£'000


2009

£'000

Restated

2008

£'000

Restated

2008

£'000







Surplus for the financial year


34,241

35,089

31,511

33,556







Actuarial (loss)/gain relating to the pension scheme


6


(6,759)


(7,204)


5,740


6,220







Unrealised deficit on revaluation of investments


-

-

(1,114)

(1,114)







Total recognised surpluses and deficits relating to the year



27,482


27,885


36,137


38,662







Prior year adjustment

29

1,789

1,843









Total recognised surpluses and deficits since the last report


29,271

29,728










RECONCILIATION OF MOVEMENT IN GROUP'S AND PEABODY'S FUNDS 

Year ended 31 March 2009



Peabody

Group

Peabody

Group



Note


2009

£'000

 


2009

£'000


Restated

2008

£'000

Restated

2008

£'000

Opening funds as previously stated

Prior year adjustment 

21

29

175,506

1,789

195,149

1,843

140,865

293

157,806

524







Opening total funds as restated

Total recognised surpluses and deficits relating to the year.


177,295


27,482

196,992


27,885

    141,158

    

    36,137

158,330


38,662







Closing total funds

21

204,777

224,877

177,295

196,992










Note



£'000


2009

£'000



£'000

Restated

2008

£'000

FIXED ASSETS






Housing properties 

11(a)


935,865


940,037

Social Housing Grant

Other Public Grants

11(a)

11(a)


(346,635)

(56,861)


(363,477)

(56,440)










532,369


520,120

Other tangible fixed assets

12(a)


11,827


11,338

Fixed asset investments

13


11,459


12,432










555,655


543,890

CURRENT ASSETS






Properties for sale

14

1,328


2,306


Debtor due in more than one year

15

26,438


28,438


Debtors due in less than one year

15

12,652


11,786


Cash held on deposit


28,000


-


Cash at bank and in hand


10,247


24,993










78,665


67,523


CREDITORS: Amounts falling due within one year


16


(29,596)



(29,491)








NET CURRENT ASSETS



49,069


38,032







TOTAL ASSETS LESS CURRENT LIABILITIES




604,724



581,922







CREDITORS: Amounts falling due after more than one year


17



385,660



396,946







PENSION DEFICIT

6


14,287


7,681







RESERVES






Revenue reserve

21

197,522


168,668


Designated reserves

21

7,255


8,627











204,777


177,295










604,724


581,922








The notes on pages 24 to 56 form part of these financial statements.  

These financial statements were approved by the Board on 16 July 2009 and signed on their behalf by:





Pam Alexander                            Stephen Howlett

Chair                                            Chief Executive





Note



£'000


2009

£'000



£'000

Restated

2008

£'000







Net cash inflow from operating activities

24(a)


26,389


21,142







Net interest paid


(15,063)


(16,721)


Cost of early redemption of loans


-


(45,039)














Returns on investments and servicing of finance

24(b)


(15,063)


(61,760)







Capital expenditure and financial investment

24(b)


11,928


41,595







Net cash inflow before financing


23,254


977







Financing

24(b)


(10,000)


5,669







Increase in cash



13,254


6,646













Reconciliation of net cash inflow to movement in net debt



£'000


£'000


£'000


£'000







Increase in cash in the year

24(c)

13,254


6,646


Cash outflow/(inflow) from financing

24(b)

10,000


(5,669)








Change in net debt resulting from cash flows



23,254


977

Non cash transactions

24(c)


601


8,032







Movement in net debt in the year



23,855


9,009

Net debt at beginning of the year



(329,102)


(338,111)







Net debt at the end of the year

24(c)


(305,247)


(329,102)












Note



£'000


2009

£'000



£'000

Restated

2008

£'000

FIXED ASSETS






Housing properties

11(b)


995,921


999,266

Social Housing Grant

Other Public Grants

11(b)

11(b)


(346,635)

(74,724)


(363,477)

(74,342)










574,562


561,447

Other tangible fixed assets

12(b)


12,434


11,852

Fixed asset investments:  shares in quoted securities


13



6,459



7,432










593,455


580,731

CURRENT ASSETS






Properties for sale

14

1,328


2,306


Debtors due in more than 1 year

15

-


60


Debtors due in less than 1 year

15

10,569


10,678


Cash held on deposit


28,000


-


Cash at bank and in hand


23,323


38,923










63,220


51,967


CREDITORS: Amounts falling due within one year


16

(30,530)


(30,313)








NET CURRENT ASSETS



32,690


21,654







TOTAL ASSETS LESS CURRENT LIABILITIES




626,145



602,385













CREDITORS: Amounts falling due after more than one year


17



385,484



396,691







PENSION DEFICIT

6


15,784


8,702







RESERVES






Revenue reserve

21

214,343


184,805


Designated reserves

21

7,255


8,627


Revaluation reserve

21

3,279


3,560





224,877


196,992










626,145


602,385








The notes on pages 24 to 56 form part of these financial statements.  

These financial statements were approved by the Board on 16 July 2009 and signed on their behalf by:



Pam Alexander                            Stephen Howlett

Chair                                            Chief Executive




Note



£'000


2009

£'000



£'000

Restated

2008

£'000







Net cash inflow from operating activities

25(a)


30,158


22,929







Net interest paid


(17,828)


(18,107)


Cost of early redemption of loans


-


(45,039)














Returns on investments and servicing of finance

25(b)


(17,828)


(63,146)







Capital expenditure and financial investment

25(b)


10,070


43,216







Net cash inflow before financing


22,400


2,999







Financing

25(b)


(10,000)


5,169







Increase in cash



12,400


8,168



















Reconciliation of net cash inflow to movement in net debt


£'000

£'000

£'000

£'000







Increase in cash in the year

25(c)

12,400


8,168


Cash (outflow)/inflow from financing

25(b)

10,000


(5,169)








Change in net debt resulting from cash flows



22,400


2,999

Non cash transactions

25(c)


568


8,005







Movement in net debt in the year



22,968


11,004

Net debt at beginning of the year



(343,691)


(354,695)







Net debt at end of the year



(320,723)


(343,691) 








  



1.    ACCOUNTING POLICIES

Basis of Preparation

The financial statements have been prepared in accordance with UK Generally Accepted Accounting Principles (UK GAAP)the Statement of Recommended Practice 'Accounting by Registered Social Landlords' issued in January 2008 (SORP 2008) and comply with the Accounting Requirements for Registered Social Landlords General Determination 2006 and under the historical cost convention as modified by the £3,279,000 revaluation of properties purchased from a BES Company in 1999.

A summary of the more important accounting policies is set out below.

Basis of Consolidation

The Group accounts consolidate the accounts of Peabody and all its subsidiaries (excluding Peabody Pension Trust) at 31 March using acquisition accounting.

Turnover

Turnover represents rental and service charge income receivable, income from shared ownership first tranche sales, fees and revenue grants from local authorities, the Homes and Communities Agency and other funding bodies, and income from the sale of housing properties built for sale.

Income from first tranche sales and sales of properties built for sale is recognised at the point of legal completion of the sale.

Housing Properties and Stock for Sale

Housing properties developed for sale are stated at cost less any capital grant received. Stock and work in progress is stated at the lower of cost and net realisable value.

Housing Properties and Depreciation

Housing properties under construction are stated at cost and are not depreciated.  These are reclassified as Housing Properties on practical completion of construction.

Freehold land is not depreciated.

The Group depreciates freehold housing properties by component on a straight line basis over the estimated useful economic lives of component categories. Useful economic lives range from 15 to 100 years.  Component categories include general structure, kitchens, bathrooms, windows, doors, roofs, lifts, boilers and electrical installations.

Works to properties for market rent are capitalised and depreciated over 5 years.

The Group depreciates housing properties held on long leases in the same manner as freehold properties, except where the unexpired lease term is shorter than the longest component life envisaged, in which case the unexpired term of the lease is adopted as the useful economic life of the relevant component category. 

Impairment reviews are carried out on an annual basis on assets whose useful economic lives are expected to exceed 50 years, in accordance with Financial Reporting Standard 11.

Capitalisation of Interest

Interest on borrowings is charged to housing properties under construction up to the date of completion of each scheme. The interest charged is on net borrowings to the extent that they are deemed to be financing a scheme. This treatment applies irrespective of the original purpose for which the loan was raised.

Capitalisation of Development Administration Costs

The cost of housing properties comprises their purchase price, together with directly attributable costs in bringing them into working condition for their intended use. Directly attributable costs, in accordance with FRS 15, include salary costs of own employees incurred directly in respect of the construction or acquisition of the property, and incremental costs that would have been avoided only if individual properties had not been constructed or acquired. 

Overheads and other indirect costs are written off as incurred. 



Sale of Housing Properties

Where properties built for sale are disposed of during the year, the disposal proceeds are included in turnover, and the attributable costs are included as costs of sales within operating costs.

The surplus or deficit on the disposal of housing properties held previously as fixed assets is shown on the face of the income and expenditure account.

Shared Ownership Housing Properties and Staircasing

Shared ownership properties are split proportionally between current and fixed assets based on the element relating to expected first tranche sales. The first tranche proportion is classed as a current asset and related sales proceeds included in turnover, and the remaining element is classed as fixed asset and included in housing properties at cost, less any provisions needed for depreciation or impairment.

Capital Grant

Where developments have been financed wholly or partly by Social Housing Grant (SHG) or other capital grants the amount of grant received and receivable in respect of housing properties is deducted from the cost of housing properties.

At the balance sheet date, if the capital grant received or receivable is greater than gross cost of the asset to which the grant relates, the difference is included within creditors falling due within one year and shown as grant received in advance.

SHG is subordinated to the repayment of loans by agreement with the Homes and Communities Agency. SHG released on sale of a property may be repayable but is normally available to be recycled and is credited to a Recycled Capital Grant Fund and included in the balance sheet in creditors.

Revenue Grant

Grants in respect of revenue expenditure are credited to the income and expenditure account in the same period as the expenditure to which they relate.

Recycled Capital Grant Fund/Disposal Proceeds Fund

On disposal of relevant housing properties Peabody is allowed to retain any social housing grant applied to that property for eligible re-investment. This amount is disclosed separately within creditors. If unused within a three year period, it will be repayable to the Homes and Communities Agency with interest.

Other Fixed Assets and Depreciation

Other fixed assets are stated at cost less accumulated depreciation.  

Depreciation is charged on a straight line basis over the estimated useful economic lives of assets at the following annual rates:

Freehold offices                       1.67%

Office and IT equipment           20%


Depreciation is charged on the above assets from the month of purchase until the month of disposal.

Operating Leases

Rentals paid under operating leases are charged to the income and expenditure account in equal amounts over the lease term.

Investments

Fixed asset investments are stated at their market value except for investments in subsidiary undertakings, which are carried at cost less any provision for impairment.

Quoted investments are shown at market value. The movement in the difference between the cost and market value of these investments is shown as an unrealised gain or loss in the statement of total recognised surpluses and deficits when in excess of the original cost.

If the value of the investments are lower than cost the difference is recognised in the income & expenditure account.


Value Added Tax

Value added tax is accounted for on an accruals basis. The primary activities of the Group, social housing lettings, constitute exempt supplies, and accordingly no input tax borne is recoverable. For business supplies chargeable to tax, or where special dispensations have been agreed, input tax directly relating to goods and services that have enabled the supply, and relating to a fair proportion of the cost of central services in support of these, are recovered from HM Revenue & Customs.

Pension Costs

Local Government Defined Benefit Pension Scheme

The Group provides membership of the Local Government Pension Scheme, the London Pension Fund Authority, for all employees who elected to take up this option prior to 31 March 2008.  This is a funded final salary pension scheme. The assets of the pension fund are managed by third-party investment managers and are held separately in trust. 

Regular valuations are prepared by independent professionally qualified actuaries. These determine the level of contributions required to fund the benefits set out in the rules of the fund and allow for the periodic increase of pensions in payment. Following the full adoption of FRS 17, the current service cost of providing retirement benefits to employees during the year, together with the cost of any benefits relating to past service is charged against the operating surplus in the year.

A credit representing the expected return on the assets of the pension fund during the year is included within other finance income. This is based on the market value of the assets of the fund at the start of the financial year.

A charge within other finance charges representing the expected increase in the liabilities of the pension fund during the year is included within net interest. This arises from the liabilities of the fund being one year closer to payment. 

The difference between the market value of assets and the present value of accrued pension liabilities is shown as an asset or liability in the balance sheet net of deferred tax.

Differences between actual and expected returns on assets during the year are recognised in the statement of total recognised surpluses and deficits in the year, together with differences arising from changes in assumptions.

Friends Provident Defined Contribution Pension Scheme

Employees of the Peabody Group are able to join the Peabody Group Pension Scheme which is a defined contribution scheme operated by Friends Provident. The assets of this scheme are held separately from those of the Group.  Employer contributions in respect of this scheme are charged to the income and expenditure account as incurred.

Loans and Other Financial Instruments

Loans and other financial instruments are stated in the balance sheet at the amount of the net proceeds. 

Where loans and other financial instruments are redeemed during the year, any redemption penalty is recognised in the income and expenditure account of the year in which redemption takes place.

Capitalisation of Loan Costs

The initial cost of raising finance is deducted from the loan proceeds and amortised over the period of the loan.

Designated Reserves 

Peabody designates reserves for particular purposes with the expectation that amounts from these reserves will be transferred back to general reserves to match relevant expenditure in the income and expenditure account.

Revaluation Reserve 

The revaluation reserve records any appreciation in value of fixed asset investments except where the revalued asset represents designated reserves, in which case the revaluation element is shown separately as part of the designated reserve.  The revaluation reserve also records the revaluation of properties repurchased from the BES Company as noted above in 1999.



             Homes Managed by Other Parties on Behalf of the Peabody

A number of Peabody's supported homes are managed by third parties on behalf of the PeabodyWhere the risks and benefits of managing these homes have been transferred to the third party the transactions relating to such homes are excluded from Peabody's income and expenditure account.

Related Party Transactions

Peabody has taken advantage of the exemption permitted by FRS 8 - 'Related Party Disclosures'and does not disclose transactions with group undertakings that are eliminated on consolidation. 

Taxation

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

Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the balance sheet date where transactions or events that result in an obligation to pay more tax in the future or a right to pay less tax in the future have occurred at the balance sheet date. Timing differences are differences between the Group's taxable profits and its results as stated in the financial statements that arise from the inclusion of gains and losses in tax assessments in periods different from those in which they are recognised in the financial statements.

A net deferred tax asset is regarded as recoverable and therefore recognised only to the extent that, on the basis of all available evidence, it can be regarded as more likely than not that there will be suitable taxable profits from which the future reversal of the underlying timing differences can be deducted.

Deferred tax is measured at the average tax rates that are expected to apply in the periods in which the timing differences are expected to reverse, based on tax rates and laws that have been enacted or substantively enacted by the balance sheet date. 

  2(a)    TURNOVER AND OPERATING SURPLUS

PEABODY


2009

Restated

2008



Turnover



 

 

£'000

 

 

 


Operating

costs



 

£'000


Operating surplus/

(deficit)


 

£'000


Turnover




 

£'000


Operating

costs



 

£'000


Operating surplus/

(deficit)

 

 

 

£'000

Social housing lettings







General needs housing

78,516

(60,289)

18,227

75,145

(57,505)

17,640

Shared ownership

1,172

(1,107)

65

1,274

(1,107)

167

Key worker

2,787

(945)

1,842

2,721

(1,005)

1,716









82,475

(62,341)

20,134

79,140

(59,617)

19,523

Other social housing activities







Donations received

220

-

220

1,796

-

1,796

Development costs

87

(3,031)

(2,944)

347

(3,518)

(3,171)

Supporting People contract income

525

(525)

-

241

(234)

7

First tranche shared ownership sales

2,833

(2,853)

(20)

3,171

(2,536)

635

Non social-housing activities







Market renting

3,047

(629)

2,418

2,804

(1,041)

1,763

Commercial lettings

2,282

(494)

1,788

2,393

(1,338)

1,055

Leasehold properties

844

(2,053)

(1,209)

1,098

(1,721)

(623)

Community regeneration

1,817

(3,811)

(1,994)

2,409

(3,388)

(979)








Total

94,130

(75,737)

18,393

93,399

(73,393)

20,006












  2(a)    TURNOVER AND OPERATING SURPLUS

GROUP


2009

Restated

2008



Turnover



£'000


Operating costs


£'000


Operating surplus/

(deficit)


£'000


Turnover



             £'000


Operating 
costs



£'000


Operating surplus/

(deficit)


£'000

Social housing lettings







General needs housing

85,308

(64,633)

20,675

81,498

(61,211)

20,287

Shared ownership

1,172

(1,107)

65

1,274

(1,108)

166

Key worker

2,787

(945)

1,842

2,721

(1,005)

1,716









89,267

(66,685)

22,582

85,493

(63,324)

22,169

Other social housing lettings







Donations received

10

-

10

35

-

35

Development costs

506

(3,572)

(3,066)

347

(3,535)

(3,188)

Other

37

-

37

922

(958)

(36)

Supporting People contract income

591

(628)

(37)


305


(313)


(8)

First tranche shared ownership sales

2,833

(2,853)

(20)

4,074

(3,616)

458

Non social housing activities







Market renting

3,047

(629)

2,418

2,804

(1,042)

1,762

Commercial lettings

2,471

(551)

1,920

2,581

(1,375)

1,206

Leasehold properties

844

(2,053)

(1,209)

1,098

(1,721)

(623)

Community regeneration

1,817

(3,811)

(1,994)

2,519

(3,553)

(1,034)

Sale of sites and properties

-

-

-

2,715

(1,254)

1,461

Other

(195)

(120)

(315)

-

-

-








Total

101,228

(80,902)

20,326

102,893

(80,691)

22,202









2(b)    PARTICULARS OF INCOME AND EXPENDITURE FROM SOCIAL HOUSING LETTINGS

    PEABODY



General Needs Housing

Supported Housing and Housing for older people

Shared Ownership


Key Worker

Housing


Total

Total



2009

£'000


2009

  £'000


2009

£'000


2009

£'000


2009

£'000

Restated

2008

£'000

Income from lettings







Rents receivable

  65,007 

  5,882 

  897 

  2,711 

  74,497 

  70,344 

Service charges receivable

  4,901 

  969 

  157 

  72 

  6,099 

  6,080 

Charges for support services

  -  

  206 

  -  

  -  

  206 

  493 

Other income

  340 

  1,211 

  118 

  4 

  1,673

  2,223 








Total income from social housing 

  70,248 

  8,268 

  1,172 

  2,787 

  82,475 

79,140








Expenditure on letting activities







Services

  (6,529)

  (1,003)

  (211)

  (111)

  (7,854)

  (7,120)

Management

  (13,288)

  (4,938)

  (490)

  (390)

  (19,106)

  (22,780)

Routine maintenance

  (12,850)

  (340)

  (131)

  (217)

  (13,538)

  (9,160)

Cyclical maintenance

  (12,369)

  (274)

  (12)

  (27)

  (12,682)

  (10,901)

Rent losses from bad debts

  (163)

  (22)

  (3)

  (9)

  (197)

  (782)

Depreciation of housing properties

  (8,012)

  (502)

  (258)

  (192)

  (8,964)

  (8,874)








Operating costs on social housing

  (53,211)

  (7,079)

  (1,105)

  (946)

  (62,341)

(59,617)








Operating surplus on social housing lettings

  17,037 

  1,189 

  67 

  1,841 

     20,13


19,523






















Rent losses from voids

(1,382)

(7)

-

(89)

(1,478)

(1,514)









  2(b)    PARTICULARS OF INCOME AND EXPENDITURE FROM SOCIAL HOUSING LETTINGS 

   GROUP



General Needs Housing




2009

Supported Housing and Housing for older people


2009

Shared Ownership





2009

Key Worker

Housing





2009

Total






2009

Total





Restated

2008


£'000

£'000

£'000

£'000

£'000

£'000

Income from lettings




2



Rents receivable

71,776

5,881

896

2,710

81,263

75,928

Service charges receivable

4,927

969

157

72

6,125

6,179

Charges for support services

-

206

-

-

206

494

Other income

340

1,211

118

4

1,673

2,892








Total income from social housing

77,043

8,267

1,171

2,786

89,267

85,493








Expenditure on letting activities







Services

(6,588)

(1,003)

(211)

(111)

(7,913)

(7,224)

Management

(15,766)

(4,939)

(490)

(390)

(21,585)

(24,799)

Routine maintenance

(14,084)

(340)

(131)

(217)

(14,772)

(10,243)

Cyclical maintenance

(12,737)

(274)

(12)

(27)

(13,050)

(11,224)

Rent losses from bad debts

(242)

(22)

(3)

(9)

(276)

(867)

Depreciation of housing properties

(8,137)

(502)

(258)

(192)

(9,089)

(8,967)








Operating costs on social housing

(57,554)

(7,080)

(1,105)

(946)

(66,685)

(63,324)








Operating surplus on social housing lettings


19,489


1,187


66


1,840


22,582


22,169






















Rent losses from voids

(1,405)

(7)

-

(89)

(1,501)

(1,531)









3.    ACCOMMODATION IN MANAGEMENT


Peabody

Group

Managed directly at 31 March 

Social Housing

2009

Units

2008

Units

2009

Units

2008

Units






Housing accommodation

14,086

14,590

15,425

15,931

Shared ownership

453

432

485

463

Keyworker

337

326

337

326

Supported housing

532

540

587

595







15,408

15,888

16,834

17,315






Managed by others at 31 March 

Social Housing










Supported housing

348

347

348

347






Non - social housing










Total non-social rented housing 

378

348

378

348







4.    EMOLUMENTS OF GOVERNORS AND EXECUTIVE OFFICERS

None of the Governors received any emoluments during the year (2008: £Nil). 


Governors were reimbursed expenses totalling £1,396 (2008: £1,514).


The remuneration paid to the Group Chief Executive, Peabody Executive Officers (as listed on page 2) and the Chief Executive of CBHA, was as follows:


    2009

    £

    2008

    £


Total emoluments (including pension contributions and benefits in kind)


    942,674


    853,269

Amounts paid in respect of interim directors

    30,736

    35,595




Emoluments (excluding pension contributions) paid to the Group Chief Executive


    174,479


    167,662





The Group Chief Executive is an ordinary member of the Peabody's pension scheme. Peabody paid £24,837 of employers contributions into the pension scheme on behalf of the Group Chief Executive in thyear ended 31 March 2009 (2008: £24,018).

The Nominations and Remuneration Committee of the Governors meets twice a year and fixes the remuneration of the Group Chief Executive and the Peabody Executive Team.

  5.  EMPLOYEE INFORMATION

The average number of persons employed during the year was:



   Peabody

Group




2009

Restated

2008


2009

Restated

2008

The average number of full-time equivalent employees


  No.

No.

  No.

  No.

Head office functions


126

129

132

135

Housing management


350

339

379

374

Maintenance


117

116

117

116

Community services


154

155

164

159









747

739

792

784
















2009

Restated

2008


2009

Restated

2008

Staff costs for the above persons:


  £'000

£'000

  £'000

£'000







Wages and salaries

 

21,880

21,557

23,305

23,008

Social security costs 

 

1,543

1,467

1,670

1,576 

Other pension costs (note 6)


1,451

1,897

1,624

2,028 

Other staff costs


789

441

813

462 









25,663

25,362

27,412

27,074







6.    PENSION LIABILITIES

The London Pensions Fund Authority - Peabody

Peabody participates in the London Pensions Fund Authority Scheme (LPFA) for those employees who elected to join prior to 31 March 2008. The scheme is now closed to new entrants.

The pension cost, which includes liability for pension increases, has been determined in accordance with the advice of professionally qualified consulting actuaries based on an actuarial valuation made as at 31 March 2007 using the projected unit method. The most significant actuarial assumptions used in this valuation were:

Discount rate      -    6.3% per annum

Rate of general pay increases    -    4.7% per annum

Rate of increase in pensions in payment    -    3.2% per annum

Price inflation    -    3.2% per annum

Valuation of assets    -    assets have been valued at a 12 month smoothed market value


The actuarial valuation at 31 March 2007 showed that the market value of the LPFA's assets represented 82% of the value of benefits that had accrued to the Fund's pensioners, deferred pensioners and members based on past service, allowing for assumed future pay and pension increases. The valuation has been updated to 31 March 2009.

Peabody's service cost under the LPFA was £1,508,000 (2008 - £1,897,000).  

The Group's service cost under the LPFA was £1,674,000 (2008 - £2,028,000).

The major assumptions used by the actuary to value the liabilities of the scheme under FRS 17 are:




At 31 March 2009

At 31 March 2008



% per annum

% per annum

Inflation / Pension increase rate


3.1

3.6

Rate of increase in salaries


4.6

5.1

Expected return on assets


6.4

7.0

Discount rate


6.9

6.9

Valuation method


Projected unit

Projected unit


  6.    PENSION LIABILITIES (continued)

The London Pensions Fund Authority Peabody

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


Expected long term rate of return

Value at 31 March 2009

£'000

Expected long term rate of return

Value at 31 March 2008

£'000

Equities

7.0%

18,997

7.5%

24,318

Target return funds/Bonds

5.5%

3,333

6.3%

7,857

Alternative assets/Property

6.0%

8,332

6.7%

7,316

Cash

4.0%

2,666

4.8%

1,221






Total fair value of assets 

33,328


40,712






Present value of scheme liabilities

(47,565)


(48,342)






Net (under) funding in funded plans

(14,237)


(7,630)





Present value of unfunded liabilities

(50)


(51)






Net pension liability

(14,287)


(7,681)










  2009



2009



2008



2008

Amounts charged to operating profit

£'000

(% of payroll)

£'000

(% of payroll)






Current service cost

1,212

11.4

1,897

17.0

Interest cost

3,367

31.6

2,951

26.4

Expected return on employer assets

(2,899)

(27.2)

(2,976)

(26.7)

Past service cost

296

2.8

-

-

Losses on curtailments and settlements

102

1.0

-

-






Total

2,078

19.6

1,872

16.7






Actual return on plan assets

(8,661)


(865)









2009

2008

Reconciliation of defined benefit obligation

£'000

£'000




Opening defined benefit obligation

48,393

54,188

Current service cost

1,212

1,897

Interest cost

3,367

2,951

Contribution by members

705

659

Actuarial gains

(4,958)

(9,693)

Past service costs 

296

-

Losses on curtailments

102

-

Estimated unfunded benefits paid

(5)

(5)

Estimated benefits paid

(1,497)

(1,604)




Closing defined benefit obligation

47,615

48,393





  6.    PENSION LIABILITIES (continued)

The London Pension Fund Authority Peabody


2009

2008

Reconciliation of fair value of employer assets

£'000

£'000




Opening fair value of employer assets

40,712

41,097

Expected return on employers assets

2,899

2,976

Contribution by members

705

659

Contribution by employer

2,226

1,537

Contribution in respect of unfunded benefits

5

5

Actuarial losses

(11,717)

(3,953)

Unfunded benefits paid

(5)

(5)

Benefits paid

(1,497)

(1,604)




Closing fair value of employer assets

33,328

40,712






2009

2008

Amounts for the current and previous accounting period

£'000

£'000




Fair Value of employer assets

33,328

40,712

Present value of defined benefit obligation

(47,615)

(48,393)

Deficit

(14,287)

(7,681)

Experience losses on assets

(11,717)

(3,953)

Experience (losses)/gains on liabilities

(2)

2,310


Analysis of amount recognisable in statement of total recognised surpluses and deficits (STRSD)

2009

£'000

2008

£'000




Actuarial gains/(losses)

(6,759)

5,740




Actuarial gains/(losses) recognisable in the STRSD

(6,759)

5,740




Cumulative actuarial gains and losses

3,753

10,512


















  6.    PENSION LIABILITIES (continued)

The London Pension Fund Authority - CBHA

The following are the disclosures presented in the financial statements of the Peabody's wholly owned subsidiary CBHA in respect of the LPFA pension scheme.

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


Expected long term rate of return

Value at 31 March 2009

£'000

Expected long term rate of return

Value at 31 March 2008

£'000

Equities

7.0%

1,509

7.5%

1,884

Target return funds/Bonds

5.5%

265

6.3%

609

Alternative assets/Property

6.0%

662

6.7%

567

Cash

4.0%

212

4.8%

95






Total fair value of assets 

2,648


3,155






Present value of scheme liabilities

(4,145)


(4,176)






Net (under) / over funding in funded plans

(1,497)


(1,021)





Present value of unfunded liabilities

-


-






Net pension liability

(1,497)


(1,021)










  2009



2009



2008



2008

Amounts charged to operating profit

£'000

(% of payroll)

£'000

(% of payroll)






Current service cost

125

13.7

131

18.1

Interest cost

293

32.0

255

35.3

Expected return on employer assets

(227)

(24.8)

(232)

(32.1)

Past service cost

41

4.5

-

-

Losses / (gains) on curtailments and settlements

-

-

-

-






Total

232

25.4

154

21.3






Actual return on plan assets

(679)


(67)









2009

2008

Reconciliation of defined benefit obligation

£'000

£'000




Opening defined benefit obligation

4,176

4,684

Current service cost

125

131

Interest cost

293

255

Contribution by members

61

43

Actuarial gains

(473)

(830)

Past service costs

41

-

Estimated benefits paid

(78)

(107)




Closing defined benefit obligation

4,145

4,176





6.    PENSION LIABILITIES (continued)

The London Pensions Fund Authority - CBHA


2009

2008

Reconciliation of fair value of employer assets

£'000

£'000




Opening fair value of employer assets

3,155

3,184

Expected return on employers assets

227

232

Contribution by members

61

43

Contribution by employer

201

153

Contribution in respect of unfunded benefits

-

-

Actuarial losses

(918)

(350)

Unfunded benefits paid

-

-

Benefits paid

(78)

(107)




Closing fair value of employer assets

2,648

3,155






2009

2008

Amounts for the current and previous accounting period

£'000

£'000




Fair Value of employer assets

2,648

3,155

Present value of defined benefit obligation

(4,145)

(4,176)

Deficit

(1,497)

 (1,021)

Experience gains on assets

(918)

(350)

Experience losses on liabilities

-

106


Analysis of amount recognisable in statement of total recognised surpluses and deficits (STRSD)

2009

£'000

2008

£'000




Actuarial (losses)/gains

(445)

480




Actuarial (losses)/gains recognisable in the STRSD

(445)

480




Cumulative actuarial gains and losses

25

470





Friends Provident Defined Contribution Pension Scheme

Employees of the Peabody Group from 1 April 2008 are able to join the Peabody Group Pension Scheme which is a defined contribution scheme operated by Friends Provident. The assets of this scheme are held separately from those of the Group. Employer contributions in respect of this scheme are charged to the income and expenditure account as incurred. During the year ended 31 March 2009 employer contributions totalling £36,158 (2008: £nil) were made into the scheme.

Peabody Pension Trust Limited (PPT) 

Peabody Pension Trust acts as Trustee and administrator for the Governors of Peabody for the operation of a retirement benefits scheme for those Peabody employees who were eligible at 31 December 1977. Peabody has entered into commitments to pay the shortfall of pension payments over income for PPT for each year. The excess of liabilities over commitments is measured with respect to RPI in April of each year and in the year ended 31 March 2009 was £17,380 (2008: £16,601). 

PPT is not a pension scheme under the terms of the Pension Scheme Disclosure Regulations.




7.    INTEREST RECEIVABLE AND SIMILAR INCOME 



Peabody

Group



2009

2008

2009

2008



£'000

£'000

£'000

£'000






Income from listed investments

388

289

388

289

Other interest receivable and similar income

1,262

1,669

1,853

2,377

Interest received from Group entities

1,940

2,067

-

-

Other finance income

-

25

-

25







3,590

4,050

2,241

2,691








8.    INTEREST PAYABLE AND SIMILAR CHARGES



Peabody

Group



2009

2008

2009

2008



£'000

£'000

£'000

£'000







Interest payable 

20,743

24,125

20,750

24,125

Amounts capitalised

(1,915)

(2,348)

(1,915)

(2,391)

Premium on repurchase of debt

-

37,031

-

37,031

Other finance costs - net interest cost on pension scheme (note 6)

468

-

534

27







19,296

58,808

19,369

58,792











Capitalisation rate used to determine the finance costs capitalised during the period


5.1%


6.1%


5.1%


6.2%






9.    SURPLUS ON OPERATING ACTIVITIES 


Peabody

Group



2009

Restated

2008


2009

Restated

2008


£'000

£'000

£'000

£'000

Surplus on ordinary activities before taxation is stated after charging:





Depreciation on tangible fixed assets

10,803

10,492

10,983

10,639

Auditors' remuneration:





    In their capacity as auditors :





Group

-

-

63

85

Peabody

56

64

-

-

    In respect of other services

15

23

15

23







  10.    TAXATION CHARGE



Peabody

Group



2009

£'000

2008

£'000

2009

£'000

2008

£'000

The taxation charge comprises:






Adjustment in respect of prior years


-

-

-

-

United Kingdom corporation tax at 28% (2008: 30%) 



-


-


-


-









-

-

-

-








The tax assessed for the period is lower than that resulting from applying the standard rate of 28% corporation tax in the UK. The differences are explained below:




Group

Group





2009

£'000

 

Restated 2008 

£'000






Surplus on ordinary activities before taxation



35,089

33,556






Tax on profit on ordinary activities at standard rate of 28% (2008: 30%)




9,825


10,067






Factors affecting charge for the year:










Charitable surplus exempt taxation



(9,825)

(10,067)









-

-








A deferred tax asset has not been recognised in respect of the timing differences relating to trading losses as there is insufficient evidence that the asset will be recovered. The amount of the asset not recognised is £495,000 (2008£495,000). The asset would be recovered if suitable taxable profits were to arise in the future against which the losses could be offset.

  11 (a)    HOUSING PROPERTIES - PEABODY





Housing
properties

Housing
 properties

under

construction

Total





£'000

£'000

£'000

Cost







At 1 April 2008




962,543

22,258

984,801

Prior period adjustment




(752)

-

(752)








At 1 April 2008 (as restated - note 29)




961,791

22,258

984,049








Work completed




31,199

(31,199)

-

Additions




37,688

10,026

47,714

Disposals




(43,700)

-

(43,700)








At 31 March 2009




986,978

1,085

988,063








Depreciation







At 1 April 2008




44,247

-

44,247

Prior period adjustment




(235)

-

(235)








At 1 April 2008 (as restated - note 29)




44,012

-

44,012

Charge for the year




9,778

-

9,778

Disposals




(1,592)

-

(1,592)








At 31 March 2009




52,198

-

52,198








Depreciated cost







At 31 March 2009




934,780

1,085

935,865








At 31 March 2008 (as restated - note 29)




917,779

22,258

940,037















Social housing grant







At 1 April 2008




353,607

9,870

363,477

Work completed




9,870

(9,870)

-

Received




7,525

261

7,786

Disposals




(24,628)

-

(24,628)








At 31 March 2009




346,374

261

346,635








Other public grants







At 1 April 2008




56,097

343

56,440

Work completed




343

(343)

-

Received




421

-

421








At 31 March 2009




56,861

-

56,861















Net book value







At 31 March 2009




531,545

824

532,369








Net book value







At 31 March 2008 (as restated - note 29)




508,075

12,045

520,120









  11 (a)    HOUSING PROPERTIES - PEABODY (continued)

Additions during the year comprise £37.7.million (2008: £49.3million) of major repairs and refurbishment works, and £10.0 million (2008: £8.0 million) of expenditure on new-build properties. 

Additions to housing properties in the course of construction during the year included capitalised interest (at an average rate during the year of 5.1%) of £1,915,000 (2008 - £2,348,000 at an average rate of 6.2%).

Housing properties includes shared ownership properties that have a cost of £38,891,000 (2008: £37,031,000) and associated Social Housing Grant of £15,756,000 (2008: £15,397,000).

Housing properties includes £168 million of land which has not been depreciated.






2009

2008





£'000

£'000

Housing properties comprise:






Freeholds




891,822

882,211

Long leaseholds




96,241

101,838











988,063

984,049







  11 (b)    HOUSING PROPERTIES - GROUP





Housing

properties

Housing

properties

under

construction

Total





£'000

£'000

£'000

Cost







At 1 April 2008 




1,021,694

22,375

1,044,069

Prior period adjustment




(686)

-

(686)








At 1 April 2008 (as restated - note 29)




1,021,008

22,375

1,043,383








Works completed




31,199

(31,199)

-

Additions




37,928

10,841

48,769

Disposals




(43,803)

-

(43,803)








At 31 March 2009




1,046,332

2,017

1,048,349








Depreciation







At 1 April 2008




44,340

-

44,340

Prior period adjustment




(223)

-

(223)








At 1 April 2008 (as restated - note 29)




44,117

-

44,117

Charge for the year




9,903

-

9,903

Disposals




(1,592)

-

(1,592)








At 31 March 2009




52,428

-

52,428








Depreciated cost







At 31 March 2009




993,904

2,017

995,921









At 31 March 2008 (as restated - note 29)





976,891


22,375


999,266















Social housing grant







At 1 April 2008




353,607

9,870

363,477

Works completed




9,870

(9,870)

-

Received




7,525

261

7,786

Disposals




(24,628)

-

(24,628)








At 31 March 2009




346,374

261

346,635








Other public grants







At 1 April 2008




73,997

345

74,342

Received




422

-

422

Disposals 




(40)

-

(40)








At 31 March 2009




74,379

345

74,724















Net book value







At 31 March 2009




573,151

1,411

574,562








Net book value







At 31 March 2008 (as restated - note 29)

 

 

 

549,287

12,160

561,447









11 (b) HOUSING PROPERTIES - GROUP (continued)

Additions during the year comprise £37.9 million (2008: £49.4million) of major repairs and refurbishment works, and £10.8 million (2008: £9.2 million) of expenditure on new-build properties. 

Additions to housing properties in the course of construction during the year included capitalised interest (at an average rate during the year of 5.1%) of £1,915,000 (2008 - £2,391,000 at an average rate of 6.1%).

Housing properties include shared ownership properties that have a cost of £41,715,000 (2008: £39,899,000) and associated Social Housing Grant of £17,543,000 2008: £17,224,000).

Housing properties includes £180 million of land which has not been depreciated.





2009

2008





£'000

£'000

Housing properties comprise:






Freeholds




952,108

941,545

Long leaseholds




96,241

101,838











1,048,349

1,043,383







11 (c)    SOCIAL HOUSING GRANT

The total Social Housing Grant receivable to date is £346,635,000 (2008: £363,477,000), as shown in note 11(a). 

  12 (a)    OTHER TANGIBLE FIXED ASSETS - PEABODY







Freehold
offices



Office
equipment




Total





£'000

£'000

£'000

Cost







At 1 April 2008




13,675

5,213

18,888

Additions




3

1,516

1,519

Disposals




(5)

-

(5)








At 31 March 2009




13,673

6,729

20,402








Depreciation







At 1 April 2008




4,830

2,048

6,878

Charge for the year




524

501

1,025








At 31 March 2009




5,354

2,549

7,903








Other public grants







At 1 April 2008




-

672

672

Received




-

-

-








At 31 March 2009




-

672

672








Net book value







At 31 March 2009




8,319

3,508

11,827








Net book value







At 31 March 2008




8,845

2,493

11,338









  12 (b)    OTHER TANGIBLE FIXED ASSETS - GROUP






Freehold

offices



Office

equipment




Total




£'000

£'000

£'000

Cost






At 1 April 2008



14,117

5,393

19,510

Additions

Disposals



3

(5)

1,664

(60)

1,667

(65)







At 31 March 2007



14,115

6,997

21,112







Depreciation






At 1 April 2008



4,859

2,127

6,986

Charge for the year

Disposals



532

-

548

(60)

1,080

(60)







At 31 March 2009



5,391

2,615

8,006







Other public grants






At 1 April 2008



-

672

672

Received



-

-

-







At 31 March 2009



-

672

672







Net book value






At 31 March 2009



8,724

3,710

12,434







Net book value






At 31 March 2008



9,258

2,594

11,852








  13.    FIXED ASSET INVESTMENTS

Peabody


Shares in
 subsidiary

undertakings

Shares in
 quoted 

securities

Total



£'000

£'000

£'000

Market value





At 1 April 2008


5,000

7,432

12,432

Additions


-

387

387

Change in market value of investments 


-

(1,360)

(1,360)






At 31 March 2009


5,000

6,459

11,459







In addition to a £5 million investment in Peabody Enterprises LimitedPeabody fixed asset investments comprise shares in quoted securities and cashThe investment income generated from these shares is used to fund Community Services activities. The historic cost of this investment portfolio is £7,829,992 (2008: £7,442,171and the market value as at 31 March 2009 was £6,459,409 (2008: £7,432,034)


Group 

Group fixed assets investments comprise the shares in quoted securities and cash only.

    

14.    PROPERTIES FOR SALE 



Peabody

Group





2009

Restated

2008


2009

Restated

2008



£'000

£'000

£'000

£'000







Shared ownership properties


1,328

2,306

1,328

2,306








Properties held for sale represents the first tranche proportion of shared ownership units.  

As at 31 March 2008 Peabody's development at Cooper's Road was still under construction.  Cooper's Road is a development of 80 units including 33 shared ownership properties.  First tranches of the shared ownership properties were all sold during the year ended 31 March 2009.    

During the year ended 31 March 2009 Peabody completed 20 shared ownership units at Milbourne Street, Hackney. Construction of these units was completed in March 2009 with the sale of these units anticipated to take place in the first half of the 2009/10 financial year.  It is anticipated that the net realisable value of the units will exceed the value held in current assets at the year end.  

  15.    DEBTORS



Peabody

Group



2009

2008

2009

2008



£'000

£'000

£'000

£'000

Amounts falling due within one year












Rent and service charges in arrears


8,365

8,050

9,030

8,712

Less: provision for bad debts


(3,905)

(3,945)

(4,204)

(4,269)









4,460

4,105

4,826

4,443

Operating lease payments in advance


-

1

-

1

Amounts owed by subsidiary undertakings


343

1,357

-

-

Amounts owed by subsidiary undertakings - loan


2,500

500

-

-

Loans to employees


61

57

61

57

Other debtors and prepayments


4,718

5,204

5,112

5,455

Loan to Charity Bank


570

562

570

562

Loan to SCORE


-

-

-

60

Blue Hut Escrow account


-

-

-

100









12,652

11,786

10,569

10,678

 






Amounts falling due after one year












Amounts owed by subsidiary undertakings - loan


26,438

28,438

-

-

Loan to SCORE


-

-

-

60









26,438

28,438

-

60








At the balance sheet date, £28,938,000 (2008: £28,938,000) is on-lent to CBHA, a fixed interest rate of 6.79% is applicable to £24.5 million of the loan.  The on-lending is disclosed above, split between amounts due within one year and after one year.

The loan to SCORE represents a secured loan of £120,000 made by CBHA during the year ended 31 March 2005 to Sporting Club Orient, a charitable organisation providing sports facilities in East London. A fixed rate of interest at 5.5% applies to the loan, which is repayable over five years with the first repayment due on the fourth anniversary of the granting of the loan in January 2009. Interest on the balance is paid quarterly.

SCORE failed to repay the first instalment of £60,000 in January 2009.  Negotiations are underway to revise the loan terms and a provision against the full loan has been made in the financial statements.




  16.    CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR



Peabody

Group




Restated


Restated



2009

2008

2009

2008



£'000

£'000

£'000

£'000







Bank and building society loans


-

500

-

500

Trade creditors


7,125

5,254

7,376

5,503

Rent and service charges received in advance


4,565

4,438

4,831

4,672

Social housing grant received in advance


225

-

225

-

Amounts owed to subsidiary undertakings


28

256

-

-

Loan from Peabody Pension Trust


33

31

33

31

Recycled capital grant fund


7,471

3,505

7,471

3,505

Other taxation and social security costs


683

610

700

688

Accruals and deferred income


9,466

14,897

9,894

15,414















29,596

29,491

30,530

30,313







Social housing grants received in advance will be utilised against capital expenditure in the year ended 31 March 2010.

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



Peabody

Group




Restated


Restated



2009

2008

2009

2008



£'000

£'000

£'000

£'000







Bank and building society loans


370,963

381,056

370,577

380,637

Guaranteed secured debenture stock


1,346

1,346

1,346

1,346

Guaranteed debenture stock premium

123

131

123

131









372,432

382,533

372,046

382,114







Recycled capital grant fund


12,974

14,104

13,184

14,268

Disposal proceeds fund


254

309

254

309









385,660

396,946

385,484

396,691







18.    RECYCLED CAPITAL GRANT FUND



Peabody

Group



2009

2008

2009

2008



£'000

£'000

£'000

£'000







At 1 April 2008


17,609

8,177

17,773

8,177

Grant recycled


2,153

9,397

2,193

9,555

Interest accrued


683

741

689

747

Major repairs and works to existing stock

-

(547)

-

(547)

Purchase / development of properties

-

(159)

-

(159)









20,445

17,609

20,655

17,773

Repayment of grant to HCA


-

-

-

-







Balance at 31 March 2009


20,445

17,609

20,655

17,773








19.    DISPOSAL PROCEEDS FUND



Peabody

Group



2009

2008

2009

2008



£'000

£'000

£'000

£'000







At 1 April 2008


309

609

309

609







Net sale proceeds recycled


2

158

2

158

Interest accrued


12

26

12

26

Major repairs and works to existing stock

(69)

(484)

(69)

(484)












Balance at 31 March 2009


254

309

254

309








20.    DEBT ANALYSIS




Peabody

Group



2009

2008

2009

2008



£'000

£'000

£'000

£'000







Bank and building society loans


370,963

381,556

370,577

381,137

Guaranteed secured debenture stock

1,346

1,346

1,346

1,346

Guaranteed secured debenture stock premium

123

131

123

131









372,432

383,033

372,046

382,614









Peabody

Group



2009

2008

2009

2008



£'000

£'000

£'000

£'000







Within one year


-

500

-

500

Between two and five years

8,000

6,500

8,000

6,500

After five years

364,432

376,033

364,046

375,614









372,432

383,033

372,046

382,614








Bank and building society loans

The Group's bank and building society loans are secured by specific charges over housing properties. The borrowings bear interest rates of between 1.2% and 10.25% and are repayable in instalments due as shown above.  


Risks

The main risks associated with the Group's borrowings are interest rate risk and liquidity risk. The Finance Committee reviews and agrees policies for managing these risks and these are summarised below:


Interest rate risk

The Group regularly reviews its policy on the proportion of debt that should be held at fixed and floating interest rates.  As at 31 March 2009, £295.3 million of the Group's borrowings are at fixed rates with the remainder at floating rates.


Liquidity risk

The Group's policy is to limit liquidity risks by ensuring that it has adequate short and long term borrowing facilities in place, to provide the required level of funding flexibility.



21.    RESERVES




Designated Reserves




Revenue Reserve


Revaluation

Reserve


Subsidence Reserve

Peabody Community Fund



Total


£'000

£'000

£'000

£'000

£'000

Peabody






At 1 April 2008 - as previously stated

166,879

-

929

7,698

175,506

Prior period adjustment

1,789

-

-

-

1,789







At 1 April - as restated

168,668

-

929

7,698

177,295

Transfers

1,372

-

-

(1,372)

-

Surplus in the year

34,241

-

-

-

34,241

Other gains/(losses)

(6,759)

-

-

-

(6,759)







At 31 March 2009

197,522

-

929

6,326

204,777







Group






At 1 April 2008

182,962

3,560

929

7,698

195,149

Prior period adjustment

1,843

-

-

-

1,843







At 1 April 2008 - as restated

184,805

3,560

929

7,698

196,992

Transfers

1,653

(281)

-

(1,372)

-

  Surplus in the year

35,089

-

-

-

35,089

Other gains/(losses)

(7,204)

-

-

-

(7,204)







At 31 March 2009

214,343

3,279

929

6,326

224,877








At 31 March 2009 the General Reserves, being those which are not designated, were all used in financing investment in social housing or in the programme of community regeneration activities. Any surpluses are reinvested in the above activities thus ensuring that Peabody is able to continue to deliver itmission to make London a city of opportunity for all by ensuring as many people as possible have a good home, real sense of purpose and a strong feeling of belonging.


The designated subsidence reserve will be used to fund repairs to properties which had been the subject of known subsidence events prior to June 2007.  


The Peabody Community Fund designated reserve reflects a write-down of £1,360,000 during the year in respect of a fall in value of the Peabody Community Fund investment portfolio.


22.    CAPITAL COMMITMENTS

Capital expenditure contracted for and not provided for in the accounts amounts to £15,246,000 (2008£25,018,000).


All of this anticipated expenditure is covered by Social Housing Grant, reserves and private finance.

23.    CONTINGENT LIABILITIES

There are no known material contingent liabilities as at 31 March 2009 (2008: £Nil).


  24.    NOTES TO THE PEABODY CASH FLOW STATEMENT

(a)    RECONCILIATION OF OPERATING SURPLUS TO NET CASH INFLOW FROM OPERATING     ACTIVITIES





2009

£'000

Restated

2008

£'000







Operating surplus




18,393

20,006

Depreciation




10,803

10,492

Decrease/(increase) in stock




978

(2,306)

Decrease in debtors




1,134

4,482

Decrease in creditors




(4,298)

(11,862)

Adjustment for pension funding




(621)

330







Net cash inflow from operating activities




26,389

21,142







(b)    ANALYSIS OF CASH FLOWS FOR HEADINGS NETTED IN THE CASH FLOW STATEMENT





£'000


2009

£'000



£'000

Restated

2008

£'000

Returns on investments and servicing of finance






Interest received


3,202


3,761


Dividends received


388


289


Interest paid


(18,653)


(20,771)


Cost of early redemption of loans


-


(45,039)








Net cash outflow from returns on investments and servicing of finance



(15,063)



(61,760) 







Capital expenditure and financial investment






Cash paid for construction of, investment in, and purchase of housing properties



(44,541)



(53,044)


Social Housing Grant received


8,138


5,627


Other grants received


-


2


Cash received on sale of property


51,490


91,207


Cash paid for investments


(387)


(289)


Cash paid for purchase of other tangible fixed assets



(1,514)



(807)


Internal costs capitalised


(1,258)


(1,101)








Net cash inflow from capital expenditure and financial investment



11,928



41,595







Financing






New loans


20,000


85,000


Repayment of loans made to subsidiary undertaking



-



500


Repayment of loans


(30,000)


(79,831)









Net cash (outflow)/inflow from financing




(10,000)



5,669








  24.    NOTES TO THE PEABODY CASH FLOW STATEMENT (continued)

  • ANALYSIS OF NET DEBT 






At 1 April 

2008

£'000


Cash

Flow

£'000

Other 

non-cash

changes

£'000


At 31 March 2009

£'000








Cash at bank and in hand (including funds on deposit)




24,993


13,254


-


38,247

Debt due after one year



(382,533)

10,000

101

(372,432)

Debt due within one year



(500)

-

500

-

Debtor due after more than one year



28,438

-

(2,000)

26,438

Debtor due within one year



500


2,000

2,500











(329,102)

23,254

601

(305,247)









25.    NOTES TO THE CONSOLIDATED CASH FLOW STATEMENT

(a)    RECONCILIATION OF OPERATING SURPLUS TO NET CASH INFLOW FROM OPERATING     ACTIVITIES





2009

£'000

Restated

2008

£'000







Operating surplus for the year




20,326

22,202

Depreciation




10,983

10,639

Decrease/(increase) in stocks




978

(1,120)

Decrease in debtors




169

2,336

Decrease in creditors




(1,642)

(11,458)

Adjustment for pension funding




(656)

330







Net cash inflow from operating activities


30,158

22,929








  25.    NOTES TO THE CONSOLIDATED CASH FLOW STATEMENT (continued)

(b)    ANALYSIS OF CASH FLOWS FOR HEADINGS NETTED IN THE CASH FLOW STATEMENT





£'000


2009

£'000



£'000

Restated

2008

£'000

Returns on investments and servicing of finance






Interest received


1,952


2,402


Dividends received


289


289


Interest paid


(20,069)


(20,798)


Cost of early redemption of loans


-


(45,039)








Net cash outflow from returns on investments and servicing of finance



(17,828)



(63,146) 







Capital expenditure and financial investment






Cash paid for construction of, investment in and purchase of housing properties


(45,596)


(54,132)


Social Housing Grant received


8,139


5,845


Other grants received


-


2


Cash received on sale of property


50,839


93,717


Cash paid for the purchase of other tangible fixed assets



(1,667)



(826)


Cash paid for investments


(387)


(289)


Internal costs capitalised


(1,258)


(1,101)








Net cash inflow from capital expenditure and financial investment



10,070



43,216




    



Financing






New loans


20,000


85,000


Repayment of loans


(30,000)


(79,831)








Net cash (outflow)/ inflow from financing




(10,000)



5,169







  • ANALYSIS OF NET DEBT 


     

    At 1 April

    2008

    £'000


    Cash

    flow

    £'000

    Other 

    non-cash

    changes

    £'000


    At 31 March 2009

    £'000






    Cash at bank and in hand

    38,923

    12,400

    -

    51,323

    Debt due after one year

    (382,114)

    10,000

    68

    (372,046)

    Debt due within one year

    (500)

    -

    500

    -







    (343,691)

    22,400

    568

    (320,723)







  26.    LEGISLATIVE PROVISIONS, TAXATION, SUBSIDIARY UNDERTAKINGS AND JOINT VENTURES

Peabody is a registered charity formed under an Act of Parliament, and a registered provider registered with the Tenant Services Authority (TSA).

Peabody has the following wholly owned subsidiaries, all of which are incorporated in Great Britain and have been included in the Group results:

  • CBHA (a charitable company, limited by guarantee and a registered social landlord)

  • Peabody Enterprises Limited

  • Peabody Land Limited

  • Ladbroke Developments Limited

  • Blue Hut Developments Limited

  • Peabody Pension Trust

Peabody Land Limited, Peabody Enterprises Limited, Ladbroke Developments Limited and Blue Hut Developments Limited are trading subsidiaries involved in the development and sale of lanand private residential property.

Peabody Pension Trust Limit has been excluded from consolidation on the grounds of materiality.  

27.    TRANSACTIONS WITH RELATED PARTIES

At 31 March 2009 there were six members of the Board or other Committees who had tenancy agreements Peabody. There were 8 residents involved with the Governance of CBHA at 31 March 2009The tenancy agreements have been granted on the same terms as for all other residents, and the housing management procedures, including those relating to management of arrears have been applied consistently to these residents.

28.    SURPLUS ON SALE OF FIXED ASSETS

During the year Peabody sold its 529 properties in Croydon to London & Quadrant Housing Trust and 102 properties which were void and economically unviable, generating a total surplus of £30.8 million. In addition Peabody generated a surplus on the sale of properties under the preserved right to buy and from shared ownership staircasing transactions of £2.1 million.

CBHA sold 2 properties during the year under the preserved right to buy, and completed 1 shared ownership staircasing transactiongenerating a surplus of £0.3 million. 

29    PRIOR YEAR ADJUSTMENT

The prior year adjustment reflects the change in accounting for shared ownership first tranche sales in accordance with SORP 2008. The previous SORP recommended that first tranche sale proceeds should be credited against shared ownership housing properties classified as fixed assets.

The SORP 2008 treatment requires an appropriate proportion of development costs representing first tranche development to be accounted for as current assets and the related sales proceeds shown in turnover. The remaining proportion of property development costs are accounted for as fixed assets with any subsequent sale treated as a disposal of the fixed asset.

The effect of the change in accounting policy is an increase in the Group's turnover for the year ending 31 March 2008 of £4,074,000, an increase in the cost of sales of £3,592,000 and an increase in the surplus on sale of fixed assets of £837,000, with a consequent increase in surplus of £1,319,000.  The cumulative effect on reserves is an increase of £1,843,000.  

  29    PRIOR YEAR ADJUSTMENT (continued)


Cumulative prior year adjustment to 31 March 2007

Prior year adjustment for 2007/08

Cumulative prior year adjustment to 31 March 2008


£'000

£'000

£'000

Peabody




Shared ownership sales




Turnover - proceeds of first tranche sales

35,820

3,171

38,991

Cost of sales

(35,527)

(2,512)

(38,039)

+39)39)

Surplus on subsequent tranche shared ownership sales

-

837

837





Surplus

293

1,496

1,789





Revenue reserves




Revenue reserves as at 31 March as previously stated

131,073


166,879

Add: surplus on first tranche shared ownership sales

293

1,496

1,789





Revenue reserves at 31 March as restated

131,366


168,668









Group




Shared ownership sales




Turnover - proceeds of first tranche sales

37,806

4,074

41,880

Cost of sales

(37,282)

(3,592)

(40,874)

Surplus on subsequent tranche shared ownership sales

-

837

837





Surplus

524

1,319

1,843





Revenue reserves




Revenue reserves as at 31 March as previously stated

144,173


182,962

Add: surplus on first tranche shared ownership sales

524

1,319

1,843





Revenue reserves at 31 March as restated

144,697


184,805







  29    PRIOR YEAR ADJUSTMENT (continued)

The prior year adjustment to current asset balances for the group and association for the year ended 31 March 2008 is an increase of £2,306,000, being the transfer of the shared ownership first tranche proportion from fixed assets to current assets.

The impact of the adjustment on completed shared ownership properties within housing property balances is shown below:


Cumulative prior year adjustment to 31 March 2007

Prior year adjustment for 2007/08

Cumulative prior year adjustment to 31 March 2008


£'000

£'000

£'000

Peabody




Tangible fixed assets - properties




Cost




At 31 March as previously stated

962,771


984,801

Add: accumulated first tranche surpluses from prior years

79

1,475

1,554

Less: First tranche amounts held as current assets

-

(2,306)

(2,306)





At 31 March as restated

962,850


984,049









Depreciation




At 31 March as previously stated

35,122


44,247

Less: depreciation charge for restated housing properties

(214)

(21)

(235)





At 31 March as restated

34,908


44,012









Group




Tangible fixed assets - properties




Cost




At 31 March as previously stated

1,022,049


1,044,069

Add: accumulated first tranche surpluses from prior years

310

1,310

1,620

Less: First tranche amounts held as current assets

(965)

(1,341)

(2,306)





At 31 March as restated

1,021,394


1,043,383





Depreciation




At 31 March as previously stated

35,122


44,340

Less: depreciation charge for restated housing properties

(214)

(9)

(223)





At 31 March as restated

34,908


44,117











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