Coastline Housing Limited Coastline Housing Limited Financial Statements Consolidated Financial Statements For the year ended 31 March 2007 For the year ended 31 March 2021 **Registered Number 3284666** **Registered Number 03284666** Registered Office: Coastline House 4 Barncoose Gateway Park Pool, Redruth Cornwall TR15 3RQ ## **Contents** |**ontents**|| |---|---| |Directors, Executive Team and Advisors…………………………………………………………|2| |Report of the Board (incorporating the Statement of Board’s Responsibilities)………………|4| |Strategic Report (incorporating the Value for Money Statement)………………………………|24| |Report of the Independent Auditor to the Members of Coastline Housing Ltd…....................|53| |Statement of Comprehensive Income for the year ended 31 March 2021…………..………..|57| |Other Comprehensive Income for the year ended 31 March 2021....…………………………|57| |Statement of Financial Position as at 31 March 2021..…………………………………………|58| |Consolidated Statement of Cash Flows for the year ended 31 March 2021…………………|60| |Consolidated Statement of Changes in Equity………………………..…………………………|62| |Notes to the Financial Statements…………………………………………………………………|63 to 102| 1 ## **Directors, Executive Team and Advisors** |**The Board**||**From**|**To**|**Committee**|**Meeting Attendance**|**Meeting Attendance**|**Meeting Attendance**| |---|---|---|---|---|---|---|---| |||||**Membership**|**(Inc.**|**Committees)**|| ||||||**No**|**Max**|**%**| |||||||**Avail**|| |D Law MBE|Chair|9 May 2012|23 September 2020|$|5|5|100| |P Stephens|Deputy Chair|1 Jan 2013||$, %|13|15|87| ||_(Interim Chair_|_24 September 2020_|_30 June 2021)_||||| |M Duddridge|_Chair Designate_|_1 April 2021_||$|-|-|-| ||Chair|1 July 2021|||||| |A Young|Chief Executive|9 Oct 2014||$, %|16|16|100| |F Perrin||1 Jan 2018|13 November 2020|$|7|7|100| |M J Waldron||1 Oct 2013||$|10|11|90| |P A W Bearne||18 May 2015||%, &|13|13|100| |S Harrison||27 Sept 2018||!, &|13|13|100| |S Roberts||1 Oct 2013||!, %, &|18|18|100| |C Pears|Independent|1 July 2020||!|4|5|80| ||ARAC member||||||| |||1 March 2021|||||| ||Board member||||||| |K Harris||1 September 2020||!|8|8|100| |A Moore||1 September 2020||$|7|7|100| |E Chapman|Independent|1 February 2021||&|1|1|100| ||CEF member||||||| |J De-Ville|Independent|1 February 2021||&|1|1|100| ||CEF member||||||| |K Kemp|Independent|1 February 2021||&|1|1|100| ||CEF member||||||| |L Denmead|Independent|1 February 2021||&|1|1|100| ||CEF member||||||| 2 ## **Committee Membership Key** **!** Audit, Risk and Assurance Committee **$** Property and Investment Committee **%** Coastline Services Board & Customer Experience Forum |**The Executive**|**Team**|**From**| |---|---|---| |A Young|Chief Executive|9 Oct 2014| |L Beard|Deputy CEO (with responsibility for Housing, Assets and Communities) 26 Nov 2007|| |N Mallows|Director of Finance and ICT|25 Jan 2016| |C Weston|Director of Development and Commercial Services|1 Mar 2016| |D Wingham|Director of HR and Governance|1 Oct 2007| **Advisors** Principal Solicitors Trowers and Hamlins, The Senate, Southernhay Gardens, Exeter EX1 1UG Stephens and Scown, Osprey House, Malpas Road, Truro, Cornwall TR1 1UT Funders Abbey National Services, 2 Triton Square, Regent’s Place, London NW1 3AN MandG Investments, Laurence Pountney Hill, London, EC4R 0HH Affordable Housing Finance, 3rd Floor, 17 St. Swithin’s Lane, London EC4N 8AL NatWest plc, 9th Floor, 250 Bishopsgate, London EC2M 4RB Homes England, 50 Victoria Street, Westminster, London SW1H 0TL Lloyds Bank plc, 10 Gresham Street, London, EC2V 7AE Bankers NatWest plc, 4 Commercial Square Camborne TR14 8EB External Auditors KPMG, Regus, 4th floor, Salt Quay House, 6 North East Quay, Plymouth PL4 0HP Internal Auditors Bishop Fleming, Chy Nyverow, Newham Road, Truro TR1 2DP 3 ## **Report of the Board** ## **Introduction** Coastline is pleased to present the 2020/21 Annual Report and Accounts. The financial results continue to represent strong progress towards the targets set out in the 2016-2021 Corporate Plan and provide a sustainable and resilient base as we focus on the new Coastline Plan for 2021-2026 which is being launched during 2021. The year to 31 March 2021 has seen continued unprecedented impacts from the Covid-19 pandemic. We experienced a severe lockdown at the start of the year and have had to learn and adapt during the various phases. Our response strategy has been to ensure that we are well placed to maintain the highest levels of customer service possible, while keeping Customers and colleagues safe. We continue to review and adapt our plans and approach to ensure that we offer a caring and responsive service to our Customers. However it is clear that we will not be able to catch up all of the backlog from 2020/21 in the year just started, and so we are carefully considering how that catch up can be accomplished smoothly over a number of years. Our response during the pandemic is set out fully in the Strategic Report but the Board would like to express its appreciation of the professional and caring response delivered by all colleagues. Coastline remains committed to delivering its mission of ‘Great Homes, Great Services, Great People’, and the Strategic Report sets out both the considerable progress towards delivering the previous Corporate Plan as well as our ambition for the future. ## **Legal Structure** Coastline Housing Limited (‘CHL’ or ‘the Company’) was incorporated in November 1996 and is an independent registered charity and social business, run on a non-distribution basis. This means that all profits generated are retained for furtherance of Coastline’s charitable objectives. CHL is a public benefit entity. It has four wholly-owned subsidiaries: - Coastline Services Limited (‘CSL’), a building maintenance and grounds contractor; - Coastline Design and Build Limited (‘CDB’), a design and build contractor; - Coastline Homes Limited (‘CHM’), a design, construction and sale of residential housing contractor; and - Coastline Care Limited (‘CCL’), which has remained Dormant throughout 2020/21. Together these companies form Coastline Housing Group (‘the Group’). CHL is registered with the Charity Commission as a charitable company and with the Regulator of Social Housing (‘the RSH’) as a provider of social housing; both of these provide the primary regulatory framework for Coastline with the Regulator of Social Housing as principal regulator. CHL is also registered with the Care Quality Commission (CQC) for the services provided at Miners Court. CHL is a company Limited by Guarantee registered at Companies House. CSL, CDB, CCL and CHM are all companies limited by shares and are registered at Companies House. 4 The Group is governed by a paid Board of Non-Executive Directors and the Chief Executive. The Directors of the Company who have served during the year and up to the date of the signing of these financial statements are listed on page 2. ## **Principal Activities** The principal activity of the Group is the provision of affordable housing for people on low incomes. Any financial surplus from our activities is reinvested into improving existing homes, communities and services, and developing new homes. The investment into new affordable housing remains a key strategic deliverable and represents an expected level of investment in excess of £200 million over the next five years. This is in addition to the investment in improvements for existing stock which is forecast to be in excess of £21 million over the same period, separate and above any other expenditure in relation to day to day repairs and maintenance. The Group via CSL, provides property and grounds maintenance services to CHL and to a number of public and private sector clients across Cornwall. CDB is a commercial design and build contractor for new builds whose principal client is CHL. CHM was incorporated in September 2017 in preparation for delivery of a wider range of housing options including an element of open market housing for sale where it forms part of wider development schemes that the Group is undertaking. The company commenced trading in the year ended 31 March 2019. Due to significant changes in contracts and the delivery of care and support across Cornwall the trade and activities of CCL were transferred back into CHL from 1 April 2015. The company was Dormant for the year ended 31 March 2021 as it was for the previous year. ## **Corporate Plan: Mission, Values and Objectives** Coastline exists to provide housing for those in need, to help improve the neighbourhoods that people live in, and to provide services that improve the quality of our Customers’ lives. We are an independent, charitable, not-for-profit housing association owning and managing over 5,000 homes throughout Cornwall. We aim to make a financial surplus to support our mission and vision. All of our surpluses are reinvested into our charitable work. ## Our **mission statement** is: - Great Homes - • Great Services - Great People This is our ‘brand promise’ to our Customers, partners and other stakeholders – a clear and succinct statement of our purpose and what we stand for. It is also underpinned by a fourth statement of “Great Foundations”, which ensures the business fundamentals are in place that enable and support our charitable mission. 5 Our impact doesn’t end with the bricks and mortar. We work hard to ensure our Customers are living in happy and thriving communities, and we also provide opportunities for our Customers to change their lives by re-entering the workplace or starting on the path to training or volunteering. We recognise the current challenging times for many and we remain committed to helping people improve their financial wellbeing in a number of ways. Additionally, we provide a helping hand to those members of our society who find themselves in the unenviable position of being homeless, offering a range of essential services – day and night. Our Corporate Plan for 2017-2021 set out a number of clear, measurable and challenging targets. These targets and progress against them are further detailed in the Strategic Review. The new Coastline Plan, ‘Great Futures’, is being launched during 2021 and provides the context and mission detail for the next four years to 2025. It seeks to further stretch our ambitions to alleviate housing and related issues across Cornwall, whilst making positive changes towards addressing the impacts of climate change. ## **Values** Our values are what we as an organisation care most about and they underpin everything that we do. We will: - Put our Customers first; - Be open, honest and accountable; - Strive to be the best; and - Value each other ## **Objectives** The current Corporate Plan document is available on our website http://www.coastlinehousing.co.uk/corporate plan.pdf, but can also be obtained from our registered office and provides details of outcomes, milestones and performance measures for each objective. The headline targets of the Corporate Plan 2017-2021 are: - We will build 1,000 new affordable homes for rent and low cost home ownership; - We will ensure that none of our homes cost more than £600 a year to heat; - We will have all of our core customer services available on-line, and 50% of our Customers will be choosing to use these services; - We will do more for vulnerable groups, with a new homeless facility completed and 130 homes for older people; - We will grow our income while ensuring that we also increase our productivity, improving our operating margin to 38%, allowing us to invest more in homes and services; and - We will be recognised as a brilliant company to work for, reaching the Top 50 of The Sunday Times Best Companies not-for-profit list. 6 ## **Governance Structure** ## **Charitable Objects** The Group is headed by Coastline Housing Limited which is a registered charity with the following objects: - The relief of persons in necessitous circumstances, the aged, disabled, handicapped, and chronically sick through the provision of suitable housing, amenities and services. - The provision of recreational or other facilities in the interests of social welfare with the object of improving the conditions of life for the Customers and other persons eligible for benefit from the Company. - The relief of poverty and the advancement of education for the benefit of the community. ## **The Board** The Board is led by the incoming Chair Mark Duddridge (from 1 July 2021) and during the year by Interim Chair, Peter Stephens, who in September 2020 replaced the outgoing Chair Derek Law MBE, who had served a full nine year period. The membership of the Board is given on page 2. Each Director brings a range of experiences and skills to the operation of the Board and its Committees. New Board Directors undergo a formal induction programme which includes background information about the Group and other governance-related issues. The current Board consists of nine independent Non-Executive Directors and one Executive Director. Board recruitment is based on skills, knowledge and expertise; vacancies are widely advertised. The Directors are all subject to an annual appraisal conducted by the Chair, Deputy Chair and the Chair of the Audit, Risk and Assurance Committee and one other Non-Executive Director in respect of the Chair. There have been no changes to the Board since 31 March 2021, other than those detailed above. The Board decided to pause recruitment for the Chair in April 2020 due to the pandemic and reflecting the potential impact on our ability to recruit, therefore appointing an interim chair. The recruitment process was then recommenced later in the year once conditions for recruitment were considered to be more favourable. The Board controls the Group’s strategic direction and reviews its operating and financial position. It is supplied with timely and relevant information to enable it to discharge its duties. Board papers are distributed in advance of meetings and papers are sufficiently detailed to enable the Directors to understand the Group and Company management and performance. ## **Board and Executive Officers Remuneration** Non-Executive Directors receive remuneration from the Group as well as reimbursement of expenses incurred. This has been independently reviewed during the year with no significant changes proposed. The remuneration of the Executive Officers is determined by the Board with an independent external review having been completed most recently during 2021. 7 ## **Board Committees** The Board delegates some of its responsibilities to two Committees: the Audit, Risk and Assurance Committee and the Property and Investment Committee. The Remuneration and Nominations Committee was discontinued in September 2017 following a review of governance arrangements and board effectiveness with its responsibilities being retained by the main Board reflecting the importance of colleagues, resources, executive remuneration and performance management. During the year the Board approved the creation of a Customer Experience Forum, which is part of our formal governance structure and met for the first time in 2020/21. This Forum is part of our on-going commitment to broadening Customer input into how Coastline is run, and supports the principles of the National Housing Federation’s ‘Together with Tenants’ and Coastline’s Trust Charter. ## **Audit, Risk and Assurance Committee** This Committee is chaired by Steve Harrison. The other Directors who served during the year on the Committee were Sue Roberts, Karen Harris, Charles Pears and Peter Stephens (April to September 2020). It met five times during the year and its work included: - reviewing the external auditor’s plans for the audit of the Group’s financial statements; - reviewing the external auditor’s management report and audit highlights memorandum; - reviewing the financial statements for the year; - reviewing plans and reports from the internal auditors on the Group’s system of internal control, monitoring responses to those reports and compliance with recommendations; - reviewing the processes in place for monitoring, evaluating and managing the risks facing the Group; and - completing the annual review of the Asset and Liability Register. ## **Property and Investment Committee** This Committee is chaired by John Waldron. The other Directors on the Committee who served during the year were Allister Young, Andrew Moore, Peter Stephens, Mark Duddridge and Fiona Perrin (April to November 2020). It met four times during the year and its work included: - reviewing and monitoring the Group’s 30-year Business Plan and related stress testing; - reviewing and monitoring the Defensive Action Plan; - reviewing the Group’s funding requirements and arrangements; - reviewing the performance of the Group’s development programme; - reviewing the Group’s Asset Management and Responsive repairs strategies; - reviewing the Group’s maintenance programme; - Contract Procurement; and - approving the Group’s Finance Strategy. 8 ## **Customer Experience Forum** The CEF is a new committee of Customers and NED’s, launched in January 2021 that oversees the customer experience for Coastline and makes recommendations to the Board. This approach is considered a key element of ‘co-regulation’ and provides further assurance over performance and the internal control environment. This Committee is chaired by Philip Bearne. The other Directors of the committee who served during the year were: Steve Harrison and Sue Roberts. The independent members who served during the year were: Edward Chapman, Joe De-Ville, Kelly Kemp and Lisa Denmead. The Executive members of the Group were Louise Beard and Christopher Weston. During the year CV/CEF achieved the following outcomes: - Delivered a report to each Board meeting following one of its meetings; - Scrutinised KPIs and complaints trends; - Promoted the work of the CV through CoastLines; - Received presentations from key members of staff to support scrutiny work; - Was part of the NHF ‘Together with Tenants’ Trust Charter work in Cornwall; - Involvement in setting of new Local Offers “Our Pledge To You”; - Completed a Play Park scrutiny; - Commenced a Damp and Mould scrutiny; and - Completed several mystery shops. ## **Governance Code** The Board has adopted the National Housing Federation Code of Governance (2015), and maintains the provision for up to two co-opted members in addition to the Board of up to ten within the Company’s Articles. Coastline fully complies with the NHF Code of Governance (2015). 9 ## **Staffing Structure** Although our commitment to customer care extends to every part of our business, most Customers’ first point of contact is our dedicated **Customer Access Team** . Using a centralised customer relationshipmanagement system, this team responds to queries, processes feedback and requests, and offers a single, approachable point of liaison between the Customer and our various specialist teams. The Customer Access Team forms the hub for the rest of our **Housing, Assets and Communities Directorate** which has responsibility for all maintenance and housing management issues including our supported and sheltered accommodation and related services. Our **Community Investment Team** ensures that Customers are involved in shaping, challenging and influencing our services at every level. This team also strives to improve and increase such opportunities, ensuring that our business is led by our Customers’ needs and aspirations, works to support local community initiatives and assists Customers into training, volunteering and work through the Volunteer, Inspiring Futures and Coastline Construct programmes. The Group’s development and sales programme is lead and managed by the **Development and Sales Teams** which, along with our in-house contractor team **Coastline Services,** makes up our **Development and Commercial Services Directorate** . These teams are all assisted in their work by a **Finance, Performance and Information Technology Directorate** providing financial and performance information, risk management arrangements, treasury management and information technology functions; and by a **HR and Governance Directorate** providing Governance Support, Human Resources, Public Relations/Marketing and overseeing the Group’s approach to Health and Safety and wellbeing. An **Executive Team** oversees the day-to-day operational running and, working with the Board and wider colleagues, identifies and executes the Group’s strategic direction. The members of the Executive Team are shown on page 2. ## **Employees** The Group relies on the quality and commitment of its employees in order to meet its corporate objectives. The Group ensures that sufficient staff with appropriate skills are employed and that effective employment policies are in place and good practice is followed. The Board express their thanks for the hard work and commitment shown by all employees of the Coastline Group. 10 ## **Equal Opportunities** The Group is committed to an equal opportunities policy within which it actively encourages applications for employment from all groups in society. It is also committed to an equality and diversity agenda designed to ensure equal access to its services. Coastline is an accredited Living Wage Accredited Employer. In line with our value of being open, honest and accountable we continue to voluntarily publish our Gender Pay results which are as follows: |**Gender Pay Reporting April 2020**|**Male**|**Female**| |---|---|---| |Group Head Count|144|160| |Mean Hourly Rate|£14.09|£13.21| |Median Hourly Rate|£11.21|£11.19| |Mean Bonus|£758.33|£676.36| |Median Bonus|£820.2|£694.28| |% not receivingbonus|17%|16%| |**Gender Pay Reporting April 2021**|**Male**|**Female**| |---|---|---| |Group Head Count|155|167| |Mean Hourly Rate|£14.59|£14.08| |Median Hourly Rate|£11.75|£11.99| |Mean Bonus|£295.95|£263.43| |Median Bonus|£291.65|£250.00| |% not receivingbonus|24.52%|23.95%| The most significant recent change in relation to pay was the 2018 decision to extend corporate bonus arrangements to include all extra care and supported housing staff. Staff in these areas are mainly female and had been historically excluded due to the cost pressures associated with the contracts for these services. The decision to extend was based on promoting equity across all staff employed by the Group and is treated as a corporate cost rather than a cost directly attributable to the service. During 2020/21, the Board made two operational allowance payments to colleagues who it was felt had put themselves more at risk during the different periods of Covid-19 protection measures. These payments were focussed on our Extra Care, Homeless support services and repairs delivery colleagues who continued to deliver front line services in person throughout this period. Management have also made use of the furlough and flexible furlough scheme during the course of this financial year, to ensure that our charitable financial resources are maximised and our colleagues protected from any financial impacts of the challenging and changing nature of personal and operational issues that arose as a result of the pandemic. The 2020/21 bonus was paid in May this year (in the same way as for the previous year), to separate from the other April changes relating to cost of living increase and the effects of general taxation changes, so that staff had greater transparency on the level of bonus paid. Performance related pay and arrangements for bonuses for 2021/22 remain under review as the business continues to assess, and adjust in relation to, changes resulting from Covid-19. 11 |**April 2020**|**Pay Quartiles by gender (adjusted rate which includes bonus)**|**Pay Quartiles by gender (adjusted rate which includes bonus)**|**Pay Quartiles by gender (adjusted rate which includes bonus)**| |---|---|---|---| |Band|Males|Females|Description| |1|43%|57%|Includes all employees whose hourly rate places them at or| ||||below the lower quartile| |2|51%|49%|Includes all employees whose hourly rate places them above
the lower quartile but at or below the median| |3|47%|53%|Includes all employees whose hourly rate places them above
the median but at or below the upper quartile| |Highest|49%|51%|Includes all employees whose hourly rate places them above
the upper quartile| **April 2021 Pay Quartiles by gender (adjusted rate which includes bonus)** |Band|Males|Females|Description| |---|---|---|---| |1|35%|65%|Includes all employees whose hourly rate places them at| ||||or below the lower quartile| |2|66%|34%|Includes all employees whose hourly rate places them
above the lower quartile but at or below the median| |3|44%|56%|Includes all employees whose hourly rate places them
above the median but at or below the upper quartile| ||||Includes all employees whose hourly rate places them| |Highest|47%|53%|above the upper quartile| Coastline’s median pay difference is marginally towards employees identifying as female in 2021, broadly consistent with previous years where there has been limited or no differential between pay of different genders. Management believe any current differential to be within a reasonable tolerance level and demonstrative of the effectiveness of our pay policy and commitment to equality. The movement in proportions of colleagues that fall into different pay quartiles is more difficult to assess due the volume of changes during the last 12 months. Particularly, as an increase in overall headcount may reflect changing priorities as a result of Covid-19. Another key measure for Coastline reflecting the outputs from the Hutton review is the ratio of highest paid to the median salary level (excluding the highest paid). The ratio based on April data in line with the gender reporting above (i.e. excluding pension contributions) showed that the ratio for Coastline was 5.46:1 (2020, 6.02:1). Further details of Executive and staff salaries can be found in the Notes to the Financial Statements (note 9, page 78). 12 ## **Internal Control and Risk Management** ## **Approach** The Group has adopted a risk-based approach to internal control. This approach includes regular evaluation of the nature and extent of risks to which the Group is exposed and is consistent with the approach expected by the Financial Reporting Council and the Regulator of Social Housing. The Board recognises that no system of internal control can provide absolute assurance or eliminate all risk. The system of internal control is designed to manage risk and to provide reasonable assurance that key business objectives and expected outcomes will be achieved. It also exists to give reasonable assurance about the preparation and reliability of financial and operational information and the safeguarding of the Group’s assets and interests. Assurance over the internal control environment is provided in a number of ways, the most significant of which are set out below. ## **Culture and ‘Tone at the Top’** The Group takes internal control seriously. Disregard of control procedures is treated as a potential disciplinary offence. Training in appreciation of risk and methods of control forms a part of Board and management development. ## **Health and Safety** Our vision is to create and maintain an environment where care for our people, and those who work with us, is our top priority; where the belief that all accidents are preventable prevails. ## **External and Internal Audit** The external auditors have a duty to report to the Board significant matters relating to control weaknesses and inefficiencies that come to their attention during the course of their audit work under the Code of Audit Practice. The Group maintains an independent internal audit function whose principal objective is to assess the appropriateness and effectiveness of the systems of internal control and risk management. Initial findings reports are presented to the Audit, Risk and Assurance Committee, which receives a follow-up report at each meeting setting out the progress on all outstanding recommendations. In addition to the external and internal audit functions a number of independent specialist compliance audits are commissioned each year to supplement the assurance framework. These cover areas such as our Gas Servicing programme, Health and Safety Arrangements, Fire Risk Assessments, Legionella Management and Asbestos Management. ## **Customer Scrutiny** The Company has an effective customer scrutiny function (previously known as the ‘Customer Scrutiny Committee’, relaunched as the Customer Voice in 2020). The Customer Voice (CV) receives all forms of customer feedback and engagement through our Coastline Conversation. This is where we enable Customers to get involved in matters that are important to them and their neighbourhoods, building relationships with Coastline, and creating opportunities in communities to build on existing strengths. We work closely with the Customer Voice, who we see as our ‘critical friends’, and use the performance information to identify areas that require scrutiny, and make recommendations to the Customer Experience Forum. In holding us to account against our Mission Statement, the Trust Charter, and ‘Our Pledge to You’, they bring their lived experience in Coastline communities to the fore. 13 We have maintained a proactive stance in relation to potential changes in consumer standards within the White Paper and have set up the Customer Experience Forum (CEF) to enable the lived experience to be embedded within the governance structure. We have also been engaging with the Housing Ombudsman requirements and in discussions with the CEF we are progressing towards a new two stage complaints policy in July, with roles in the decision making process for customer mentors to provide support to complainants and for CEF customer members to be on the complaints panel. 14 ## **Risk Management** Management responsibility has been clearly defined for the identification, evaluation and control of significant risks throughout the Group. There is a formal and on-going process of management review which is co-ordinated through a quarterly reporting framework from management, through the Executive Team to the Audit, Risk and Assurance Committee. This process has been in place throughout the year but subject to continual review and improvement and is consistent with best practice and regulatory requirements. One of the areas that continues to be developed is the consideration of Strategic or Principal Risks in addition to risks that are significant. Whilst the assessment of significant risks follows a specific methodology the consideration of strategic risks has been completed as a separate exercise to supplement and enhance Coastline’s overall approach to risk management. Strategic or Principal Risks are those which are considered to be of fundamental importance to the formulation and delivery of Corporate Plan objectives. Our initial work which will be taken forward as part of our Risk Management Policy has identified the following as strategic risks, noting that Covid-19 is not explicitly listed below but is included in the current risks which have been reassessed rather than as a separate risk below: |**Strategic / Principal**
**Risk**|**Risk Mitigation Strategy**| |---|---| |**Product Safety**
(including landlord health
and safety)|Detailed assurance map on property related requirements coupled with
third party expert reviews for example CORGI accredited Landlord Gas
Safety processes.
Development handover process review by internal auditors and all new
build defect repairs treated the same as responsive repairs.
Pro-active identification of RADON potential issue and reporting to Board.
Pro-active review of all buildings in relation to fire safety despite no
buildings over 18m.| |**Human Resources and**
**Governance**
(including
Board,
Executive,
staff
and
volunteers in relation to
skills)|Rolling programme of NED recruitment
Investment in apprenticeships across the business to build skills and
capacity for the future
Significant investment in safer working practices for staff
Investors in People Silver Rated employer.
Investors in Volunteers accreditation and effective deployment of
additional resources within business to support charitable activities.
Health and Wellbeing Strategy with significant focus on colleagues’ mental
health.| 15 |**Government**
**Policy,**
**legislation**
**and**
**regulation**|Active involvement with trade body the National Housing Federation and
PlaceShapers group of Housing Associations alongside maintaining
effective dialogue with Cornwall Council, local MP’s and Parish Councils.| |---|---| |**Funding and financial**
**viability**|Annual finance strategy and constant market engagement to maintain
existing and develop additional sources of finance.| |**Wider Economic**
(including sales, rental
level exposures as well
as interest and inflation
rates)|Exposure to sales limited to ensure that change of product mitigates risk.
Regular reporting to Property and Investment Committee and Board on
key economic indicators alongside stress testing and scenario planning to
inform Defensive Action Plan.| |**Programme**
(impact
of
planned
expansion on internal
systems of governance,
management
and
delivery)|Investment into ICT to provide systems and infrastructure that can support
growth.
Cross departmental working supporting issues of peak delivery. Board
recruitment focussed on skills that will help support and challenge delivery
of extensive ICT and new homes investment.| |**Reputation and Trust**
(including
potential
communications failure
exacerbating issues)|Business continuity planning and communications strategy in place to
mitigate risk.
New customer charter pledge commitments to replace previous Local
Offers to residents includes response time promise of four days coupled
with simplified complaints process to ensure that any service failures are
promptly dealt with.| |**Technology, Data and**
**Cybersecurity**|On-going programme of training and upgrading of core systems across the
business coupled with regular sessions led by the Head of ICT to promote
and co-ordinate opportunities for technology based improvements across
the business.
Cyber insurance provides access to experts in case of major incident.
Regular Data Quality Meetings chaired by Director of Finance and ICT with
representation from across Coastline teams.
Data standards enforced with all changes to key fields in housing
management, CRM or Service Connect needing to be approved at Data
Quality or Applications Steering Group.| |**Markets and Supply**
**Chain**(including market
consolidation, securing
development
opportunities and overall
consideration of supply
chain
considerations|Digital access and customer first strategy coupled with ICT strategy to
improve service offering to Customers and colleagues to improve
interactions with and across Coastline.
Active discussions with Cornwall Council, Homes England and others on
potential strategic alliances to maximise development opportunities.| 16 |across all aspects of
operations
and
development
investment)|Strategic alliance with Legal and General Affordable Homes providing
scope to engage and shape new entrant in social housing markets
offering.| |---|---| |**Climate Change**and
related impacts across
all of the above strategic
risks.|Presentation to November 2019 and June 2021 Board Away Days to
consider impact of climate change on Cornwall.
Coastline Plan post 2021-25 includes objectives to contribute towards
alleviating both the causes and impact of climate change on the
communities we work in.| The Audit, Risk and Assurance Committee reviews the Group’s significant risks and the overall risk position compared to the Board’s agreed risk appetite each quarter, and the minutes of the meeting are subsequently reviewed by the Board. The Board receives an update on the Group’s risk position three times a year, and also formally reviews the risk map and sets the Group’s risk appetite on an annual basis. The Group risk appetite was amended from ‘cautious to medium’ to ‘cautious’ following review in April 2020 and has been confirmed as ‘cautious’ as part of the Annual Risk Review as recommended by the Audit, Risk and Assurance Committee. This has then been subsequently agreed and approved by the Board as part of the same Annual Risk Review in May 2021. This appetite reflects the concerns about the increased level of uncertainty in housing operations, the UK Economy and in particular the impacts on the local Cornish economy resulting from Covid-19 as well as the fuller impacts on supply chain in relation to the UK exit from the European Union. The Group recognises that our Customers and our assets are vital to the on-going success of the Group, and we operate within a ‘cautious’ overall risk range which we consider to be appropriate for our business. Our vision in relation to health and safety risks is to create and maintain an environment where care for our people, and those who work with us, is our top priority; where the belief that all accidents are preventable prevails. In other areas we are willing to accept some risk within acceptable financial parameters to enable us to grow our business and achieve our charitable mission which is reflected in our corporate objectives. ## Significant Risks (taken from the Significant Risk Register) Significant Risks are identified as those having a combined likelihood/impact score of 12 or above (on a scale of one to 25). ## **Great Homes** |**Great Homes**|| |---|---| |**Risk**|**Action being taken**| |Landlord health and safety
compliance|•
Fire Risk Assessments reviewed by external advisors
•
CO and Smoke Alarms installed and annually serviced
•
CORGI accredited gas safety process| 17 |Increased costs associated
with changes in building /
letting
or
registered
provider regulations.|•
Decent Homes standards maintained and fully costed in
business plan
•
Stock condition surveys brought in-house to improve overall
data quality and service to Customers
•
Corporate Plan target in relation to heating affordability| |---|---| |Quality of new homes|•
Clerk of works service supported by outsourced elements to
ensure access to technical support
•
Employers agent used on all new build schemes
•
Development Managers and Development Officers assigned to
individualprojects| |Shared Ownership sales
below forecast|•
Detailed forward sales projections with targets and intervention
levels
•
Weekly sales meeting chaired by Director of Development and
Commercial Services
•
Regular reporting of performance via the Group Finance and
Performance Report to Board supplemented by detailed
development performance reporting to both Property and
Investment Committee and Board.| |Build costs increase|•
Regular benchmarking of costs and value for money
assessments undertaken by independent quantity surveyors.
•
Appraisal and commitment to schemes largely based on build
contract already being in place.| |Development
handover
timings|•
Forward estimates of practical completion dates reviewed by
Executive monthly and communicated across business
•
2-week Development team ‘grace’ period between practical
completion and customer move-in to ensure quality and
certainty of home and timing.| ## **Great Services** |**Great Services**|| |---|---| |Responsive
repairs
performance deteriorates|•
Corporate Plan sets out on-going development of customer
service offer
•
Customer Scrutiny arrangements include new Customer
Experience Forum with direct access and feedback to Board
•
Customer Voice meetings in 2020/21 combined increased
Board oversight of this area with greater customer involvement.
•
Regular performance monitoring and satisfaction information
provided to the Board and Senior Leadership Team.
•
Monthly monitoring and reporting of key performance indicators
and budgets to Board| |Supported Housing / CQC
related service failure|•
Detailed policies and procedures in relation to safeguarding,
record keeping and service delivery
•
Monthly operational report on Extra Care, Homeless Crisis and
Homeless day centre to Executive Team
•
Detailed KPI suite for supported housing contracts reviewed
monthly and quarterly| 18 **Great People** |**Great People**|| |---|---| |Low colleague morale|•
Investment in Coaching and Leadership programme with Jack
Russell Coaching and programme of embedding
•
HR Strategy
•
Wellbeing Strategy
•
Operational allowances paid during Covid-19 restriction period
•
Regular virtual QandA sessions with CEO and Executive Team
•
Regular surveying of colleagues during last year to gauge
concerns and wellbeing and direct support
•
Investors in People assessment currently in progress| |Health and Safety problems
not highlighted or addressed|•
Significant investment in safer working practices for staff
•
Adverse incident reporting available online to staff| |Absence rates increase and
or loss of key staff member|•
Detailed Business Continuity Plan
•
Regular Incident Management Team meetings
•
Return to Work process and detailed absence reporting| |Industrial injury as a result of
exposure to significant risks|•
Accidents/incidents/RIDDORS (reasons and actions taken),
sickness (and reasons) reported monthly to Senior Leadership
Team
•
Health and Wellbeing information included in quarterly HR
Report to Health and Safety Committee and in monthly Board
updates
•
CSL (biggest risk area) specific Health and Safety report to every
Board| |**Great Foundations**|| |Rent policy changes|•
Stress testing and defensive action planning review by the Board
includes modelling of different rental scenarios
•
New affordable rent properties considered separately to
conversions in terms of risk exposure
•
Detailed legal advice taken in relation to Welfare Reform and
Work Act and Housing and Planning Act to ensure accuracy and
maximisation of available income
•
Spread of housing products now offered including Shared
Ownership and Rent to Buy| |Failure to achieve Business
Plan and/or other financial
targets|•
Business Plan reviewed quarterly
•
Triannual review on performance against targets as part of
Corporate Plan updates to Board
•
Quarterly reporting and forecasting information to Board| |Rent arrears increase|•
Customer insight data embedded as part of pro-active arrears
management
•
Weekly reporting on arrears including average cash balance
outstanding
•
Support based approach to arrears management
•
Very low levels of arrears compared to peers and wider sector| |Business Plan assumptions
incorrect|•
Business Plan assumptions reviewed by Property and
Investment Committee on a quarterly basis and reported to Board
•
Regular sensitivity testing and scenario planning| 19 |Failure to adapt to a
changing environment|•
Regular Board Strategy days
•
Involvement of Executive Team in National forums
•
Engagement through National Housing Federation and
PlaceShapers| |---|---| |Company
pension
contributions in relation to
frozen
defined
benefit
(2016) increase|•
Previous work completed to date so that remaining risk is only in
relation to SHPS DB which was frozen as at March 2016.
•
Triennial valuation exercise undertaken by Social Housing
Pension Scheme
•
Annual estimate of SHPS DB deficit provided in statutory
accounts and assumptions reviewed by external audit and
retained pensions consultant
•
Pro-active consideration of pensions options included in 2021/22
Finance Strategy.| The on-going review of risk includes consideration of the completeness of the principal risks identified, of the relative significance of those risks and of the risk management techniques that are applied to mitigate those risks. The Board agreed that a range of risk mitigation techniques should be used including assurance, preparation of contingency plans and internal controls. A system of internal control is present in all aspects of the Group’s operations and is essential to its management of risk. ## **Fraud and Significant Control Failings** Coastline complies with the regulator’s requirements with respect to fraud and has a clear policy that has been approved by the Board. The policy requires a register to be maintained of all actual and attempted fraud. All such cases are reported to the Board through the Audit, Risk and Assurance Committee. All cases are reported to the Regulator of Social Housing. Contingency plans exist to be invoked in the case of suspected fraud. These are designed to prevent further loss and to maximise the chance of recovery of any losses that might have been incurred. No significant control failings or fraud have been identified during the period. ## **Overall Assessment** The Board is satisfied that the Group's risk management and internal control systems remained effective during the year and up to the date of the approval of these financial statements. No weaknesses in internal control which resulted in material misstatement or loss have been identified which would have required disclosure in these financial statements. 20 ## **Regulatory Compliance** The Board reviews and confirms compliance annually with the RSH Regulatory Framework and the National Housing Federation Code of Governance (2015). Open communication has been maintained with the Regulator throughout the year which including completion of the new Covid-19 Operational Response Survey. Following a robust self-assessment undertaken by the Executive Team and approved by the Board, Coastline certifies compliance with all standards within the Regulatory Framework for Social Housing (April 2015). As part of the Regulatory Framework registered providers of social housing are required to annually publish evidence in the statutory accounts that enable stakeholders to understand the providers: - Performance against its own value for money targets and metrics set out by the Regulator, and how that performance compares to peers; and - Measurable plans to address any areas of underperformance, including clearly stating any areas where improvement would not be appropriate and the rationale for this. The Board believes that the requirements of the Regulatory Framework are consistent with the values of Coastline as set out on page 4, which include commitments to ‘being open, honest and accountable’ and ‘striving to be the best’. The Strategic Report (page 24) sets out information regarding Coastline’s activities, including detailed performance information and benchmarking and meets the requirements of the Regulatory Framework. As part of a planned routine programme of reviews the Regulator of Social Housing undertook an In Depth Assessment (IDA) during the period May to July 2021 and subsequently published a refreshed regulatory judgement for Coastline Housing that confirmed there were no changes to the existing grades. The current regulatory ratings for financial viability and governance are as follows: ## **Viability (V1)** “The provider meets the requirements set out in the Governance and Financial Viability standard of the Regulatory Framework in relation to financial viability”. ## **Governance (G1)** “The governing body, supported by appropriate governance and executive arrangements, maintains satisfactory control of the organisation”. Further details of the regulatory approach and assessment of Coastline are available at: https://www.gov.uk/government/publications/a-guide-to-regulation-of-registered-providers/a-guide-toregulation-of-registered-providers https://www.gov.uk/government/publications/regulatory-judgement-coastline-housing-limited Coastline Housing Group complied with the RSH Governance and Financial Viability Standard during 2020/21. 21 ## **Merger Code** In March 2016 the Board considered and adopted the NHF Merger Code. This voluntary code sets out ten principles which form a framework for considering the various ‘partnering’ opportunities that may arise. The Board regularly reviews its position, the latest being in May 2020, re-asserting Coastline’s commitment to the principles within that code. Coastline’s corporate values and approved policy includes involving the Board and Executive Team for evaluating merger and strategic alliance opportunities. ## **Other Disclosures** ## **Directors’ and Officers’ Liability Insurance** The Company has maintained directors’ and officers’ liability insurance throughout the year. This cover is provided through our affiliation fee with the National Housing Federation (NHF). From April 2021 this cover has been provided by Weald Insurance Brokers Ltd following the discontinuation of the offering from the NHF. ## **Charitable and Political Donations** No political donations were made during the year (2020: £nil). Donations made to charity or other community funding arrangements during the year totalled £35,169 (2020: £6,050). ## **Disclosure of Information to Auditors** The Board members who held office at the date of approval of this Board report confirm that: - so far as they are each aware, there is no relevant audit information of which the Group’s auditors are unaware; and - each Director has taken all the steps that they ought to have taken as a Director to make themselves aware of any relevant audit information and to establish that the Group’s auditors are aware of that information. ## **Auditor** A resolution to re-appoint KPMG LLP as Auditor of the Group will be proposed at the Annual General Meeting. ## **Going Concern** The Board confirms it has a reasonable expectation that the Group and Company has adequate resources to continue in operational existence for a period of 12 months from the date of approval of these financial statements. Accordingly it continues to adopt the going concern basis in preparing the Group’s and Company’s financial statements. The considerable impact of Covid-19 on the country, the housing industry and Cornwall is considered in more detail as part of the Strategic Review and despite the challenges that this unprecedented period of history has presented for Coastline the underlying business model remains financially robust and viable in the long-term. 22 ## **Statement of directors’ responsibilities in respect of the Strategic Report, the Directors’ Report and the financial statements** The directors are responsible for preparing the Strategic Report, the Directors’ Report and the financial statements in accordance with applicable law and regulations. Company law requires the directors to prepare financial statements for each financial year. Under that law they have elected to prepare the financial statements in accordance with UK Accounting Standards and applicable law (UK Generally Accepted Accounting Practice), including FRS 102 _The Financial Reporting Standard applicable in the UK and Republic of Ireland_ . Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Company and of the surplus or deficit for that period. In preparing these financial statements, the directors are required to: - select suitable accounting policies and then apply them consistently; - make judgements and estimates that are reasonable and prudent; - state whether applicable UK Accounting Standards and the Statement of Recommended Practice have been followed, subject to any material departures disclosed and explained in the financial statements; and - assess the Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern; and - use the going concern basis of accounting unless they either intend to liquidate the Company or to cease operations, or have no realistic alternative but to do so. The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company’s transactions and disclose with reasonable accuracy at any time the financial position of the Company and enable them to ensure that the financial statements comply with the Companies Act 2006, the Housing and Regeneration Act 2008 and the Accounting Direction for Private Registered Providers of Social Housing 2019. They are responsible for such internal control as they determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error, and have general responsibility for taking such steps as are reasonably open to them to safeguard the assets of the Company and to prevent and detect fraud and other irregularities. The directors are responsible for the maintenance and integrity of the corporate and financial information included on the Company’s website. Legislation in the UK governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions. ## **By order of the Board** ## **M Duddridge Chair – Coastline Housing Ltd** 13 September 2021 Coastline House 4 Barncoose Gateway Park Pool, Redruth Cornwall TR15 3RQ 23 ## **Strategic Report** ## **Five-year Performance Summary** The tables below set out the Group’s five-year Statement of Consolidated Income and Statement of Financial Position: |||**2017**|**2018**|**2019**|**2020**|**2021**| |---|---|---|---|---|---|---| |**Statement of Consolidated Income**||**£m**|**£m**|**£m**|**£m**|**£m**| |Turnover: continuing activities||23.6|23.7|25.1|30.5|29.5| |Turnover: Shared Ownership Sales||2.4|6.0|4.2|6.5|3.9| |Cost of sales||(1.8)|(4.8)|(3.6)|(5.5)|(3.2)| |Operating costs||(15.4)|(15.9)|(16.6)|(21.8)|(21.3)| |Pension cessation adjustment||-|2.1|-|-|-| |**Operating surplus**||**8.8**|**11.1**|**9.1**|**9.7**|**8.9**| |Surplus on sales of properties||0.9|3.2|4.6|5.3|3.3| |Net interest payable and similar charges||(4.4)|(3.8)|(4.0)|(4.1)|(4.4)| |One- off costs relating to treasury activities||
**(0.9)**|(1.9)|**-**|-|(2.3)| |**Surplus before taxation**||**4.1**|**8.7**|**9.7**|**10.9**|**5.5**| |**Statement of Financial Position**||**£m**|**£m**|**£m**|**£m**|**£m**| |Housing properties||157.7|
185.9|
218.1|
245.7|
277.9| |Other fixed assets||4.3|
4.2|
4.3|
4.8|
5.0| |**Total fixed assets**||**162.0**|
**190.1**|
**222.4**|
**250.5**|
**282.9**| |Net current assets||15.0|
5.5|
9.6|
8.8|
13.2| |**Total assets less current liabilities**||**177.0**|
**195.6**|
**232.0**|
**259.3**|
**296.1**| |Loans and long term liabilities||(144.2)|
(158.5)|
(185.3)|
(201.9)|
(233.5)| |Pensions liabilities||(6.2)|
(1.6)|
(3.1)|
(1.6)|
(3.4)| |**Total assets less liabilities**||**26.6**|
**35.5**|
**43.6**|
**55.8**|
**59.2**| |Revenue reserves||26.6|
35.5|
43.6|
55.8|
59.2| |**Total reserves**||**26.6**|
**35.5**|
**43.6**|
**55.8**|
**59.2**| Turnover in relation to continuing activities over the last five years is characterised by growth in rental income through the delivery of new affordable homes and has risen from £23.6 million in 2017 to £29.5 million in 2021, an increase of 25% over that period, against a backdrop of the 1% per annum rent reduction (as required by legislation) for the period 2017-2020. Turnover in relation to continuing activities was unusually high in 2020 due to the novation of two schemes as part of the commencement and mobilisation of the new strategic alliance with Legal and General Affordable Homes. Turnover in relation to shared ownership sales is more variable than rental income reflecting the timings of different new build development schemes being contracted and delivered. Operating and net margins have continued to improve steadily but have been impacted by shared ownership and disposals activity and one-off events such as the pension cessation in 2018 and the treasury management actions in other years. The investment in existing and new housing properties sees an increase in the balance sheet for both the assets and loans over the last five years rising by 76% over this period for housing properties and 62% for loans and long term liabilities over the same period. The differential is demonstrative of the strong 24 cash generation of underlying social housing rentals and is a key element of our continued financial success. ## **Operating Environment and Highlights** This review focuses on the financial year as a whole and such a review cannot ignore the considerable and unprecedented impact of Covid-19, which has led to periods of limited activity due to the government mandated protection measures (ranging from complete lockdown in the early months to restricted working due to social distancing and restricted working at our suppliers and partners leading to additional delays). Despite the vaccination roll-out, the new wave of Delta variant infections has meant that there remains on-going uncertainty around the economic recovery and it is likely that Covid-19 infections will impact on following financial periods. As an example of this, it will take us a few years to catch up fully on our repairs programmes and consequently work on repairs will need to be carefully scheduled to address the needs of our Customers and communities. The impact of the Covid-19 pandemic has impacted locally on Cornwall, and will continue to be felt for a long time to come. The impact is felt not just in the sad additional losses of life suffered as a direct result of the pandemic, but also through the economic impact on a Cornish economy that is highly reliant on hospitality and tourism, which have both been badly affected though now fortunately recovering strongly. As a locally based charity focussed on serving our communities, Coastline’s Board recognised the importance of a swift and comprehensive response to the pandemic, and the work of colleagues across the Group has been and continues to be exceptional. The wide range of activities that Coastline operates has needed our teams to be flexible and adaptable and this is especially true in the case of our Extra Care scheme at Miners Court and across our Homeless Supported Housing projects including the new purpose built unit at Chi Winder. Colleagues have covered additional shifts, absences, made phone calls to vulnerable Customers, been involved in delivering shopping, assisted other charities and volunteer organisations and been fully engaged personally and professionally in helping our communities. Our senior managers have provided strong leadership in guiding the Group through the most difficult year for business that many of us can remember. Against this operating backdrop Coastline has developed a phased plan for returning services to normal and this supplements the work of the detailed Business Continuity Plan by giving a framework for Customers and colleagues to understand how service levels may be impacted by any further outbreak. In performance terms Coastline has fared better than many other comparable housing associations as evidenced by recent performance information informed by Housemark (Covid-19 Impact Report, March 2021): 25 Proportion of unitsl•tin-month UK-vJidv +Yourofgan15ation rx2 "/.>//// • PrOP￿rt￿n otvnitF gthd ¥vqilpbleto let UK-*41de +Y￿ror{SnI$￿tIon 14% YA rFppirB por I,￿0 propertie vK-w //,, )0%¥ o¥ The success on arrears reflects a starting point of sector leading arrears levels and pro-active tenancy sustainment work which has been further enhanced during the last year by reallocating staff resources to support and signpost Customers towards further sources of support. In relation to lettings activity this has been an area with more variable performance and has seen our results be behind industry averages. We have enhanced our digital sign-up process to support more remote lettings and this has clearly been an area where the impact on our business has been more significant than others. There was the initial period of lockdown where moving homes was not permitted and then the challenges of bringing this service back on-line with new and changing restrictions. We are content that we have reached a position of more ‘normal’ service and expect to see performance improve over 2021/22. In terms of liquidity Coastline signed its first SONIA based loan with Lloyds Banking Group adding a further £30 million of facilities to our existing arrangements and signed revised terms with Santander UK plc to extend some of our existing Revolving Credit Facilities (RCF’s) to 2025. These new arrangements increased available facilities from £186 million to £221 million. One of the key elements of our Charitable Mission is addressing the shortage of **‘great homes’** at affordable prices in Cornwall. Delivery for the year ended 31 March 2021 finished at 160 new homes including 16 delivered as part of the Strategic Alliance with Legal and General Affordable Homes. The new homes are offered on a variety of different tenures reflecting our ambition to tackle every aspect of affordable housing shortage. Whilst the final number of completions was below expectation as a result of Covid-19 related delays it is a level of completions which sees Coastline within the top 10 fastest growing housing providers for the fourth year in a row. We are the only organisation to deliver that level of growth consistently over that period. 2020/21 saw continuing strong performance on property sales both on first tranche shared ownership and in relation to disposals of existing assets. The impact of Covid-19 largely being on completion times as opposed to any impacts on value. The Corporate Plan highlights a notional asset churn of 2% per annum which has been informed by the analysis completed as part of the Asset Investment and Viability Strategy. This work demonstrated that an optimal asset hold was in the order of 50-years and matched the next phase of required component replacement. This work in isolation could lead to a net reduction in affordable housing and as such has been matched by a commitment to provide energy efficient new build affordable accommodation across Cornwall. This ensures that there is always a net growth in affordable homes, with the new build programme contributing positively to economic growth and the disposal of older less efficient affordable properties providing a source of entry level properties to purchase on the open market. Demonstrating this commitment to net growth, Coastline's new housing supply (gross as per the Regulator’s VfM metric) was: |||||||| |---|---|---|---|---|---|---| ||16/17|
17/18|18/19|
19/20|20/21|21/22 (planned)| |||||||| |Coastline|3.4%|
7.3%|3.3%|
6.3%|3.3%|6.5%| |||||||| |Industry Median|
1.2%|
1.2%|1.4%|
1.3%|Not yet
published|n/a| |Average||||||| |||||||| Coastline is planning to continue delivering more net new affordable homes a year than the national average for the sector. Whilst this is not an achievement in itself, it is a demonstration of one of the intentions of the Board and reflects the commitment to ensuring that any home sold is replaced on at least a one for one basis irrespective of how the disposal occurs. The other consideration in relation to development of new housing is our regional context. Analysis from the RSH shows that development delivery is inversely related to areas of economic deprivation, i.e. poorer areas see less new build housing. Cornwall has a number of areas of economic deprivation and lower wage and house price levels. Coastline’s performance against this backdrop highlights further the rationale for our continued investment in new build properties as this helps stimulate local economies and communities. The alliance with Legal and General Affordable Homes provides the scope for investment of an additional 100 homes a year going forwards with discussions already well underway as to how this can be increased. Our focus on ‘great homes’ includes an absolute focus on product safety and it is important to note that whilst Coastline owns no high rise buildings we have completed and continue to review all Fire Risk Assessments, as well as physically inspecting all properties of three storeys or higher with an internal communal access. Another important area of product safety in Cornwall is Radon, as much of Cornwall is significantly impacted as a Radon Affected Area (https://www.ukradon.org/information/ukmaps). All of our properties have been previously surveyed and any confirmed as above ‘action level’ given remedial measures. As part of Coastline’s commitment to product safety, re-testing of these properties commenced during 2019 as part of a five-year cyclical risk-based programme. This level of detail continues to be included in our financial statements, although immaterial in monetary terms, to demonstrate Coastline’s commitment to both housing safety and one of our values of being open, honest and accountable. In relation to the ‘great services’ challenge of our customer promise 2020/21 saw the third and final year of our Customer First Survey which is designed to survey one third of our Customers each year on a geographical basis. The survey includes a number of ‘core comparator’ questions and statements, as well as a number of new measures to respond to themes emerging from the Social Housing Green Paper and the Together with Tenants agenda. The backdrop to this year’s survey is the global Covid-19 pandemic; it is difficult to know the extent to which this could affect our Customers’ responses. The survey window coincided with our recovery period for repairs backlogs, as well as other key service areas not being fully re-mobilised. The survey this time 28 included two questions which were specific to Coastline’s response to supporting Customers through Covid-19. In comparing Customer Satisfaction through the average of the 2018-20 results with those from 2015, when the last full survey of our Customers was carried out we see that Customers report improved satisfaction with value for money in rent (from 88% to 93%) and that Coastline listens to views and acts upon them (from 74% to 83%). The remaining four core measures show a reduction in satisfaction of 1 or 2% as shown in the table above. The Customer First survey has identified some key areas where we can deliver improvements to Customers; these have been developed as action and improvement plans and reflected in the relevant strategies across the business. These documents have been developed differently to previous iterations, with involvement and ownership from the Senior Leadership Team and by sharing with the new Customer Experience Forum at their inaugural meeting in February 2021. Updates have been and continue to be provided at subsequent meetings to enable Customers to hold us to account on the delivery of the improvements. From 2021, the Customer First survey will be replaced by the ‘Business Benchmarking’ survey, carried out via the UK Institute of Customer Service (UKCSI). This will reflect wider business sector satisfaction measures than those of the traditional housing association sector, and will provide a new benchmark of satisfaction across a range of areas. In terms of business preparedness and the potential for disruption in relation to continued Covid-19 protection measures and the UK exit from the EU, Coastline has continued a review of our supply chain, suppliers generally, funding and considered the potential impact on our Customers. Financial forecasts continue to be made on a prudent basis using the most recently available market data and Coastline’s defensive action planning has considered a variety of scenarios including those that might reasonably be expected to occur if a either a further wave of Covid-19 occurs, and/or there is a more market disruption in relation to trading arrangements with the EU or wider global market conditions. As part of considering the rent changes and the regulatory Rent Standard, from April 2020 Coastline’s Rent Policy reflects the consideration of local affordability by capping all rents at Local Housing Allowance Levels. The value of this affordability capping for 2020/21 is £14,000 and is considered entirely consistent with both regulatory requirements and our charitable mission. Coastline continues to benefit from the current low interest rate environment and forecast low long-term rates. This increasingly needs to be balanced with providing a stable platform and managing the risk of rates increasing over the yield curve as a whole, which would then impact on longer term business assumptions. Part of this balance was addressed via a long-term 30 year loan with Scottish Widows which completed on the 23 June 2021 and provides for fixed rate interest for the whole of that time. This loan also provides an additional refinancing buffer in relation to the notional repayment dates of our current revolving credit facilities, although these are expected to be refreshed as part of normal on-going treasury management actions during 2021/22. Coastline’s overall approach during both more recent and medium-term periods of change and uncertainty has been to continue an ambitious programme of investment in new social housing and delivery of much needed supported housing services in both extra care and homeless accommodation. This year marks the final year of the Corporate Plan covering the period 2017-2021 and whilst it retains a focus on high levels of service to existing Customers, it also has a strong focus on growth, reflecting the need for housing associations to continue building and delivering the much needed homes that our communities require. This aspiration and ambition has been carried through into the new Coastline Plan for 2021-25 and “Great Futures”. The core principle of maximising our delivery of new housing investment is a central part of our approach to value for money as this investment delivers additional housing without adding significantly to our management cost base. This objective maintains the benefit of focusing our attention on housing delivery as well as generating value for money savings over time, which allows us to maintain our investment in wider community-based initiatives which are part of delivering high quality services. In such a working environment there is no room for complacency and it is critical that our business remains focussed on maintaining and improving levels of customer service, operational efficiency and financial performance. However, it is also important to take stock of and communicate what we have achieved to date, so that we can both celebrate and understand where we have further work to do. To this end, we have set out below some of our most significant achievements over the last year. The remainder of this report provides more detail of what we have achieved against our Corporate Plan aims, and what we plan to do in the coming years: - During 2020/21 we completed 160 homes; - For the fourth year running, one of the top ten fastest growing Housing Associations in Inside Housing Survey - At the end of March 2021 we had 485 homes on site and forecast completions for 2021/22 are in excess of 300; - We spent £9.6 million maintaining our homes during the year, of which £2.3 million was long-term investment made possible by our strong operating surplus; - Coastline Housing’s operating margin of 26.7% (2020: 26.2%), and in cash terms the operating surplus was £8.8 million (2020: £9.7 million); and - Work completed on new Coastline Plan for 2021-2025 and launch with Customers and other stakeholders during 2021/22. The operating margin shows how efficient we are in running the business; and the operating surplus provides the cash we need to fund the construction of new homes and invest in improvements to our existing homes. This strong performance is the result of an ongoing focus on delivering efficient, customer focussed services. Our strong financial performance, combined with our high levels of customer 30 satisfaction, provide strong evidence that we are, in the main, delivering the right services in an efficient and cost effective way. ## **Financial Structure** During 2020/21 Coastline Housing maintained a stable financial platform with the only transactions of note being a sector leading ‘day one’ SONIA facility negotiated with Lloyds Bank plc for £30.0 million, and the cancellation of embedded fixed interest rate within existing NatWest loans totalling £7.0 million which crystallised breakage costs of £2.3 million. The cancellation of high rate embedded fixed rate loans has the benefit of reducing future cashflow in relation to interest payable which the Board was keen to see to facilitate additional spending in the next two to three years in relation to planned investments in existing properties that has been delayed as a result of the Covid-19 pandemic. The current finance platform is sufficiently stable and flexible to enable Coastline to deliver the next phase of Coastline’s ambitions as reflected in the 2021-2025 Coastline Plan “Great Futures”. Long term borrowings increased by £30.0 million during the year to cover projected capital expenditure and manage treasury risk during the year and now stand at £173.4 million (2020: £143.4 million) against facilities at year end of £221.4 million (2020: £186.4 million). Treasury activities are controlled and monitored by the Property and Investment Committee, under delegated authority from the Board, and are executed by the Director of Finance and ICT with the assistance of external consultants as required. This helps ensure that adequate cost-effective funding is available for the requirements of the business and that financial risk is minimised. The process is periodically subject to review by internal auditors. Cash flows are monitored and forecast regularly to minimise cash held and ensure further funds are drawn down as required to cover the investment plans of the Group. Coastline Housing’s financial instruments comprise borrowings, some cash and liquid resources and various items such as trade debtors and trade creditors that arise directly from its operations. The main purpose of these financial instruments is to finance Coastline Housing’s operations. The main risks arising from Coastline Housing’s financial instruments are interest rate risk, liquidity risk and re-financing risk. The Property and Investment Committee reviews and agrees the management of these risks as summarised below; **Interest rate risk:** Coastline finances its operations through a mixture of generated surpluses, and short, medium and long term borrowings. This position is reported to the Property and Investment Committee on a quarterly basis. At the year-end 50% (2020: 64%) of the Group’s borrowings were at fixed rates of interest. Of the debt with fixed interest rates the average duration of the Group’s interest rate hedging was 14 years (2020: 13 years), the increase reflecting a smaller notional debt than last year end being at fixed rates for slightly longer. **Liquidity risk:** Liquidity risk is managed by setting and monitoring required levels of cash and available facilities as well as monitoring the availability of loan security. A three-year, monthly cashflow and a three-month, weekly cashflow are monitored on a monthly basis by the Board and more detailed information on liquidity and loan security is reported to the Property and Investment Committee on a quarterly basis. Total facilities available increased in line with commentary above to £221.4 million, 2020: 31 £186.4 million) during the year, with undrawn facilities totalling £47.3 million (2020: £43.0 million). The average maturity of net debt remained at over five years. Cash available has increased during the year to £10.8 million (2020: £5.1 million) which is at a level consistent with the move to achieving liquidity through undrawn, charged, available loan facilities in addition to immediately available cash balances. Charged ‘available to draw’ facilities were £35.1 million (2020: £23.0 million) making liquid resources £45.9 million (2020: £26.9 million). **Re-financing risk:** Re-financing risk is managed by setting targets of how much debt can be repayable within certain timeframes. This position is reported to the Property and Investment Committee on a quarterly basis. At the year-end 21.8% (2020: 21.8%) of the Group’s debt fell due within the next three years, the majority of this being related to a revolving credit facility. During 2020/21 the amount of debt due within the next three years has fallen to nil% as a result of signing the agreement with Santander UK plc in 2020 which extended £45 million of revolving credit facilities to 2025 and the new £30 million revolving credit facility with Lloyds Banking Group. In addition to these facilities a new £25 million 30-year term loan was signed with Scottish Widows on the 23 June 2021 providing bond type finance within a more typical loan agreement documentation. ## **Operating and Financial Performance (Value for Money)** ## **Property numbers** The table below summarises how many properties Coastline has owned and managed over the last five years: ||**2017**
**2018**
**2019**
**2020**
**2021**| |---|---| |**Property Stock**|**No.**
**No.**
**No.**
**No.**
**No.**| |Social housing rented
Shared ownership
Market rented
Managed but not owned
Leasehold properties
Total Housing Stock
Garages
Total Property Stock|3,951
4,181
4,246
4,364
**4,426**
196
263
300
370
**409**
9
9
9
6
**5**
14
14
14
54
**69**
95
97
103
114
**117**| ||4,265
4,564
4,672
4,908
**5,026**
706
716
685
685
**660**| ||4,971
5,280
5,357
5,593
**5,686**| ## **Performance overview** To deliver ‘value for money’ (VfM), Coastline must continually look at how resources are used to achieve continuous improvement and excellence in running the business and improving productivity. When viewed in this way, it is clear that value for money is not a stand-alone activity, but something that is intrinsic to all core activities and decision-making processes. There is therefore no single policy or strategy that sets out how value for money will be achieved. The various threads are pulled together in the Corporate Plan and there is a particularly strong link with 32 performance management and improvement processes, with robust and effective management integral in the process of delivering and improving business productivity. Our approach to ‘value for money’ is firmly embedded in our culture. From an ambitious Corporate Plan that is led by the Board and Executive Team and has clear, measurable and stretching objectives, to a suggestion scheme where all staff are empowered to propose ideas that will improve how the organisation is run, and rewarded for those that are implemented. We have a Senior Leadership Team that meets monthly to review financial and non-financial performance indicators, to share knowledge and to make decisions based on this information. Our Customers are also involved – with the Customer Voice and Customer Experience Forum being presented with a suite of performance information that they have reviewed and provided details of their expectations. Performance reporting to Customer Voice is primarily via the Coastline Conversation which receives a regular update from the Customer Experience Forum meetings. This report provides a self-assessment to our stakeholders of how we are achieving ‘value for money’ in what we do. It sets out a summary of Coastline’s financial and operational performance during 2020/21 and reports our progress against the four themes of our Corporate Plan: - Great Homes; - Great Services; - Great People; and - Great Foundations. For Coastline this aim was embedded within the Corporate Plan objectives through the expectation of increased growth in units delivering improvements in overall cost efficiencies. Coastline continues to use operating margin as proxy for operating cost per unit and this measure of improving operating margin, from 36% in 2017 to 38% by 2021, was a key measure within the Corporate Plan. The biggest benefit of using a simple measure like this is that everyone understands its calculation and staff can see their impact on it. The operating margin target of 38% when set excluded shared ownership sales and broadly matched the Regulator’s Value for Money Metric of Operating Margin – Social Housing lettings. Initial performance against this in 2015/16 and 2016/17 showed positive movement towards the target but was not met at the end of the Corporate Plan period in 2021. This was not a surprise and has been reported as being off target for the last two years reflecting increasing pressures on property costs, a slower than planned delivery of new affordable housing and the additional reduction in short-term operating margin resulting from viability property disposals, which do however improve long-term margins and returns. Coastline’s performance in this regard mirrors the position across the industry as operating margins have continued to decline over the last three years. Our relative position on this aim and VfM Metric has improved over this time however seeing a move from more median performance to upper quartile based on the most recently available information for the financial year 2019/20 for the wider sector. The Board have taken a strategic view to maintain levels of investment in customer service and property quality, as well as staff health and wellbeing, rather than reducing spend to protect the margin. We still maintain that the focus on measuring this metric and understanding the reasons behind any changes helps with assessing Coastline’s performance both in isolation and in the wider industry setting. The Board has considered Coastline's approach to VfM at separate strategy days reviewing comparative performance across the Sector Scorecard and the regulator’s VfM Metrics. 33 As part of the regulatory standard on value for money Coastline is required to: - clearly articulate our strategic objectives; - have an approach agreed by the Board for achieving value for money in meeting these objectives and demonstrating their delivery of value for money to stakeholders; - through our strategic objectives, articulate our strategy for delivering homes that meet a range of needs; and - ensure that optimal benefit is derived from resources and assets and optimise economy, efficiency and effectiveness in the delivery of our strategic objectives. The standard also makes wider reference to expectations of registered providers as follows: - have a robust approach to achieving value for money – this must include a robust approach to decision making and a rigorous appraisal of potential options for improving performance; - regular and appropriate consideration of potential value for money gains – this must include full consideration of costs and benefits of alternative commercial, organisational and delivery structures; - consideration of value for money across their whole business and where they invest in non-social housing activity, they should consider whether this generates returns commensurate to the risk involved and justification where this is not the case; and - that they have appropriate targets in place for measuring performance in achieving value for money in delivering their strategic objectives, and that they regularly monitor and report their performance against these targets. Coastline retains a subscription to the HouseMark benchmarking service for performance measures but has dropped the detailed activity cost benchmarking service as analysing costs below a certain level is not productive for three main reasons: - i. the different approaches to recording and analysing costs at a low level; - ii. the interplay between how teams are set up to work within different businesses; and iii. we focus on outcomes and overall business efficiency and therefore the focus remains on operating margin and performance measures such as arrears, voids and development of new homes. The broader approach for value for money activities and management within Coastline is contained within our Value for Money Framework which was most recently updated during 2019/20 and is available on request. In line with our commitment to demonstrating transparency and value for money Coastline joined the pilot Sector Scorecard programme in January 2017 and has continued membership since that date. Our performance against these metrics and the RSH’s value for money metrics (# noted in table below) is provided below. For many of these metrics the reasons for changes in performance are detailed in the sections prior to this. Summary commentary is added to supplement this and provide greater transparency. The Sector Scorecard reports on an agreed set of metrics upon which housing providers can compare their performances as part of demonstrating that they are providing value for money for their Customers. The Sector Scorecard measures 15 indicators across five general areas focusing on: business health, development, outcomes delivered, effective asset management and operating efficiencies. 34 The specific indicators are: |||||Results|||IndustryMedian|IndustryMedian|Commentary| |---|---|---|---|---|---|---|---|---|---| |Theme|Indicator|2016/17|2017/18|2018/19|2019/20|2020/21|2019|2020|| |Business
Health|1Operating
Margin
(overall) #|34.0%|30.5%|31.1%|26.2%|26.7%|25.5%|21.5%|Coastline
performance
improving relative
to wider industry.
.| ||1Operating
Margin
(social
housing
lettings) #|35.6%|36.0%|35.9%|31.8%|29.3%|27.2%|23.6%|| ||~~1~~EBITDA
MRI
(as a
percentage
of interest)#|141.1%|163.3%|177.2%|161.3%|105.0%|197.9%|196.1%|Current year
reflects break
costs of circa
£2.3million within
interest payable.| |Developmen
t – capacity
and supply|Units
developed
(absolute)|139|331|150|302|160|n/a|n/a|Delivery
represents top-10
fastest growing RP
performance.| ||Units
developed
(as
a
percentage
of
units
owned)#|3.4%|7.3%|3.3%|6.3%|3.3%|1.4%|1.3%|Covid-19 impact
on 2020/21
delivery and
intention is for
growth at 5%+
levels| ||Gearing#|57.1%|59.4%|58.3%|56.1%|58.1%|33.8%|33.8%|Gearing increasing
reflecting
investment
generally in new
build properties.| |Outcomes
delivered|Customers
satisfied with
the
service
provided by
their
social
housing
provider|90.0%|90.0%|92.0%|89.5%|88.0%|87.5%|86.9%|Work commencing
on UK Institute of
Customer Service
project to improve
customer service.| ||£’s invested
for
£
generated
from
operations in
new housing
supply #|£3.28|£4.55|£2.79|£3.67|£7.01|n/a|n/a|Metric
demonstrates
commitment to
investment in new
supply.| ||Reinvestmen
t#|17.5%|16.8%|18.4%|13.0%|13.3%|5.4%|6.1%|Reinvestment is
high reflecting
both commitment
to new build and
improving existing
homes.| |Effective
asset
managemen
t|Return
on
capital
employed
(ROCE)#|5.0%|5.6%|5.9%|5.8%|4.1%|3.2%|2.8%|Fall in ROCE
reflects additional
capital within work
in progress not yet
producing assets
for rental due to
Covid-19.| 35 ||Occupancy|99.9%|96.3%||98.8%|98.8%|99.5%|99.5%|98.5%|99.5%|99.28%|Performance in
line with industry
average| |---|---|---|---|---|---|---|---|---|---|---|---|---| ||Ratio
of
responsive
repairs
to
planned
maintenance
spend|0.68|0.71||0.27||0.27||0.14|0.65|0.64|Ratio is subject to
accounting
differences and is
an area of focus in
line with in-house
stock condition
surveys.| |Operating
Efficiencies|~~1~~Headline
social
housing cost
per unit#|£3,256|£2,924||£3,220||£3,316||£3,404|£3,725|£4,023|Performance
relative to industry
has improved but
cost pressures
relating to growth
can create in-year
capacityissues.| ||Rent
collected|99.96%|99.84%|99.56%||99.45%||98.9%||99.80%|99.84%|Reduction in rent
collected matches
increase in
arrears, but noting
that arrears levels
are of the lowest in
the Housing
Sector.| ||1Overheads
as
a
percentage
of
adjusted
turnover|13.8%|12.5%|13.9%||13.1%||11.6%||12.8%|13.9%|Level of
overheads reflects
upfront investment
in systems that
should deliver
efficiencies in the
longer term.| |||||||||||||| |||||||||||||| _Definitions for all of the above measures can be found at http://www.sectorscorecard.com/about-the-sector-scorecard/about_ ## _Sector Scorecard Analysis Report 2020_ _Details of the value for money metrics as specified by the Regulator of Social Housing can be found at_ https://www.gov.uk/government/publications/value-for-money-metrics-technical-note Coastline continues to support the Sector Scorecard and notes that further analysis of the elements under management, service charges, maintenance and major repairs will require the sector to work together to ensure more consistency in approach. The current results from the scorecard as with the RSH regression analysis output at a detailed level is subject to the different approaches to cost allocations that are made by providers and as such, in line with our overall approach to value for money, Coastline prefers a focus on a limited number of high level performance measures. The Sector median is as reported in the RSH Consolidated Global Accounts Dataset and “Value for Money metrics report – annex to Global Accounts 2020” |**RSH Reference Indicator**|||**Results**|||**Sector**
**Median**|***SW**
**Median**| |---|---|---|---|---|---|---|---| ||||||||| ||2016/17|2017/18|2018/19|2019/20|2020/21|2019/20|2019/20| |Metric 1 – Reinvestment %|17.5%|16.8%|17.1%|13.0%|13.3%|7.2%|8.7%| |Metric
2
–
New
Supply
Delivered % (a – Social housing
units)|3.4%|7.3%|3.3%|6.3%|3.3%|1.5%|1.7%| 36 |Metric
2
–
New
Supply
Delivered % (b – Non-social
housingunits)|0.0%|0.0%|0.0%|0.0%|0.1%|0.0%|0.0%| |---|---|---|---|---|---|---|---| |Metric 3 – Gearing|57.1%|59.4%|57.9%|56.1%|58.1%|44.0%|44.0%| |Metric 4 – EBITDAMRI Interest
Cover|141.1%|163.3%|177.2%|161.3%|105.0%|170.0%|186.2%| |Metric 5 – Headline Social
HousingCost Per Unit|£3,256|£2,924|£3,260|£3,316|£3,404|£3,830|£3,610| |Metric 6 – Operating Margin (a
– Social HousingLettings)|35.6%|36.0%|35.0%|31.8%|29.3%|25.7%|26.8%| |Metric 6 – Operating Margin (b
– Overall)|34.0%|30.5%|31.0%|26.2%|26.7%|23.1%|23.5%| |Metric 7 – Return on Capital
Employed(ROCE)|5.0%|5.6%|5.9%|5.8%|4.13%|3.4%|3.5%| * _The SW Median is a calculated reference group of 17 organisations operating in the South West region (or relevant precursor organisations to now merged entities._ The Board has decided that using the Corporate Plan targets in addition to the RSH VfM Metrics provides the most effective way of assessing Coastline’s performance and commentary against both the regulatory metrics and Coastline’s chosen measures follows under the headings of our Corporate Plan: - Great Homes - Great Services - Great People - Great Foundations In previous years the format has provided the headline measure, an indication of the target for the year ahead and an assessment of the progress as at the end of the current financial year. The Corporate Plan for 2016-2021 came to an end on 31 March 2021, and 2021 sees the launch of our new Coastline Plan “Great Futures” which covers 2021-2025. Reflecting this transition the update below confirms the results to the end of March 2021 with an introduction to the new plan at the end. The final outturn from the Corporate Plan 2017-21 Plan was reported to the Board in May 2021 and showed that overall, 18 of the 25 objectives were rated ‘green’, four as ‘yellow’ and three as ‘amber’. The final position of performance against the Corporate Plan was also subject to an independent assessment by the Group’s internal auditors (Bishop Fleming). ## **Great Homes** |**Objective**|**Corporate Plan**
**Headline**
**Measure**|**March 2021 Target**|**Position at March 2021**| |---|---|---|---| |To build our share of the
new homes needed to
meet the needs of those
that live in Cornwall|• 1,000 new
affordable
homes
completed,
including 130
homes for older
persons|• A cumulative total
of 1,320 new
affordable homes
completed:
2020/21: 387.
• Have at least two
initiatives agreed
after “Spring
Forward” to work
more closely with
our Supply Chain.|• A total of 1,066 new affordable homes have
been completed during the 5 years of the
plan and we have been in the top ten
fastest growing providers in each of the last
four years_(Inside Housing – development_
_survey)_
• 160 homes were completed in the year to
March 21. This was less than the revised
target as a result of Coivid-19 delays on
sites.
• Team have collated feedback from ‘Spring
Forward’ event. Work on this has been| 37 |**Objective**|**Corporate Plan**
**Headline**
**Measure**|**March 2021 Target**|**Position at March 2021**| |---|---|---|---| ||||delayed due to Covid-19 but is now being
picked up again.
• The number of homes delivered for older
persons was not achieved due to challenges
in securing consistent support from
Cornwall Council for a new scheme.| |To continue to improve
the overall quality of our
homes|• No home
costing more
than £600 a
year to heat|• 18 homes costing
more than £600 to
heat
• Upgrade heating
systems and
repairs completion
of retained homes
• New
environmental
strategy in place,
setting out
Coastline’s
approach to
meeting the
challenge of
Cornwall’s Climate
Change Emergency|• As at 31 March 2021, 21 homes do not
meet the £600 target. 18 homes have
received a letter explaining they cannot be
upgraded further, and where the home is
already identified for disposal, the
customer has been made aware of the
incentive to move scheme. The remaining
three homes could meet target with
investment but; two have refused mains
gas connections and one elected for a new
oil boiler in 2017 so at this time these
cannot be resolved.
• This target has effectively run its course; as
and when the remaining properties fall void
a decision on their future can be taken at
that time but most likely they will be
considered for disposal.
• Heating upgrades have been refused as
above but remain programmed in all
homes, with a detailed 50 year plan in place
to inform the Business Plan; this will be
subject to change dependent on the future
of gas and net carbon zero strategic
objectives.
• The Environmental Strategy is under
development and is expected to be finalised
later in 2021.
• 284 homes above £600 in 2017, and
progressed to beyond 90% of the target,
and those that are above £600 are where
achievingit would not bepossible.| |To transform how we
manage our assets,
replacing our older
more expensive homes
with higher quality new
ones|• Bringing
forward up to
2% of our
existing homes
a year for
disposal|• 70 disposals of
existing homes
• Feasibility study of
Cornish Units
• Viability review of
garage and
appropriate
additions to the
model|• Under the Asset Investment and Viability
Strategy (updated Jan 2020) 654 properties
have been identified for potential disposal
when they fall vacant; the viability model
will be reviewed later in 2021 and is likely
to incorporate further triggers related to
net-zero carbon.
• The Cornish Unit feasibility study was
delayed due to the Covid-19 pandemic but
is scheduled to recommence in mid-2021. In
the interim, to prevent disrepair, a
specification for a pilot project for
insulation and re-roofing has been
developed for a small number of more
pressingunits.| 38 |**Objective**|**Corporate Plan**
**Headline**
**Measure**|**March 2021 Target**|**Position at March 2021**| |---|---|---|---| ||||• All garages have been surveyed following
development of a more granular new stock
condition survey template. The more
detailed garage review will take place in
2021.| ||• Selling up to 2%
of our existing
homes a year|• A cumulative total
of 199 existing
homes sold:|• 165 homes sold in total in plan period.
• Note that Covid-19 has impacted on supply
of voids available for sale in year and is also
impacting on sales speed as mortgage
valuations and searches are taking longer.
Interest, prices and sales holding up. This
has reduced finalyear numbers.| ||• All the proceeds
re-invested in
new homes|• Further
reinforcement and
distribution of
Film.|• Film completed and uploaded to Coastline
YouTube channel.
• Wider supply chain and BtoB update day
took place Feb 2020.
• Ethical Sales Statement agreed with ET and
PIC. Now being implemented with all sales,
e.g. all disposals notified to local
Parish/Town councils to allow local
purchasers to be sought in first instance.| |To establish a profit
making private homes
model to cross subsidise
our charitable work|• 45 homes for
private sale
completed with
the proceeds
re-invested in
building new
affordable
homes for rent
and sale|• A cumulative total
of 29 private
homes sold:
• Planning
Application
submitted for
Pencoose Farm.
• All homes sold at
Pisky Farm|• Total Sales Completed 4.
• Pisky Farm, at year end four homes
occupied, two sold SSTC. Post year end
note – all plots sold by end of June 2021.
• Quintrell Downs – Contractor (MiSpace)
appointed and progressing on site.
Specification discussions with MiSpace and
sales team reviewing likely sales agent.
• Pencoose abandoned following reduction in
likely planning prospects.| ## **Great Services** |**Objective**|**2021 Measure**|**March 2021 Target**|**Position at March 2021**| |---|---|---|---| |To ensure our customer
service offer is digitally
accessible and easy to
use|• All of our core
customer
services
available for
Customers on-
line|• New contact
system phases 1-5
implemented
• Work to plan
introduction of
WebChat
• Training for all staff
• On-line Tenancy
style test added to
sign up process
• Digital customer
engagement - new
CSC format
introduced
• Identified
preferred E-|• All core services are available on-line via
MyCoastline and other digital means.
• A number of functional and cosmetic
enhancements, continue to be developed
as a part of a cyclical review, with a work
beginning on ‘My Community’ in
MyCoastline, as a space for information,
advice and guidance, as well as information
about our programme of Community
Standard visits and improvements.
• Planning and design is now underway for
the next phase of our contact solution, Web
Chat. On-line payments of rent in advance
is live, and DD and payment gateway,
supporting changes made to our face to| 39 |**Objective**|**2021 Measure**|**March 2021 Target**|**Position at March 2021**| |---|---|---|---| |||signature process
for tenancy
agreements sign up
• Rent in advance
payments on-line
as part of the
digital sign up
• New customer 6
week visits on-line|face and phone offer supporting this digital
shift.
• On-line settling-in visits for new Customers
are in development.| ||• 50% of
Customers
choosing on-
line services|• 40% of Customers
using on-line
services
• 2,000 portal sign
ups
• Enhanced usage of
on-line systems by
Customers to
increase self-serve
• Incentive schemes
for Customers to
engage digitally
introduced
• Training for staff
on the MyCoastline
app and digital
upskilling
• Engage with the
Smartline project
to maximise digital
shift opportunities
• Digital skills
training for
Customers
• Interrogate
frequent and
repeat caller data
to target
Customers and
resolve issues and
change behaviours|• MyCoastline portal registrations stand at
2,340. Taking into other forms of digital
contact, we continue to exceed both the
registrations target and the 50% of contacts
now being made on-line. Whilst we have
seen steady progress towards this over the
life of the Plan, it is likely that changes
made during the COVID-19 era regarding
contacting Coastline digitally wherever
possible has accelerated this.
• Customer profiling work is now complete
with a segmentation model. This allows us
to determine Customers’ propensity to
engage digitally and the likely level of
resource needed to support those
Customers who are less able to choose
digital services.
• MyCoastline continues to be promoted
externally with Customers and internally
with staff. A more focussed approach to
digital engagement for both Customers and
colleagues is in place, with the re-allocation
of an existing manager to focus primarily on
digital campaigns and existing project
delivery now embedded to support
customer and colleague channel shift.
• On-line applications and assessment
processes are now business as usual, with
digital/remote sign up continuing as part of
our response under COVID-19, and likely to
become the norm.| ||• 50% of our
existing homes
re-let through
our
‘HomeZone’
letting portal|• Explore options for
future lettings
platform including
ATLAS (HomeHunt
replacement)
• Review and
relaunch the
Lettings policy|• This financial year 52% of properties have
been let through Homehunt. Our
agreement with Cornwall Council is to
make at least 50% of properties available to
let on Homechoice in the first instance. 58%
were initially advertised on Homechoice
but only 48% were allocated due to the
poor quality of nominations through
Homechoice.
• The Lettings Policy was approved by Board
in May 2020 and has now been ‘launched’
with relevant changes to Homehunt
bandings.| 40 |**Objective**|**2021 Measure**|**March 2021 Target**|**Position at March 2021**| |---|---|---|---| |To achieve exceptional
levels of customer
satisfaction|• Customer
satisfaction
levels of 93%|• 93% overall
customer
satisfaction
• Phase three of the
Customer First
survey completed
• Action plan in
place and feedback
to Customers on
improvements
following surveys
(“you said, we
did”)
• On-line
transactional
surveying
developed on the
new contact
system|• Customer satisfaction monitoring is
changing through new CRM Customer
Voice software for our transactional
surveys.
• To challenge and improve our approach to
Customer feedback, we make active use of
our membership of the UK Institute of
Customer Service and continue to change
our approach to collecting, measuring and
acting on feedback, ultimately creating a
more joined up view of feedback and real
time responses, owned by the relevant
service area. This work will continue into
the life of the new Coastline Plan, with the
next priority service area being responsive
repairs.
• Our Year 3 bespoke perceptional
satisfaction survey, Customer First, is
complete with the final report and
Improvement Plan having been to Senior
Leadership Team (SLT) and Board in
November and Customer Experience Forum
(CEF) in February. The geographical
approach to surveying 100% of Customers
over three years is now complete. Year 3
results show 86% overall satisfaction, and
the combined three year average is 88%.
• We are currently planning for the Business
Benchmarking survey as part of the UK
Institute of Customer Service membership
offer, and the first survey of all Customers
is scheduled for April 2021, with initial
results expected in June.| ||• Transactional
monitoring of
customer
satisfaction in
place|• Institute of
Customer Service
best practice
review
• Options agreed
and established on
new contact
system
• Feedback to
Customers on
performance and
improvements
• Together with
Tenants Charter
published and
measured and
reported to
Customers
• Review and launch
of new Local Offers
to Customers|• Transactional surveys are in place for all key
services, and our approach to collecting and
using this data is being developed to bring
consistency and best practice across the
group.
• We see making use of our membership
with the UK Institute of Customer Service
as an opportunity to challenge ourselves to
deliver excellence and be sector-leading.
• New customer feedback surveys have been
developed to enable the new
communication software solution to
capture an increased range of customer
experience at the point of transaction.
• New Pledges linked to the Trust Charter
commitments have been developed, and
are beginning to be rolled out. Full launch
will tie in with the Coastline Plan to
maximise opportunities to promote these
key documents with colleagues and
Customers.| 41 |**Objective**|**2021 Measure**|**March 2021 Target**|**Position at March 2021**| |---|---|---|---| |To provide a repairs
service that is easy to
use and delivers choice
and quality|• Customers able
to manage
repairs
appointments
on-line|• Regular monthly
transactions via
portal
• Communal repairs
reporting added to
the portal
• Community
Standard work
recorded digitally
and actions
automated via My
Coastline|• On-line appointments can be made by the
customer at the point of reporting. In the
financial year 20/21, 1,459 repairs were
raised via MyCoastline (currently running at
approximately 10% of all repairs reported
per calendar month).
• Mobile working is operational but further
enhancements and integration will be
necessary to make it fully effective.
• The newly developed remote video
diagnostic tool which utilises Customers’
mobile phones during repairs calls has been
fully implemented, however not popular
with all Customers.
• Further enhancements are planned for the
portal which will take into account
customer feedback and findings from the
repairs review, including some ‘how to’
videos to support Customers with on-line
processes. This work will continue into the
new Coastline Plan.
• A new mould and condensation survey has
now been implemented which regularly
surveys Customers electronically to
proactively collate repairs in homes.
Follow-up home surveys are used to assess
ventilation issues and confirm remedial
action required.
• The Smartline team has now finalised the
current project and planning procurement
and planning of the extension whilst
COVID-19 reduces customer home visits
and contact. The extension will focus on
learning from the first project and
implementing innovative solutions to issues
raised which can then be monitored to
confirm success levels.
• The Smartline Project is now focussing on
increasing digital inclusion of Customers via
“Getting Online – Stay Connected” and on-
line coffee mornings which are growing in
popularity.| ||• 99% customer
satisfaction
with repairs
service|• 99% transaction
satisfaction from
repairs service
(note – wider
project during year
to review
collection of
satisfaction data)
• New voids process
pilot complete
• Void Standard
reviewed,|• The recommendations from the Void Lean
Review have been approved and
implemented and it is now complete.
• The Homeless property standard has been
reviewed, finalised and is now used for all
homeless accommodation.
• Despite the continuing challenges of Covid-
19 throughout the year, at the end of
March 2021 in terms of performance
against the 5 Year Programme 3,020
surveys have been completed from an
overall stock level of 5,950,equatingto| 42 |**Objective**|**2021 Measure**|**March 2021 Target**|**Position at March 2021**| |---|---|---|---| |||approved and
published
• Year 3 of SCS
completed 60%
July 2021|50.75% of overall stock, or 92.3%
performance against the expected target of
3,273. The information gained from the
competed surveys to date have been
utilised to develop the financial
programmes and inform the business
planning process.
• During the Covid-19 period there have been
lower than normal volumes of customer
satisfaction returns for the repairs service
as the service was moved to an emergency
only provision.
• Customer satisfaction with repairs has
increased from the previous 82.4% to
92.4% for the financial year to end of
March 2021.| ||• 99% of repairs
completed
‘right first time’|• 99% repairs
completed ‘right
first time’
• Improve diagnosis
of complex
maintenance
issues with a
reduction in
number of
complaints|• The ongoing outstanding repairs have
reduced significantly and are very much in
line with previous years. February and
March has seen a large increase in general
repairs reported by Customers however the
increased resources put in place to deal
with Covid-19 backlog have performed
exceptionally to keep these on track.
• At the end of March 2021 the ‘right first
time’ performance was 90.54%, a slight
decrease from October at 93.83%, and from
March 2020 at 96.6%. Further work is
required on the accuracy of this, as
feedback suggests operatives find it difficult
to classify ‘right first time’ consistently and
accurately.| |To help people back into
work and training|• 500 people
helped back
into work or
training|• 550 people helped
into work or
training (since
2017)
• 2 cohorts of
inspiring futures
Spring and Winter
• Construct live at
Quintrell or
alternative site
with Newquay
Orchards
• Completion of
Together For
Families support
contract extension
March 2021|• Work programmes have been paused due
to COVID-19, but planning is underway to
deliver Coastline Construct in the new
financial year, and inspiring futures will be
‘reimagined’ to adapt to our new ways of
working.
• Despite the COVID-19 restrictions, we have
been able to support 11 people into work
and 16 into training – this includes taking
on new volunteers
• We have now exceeded the 500 target,
with 545 people supported into work or
training since 2017.
• Together for Families (TFF) is now into
project wind-down as the contract ends in
July 2021.
• Funding for a new countywide partnership
project ‘Building Futures’ has been secured,
and a mobilisationplan is inplace.| |To establish a
sustainable model for
deliveringhomeless|• A new
permanent
home for our|• Move on Pathway
created to ensure
clients have|• Our ‘Offer’ document showing the services
available from Coastline for people| 43 |**Objective**|**2021 Measure**|**March 2021 Target**|**Position at March 2021**| |---|---|---|---| |services and expand the
support we provide|Homeless
Service opened|accommodation
options to move on
to and creating
spaces for new
homeless clients
• Contract delivered
and targets met for
crisis revenue
support, supported
accommodation
and supported
outreach|experiencing homelessness has been
refreshed.
• RSAP funding announced and exploring
opportunities alongside Cornwall Council.
• Active support provided to Cornwall
Council to assist with pandemic related
‘Everybody In’ initiative.| ||• 250 vulnerable
people helped
each year|• 92% satisfaction
from clients using
the Homeless
Service
• Evidence of PIE
Framework
outcomes
• Annual Volunteer
Statement
• Crisis and
supported
contractual
requirements
exceeded
• Replacement of
East Charles Street
with new builds in
Trevu
• Disposal of East
Charles Street
• Bring the 6 market
rents at Lamorak
into management
and use for
Homeless move-on|• 363 people have been supported by the
Homeless Service as at 31 December 2020.
• Replacement units for East Charles Street at
Trevu started on site on 22 March 2021 -
project expected to take 6-12 months.
• Replacement for three bedspaces from
Strawberry Cottage are due for completion
on 9 April 2021. Two further units are in the
process of being identified.
• Units at Lamorak being converted from
Market Rent as current tenancies end.
• Homeless Service team have been
undertaking a review and update of their
PIR approach to providing services.| |To increase the number
of older Customers that
we support|• 130 new homes
for older
people,
including a new
Extra Care
Complex|• Start on site at
Bodmin or
alternate site
identified.|• To date 4 homes for older people
completed at Pengover (Redruth), 22 flats
for older people at Quarry Car Park
(Helston), 23 homes at Heartlands (Pool)
and 22 homes at Miners Row (Redruth)
• It has not been possible to identify a
suitable site for the provision of Extra Care
that received full support from Cornwall
Council in relation to Care funding. A
meeting has taken place with CC to explain
that Coastline will not be actively pursuing
this now unless firm support is given at an
earlystage.| 44 ## **Great People** |**Objective**|**2021 Measure**|**March 2021 Target**|**Position at March 2021**| |---|---|---|---| |To be recognised as one
of the best places to work
in Cornwall, and one of
the best housing
associations in the
country|• Sunday Times
Top 50 Not For
Profit employer|• Conclude on
whether using Best
Companies or IiP to
measure._(Former_
_would be consistent_
_with original target,_
_latter is now felt to_
_be more robust, but_
_will not be known_
_until late 2021)_
• Implementation of
new HR Strategy,
including review of
overall benefits
package
• Evaluation of Health
and Wellbeing
Strategy|• Annual Health and Wellbeing Report to
Board May 2020.
• IiP interim reviews in 2019 and 2020
positive
• New T and C’s agreed for Coastline
Services colleagues from October 2020 to
harmonise across the Group.
• Strategic discussion held at November
2020 Board Strategy Day.
• Wellbeing remains front and centre
during current lockdown with briefings,
‘Hugs in a box’, virtual events taking place
• Introduction of Headspace App for all
colleagues.
• We have not achieved ‘Top 50’ or ‘IIP
Gold’, we have made significant progress
on culture, health and wellbeing, and
consistency of ‘offer’ across the Group.| |To invest in our staff so
that they can deliver to
their full potential|• All staff have
continuous
career
development
plan in place|• All staff have
Personal
Development Plans
in place and
regularly reviewed
through the
quarterly
performance review
process
• Review of
performance review
process and
implementation of
any changes
• Successful rollout of
year 2 of the
leadership training
programme with
Jack Russel Coaching
(to include all
managers)|• New Performance Review scheme
launched in January 2019.
• Organisational development leadership
programme for SLT for 2019/20,
facilitated by Jack Russell has been
completed.
• One day leadership programme for all
other managers facilitated by SLT in
November 2019. We planned in 2020 to
focus on bringing all managers on board
with the full leadership programme –
dates were scheduled, some of which had
to be cancelled due to COVID-19. These
are now taking place with more sessions
held in April 2021.| |To ensure that we live up
to the values we share|• At least 90% of
staff feel that our
behaviours are in
line with our
values|• At least 90% of staff
feel that our
behaviours are in
line with our values
– survey scheduled
for Q4 2020/21|• Values Survey undertaken December
2019. Results similar to 2016 but slight
increase in how we value one another
• Covid-19 survey results were
overwhelmingly positive on how the
response had been managed, the
communications, support for wellbeing,
the ability to work remotely and
confidence that safety would be
maintained as we return.
• 2ndCovid-19 survey still positive and
wider responses achieved.| 45 ## **Great Foundations** |**Objective**|**2021 Measure**|**March 2021 Target**|**Position at March 2021**| |---|---|---|---| |To grow our income
while ensuring that we
become more productive
in how we work|• Operating margin
of 38%|• Coastline Housing
Operating margin of
27.2%_(note this is_
_not directly_
_comparable to the_
_Corporate Plan_
_target which is more_
_closely linked to_
_statutory accounts_
_social housing_
_lettings margin)_
• Coastline Group
operating surplus of
£9.4 million
• Coastline Group net
surplus of £11.3
million|• Position approved in July-20 :
`o`
CHL Operating Margin (exc SO)
25.8%
`o`
CHL Operating Margin (inc SO)
24.7%
`o`
CHL Net Margin £7.6m
• Position at 31 March 2021
`o` CHL Operating Margin (exc SO)
29.3%
`o`
CHL Operating Margin (inc SO)
27.2%
`o`
CHL Net Margin £5.4m
• Operating Margin has not reached 38%
as originally set in the Corporate Plan for
a number of factors previously
highlighted. The closest comparator to
the 38% target is the Social Housing
Lettings Operating Margin, which at
March 19 was 35.9% and for March 20
was 33.8%
• Whilst this measure of efficiency remains
a key financial metric for Coastline the
absolute target has been considered less
important than ensuring adequate
resources in place to support
communities and colleagues in the
shorter-term due to Covid-19.| |To continue to drive
down our average cost of
debt so that our
operating surpluses go
further|• Average cost of
debt of 4.5%|• Average cost of debt
under 4.0%
(reflecting potential
for increased fixed
rate debt being
taken on at higher
than variable rate).
• Other specific
targets will be set as
part of the annual
finance strategy for
2020/21|• Average cost of debt:
`o` 31/03/20 – 3.46% (67% of debt fixed)
`o` 31/03/21 – 2.61% (50% of debt fixed)
• Interest rate significantly better than
target reflecting low interest rate
environment and pro-active
management of embedded interest rate
position.| |To ensure that our Board
and governance
arrangements remain
strong and keep pace
with the changing
dynamics of the Group|• Retention of the
highest possible
‘G1 V1’
regulatory status
throughout the
life of this
Corporate Plan.|• Chair and NED
succession plan
complete, with new
Chair, NED and Co-
optee recruited and
inducted.
• Customer Service
Forum embedded in
the Governance
Framework
• Governance action
plan in place and on
track|• Board Effectiveness review completed by
Altair in June 2019
• Articles updated in January and May 2019
• 2 NED’s and 2 ARAC members recruited.
• Chair recruitment completed
• Board approved new ‘Customer
Experience Forum’ at March meeting
• G1/V1 retained
• New NHF Code of Governance 2020
adopted
• Group Standing Orders reviewed and
updated March 21| 46 |**Objective**|**2021 Measure**|**March 2021 Target**|**Position at March 2021**| |---|---|---|---| ||||• Updated Governance Action Plan
approved at March 2021 meeting| |To ensure that Coastline
has the capacity and
capability to deliver the
objectives of this
Corporate Plan|• We will pursue
joint /
partnership
working and
other strategic
alliances where
this will
contribute
towards
achieving the
aims and
objectives of this
Corporate Plan|• New Coastline 2020-
25 Plan complete
and launched
• Cornwall Strategic
Housing Group
(CSHG) in place with
HA representation
• Cornwall Affordable
Housing MoU in
place
• LandG Affordable
Homes relationship
strong
• Triannual report to
Board on Corporate
Plan progress
• Annual report to
Board on ‘state of
play’ of housing
association market
in south west|• Coastline Plan 2021-25 now signed off by
Board and being launched in 2021.
• CSHG starting to operate more effectively
with better private sector
engagement. Agreement reached that it
will have a strategic role in the production
of the new Cornwall Housing Strategy.
• Cornwall Affordable Housing MoU
delayed again by local elections, planning
for this to go to the first CSHG meeting
after the new administration is in place.
• LandG relationship remains strong, albeit
volumes are lower than we would like.
• November Strategy Day including
consideration of Coastline’s
benchmarking position on key metrics
against SW peer group.| 47 ## **Coastline Plan 2021-2025** While the work to produce the Plan was structured around six ‘themes’, the final Plan uses Coastline’s vision/mission statement (‘Great Homes, Great Services, Great People’) as its structure. It also retains ‘Great Foundations’ as a key area, but without any specific aims. Key points to note with regards to the aims of the Coastline Plan are: - Some, particularly those around climate change and ending homelessness in Cornwall, are deliberately aspirational (and inspirational) and are not likely to be achieved. - The importance of ‘place’ and of the environment is stronger than in previous plans, with a focus on green spaces, community, bio-diversity and climate change. - As well as including a specific aim about keeping the pledges we make to Customers, the wording is consistent with and echoes the aims of the Coastline Trust Charter and Pledges developed with the Customer Voice and Customer Experience Forum. - Some of the aims (under Great Services and Great People) are arguably more about our ‘values’, but have been included as aims as they are areas where we have more work to do to really live up to those particular values. - For the first time we have included aims in the ‘Great People’ heading that are outward, rather than inward, looking. This is because while having a team of ‘great people’ is crucial to Coastline’s success, it is not in itself the reason why the charity exists. ## **Setting and monitoring specific targets for the 2021-25 Coastline Plan** While the new approach deliberately results in a less detailed, published strategic plan, detailed measurable objectives are still needed. These will be approved by the Board annually, enabling the Board and other stakeholders to hold the organisation to account. This also enables us to be flexible in response to our risk appetite and an uncertain environment (e.g. Covid-19, the Social Housing White Paper, building safety reviews, and Brexit). Progress against targets will continue to be reported to the Board three times a year, as has been the practice with previous plans (and will include consideration of the strategic risk map). This reporting will also continue to form the basis for the commentary in the annual accounts that summarises for stakeholders how Coastline is performing against its strategic objectives. 48 The Plan will be launched with Customers (with a focus on the ‘Pledges’ that have been developed with involved Customers) in July, and with external stakeholders in September. ## **Section 172 Statement** The revised UK Corporate Governance Code (‘2018 Code’) was published in July 2018 and applies to accounting periods beginning on or after January 1, 2019. The Companies (Miscellaneous Reporting) Regulations 2018 (‘2018 MRR’) require Directors to explain how they considered the interests of key stakeholders and the broader matters set out in section 172(1) (A) to (F) of the Companies Act 2006 (‘S172’) when performing their duty to promote the success of the Company under S172. This includes considering the interest of other stakeholders which will have an impact on the long-term success of the company. This S172 statement, which is reported for the first time, explains how Coastline Directors: - have engaged with employees, suppliers, customers and others; and - have had regard to employee interests, the need to foster the company’s business relationships with suppliers, customers and other, and the effect of that regards, including on the principal decisions taken by the company during the financial year. - The S172 statement focuses on matters of strategic importance to Coastline, and the level of information disclosed is consistent with the size and the complexity of the business. ## **How the Board complied with its Section 172 duty** The Board welcomes the new reporting requirement as a further opportunity to explain how dialogue with stakeholders has been woven into the fabric of Coastline decision making. Recent examples of this are: the workshop and presentation from Cornwall Council planning team on the strategic housing plan for Cornwall at the June 2019 strategy day, a presentation from the Co-Chair of the Cornwall Nature Partnership at the November 2019 Strategy Day and Matt Barton presenting the strategic Covid-19 recovery in Cornwall to the June 2020 Strategy Day. The new Coastline plan “Great Futures” has been built up using engagement from Customers, colleagues and input from wider stakeholders following on from the November 2019 strategy day. Whist the impact of the Covid-19 has delayed elements of the formation and engagement the new plan is set for launch during 2021 and was presented to Board for approval by the colleagues involved in the process. The previous Chair, Derek Law MBE finished his appointment by virtue of having completed a nine year term (the maximum recommended in the NHF Code of Governance) at the September 2020 AGM and the process to recruit a replacement concluded in March 2021 with the appointment of Chair Designate Mark Duddridge. Since September 2020 and up to 1 July 2021 Peter Stephens, the Vice-Chair, has acted as interim Chair. The process of recruitment involved significant dialogue with the current Board, Executive management and Customers. This process will then also dovetail with the arrangements for production of the new ‘Coastline Plan’ to replace the existing Corporate Plan which finishes in March 2021. The new plan will seek to provide targets for the homes and services that Coastline provides that stretches both our financial and human resources and maximises delivery against our charitable mission. ## **Delegation of authority** The Board believes that governance of Coastline is best achieved by delegation of its authority for the executive management of Coastline to the CEO, subject to defined limits and monitoring by the Board and Committee structures (for reference see page 8). The Board routinely monitors the delegation of authority, ensuring it is regularly updated, while retaining ultimate responsibility. The most recent review was completed as part of an independent Board effectiveness review which reported back to the Board in May 2019 and defined an action plan which has been monitored on the Board’s behalf by the Audit, Risk and Assurance Committee and delivered by Management. The Board has a long-standing corporate governance framework which reflects the charitable status of Coastline and the regulatory frameworks for Social Housing, Supported Housing and Extra Care services. The current framework covers the following principle areas: 1. **Company Purpose** - Pursuing Coastline’s charitable objectives and accountability to communities and other stakeholders for the company’s actions. This means focussing primarily on strategic issues, while having regard to economic, political and social issues and other external factors particularly with reference to those impacting Cornwall. 2. **Strategy** - Responsibility for establishing and reviewing the long-term strategy, Corporate Plan and the financial business plan for Coastline, based on proposals made by management for achieving Coastline’s purpose. 3. **Monitoring decisions on the management team and the performance of Coastline** Including implementation of, and performance against the strategy and the business plan and the exercise of authority delegated to committees and management. The Board satisfies itself that emerging and principal risks to Coastline are identified and understood, systems of risk management, compliance and controls are in place to mitigate such risks and expected conduct of Coastline’s business and its employees is reflected in a set of values established by the CEO. 4. **Succession** Ensuring that systems and processes are in place for succession, evaluation and compensation of the CEO, executive and non-executive directors and all colleagues at Coastline. During 2020/21 the directors continued to exercise all their duties, while having regard to these and other factors as they reviewed and considered proposals from management and governed the company on behalf of its charitable purpose through the Coastline board. |**Section 172 Factor**|**Key Examples**|**Page(s)**| |---|---|---| |_Section 172 (1) (A)_
Consequence of any decision in the
long term|Charitable objectives
New Coastline Plan – all aspects|5
6 and 37-47| |_Section 172 (1) (B)_
Interests of employees|Living Wage Accreditation
Gender Pay Reporting
Coastline Plan – Great People|11-12
45| |_Section 172 (1) (C)_
Fostering business relationships
with suppliers, customers
and
others|Development Supply Chain event
European funding initiatives such as SmartLine
Coastline Plan – Great Services|37-38
42
39-44| |_Section 172 (1) (D)_
Impact
of
operations on
the
community and the environment|Charitable Objectives
Coastline Plan – Great Homes|6
37-39| |_Section 172 (1) (E)_
Maintaining high
standard
of
business conduct|Governance and Committee Structures|8-9| |_Section 172 (1) (F)_
Acting fairly between members|Balanced long-term decision making
Code of Governance|6
9 and 46| 50 ## **Streamlined Energy and Carbon Reporting (SECR)** Coastline is a social housing landlord and therefore the majority of environmental impact is drawn from the energy used by domestic property portfolio. As at 1 April 2021 Coastline owned 4,430 domestic homes which includes general needs, supported and Extra Care accommodation. For the purposes of SECR operational impacts include utility costs from office spaces, fleet vehicle and staff vehicle mileage. In terms of corporate impact which is directly accountable to the operations of the business; **Green House Gas Emissions (GHG) and Energy 1 April 2020-31 March 2021** |**Green House Gas Emissions (GHG) and Energy 1 April 2020-31 March 2021**|**Green House Gas Emissions (GHG) and Energy 1 April 2020-31 March 2021**|**Green House Gas Emissions (GHG) and Energy 1 April 2020-31 March 2021**| |---|---|---| ||Total Tonnes CO2|Units| |**Scope 1 – Direct Emissions**||| |Fleet Vehicle Mileage|172.52|434,620| |Staff Mileage|71.2|51,059| |Natural Gas|281|5,129.58| |**Scope 2 – Indirect Emissions**||| |Electricity|13.2|18,854.08| |Water|999.26|3,353.23| |**Total – Scope 1 + 2**|**1,537.18**|| |**Scope 3 – Other Indirect Emissions**||| |Housing Stock|9254.27|4430| |**Grand Total**|**10,791.45**|| |**Intensity Ratio**|291.66 Tonnes of Co2 per £M Turnover|| ## **Methodology** Each activity has been calculated in the appropriate units of measure and then converted to metric carbon tonnes to provide consistency. ## **Energy Efficiency Action** New contracts for all utility supplies commence September 2021 and have been secured with ‘green’ suppliers. The development of a new c environmental strategy during 2021 will assist Coastline in targeting the reduction of carbon impact using agreed Key Performance Indicators. In addition Coastline is working to decarbonise the housing stock working with partners to secure energy improvement funds. 51 By order of the Board **Mark Duddridge Chair – Coastline Housing Ltd 13 September 2021** 52 ## **Independent auditor’s report to the members of Coastline Housing Limited** ## **Opinion** We have audited the financial statements of Coastline Housing Limited (“the Company”) for the year ended 31 March 2021 which comprise the Group and Company Statement of Comprehensive Income, the Statement of Financial Position, the Consolidated Statement of Cash Flows, the Statement of Changes in Equity and related notes, including the accounting policies in note 1. In our opinion the financial statements: - give a true and fair view of the state of affairs of the Company as at 31 March 2021 and of its surplus/(deficit) for the year then ended; - have been properly prepared in accordance with UK accounting standards, including FRS 102 _The Financial Reporting Standard applicable in the UK and Republic of Ireland_ ; and - have been prepared in accordance with the requirements of the Companies Act 2006, the Housing and Regeneration Act 2008 and the Accounting Direction for Private Registered Providers of Social Housing 2019. ## **Basis for opinion** We conducted our audit in accordance with International Standards on Auditing (UK) (“ISAs (UK)”) and applicable law. Our responsibilities are described below. We have fulfilled our ethical responsibilities under, and are independent of the company in accordance with, UK ethical requirements including the FRC Ethical Standard. We believe that the audit evidence we have obtained is a sufficient and appropriate basis for our opinion. ## **Going concern** The directors have prepared the financial statements on the going concern basis as they do not intend to liquidate the company or to cease its operations, and as they have concluded that the company’s financial position means that this is realistic. They have also concluded that there are no material uncertainties that could have cast significant doubt over its ability to continue as a going concern for at least a year from the date of approval of the financial statements (“the going concern period”). In our evaluation of the directors’ conclusions, we considered the inherent risks to the company’s business model and analysed how those risks might affect the company’s financial resources or ability to continue operations over the going concern period. Our conclusions based on this work: - we consider that the directors’ use of the going concern basis of accounting in the preparation of the financial statements is appropriate; - we have not identified, and concur with the directors’ assessment that there is not, a material uncertainty related to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for the going concern period. However, as we cannot predict all future events or conditions and as subsequent events may result in outcomes that are inconsistent with judgements that were reasonable at the time they were made, the above conclusions are not a guarantee that the company will continue in operation. 53 ## **Fraud and breaches of laws and regulations – ability to detect** To identify risks of material misstatement due to fraud (“fraud risks”) we assessed events or conditions that could indicate an incentive or pressure to commit fraud or provide an opportunity to commit fraud. Our risk assessment procedures included: - Enquiring of directors, the group audit, risk and assurance committee, internal audit and inspection of policy documentation as to the Group’s high-level policies and procedures to prevent and detect fraud, including the internal audit function, and the Group’s channel for “whistleblowing”, as well as whether they have knowledge of any actual, suspected or alleged fraud. - Reading Board, and group audit, risk and assurance committee minutes. - Using analytical procedures to identify any unusual or unexpected relationships. We communicated identified fraud risks throughout the audit team and remained alert to any indications of fraud throughout the audit. As required by auditing standards, and taking into account possible pressures to meet loan covenants and regulatory performance targets, we perform procedures to address the risk of management override of controls and the risk of fraudulent revenue recognition, in particular the risk that income from development is recorded in the wrong period and the risk that Group management may be in a position to make inappropriate accounting entries. We did not identify any additional fraud risks. In determining the audit procedures we took into account the results of our evaluation and testing of the operating effectiveness of the Group-wide fraud risk management controls We also performed procedures including: - Identifying journal entries to test for all full scope components based on risk criteria and comparing the identified entries to supporting documentation. These included journal entries containing key words, unbalanced journal entries and unexpected journals posted to cash at bank and in hand. _Identifying and responding to risks of material misstatement due to non-compliance with laws and regulations_ We identified areas of laws and regulations that could reasonably be expected to have a material effect on the financial statements from our general commercial and sector experience, and through discussion with the directors and other management (as required by auditing standards), and from inspection of the Group’s regulatory and legal correspondence and discussed with the directors and other management the policies and procedures regarding compliance with laws and regulations. We communicated identified laws and regulations throughout our team and remained alert to any indications of non-compliance throughout the audit. The potential effect of these laws and regulations on the financial statements varies considerably. The Group is subject to laws and regulations that directly affect the financial statements including financial reporting legislation (including related companies legislation), taxation legislation, pensions legislation and specific disclosures required by housing legislation and we assessed the extent of compliance with these laws and regulations as part of our procedures on the related financial statement items. 54 ## **Other information** The directors are responsible for the other information, which comprises the strategic report, the Report of the Board and the Statement on Internal Control. Our opinion on the financial statements does not cover the other information and, accordingly, we do not express an audit opinion or, except as explicitly stated below, any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether, based on our financial statements audit work, the information therein is materially misstated or inconsistent with the financial statements or our audit knowledge. Based solely on that work: - we have not identified material misstatements in the other information; - in our opinion the information given in the strategic report and the report of the board for the financial year is consistent with the financial statements; and - in our opinion those reports have been prepared in accordance with the Companies Act 2006. ## **Matters on which we are required to report by exception** Under the Companies Act 2006 we are required to report to you if, in our opinion: - adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or - the financial statements are not in agreement with the accounting records and returns; or - certain disclosures of directors’ remuneration specified by law are not made; or - we have not received all the information and explanations we require for our audit. We have nothing to report in these respects. ## **Directors’ responsibilities** As explained more fully in their statement set out on page 23, the directors are responsible for: the preparation of financial statements which give a true and fair view; such internal control as they determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error; assessing the group and the company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern; and using the going concern basis of accounting unless they either intends to liquidate the group or the company or to cease operations, or have no realistic alternative but to do so. ## **Auditor’s responsibilities** Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue our opinion in an auditor’s report. Reasonable assurance is a high level of assurance, but does not guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of the financial statements. A fuller description of our responsibilities is provided on the FRC’s website at www.frc.org.uk/auditorsresponsibilities. 55 ## **The purpose of our audit work and to whom we owe our responsibilities** This report is made solely to the company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006 and section 128 of the Housing and Regeneration Act 2008. Our audit work has been undertaken so that we might state to the company’s members those matters we are required to state to them in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company’s members, as a body, for our audit work, for this report, or for the opinions we have formed. ## **Mark Dawson (Senior Statutory Auditor)** ## **for and on behalf of KPMG LLP, Statutory Auditor** _Chartered Accountants_ Regus, 4th floor Salt Quay House, 6 North East Quay Plymouth PL4 OHP 22 September 2021 56 ## **Group and Company Statement of Comprehensive Income for the year ended 31 March 2021** |**ear ended 31 March 2021**||| |---|---|---| |**Note**
Turnover: continuing activities
2
Cost of sales
2
Operating costs
2
**Operating surplus**
2
Gift aid receivable
Surplus on sales of properties
5
Other finance expenditure
6
Interest receivable and other income
Interest payable and similar charges
7
**Surplus for the year before taxation**
4
Tax on surplus
26
**Surplus for the year**
**Other Comprehensive Income**
Actuarial Gain/(loss) on pension scheme
24
**Total recognised surplus for the year**|**GROUP**
**2021**
**£’000**
2020
£’000
**33,364**
36,996
**(3,239)**
(5,536)
**(21,209)**
(21,780)
**8,916**
9,680
**-**
-
**3,314**
5,270
**(572)**
(364)
**5**
89
**(6,183)**
(3,783)
**5,480**
10,892
**6**
44
**5,486**
10,936
**(2,123)**
1,290
**3,363**
12,226|**COMPANY**
**2021**
**£’000**
2020
£’000
**31,815**
36,738
**(3,239)**
(5,536)
**(19,813)**
(21,700)| |||**8,763**
9,502
**280**
645
**3,314**
5,270
**(572)**
(364)
**126**
89
**(6,183)**
(3,783)| |||**5,728**
11,359
**-**
-| |||**5,728**
11,359| |||**(2,123)**
1,290| |||**3,605**
12,649| All the above results derive from continuing operations and are on a historic cost basis. The Statement of Comprehensive Income and Other Comprehensive Income was approved by the Board on 13 September 2021 and signed on its behalf by: **M Duddridge Chair** **P Stephens Deputy Chair** **S Harrison Chair of Audit, Risk and Assurance Committee** 57 ## **Statement of Financial Position as at 31 March 2021** (Reg. Number: 03284666) |**Fixed assets:**
Intangible fixed assets
Housing properties
Other tangible fixed assets
Investments
**Total fixed assets**
**Current assets:**
Stock
Rental and other debtors
Cash and cash equivalents
**Total current assets**
**Creditors: amounts falling due within one year**
**Net current assets**
**Total assets less current liabilities**
Creditors: amounts falling due after more than
one year
Pension deficit funding liabilities
Pension defined benefit (liability) / surplus
Provision for tax liabilities
**Net assets**
**Represented by:**
**Capital and reserves:**
Revenue reserves|**Note**
11
12
13
14
16
15
17

18|**GROUP**
**2021**
**£’000**
2020
£’000
**375**
315
**277,929**
245,667
**4,550**
4,434
**-**
-
**282,854**
250,416
**8,396**
7,042
**4,322**
6,608
**12,065**
5,128
**24,783**
18,778
**(11,536)**
(9,967)
**13,247**
8,811
**296,101**
259,227
**(233,533)**
(201,822)
**(184)**
(172)
**(3,196)**
(1,403)
**-**
(5)
**59,188**
55,825
**59,188**
55,825
**59,188**
55,825|**COMPANY**
**2021**
**£’000**
2020
£’000
**375**
308
**278,797**
246,288
**4,524**
4,387
**75**
75| |---|---|---|---| ||||**283,771**
251,058
**6,249**
4,265
**4,246**
6,569
**11,721**
4,507| ||||**22,216**
15,341
**(9,636)**
(7,169)| ||||**12,580**
8,172| ||||**296,351**
259,230| ||19||**(233,533)**
(201,822)
**(184)**
(172)
**(3,196)**
(1,403)
-
-| ||23
23
27||| ||||**59,438**
55,833| ||||**59,438**
55,833| ||||**59,438**
55,833| 58 These financial statements were approved by the Board on 13 September 2021 and signed on its behalf by: **M Duddridge Chair** **P Stephens S Harrison Deputy Chair Chair of Audit, Risk and Assurance Committee** 59 ## **Consolidated Statement of Cash Flows for the year ended 31 March 2021** |**021**|| |---|---| |**Cash flows from operating activities**
Surplus for the year
**_Adjustments for non-cash items:_**
Depreciation and impairment charges
Amortisation of intangible fixed assets
Profit on sale of housing properties
Loss on sale of tangible fixed assets
Taxation
Increase / (Decrease) in trade and other debtors
Increase in stocks
Increase in trade, other creditors and provisions
Pension costs less contributions payable
**_Adjustments for investing or financing activities:_**
Interest receivable and similar income
Interest payable and similar charges
Amortisation of loan arrangement fees
Government grants utilised in the year
Tax paid
**Net cash from operating activities**
**Cash flows from investing activities**
Sale of housing properties
Sale of other fixed assets
Interest received
Acquisitions of housing properties
Capital improvements to existing properties
Acquisitions of other fixed assets
Grants received to support capital expenditure
**Net cash from investing activities**
**Cash flows from financing activities**
Interest paid
New secured loans
Repayment of loans
Loan arrangement fees
**Net cash from financing activities**
Net increase / (decrease) in cash and cash equivalents
Cash and cash equivalents at 1 April
(i)
**Cash and cash equivalents at 31 March**|**2021**
2020
**£000**
£000
**5,486**
10,936
**4,625**
3,488
**126**
112
**(3,314)**
(5,270)
**-**
-
**(6)**
(44)
**2,286**
(2,139)
**(1,354)**
(2,168)
**1,211**
3,357
**-**
-
**(126)**
(89)
**4,684**
3,078
**(184)**
(92)
**(956)**
(820)
**-**
-| ||**12,478**
10,349| ||**3,921**
5,790
**-**
-
**-**
-
**(31,867)**
**(2,402)**
(27,880)
(2,856)
**(847)**
(875)
**2,668**
8,412| ||**(28,527)**
(17,409)| ||**(7,007)**
(4,862)
**31,000**
8,998
**(1,007)**
-
**-**
-| ||**22,986**
4,136| ||**6,937**
(2,924)
**5,128**
8,052| ||**12,065**
5,128| 60 ## **(i) Analysis of changes in net debt** |**GROUP**
**Cash and cash equivalents**
Cash
Overdrafts
Cash equivalents
**Borrowings**
Debt due within one year
Debt due after one year
**Total**|**At 1 April**
**2020**
**Cash**
**flows**
**Other non-**
**cash**
**changes**
**At 31**
**March**
**2021**
**£000**
**£000**
**£000**
**£000**
5,128
6,937
-
12,065
-
-
-
-
-
-
-
-| |---|---| ||**5,128**
**6,937**
**- 12,065**| ||(1,032)
1,032
-
-
(142,400)
(31,026)
-
(173,426)| ||**(143,432)**
**(29,994)**
**-**
**(173,426)**| ||| ||**(138,304)**
**(23,057)**
**-**
**(161,361)**| 61 ## **Statement of Changes in Equity** |**tatement of Changes in Equity**|| |---|---| |**GROUP**
**Balance at 1 April 2019**
Surplus for the year
Other comprehensive income (see note 24)
**Total comprehensive income for the year**
Transfer from Garlidna Reserve
**Balance at 31 March 2020**
**Balance at 1 April 2020**
Surplus for the year
Other comprehensive income (see note 24)
**Total comprehensive income for the year**
Transfer to Garlidna Reserve
**Balance at 31 March 2021**
**COMPANY**
**Balance at 1 April 2019**
Surplus for the year
Other comprehensive income (see note 24)
**Total comprehensive income for the year**
Transfer from Garlidna Reserve
**Balance at 31 March 2020**
**Balance at 1 April 2020**
Surplus for the year
Other comprehensive income (see note 24)
**Total comprehensive income for the year**
Transfer to Garlidna Reserve
**Balance at 31 March 2021**|**Revenue**
**reserve**
**Garlidna**
**reserve**
**Restricted**
**reserve**
**Total**
**equity**
**£000**
**£000**
**£000**
**£000**| ||**43,530**
**37**
**32**
**43,599**
10,936
-
-
10,936
1,290
-
-
1,290| ||**12,226**
**-**
**-**
**12,226**
25
(25)
-
-| ||
**55,781**
**12**
**32**
**55,825**| ||**55,781**
**12**
**32**
**55,825**
5,486
-
-
5,486
(2,123)
-
-
(2,123)| ||**3,363**
**3,363**
(193)
193
-
-| ||
**58,951**
**205**
**32**
**59,188**| ||**Revenue**
**reserve**
**Garlidna**
**reserve**
**Restricted**
**reserve**
**Total**
**equity**
**£000**
**£000**
**£000**
**£000**| ||**43,115**
**37**
**32**
**43,184**
11,359
-
-
11,359
1,290
-
-
1,290| ||**12,649**
**-**
**-**
**12,649**
25
(25)
-
-| ||
**55,789**
**12**
**32**
**55,833**| ||**55,789**
**12**
**32**
**55,833**
5,728
-
-
5,728
(2,123)
-
-
(2,123)| ||**3,605**
**-**
**-**
**3,605**
(193)
193
-
-| ||
**59,201**
**205**
**32**
**59,438**| 62 ## **Notes to the Financial Statements** ## **1 Accounting Policies** These Group and parent company financial statements were prepared in accordance with Financial Reporting Standard 102. The Financial Reporting Standard _is_ applicable in the UK and Republic of Ireland ( _“FRS 102”_ ). The presentation currency of these financial statements is sterling. All amounts in the financial statements have been rounded to the nearest £1,000. The parent company is included in the consolidated financial statements, and is considered to be a qualifying entity under FRS 102 paragraphs 1.8 to 1.12. The following exemptions available under FRS 102 in respect of certain disclosures for the parent company financial statements have been applied: - No separate parent company Cash Flow Statement with related notes is included. The accounting policies set out below have, unless otherwise stated, been applied consistently to all periods presented in these financial statements. Judgements made by the directors, in the application of these accounting policies that have significant effect on the financial statements and estimates with a significant risk of material adjustment in the next year are discussed in note 30. ## **Measurement Convention** The financial statements are prepared on the historical cost basis. ## **Legal Status** The Company is a company limited by guarantee, and is registered in England under the Companies Act 2006. It is a registered social housing provider and a registered charity. ## **Basis of Preparation** The consolidated financial statements include the financial statements of the Company and its subsidiary undertakings made up to 31 March 2021. A subsidiary is an entity that is controlled by the parent. The results of subsidiary undertakings are included in the consolidated profit or loss account from the date that control commences until the date that control ceases. Control is established when the Company has the power to govern the operating and financial policies of an entity so as to obtain benefits from its activities. In assessing control, the Group takes into consideration potential voting rights that are currently exercisable. In the parent financial statements, investments in subsidiaries, jointly controlled entities and associates are carried at cost less impairment. The financial statements have been prepared under the historical cost convention and in accordance with applicable Accounting Standards, the Accounting Direction for Private Registered Providers of Social Housing 2019 and the Statement of Recommended Practice, “Accounting by Registered Social Housing Providers 2018” (SORP 2018) and the Companies Act 2006. The following accounting policies have been applied consistently in dealing with items which are considered material in relation to the Company’s financial statements. 63 ## **Going Concern** The financial statements have been prepared on a going concern basis which the Board consider to be appropriate for the following reasons. The Group prepares a 30 year business plan which is updated and approved on an annual basis. The most recent business plan was approved in March 2021 by the Board. As well as considering the impact of a number of scenarios on the business plan the Board also adopted a stress testing framework against the base plan. The stress testing impacts were measured against loan covenants and peak borrowing levels compared to agreed facilities, with potential mitigating actions identified to reduce expenditure. Following the outbreak of Covid-19 the Group has undertaken a series of further scenario testing including severe but plausible downsides in the worst case assessment. The Board, after reviewing the group and company budgets for 2021/22 and the Group’s medium term financial position as detailed in the 30-year business plan including changes arising from the Covid-19 pandemic, is of the opinion that, taking account of severe but plausible downsides, the Group and Company have adequate resources to continue in business for the foreseeable future. In order to reach this conclusion, the Board have considered: - The property market – budget and business plan scenarios have taken account of delays in handovers, lower numbers of property sales, reductions in sales values and potential conversion of market sale to social homes; - Maintenance costs – budget and business plan scenarios have been modelled to take account of cost increases and delays in maintenance expenditure, with major works being phased into future years; - Rent and service charge receivable – arrears and bad debts have been increased to allow for customer difficulties in making payments and budget and business plan scenarios to take account of potential future reductions in rents; - Liquidity – available cash and unutilised loan facilities of £45.9m as at 31 March 2021, which gives significant headroom for committed spend and other forecast cash flows that arise; - The Group’s ability to withstand other adverse scenarios such as higher interest rates increased periods for relets in addition to a higher number of void properties. The Board believe the Group and Company has sufficient funding in place and expect the Group to be in compliance with its debt covenants even in severe but plausible downside scenarios. Consequently, the Board are confident that the Group and Company will have sufficient funds to continue to meet its liabilities as they fall due for at least 12 months from the date of approval of the financial statements and therefore have prepared the financial statements on a going concern basis. ## **Consolidation** The consolidated financial statements include the financial statements of the Company and its four subsidiaries Coastline Services Limited; Coastline Care Limited; Coastline Homes Limited and Coastline Design and Build Limited. The acquisition method of accounting has been adopted. Transactions between the Company and its subsidiaries are eliminated on consolidation. ## **Basic Financial Instruments** _Trade and other debtors/ creditors_ Trade and other debtors/ creditors are recognised initially at transaction price less attributable transaction costs. Subsequent to initial recognition they are measured at amortised cost using the effective interest method, less any impairment losses in the case of trade debtors. If the arrangement constitutes a financing 64 transaction, for example if payment is deferred beyond normal business terms, then it is measured at the present value of future payments discounted at a market rate of interest for a similar debt instrument. ## _Interest-bearing borrowings classified as basic financial instruments_ Interest-bearing borrowings are recognised initially at the present value of future payments discounted at a market rate of interest. Subsequent to initial recognition, interest-bearing borrowings are stated at amortised cost using the effective interest method, less any impairment losses. ## _Investments in preference and ordinary shares_ Investments in equity instruments are measured initially at fair value, which is normally the transaction price. Transaction costs are excluded if the investments are subsequently measured at fair value through profit or loss. Subsequent to initial recognition investments that can be measured reliably are measured at fair value with changes recognition in profit or loss. Other investments are measured at cost less impairment in profit or loss. ## _Cash and cash equivalents_ Cash and cash equivalents comprise cash balances and call deposits. Bank overdrafts that are repayable on demand and form an integral part of the Company’s cash management are included as a component of cash and cash equivalents for the purpose only of the cash flow statement. ## **Turnover** Group and Company turnover comprises rental income receivable net of voids, income from property sales, service charges and other services which are included at the invoiced value of goods and services supplied in the period with grant income recognised under either the performance method or accruals method dependent on the type of grant. ## **Stock** Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. The Company’s stock figure includes the proportion of shared ownership properties intended for first tranche sales, whether these have been completed and are ready for sale or in the course of construction. ## **Outright sale** Completed properties and properties under construction for open market sales are recognised at the lower of cost and net realisable value. ## **Interest Payable** Interest payable and similar charges include interest payable on long term borrowings. Borrowing costs that are directly attributable to the acquisition, construction or production of an asset that takes a substantial time to be prepared for use, are capitalised as part of the cost of that asset. ## **Other Interest Receivable** Other interest receivable and similar income include interest receivable on funds invested. Interest income and interest payable are recognised in profit or loss as they accrue, using the effective interest method. Gift aid income is recognised in the profit or loss account on the date the entity’s right to receive payments is established. 65 ## **Retirement Benefits** The Group operates a defined contribution pension scheme through the Social Housing Pension Scheme operated by The Pensions Trust. The assets of the schemes are held separately from those of the Company in an independently administered fund. The amount charged to the profit or loss account represents the contributions payable to the schemes in respect of the accounting period. The Group also participated in the defined benefit section of the Social Housing Pension Scheme operated by The Pensions Trust providing benefits based on final pensionable pay or on career average salary, although it is closed to future accrual. The assets of the scheme are held separately from those of the Group. For financial years ending on or after 31 March 2019, The Pensions Trust is able to obtain sufficient information to enable the Company to account for the Scheme as a defined benefit scheme. ## **Housing Properties** Housing properties are principally properties available for rent and are stated at cost less depreciation. Cost includes the cost of acquiring land and buildings, directly attributable development costs, interest at the average cost of borrowing for the development period, and expenditure incurred in respect of improvements which comprise the modernisation and extension of existing properties. Following the adoption of component accounting, completed housing properties are now split between their land and structure costs and a specific set of major components that require periodic replacement. Depreciation is charged to the profit or loss account on a straight-line basis over the estimated useful lives of each component part of housing properties. Land is not depreciated. The estimated useful lives are as follows: |Structure|80 years| |---|---| |Cladding (as part of the structure)|20 years| |Windows and doors|40 years| |Roofs|75 years| |Kitchens|20 years| |Bathrooms|30 years| |Lifts (excluding stairs)|15 years| |Heating|30 years| |Gas boilers/ Heat Pumps|15 years| Properties are reviewed for impairment annually. Where housing properties have suffered a permanent diminution in value, the impairment after deducting any related Social Housing Grant is recognised in the statement of consolidated income and included within cumulative depreciation. Shared ownership properties are included in housing properties at cost related to the percentage of equity retained, less any provisions needed for impairment or depreciation. Development costs which arise directly from the construction or acquisition of a property are capitalised to housing properties in the course of construction. 66 Capital expenditure on schemes which are aborted is charged to the statement of consolidated income in the year in which it is recognised that the schemes will not be developed to completion. ## **Social Housing Grant** Social housing grant (SHG) is initially recognised at fair value as a long term liability, specifically as deferred grant income and released through the statement of consolidated income as turnover income over the life of the structure of housing properties in accordance with the accrual method applicable to social landlords accounting for housing properties at cost. On disposal of properties, all associated SHG is transferred to the Recycled Capital Grant Fund (RCGF) until the grant is recycled or repaid to reflect the existing obligation under the social housing grant funding regime. Where, following the sale of a property, SHG becomes repayable, to the extent it is not subject to abatement, it is included as a liability until it is recycled or repaid. SHG is subordinated in respect of loans by agreement with the Regulator of Social Housing. ## **Government Grants** These include grants from local authorities and other organisations. Other grants are initially recognised at fair value as a long term liability, specifically as deferred grant income and released through the statement of consolidated income as turnover over the life of the structure of housing properties in accordance with the accrual method applicable to social landlords accounting for housing properties at cost. Grants in respect of revenue expenditure are credited to the statement of consolidated income in the same period as the expenditure to which they relate. ## **Sale of Housing Properties** Surpluses on sales of housing accommodation comprise proceeds from property sales, which are recognised at the date of completion, less the net book value of the properties and take into account any liabilities under the original Transfer Agreement with Cornwall Council in relation to Right to Buy sales. ## **Sale of Housing Properties – Shared Ownership** Under shared ownership arrangements, the Company sells an interest of between 25% and 75% in a Low Cost Home Ownership housing property at open market value. The owner of a low cost home has the right to purchase further proportions up to 100% (subject to occasional restrictions) at the then current valuation. Proceeds of sale of first tranches are accounted for as turnover in the statement of consolidated income. Subsequent tranches sold are disclosed in the profit or loss account after the operating result as a surplus or deficit on the sale of fixed assets. ## **Improvements, Major Repairs, Cyclical Repairs and Day to Day Repairs** The amount of expenditure incurred which relates to an improvement, which is defined as an increase in the net rental stream or the life of a property, has been capitalised. Expenditure incurred on other major repairs, cyclical and day-to-day repairs to housing properties is charged to the statement of consolidated income in the period in which it is incurred. 67 ## **Other Tangible Fixed Assets** Other tangible fixed assets are stated at cost less accumulated depreciation and accumulated impairment losses. Where parts of an item of tangible fixed assets have different useful lives, they are accounted for as separate items of tangible fixed assets, for example land is treated separately from buildings. Other tangible assets include those assets with an individual value in excess of £500 and community alarm equipment, which is specifically associated with an income stream. Depreciation is provided evenly on the cost of other tangible fixed assets to write them down to their estimated residual values over their expected useful lives. No depreciation is provided on freehold land. The principal annual rates used for other assets are: Freehold office buildings 50 years Solar PV panels 20 years Smoke and carbon monoxide detectors 10 years Furniture, fixtures and fittings 5 years Motor vehicles 5 years Plant and equipment 4 years Computer hardware 3 years Community alarm equipment 3 years Grounds plant and equipment 3 years ## **Intangible Fixed Assets** Intangible fixed assets are stated at cost less accumulated amortisation and accumulated impairment losses. Amortisation is provided evenly on the cost of intangible fixed assets to write them down to their estimated residual values over their expected useful lives. The principal annual rates used for intangible assets are: Computer software 3 years ## **Operating Leases** Payments (excluding costs for services and insurance) made under operating leases are recognised in the profit or loss account on a straight-line basis over the term of the lease unless the payments to the lessor are structured to increase in line with expected general inflation; in which case the payments related to the structured increases are recognised as incurred. Lease incentives received are recognised in profit or loss over the term of the lease as an integral part of the total lease expense. ## **Bad and Doubtful Debts** Provision is made against rent arrears of current and former tenants as well as miscellaneous debts to the extent that they are considered irrecoverable. All former tenant arrears are fully provided for in the year that they occur. ## **Capitalisation of Interest** Interest on loans financing development is capitalised up to the end of the month in which practical completion occurs. ## **Capitalisation of Development Costs** Development costs which arise directly from the construction or acquisition of a property are capitalised to housing properties in the course of construction. 68 Capital expenditure on schemes which are aborted is charged to the statement of consolidated income in the year in which it is recognised that the schemes will not be developed to completion. ## **Taxation** Coastline Housing Limited is considered to pass the tests set out in Paragraph 1 Schedule 6 Finance Act 2010 and therefore it meets the definition of a charitable company for UK corporation tax purposes. Accordingly, the charity is potentially exempt from taxation in respect of income or capital gains received within categories covered by Chapter 3 Part 11 Corporation Tax Act 2010 or Section 256 of the Taxation of Chargeable Gains Act 1992, to the extent that such income or gains are applied exclusively to charitable purposes. The profit making companies within the Group (CSL, CCL, CDB and CHM) are liable to UK corporation tax. The credit for taxation for the year includes current tax on the taxable profits for the year for these companies, where the profits are not relieved by losses brought forward. Tax on the profit or loss for the year comprises current and deferred tax. Tax is recognised in the profit or loss account except to the extent that it relates to items recognised directly in equity or other comprehensive income, in which case it is recognised directly in equity or other comprehensive income. Current tax is the expected tax payable or receivable on the taxable income or loss for the year, using tax rates enacted or substantively enacted at the balance sheet date, and any adjustment to tax payable in respect of previous years. Deferred tax is provided on timing differences which arise from the inclusion of income and expenses in tax assessments in periods different from those in which they are recognised in the financial statements. Deferred tax is not recognised on permanent differences arising because certain types of income or expense are non-taxable or are disallowable for tax or because certain tax charges or allowances are greater or smaller than the corresponding income or expense. Deferred tax is measured at the tax rate that is expected to apply to the reversal of the related difference, using tax rates enacted or substantively enacted at the balance sheet date. Deferred tax balances are not discounted. Unrelieved tax losses and other deferred tax assets are recognised only to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. ## **Value Added Tax** The Company is registered for VAT, but a large proportion of its income, including rents, is exempt for VAT purposes and the majority of its expenditure is subject to VAT which cannot be reclaimed. Expenditure is therefore shown inclusive of VAT. The Company recovers VAT where appropriate and this is credited to the statement of consolidated income account and back against capital expenditure where appropriate. ## **Gift aid payment presented within shareholders’ funds** Gift Aid payment is only recognised as a liability at the year end to the extent that it has been paid prior to the year end, there is a deed of covenant prior to the year-end or a Companies Act s288 written 69 resolution has been approved by the shareholder in the year to pay the taxable profit for the year to its parent by a certain payment date. ## **Income statement** Tax charge to be recorded to the extent that a tax charge is payable (i.e. includes any tax credit related to gift aid) ## **2 Turnover, Operating Costs and Operating Surplus** |**GROUP**
**Social housing lettings**
**Support contracts**
**Care and support**
**Other activities**
**Shared ownership first**
**tranche sales**|**2021**
2020
**Turnover**
**Cost of**
**sales**
**Operating**
**costs**
**Operating**
**surplus**
Turnover
Cost of
sales
Operating
costs
Operating
surplus
**£’000**
**£’000**
**£’000**
**£’000**
£’000
£’000
£’000
£’000
26,094
- (18,461)
**7,633**
24,473
-
(16,688)
**7,785**
657
-
(657)
**-**
569
-
(569)
**-**
858
-
(592)
**266**
852
-
(852)
**-**
1,834
-
(1,323)
**511**
4,643
-
(3,604)
**1,039**
3,921
(3,239)
(176)
**506**
6,459 (5,536)
(67)
**856**| |---|---| ||**33,364**
**(3,239) (21,209)**
**8,916**
**36,996** **(5,536)**
**(21,780)**
**9,680**| |**COMPANY**
**Social housing lettings**
**Support contracts**
**Care and support**
**Other activities**
**Shared ownership first**
**tranche sales**|**2021**
2020
**Turnover**
**Cost of**
**sales**
**Operating**
**Costs**
**Operating**
**Surplus**
Turnover
Cost of
sales
Operating
costs
Operating
surplus
**£’000**
**£’000**
**£’000**
**£’000**
£’000
£’000
£’000
£’000
26,094
- (18,276)
**7,818**
24,473
-
(16,787)
**7,686**
657
-
(657)
**-**
569
-
(569)
**-**
858
-
(592)
**266**
852
-
(852)
**-**
285
-
(112)
**173**
4,385
-
(3,425)
**960**
3,921
(3,239)
(176)
**506**
6,459 (5,536)
(67)
**856**| |---|---| ||**31,815**
**(3,239) (19,813)**
**8,763**
**36,738** **(5,536)**
**(21,700)**
**9,502**| 70 |**GROUP**
**Income and expenditure**
**Income from lettings**
Rent receivable
Service charges receivable
Grant income amortised
**Total income from lettings**
**Expenditure on letting activities**
Management
Services
Routine maintenance
Planned maintenance
Major repairs expenditure
Rent losses from bad debts
Depreciation of housing properties
Other costs
**Operating costs on lettings**
**Operating surplus on lettings**|**General**
**needs**
**Sheltered**
**housing**
**Shared**
**ownership**
**2021**
2020
**£’000**
**£’000**
**£’000**
**£’000**
£’000
18,968
4,087
955
**24,010**
22,582
679
286
163
**1,128**
1,071
956
-
-
**956**
820| |---|---| ||**20,603**
**4,373**
**1,118**
**26,094**
24,473| ||(3,749)
(715)
(398)
**(4,862)**
(3,984)
(1,180)
(235)
(131)
**(1,546)**
(1,644)
(908)
(181)
(100)
**(1,189)**
(2,297)
(3,773)
(751)
(416)
**(4,940)**
(3,720)
(890)
(177)
(98)
**(1,165)**
(1,251)
(70)
(14)
(8)
**(92)**
(127)
(3,114)
(620)
(345)
**(4,079)**
(3,540)
(449)
(89)
(50)
**(588)**
(125)| ||**(14,133)**
**(2,782)**
**(1,546)**
**(18,461)**
(16,688)| ||**6,470**
**1,591**
**(428)**
**7,633**
7,785| ## **Total income from lettings is shown net of void rents losses:** Rent losses from voids **(294) (285) (6) (585)** (403) 71 |**COMPANY**
**Income and expenditure**
**Income from lettings**
Rent receivable
Service charges receivable
Grant income amortised
**Total income from lettings**
**Expenditure on letting activities**
Management
Services
Routine maintenance
Planned maintenance
Major repairs expenditure
Rent losses from bad debts
Depreciation of housing properties
Other costs
**Operating costs on lettings**
**Operating surplus on lettings**|**General**
**needs**
**Sheltered**
**housing**
**Shared**
**ownership**
**2021**
2020
**£’000**
**£’000**
**£’000**
**£’000**
£’000
18,968
4,087
955
**24,010**22,582
679
286
163
**1,128**
1,071
956
-
-
**956**
820| |---|---| ||**20,603**
**4,373**
**1,118**
**26,094**
24,473| ||(3,590)
(715)
(398)
**(4,703)**
(3,853)
(1,180)
(235)
(131)
**(1,546)**
(1,644)
(905)
(180)
(100)
**(1,185)**
(2,368)
(3,758)
(748)
(416)
**(4,922)**
(3,839)
(886)
(177)
(98)
**(1,161)**
(1,291)
(70)
(14)
(8)
**(92)**
(127)
(3,114)
(620)
(345)
**(4,079)**
(3,540)
(449)
(89)
(50)
**(588)**
(125)| ||**(13,952)**
**(2,778)**
**(1,546)**
**(18,276)**
(16,787)| ||**6,651**
**1,595**
**(428)**
**7,818**
7,686| ## **Total income from lettings is shown net of void rents losses:** Rent losses from voids **(294) (285) (6) (585)** (403) During the year the Company spent £9.642 million (2020: £10.176 million) on maintaining and improving its existing property stock of which £2.373 million (2020: £2.856 million) was capitalised. £0.01 million grant was received in respect of this expenditure during the year (2020 £0.216 million). 72 ## **3 Accommodation in Management** At the end of the year accommodation in management for each class of accommodation was as follows: ## **GROUP and COMPANY** |**GROUP and COMPANY**|| |---|---| |General needs – social rent
General needs – affordable rent
Supported housing / housing for older people – social rent
Supported housing / housing for older people – affordable rent
Other social housing
Shared ownership
Market rented
Managed but not owned
Leasehold|**2021**
**Properties**
2020
Properties
**2,310**
2,406
**1,084**
1,110
**649**
581
**115**
-
**268**
267
**409**
370
**5**
6
**69**
54
**117**
114| ||**5,026**
4,908| 73 ## **4 Surplus for the Financial Year before Taxation** ||**GROUP**|**GROUP**|**COMPANY**|**COMPANY**| |---|---|---|---|---| |This is stated after charging/ (crediting):|**2021**|2020|**2021**|2020| ||**£’000**|£’000|**£’000**|£’000| |Depreciation on housing properties|**4,079**|3,150|**4,079**|3,150| |Depreciation of other tangible fixed assets|**545**|340|**514**|354| |Amortisation of intangible fixed assets|**126**|112|**119**|95| |Amortisation of grant income|**956**|820|**956**|820| |Gain on disposal of tangible fixed assets|**3**|2|**-**|-| |Operating lease rentals:||||| |- vehicles, plant and equipment|**34**|32|**7**|7| |- land and buildings|**13**|27|**-**|-| |Auditor’s remuneration:||||| |- audit of these financial statements|**28**|18|**28**|18| |- audit of the financial statements of
subsidiary companies|**13**|12|**2**|-| |- tax services|**5**|12|**-**|1| |- other services|**19**|5|**19**|5| 74 ## **5 Surplus on Sale of Housing Properties** |**GROUP and COMPANY**
Proceeds from sale of housing properties (gross)
Less: costs of sales
Less: Council share of proceeds under Right to Buy
**6**
**Other Finance Expenditure**
**GROUP and COMPANY**
Unwinding of discount on the SHPS (note 24)
Unwinding of discount on the Coastline Pensioners (note 23)
Amortisation of loan note fees
Valuation / Searches|**2021**
**£’000**
2020
£’000
**4,474**
7,021
**(960)**
(1,402)
**(200)**
(349)| |---|---| ||**3,314**
5,270| ||**2021**
**£’000**
2020
£’000
**214**
66
**-**
-
**325**
259
**33**
39| ||**572**
364| ## **7 Interest Payable and Similar Charges** |**7**
**Interest Payable and Similar Charges**|| |---|---| |**GROUP and COMPANY**
On loans and bank overdrafts
Break costs
Interest capitalised on developments under construction|**2021**
**£’000**
2020
£’000
**4,774**
4,853
**2,908**
-
**(1,499)**
(1,069)| ||**6,183**
3,784| The capitalisation rate used to determine the amount of finance costs capitalised in the period was 5.25% (2020: 5.49%). 75 ## **8 Employees** ## **(a) Number of employees** |**GROUP**
Average total full-time and part-time employees during the year
Average number of full-time equivalents employed during the year
**COMPANY**
Average total full-time and part-time employees during the year
Average number of full-time equivalents employed during the year
**b)**
**Staff Costs for the above employees**
**GROUP**
Staff costs:
- gross wages and salaries
- employer National Insurance contributions
- employer pension costs
**COMPANY**
Staff costs:
- gross wages and salaries
- employer National Insurance contributions
- employer pension costs|**2021**
**Number**
2020
Number
**315**
295
**280**
260| |---|---| ||**2021**
**Number**
2020
Number
**213**
201
**181**
171| ||**2021**
**£’000**
2020
£’000
**7,307**
7,027
**607**
577
**959**
318| ||**8,873**
7,922| ||**2021**
**£’000**
2020
£’000
**5,213**
5,000
**445**
434
**268**
245| ||**5,926**
5,679| ## **(b) Staff Costs for the above employees** 76 (c) The full time equivalent number of staff who received remuneration above £60,000: |**GROUP**
£130,001 to £140,000
£120,001 to £130,000
£110,001 to £120,000
£100,001 to £110,000
£90,001 to £100,000
£80,001 to £90,000
£70,001 to £80,000
£60,001 to £70,000
**COMPANY**
£130,001 to £140,000
£120,001 to £130,000
£110,001 to £120,000
£100,001 to £110,000
£90,001 to £100,000
£80,001 to £90,000
£70,001 to £80,000
£60,001 to £70,000|**2021**
**No.**
2020
No.
**1**
1
**-**
-
**1**
-
**2**
3
**1**
1
**-**
-
**2**
1
**5**
5| |---|---| ||**2021**
**No.**
2020
No.
**1**
1
**-**
-
**1**
-
**2**
3
**1**
1
**-**
-
**2**
1
**4**
4| This includes the remuneration of Executive Officers, which is also disclosed in note 9. 77 ## **9 Board Members’ and Executive Officers’ Emoluments** Key management personnel are the Executive Team who oversee the day-to-day operational running and, working with the Board and wider colleagues, identify and execute the Group’s strategic direction. They are detailed on page 2 of these accounts. The remuneration paid to the Executive Officers of the Group and the Board members during the year was as follows: |**EXECUTIVE OFFICERS**
Chief Executive
A Young
Deputy Chief Executive (with
specific responsibility for
Housing, Assets and
Communities)
L Beard
Director of HR and
Governance
D Wingham
Director of Finance and ICT
N Mallows
Director of Development and
Commercial Services,
C Weston
**TOTAL – COMPANY and**
**GROUP**|**Salary**
**£**
**Other**
**emoluments**
**£**
**Pension**
**£**
**2021 Total**
**£**
2020 Total
£
116,548
9,426
9,674
**135,648**
132,526
96,405
8,191
7,986
**112,582**
107,616
82,419
7,457
6,841
**96,717**
94,226
96,062
8,094
3,843
**107,999**
105,348
90,133
7,700
7,481
**105,314**
102,769| |---|---| ||**481,567**
**40,868**
**35,825**
**558,260**
542,485| 78 |**NON - EXECUTIVE DIRECTORS**|**2021**|2020| |---|---|---| ||**£**|£| |D Law MBE|**6,250**|12,500| |P Stephens (Chair)|**9,961**|7,500| |S Harrison|**6,298**|5,000| |P Bearne|**7,500**|7,500| |S Roberts|**5,000**|5,000| |J Waldron|**7,500**|7,500| |F Perrin|**3,125**|5,000| |C Pears|**2,083**|-| |A Moore|**3,021**|-| |K Harris|**2,897**|-| |**TOTAL – COMPANY AND GROUP**|**53,635**|50,000| |**INDEPENDENT COMMITTEE**|**2021**|2020| |**MEMBERS**|**£**|£| |E Chapman|**333**|-| |J De-Ville|**333**|-| |K Kemp|**333**|-| |L Denmead|**333**|-| |**TOTAL – COMPANY AND GROUP**|**1,332**|-| Expenses paid during the year to Board Members amounted to £956 (2020: £8,260). No Non-Executive Directors participate in any of the four Group pension schemes. At the year-end five Executive Officers were members of one of the schemes (2020: five). At the year-end £nil of pension scheme contributions relating to Executive Officers remained unpaid (2020: Nil). One of the Executive Officers; Allister Young, was a statutory director in the year. In respect of the officer who held the Chief Executive’s position during the year, pension arrangements were: - (a) As an ordinary member of the Social Housing Defined Contribution Pension Scheme. - (b) No enhancement or special terms were applied. - (c) No individual pension arrangement to which the Group makes a contribution. 79 ## **10 Trusts** The Company is Sole Corporate Trustee of Garlidna (Penzance Almshouses) Trust, a registered charity. The income and expenditure of the Trust and its assets and liabilities, are incorporated within the Company and Group’s financial statements. A transfer between reserves is performed annually for the deficit or surplus of income over expenditure. This transfer is included within the statement of changes in equity. ## **11 Intangible Fixed Assets** ## **GROUP and COMPANY** |**Cost**
At 1 April 2020
Additions
Disposals
**At 31 March 2021**
**Depreciation**
At 1 April 2020
Charged in year
Disposals
**At 31 March 2021**
**Net book value**
**At 31 March 2021**
At 31 March 2020|**Group**
**£’000**
Company
£’000
Computer
Software
Computer
Software
1,525
1,475
186
186
-
-| |---|---| ||**1,711**
**1,661**| ||(1,210)
(1,167)
(126)
(119)
-
-| ||**(1,336)**
**(1,286)**| ||**375**
**375**| ||315
308| 80 ## **12 Tangible Fixed Assets – Housing Properties** |**Group**
**Cost**
**As at 1 April 2020**
**Additions**
**Components**
**Capitalised**
**Disposals**
**At 31 March 2021**
**Depreciation**
**As at 1 April 2020**
**Charge for the year**
**Eliminated on**
**Disposals**
**At 31 March 2021**
**Net Book Value**
**At 31 March 2021**
At 31 March 2020|**Freehold Properties**
**Shared Ownership**
**Properties**
**Garlidna**
**Alms**
**Total**
**Completed**
**Under**
**Construction**
**Completed**
**Under**
**Construction**
**£’000**
**£’000**
**£’000**
**£’000**
**£’000**
**£’000**
199,175
40,171
21,916
12,440
368
**274,070**
14,760
14,224
4,089
1,461
-
**34,534**
2,402
-
-
-
-
**2,402**
(868)
-
(56)
-
-
**(924)**| |---|---| ||**215,469**
**54,395**
**25,949**
**13,901**
**368**
**310,082**| ||(27,399)
-
(936)
-
(68)
**(28,403)**
(3,721)
-
(354)
-
(4)
**(4,079)**
305
-
24
-
-
**329**| ||**(30,815)**
**-**
**(1,266)**
**-**
**(72)**
**(32,153)**| ||| ||**184,654**
**54,395**
**24,683**
**13,901**
**296**
**277,929**| ||171,776
40,171
20,980
12,440
300
245,667| 81 ## **Company** |**Cost**
**As at 1 April 2020**
**Additions**
**Components**
**Capitalised**
**Disposals**
**At 31 March 2021**
**Depreciation**
**As at 1 April 2020**
**Charge for the year**
**Eliminated on**
**Disposals**
**At 31 March 2021**
**Net Book Value**
**At 31 March 2021**
At 31 March 2020|**Freehold Properties**
**Shared Ownership**
**Properties**
**Garlidna**
**Alms**
**Total**
**Completed**
**Under**
**Construction**
**Completed**
**Under**
**Construction**
**£’000**
**£’000**
**£’000**
**£’000**
**£’000**
**£’000**
199,163
40,485
21,977
12,698
368
**274,691**
14,778
14,331
4,119
1,553
-
**34,781**
2,402
-
-
-
-
**2,402**
(868)
-
(56)
-
-
**(924)**| |---|---| ||**215,475**
**54,816**
**26,040**
**14,251**
**368**
**310,950**| ||(27,399)
-
(936)
-
(68)
**(28,403)**
(3,721)
-
(354)
-
(4)
**(4,079)**
305
-
24
-
-
**329**| ||**(30,815)**
**-**
**(1,266)**
**-**
**(72)**
**(32,154)**| ||| ||**184,660**
**54,816**
**24,774**
**14,251**
**296**
**278,797**| ||171,764
40,485
21,041
12,689
300
246,288| Included in the cost of housing properties is £4.149 million in respect of cumulative capitalised development administration costs (2020: £3.606 million) and cumulative capitalised interest of £7.520 million (2020: £6.021 million). All housing properties are freehold. See note 3 for accommodation in management. ## **Valuation for disclosure only** The value of completed housing properties as at 31 March 2021 on an existing use value, Social Housing (EUV-SH) basis was £179.8 million (2020: £172.3 million). For information purposes only, completed housing properties are valued at 31 March 2021 by Savills (UK) Limited, qualified professional independent external valuers. The valuation of the properties was undertaken in accordance with the Appraisal and Valuation Manual of the Royal Institution of Chartered Surveyors. In valuing housing properties, discounted cash flow methodology was adopted with key assumptions: Social housing and shared ownership only Discount rate 5.75% Rent assumptions: Social rented CPI +1.0% thereafter, Shared ownership RPI +0.5% and Other rents RPI +1.0% or in accordance with any relevant lease or nominations agreements 82 ## **13 Tangible Fixed Assets – Other** ## **GROUP** |**Cost**
At 1 April 2020
Additions
Disposals
**At 31 March 2021**
**Depreciation**
At 1 April 2020
Charged in year
Disposals
**At 31 March 2021**
**Net book value**
**At 31 March 2021**
At 31 March 2020|**Freehold**
**offices**
**Furniture,**
**fixtures**
**and**
**fittings**
**Computer**
**hardware**
**Plant,**
**equipment**
**and**
**vehicles**
**Community**
**alarm**
**equipment**
**Total**
**£’000**
**£’000**
**£’000**
**£’000**
**£’000**
**£’000**
3,570
1,769
956
860
71
7,226
-
22
149
444
46
661
-
-
-
(23)
-
(23)| |---|---| ||**3,570**
**1,791**
**1,105**
**1,281**
**117**
**7,864**| ||(623)
(1,004)
(660)
(478)
(27)
(2,792)
(70)
(140)
(162)
(163)
(10)
(545)
-
-
-
23
-
23| ||**(693)**
**(1,144)**
**(822)**
**(618)**
**(37)**
**(3,314)**| ||**2,877**
**647**
**283**
**663**
**80**
**4,550**| ||2,947
765
296
382
44
4,434| 83 ## **COMPANY** |**COMPANY**|| |---|---| |**Cost**
At 1 April 2020
Additions
Disposals
**At 31 March 2021**
**Depreciation**
At 1 April 2020
Charged in period
Disposals
**At 31 March 2021**
**Net book value**
**At 31 March 2021**
At 31 March 2020|**Freehold**
**offices**
**Furniture**
**, fixtures**
**and**
**fittings**
**Computers**
**hardware**
**Plant,**
**equipment**
**and**
**vehicles**
**Community**
**alarm**
**equipment**
**Total**
**£’000**
**£’000**
**£’000**
**£’000**
**£’000**
**£’000**
3,570
1,752
956
358
71
6,707
-
22
149
434
46
651
-
-
-
-
-
-| ||**3,570**
**1,774**
**1,105**
**792**
**117**
**7,358**| ||(623)
(986)
(660)
(24)
(27)
(2,320)
(70)
(140)
(162)
(132)
(10)
(514)
-
-
-
-
-
-| ||**(693)**
**(1,126)**
**(822)**
**(156)**
**(37)**
**(2,834)**| ||**2,877**
**648**
**283**
**636**
**80**
**4,524**| ||2,947
766
296
334
44
4,387| 84 ## **14 Investments** |Ordinary shares of £1 each – Coastline
Services Limited
Ordinary shares £1 each – Coastline
Design and Build Limited
Ordinary shares £1 each – Coastline Care
Limited
Ordinary shares £1 each – Coastline
Homes Limited|**GROUP**
**2021**
**£**
2020
£
**-**
-
**-**
-
**-**
-
**-**
-
**-**
-|**COMPANY**
**2021**
**£**
2020
£
**75,000**
75,000
**1**
1
**1**
1
**100**
100| |---|---|---| |||**75,102**
75,102| The Company holds 100% of the share capital of Coastline Services Limited. Coastline Services Limited is a company incorporated in England and Wales (Company number 05558027). The principal activity of the company is the provision of maintenance and technical services, primarily in respect of affordable housing. Coastline Services Limited has agreements with Coastline Housing Limited for the provision of responsive and void maintenance as well as various planned investment works to existing properties. The accounts of Coastline Services Limited are available to the public and may be obtained from its registered office at Coastline House, 4 Barncoose Gateway Park, Pool, Redruth, Cornwall TR15 3RQ. The Company holds 100% of the share capital in Coastline Design and Build Limited, which was incorporated on the 3 June 2015. Coastline Design and Build Limited is a company incorporated in England and Wales (Company number 09622238). The principal activities of the company are that of a commercial design and build contractor for new builds whose principal client is CHL. The accounts of Coastline Design and Build Limited are available to the public and may be obtained from its registered office at Coastline House, 4 Barncoose Gateway Park, Pool, Redruth, Cornwall TR15 3RQ. The Company holds 100% of the share capital in Coastline Care Limited. Coastline Care Limited is a company incorporated in England and Wales (Company number 06665734). The company has been dormant since 1 April 2015. The accounts of Coastline Care Limited are available to the public and may be obtained from its registered office at Coastline House, 4 Barncoose Gateway Park, Pool, Redruth, Cornwall TR15 3RQ. The Company holds 100% of the share capital of Coastline Homes Limited. Coastline Homes Limited is a company incorporated in England and Wales (Company number 10957677). The principal activities of the company is the design, construction and sale of residential housing. The accounts of Coastline Homes Limited are available to the public and may be obtained from its registered office at Coastline House, 4 Barncoose Gateway Park, Pool, Redruth, Cornwall TR15 3RQ. 85 ## **15 Debtors** ||**GROUP**||**COMPANY**|| |---|---|---|---|---| ||**2021**|2020|**2021**|2020| ||**£’000**|£’000|**£’000**|£’000| |Due within one year:||||| |Current tenants|**1,500**|574|**1,500**|574| |Former tenants|**242**|208|**242**|208| |Less provision for bad and doubtful|**(332)**|(296)|**(332)**|(296)| |debts||||| |**Total rent and service charges**|**1,410**|486|**1,410**|486| |**receivable**||||| |Trade debtors|**54**|25|**-**|-| |Taxation and social security|**1**|-|**(3)**|-| |Other debtors|**2,702**|5,641|**2,702**|5,641| |Less provision for bad and doubtful|**(328)**|(280)|**(328)**|(280)| |debts||||| |Prepayments and accrued income|**483**|736|**465**|722| ||**4,322**|6,608|**4,246**|6,569| At 31 March 2021 the outstanding rent and service charge amount for current tenants of general needs and older persons properties (as benchmarked by ‘HouseMark’) was £155,153 (2020: £183,668) representing 0.69% (2020: 0.87%) of the annual rent debit. Within the figure of £1,500,000 for current tenants, £989,352 in receipts were received after the 31 March relating to those arrears and accordingly have not been provided for reflecting that weekly rents due are not in arrears until the end of that week (4/4/2021). 86 ## **16 Stock** |Shared ownership first tranches
-
Completed
-
Work in progress
Outright sale properties
-
Completed
-
Work in progress
Work in progress|**GROUP**
**2021**
**£’000**
2020
£’000
**1,356**
1,324
**4,893**
2,941
**1,659**
-
**-**
2,466
**488**
311
**8,396**
7,042|**COMPANY**
**2021**
**£’000**
2020
£’000
**1,356**
1,324
**4,893**
2,941
**-**
-
**-**
-
**-**
-| |---|---|---| |||**6,249**
4,265| ## **17 Cash and Cash Equivalents** |Cash at bank and in hand
Cash and cash equivalents per cash flow statement|**GROUP**
**2021**
**£’000**
2020
£’000
**12,065**
5,128
**12,065**
5,128|**COMPANY**
**2021**
**£’000**
2020
£’000
**11,721**
4,507| |---|---|---| |||**11,721**
4,507| There were no significant non-cash transactions in the year. There are no restrictions on cash and cash equivalents held. 87 ## **18 Creditors: amounts falling due within one year** |Trade creditors
Rent, service and other charges received in
advance
Taxation and social security
Accruals and deferred income
Other creditors
Amounts due to subsidiary undertakings
RCGF Amendment|**GROUP**
**2021**
**£’000**
2020
£’000
**1,391**
2,767
**1,043**
622
**-**
18
**8,047**
5,107
**1,055**
1,453
**-**
-
**-**
-
**11,536**
9,967|**COMPANY**|**COMPANY**| |---|---|---|---| |||**2021**
**£’000**|2020
£’000| ||||| |||**629**|851| |||**1,043**|622| |||**-**|11| |||**4,512**|2,647| |||**1,055**|1,453| |||**2,397**|1,585| |||**-**|0| |||**9,636**|7,169| Amounts due to subsidiary undertakings are trading balances repayable on demand and non-interest bearing. ## **19 Creditors: amounts falling due after more than one year** |**GROUP and COMPANY**
Bank loans
Bond Premium
Private placement
Arrangement fees capitalised
Deferred Capital Grant
Recycled Capital Grant Fund|**2021**
**£’000**
2020
£’000
**140,926**
110,932
**39**
41
**32,500**
32,500
**(2,006)**
(1,822)| |---|---| ||**171,459**
141,651
**61,981**
60,042
**93**
129| ||**233,533**
201,822| 88 Total additional fees of £511,000 incurred in respect of new loan facilities (2020: £352,000) were capitalised during the year. During the year £326,000 (2020: £261,000) of capitalised fees were amortised The balance on Deferred Capital Grant shown above is net of amortised grant already released to the Statement of Comprehensive Income. Total Capital Grant received is £67.7 million (2020: £65.0 million). ## **Recycled Capital Grant Fund** |Opening balance 1 April
Arising in the year
Applied to development schemes
**Closing balance 31 March**|**2021**
**£’000**
2020
£’000
**129**
314
**-**
20
**(36)**
(205)| |---|---| ||**93**
129| ## **20 Debt Analysis** **Debt is repayable as follows GROUP and COMPANY** |Less than one year
Between two and five years
After five years|**2021**
**£’000**
2020
£’000
**-**
1,032
**67,699**
36,000
**105,727**
106,400| |---|---| ||**173,426**
143,432| 89 ## **Borrowing Facilities** The Group and Company has undrawn committed borrowing facilities. Undrawn facilities available at 31 March 2021 were as follows: ## **GROUP and COMPANY** |**GROUP and COMPANY**|| |---|---| |Expiring in less than two years
Expiring between two and five years
Expiring in more than five years|**2021**
**£’000**
2020
£’000
**-**
2,000
**47,325**
41,000
**-**
-| ||**47,325**
43,000| The main bank loans are secured by fixed charges upon a defined subset of the Company’s lettable properties. ## **Financial Liabilities** The interest rate profile of the Group and Company’s financial liabilities as at 31 March 2021 was: ## **GROUP and COMPANY** |Floating rate
Fixed rate|**2021**
**£’000**
2020
£’000
**86,226**
47,527
**87,200**
95,905| |---|---| ||**173,426**
143,432| The weighted average period for which interest rates were fixed was 14 years (2020: 13 years), and the weighted average fixed interest rate was 3.86% (2020: 4.14%) including margins. The fixed rate loans are for terms maturing between five years and 30 years at interest rates ranging from 1.00% to 7.70% including margins. 90 ## **21 Non-equity Share Capital** The Company is limited by guarantee. ## **22 Financial Commitments** |**Capital expenditure commitments are as follows:**
**GROUP and COMPANY**
Expenditure contracted for but not provided in the accounts
Expenditure authorised by the Board but not contracted|**2021**
**£’000**
2020
£’000
**34,896**
51,454| |---|---| ||**33,923**
11,361| Of the £68.8 million of capital commitments at 31 March 2021, £15.1 million (2020: £31.3 million) will be funded by grant and other public finance. The remainder will be fully funded through existing loan facilities and cash balances. All contracted expenditure can be met within existing funding arrangements. ## **Operating Leases** At 31 March 2021 Group and Company future minimum lease payments payable under non-cancellable operating leases are as follows: |**Land and buildings, leases expiring**
Within one year
In two to five years
**Vehicles, plant and equipment, leases expiring**
Within one year
In two to five years|**GROUP**
**2021**
**£’000**
2020
£’000
**-**
10
**151**
17
**151**
27
**11**
1
**26**
31
**37**
32|**COMPANY**
**2021**
**£’000**
2020
£’000
**-**
-
**-**
-| |---|---|---| |||**-**
-| |||**7**
-
**-**
7| |||**7**
7| 91 ## **23 Pension Liabilities** |**GROUP and COMPANY**
Social Housing Pension Scheme (SHPS)
Coastline Pensioners|**2021**
**£’000**
2020
£’000
**3,196**
1,403
**184**
172| |---|---| ||**3,380**
1,575| The ‘Coastline Pensioners’ are historic retirees who by virtue of agreements following restructuring post stock transfer in 1998, are paid an inflating pension until they die. These pensions are increased annually in accordance with local government pension scheme rules. Payments during the year to these pensioners were £12,000 (2020: £12,000). The carrying value of the liability of £184,000 (2020: £172,000) represents the discounted value of expected future payments discounted at 2.22% (2020: 2.36%). ## **24 Pensions** The Group participated in one pension scheme: ## **(1) Social Housing Pension Scheme (SHPS): Defined Benefit Pension Scheme** The Group participates in the Social Housing Pension Scheme (the Scheme), a multi-employer scheme which provides benefits to some 500 non-associated employers. The Scheme is a defined benefit scheme in the UK. The Scheme is subject to the funding legislation outlined in the Pensions Act 2004 which came into force on 30 December 2005. This, together with documents issued by the Pensions Regulator and Technical Actuarial Standards issued by the Financial Reporting Council, set out the framework for funding defined benefit occupational pension schemes in the UK. The last triennial valuation of the scheme for funding purposes was carried out as at 30 September 2017. This valuation revealed a deficit of £1,522m. A Recovery Plan has been put in place with the aim of removing this deficit by 30 September 2026. The Scheme is classified as a 'last-man standing arrangement'. Therefore the Company is potentially liable for other participating employers' obligations if those employers are unable to meet their share of the scheme deficit following withdrawal from the Scheme. Participating employers are legally required to meet their share of the Scheme deficit on an annuity purchase basis on withdrawal from the Scheme. For financial years ending on or before 28 February 2019, it has not been possible for the company to obtain sufficient information to enable it to account for the Scheme as a defined benefit scheme, therefore the company has accounted for the Scheme as a defined contribution scheme. For financial years ending on or after 31 March 2019, it has been possible to obtain sufficient information to enable the company to account for the Scheme as a defined benefit scheme. For accounting purposes, two actuarial valuations for the scheme were carried out with effective dates of 31 March 2018 and 30 September 2018. The liability figures from each valuation are rolled forward 92 to the relevant accounting dates, if applicable, and are used in conjunction with the company’s fair share of the Scheme’s total assets to calculate the company’s net deficit or surplus at the accounting period start and end dates. ## **a) Main actuarial assumptions used for the purposes of FRS 102:** ||**31 March 2021**|
31 March 2020| |---|---|---| ||**% per annum**|
% per annum| |Discount Rate|2.22%|
2.33%| |Inflation (RPI)|3.20%|
2.51%| |Inflation (CPI)|2.87%|
1.51%| |Salary Growth|3.87%|
2.51%| |Allowance for commutation of pension for cash
at retirement|75% of
maximum
allowance|


75% of maximum
allowance| The mortality assumptions adopted at 31 March 2021 imply the following life expectancies: |||**Life**|| |---|---|---|---| |||**expectancy at**
**age 65**|

**Life expectancy at age**
**65**| |||**(Years)**|
**(Years)**| |||**31 March 2021**|**31 March 2020**| |Male retiring in 2020 (2020: 2020)||21.6|
21.5| |Female retiring in 2020 (2020: 2020)||23.5|
23.3| |Male retiring in 2040 (2020: 2040)||22.9|
22.9| |Female retiring in 2040 (2020: 2040)||25.1|
24.5| |**b)**|
**Scheme assets:**||| |||**31 March 2021**|
31 March 2020| |||**£’000**|
£’000| ||Global Equity|1,443|
1,142| ||Absolute Return|500|
407| ||Distressed Opportunities|261|
150| ||Credit Relative Value|285|
214| ||Alternative Risk Premia|341|
546| ||Fund of Hedge Funds|1|
5| ||Emerging Markets Debt|365|
237| 93 |Risk Sharing|330|
264| |---|---|---| |Insurance-Linked Securities|217|
240| |Property|188|
172| |Infrastructure|604|
581| |Private Debt|216|
157| |Opportunistic Illiquid Credit|230|
189| |High Yield|271|| |Opportunistic Credit|248|| |Corporate Bond Fund|535|
445| |Liquid Credit|108|
3| |Long Lease Property|177|
135| |Secured Income|376|
296| |Over 15 Year Gilts||-| ||-|| |Index Linked All Stock Gilts||-| ||-|| |Liability Driven Investment|2,301|
2,592| |Net Current Assets|55|
33| |Total assets|9,052|
7,808| None of the fair values of the assets shown above include any direct investments in the employer’s own financial instruments or any property occupied by, or other assets used by, the employer. 94 ## **c) The following amounts were measured in accordance with the requirements of FRS 102:** Present values of defined benefit obligation, fair value of assets and defined benefit asset (liability): ||**31 March 2021**|31 March 2020|| |---|---|---|---| ||**£’000**||£’000| |Fair value of plan assets|9,052||7,808| |Present value of defined benefit obligation|12,248||9,211| |Surplus (deficit) in plan|(3,196)||(1,403)| |Unrecognised surplus|-||-| |Defined benefit asset (liability) to be recognised|**(3,196)**||(1,403)| ||||| ## **d) Analysis of amount charged to operating profit in the period:** Defined benefit costs recognised in statement of comprehensive income (SOCI): |(SOCI):|||| |---|---|---|---| |||**Period from**|Period from| |||**31 March 2020 to**|31 March 2019 to| |||**31 March 2021**|31 March 2020| |||**£’000**|£’000| |Current service cost||-|-| |Expenses||11|11| |Net interest expense||30|66| |Losses (gains) on business combinations||-|-| |Losses (gains) on settlements||-|-| |Losses (gains) on curtailments||-|-| |Losses (gains) due to benefit changes||-|-| |Defined benefit costs recognised in
comprehensive income (SoCI)|statement of|
41|77| 95 Defined benefit costs recognised in other comprehensive income: ||||**Period ended**|Period ended| |---|---|---|---|---| ||||**31 March 2021**|31 March 2020| ||||**£’000**|£’000| |Experience on plan assets (excluding amounts
included in net interest cost) - gain (loss)|||865|(115)| |Experience gains and losses arising
liabilities - gain (loss)||on the plan|271|(110)| |Effects of changes in the demographic assumptions||||| |underlying the present value of the defined benefit|||(41)|85| |obligation - gain (loss)||||| |Effects of changes in the financial||assumptions||| |underlying the present value of the defined benefit|||(3,111)|1,431| |obligation - gain (loss)||||| |Total actuarial gains and losses (before restriction||||| |due to some of the surplus not being|recognisable) -||(2,016)|1,291| |gain (loss)||||| |Effects of changes in the amount of surplus that is not||||| |recoverable (excluding amounts included in net|||-|-| |interest cost) - gain (loss)||||| |Total amount recognised in other comprehensive
income - gain (loss)|||(2,016)|1,291| **e) Movement in deficit during the period:** 96 Reconciliation of opening and closing balances of the defined benefit obligation: ||**Period ended**
Period ended| |---|---| ||**31 March 2021**
31 March 2020| ||**£’000**
£’000| |Defined benefit obligation at start of period|9,211
10,485| |Current service cost|-
-| |Expenses|11
11| |Interest expense|214
250| |Contributions by plan participants|-
-| |Actuarial losses (gains) due to scheme experience|(271)
110| |Actuarial losses (gains) due to changes in
demographic assumptions|41
(85)| |Actuarial losses (gains) due to changes in financial
assumptions|3,111
(1,431)| |Benefits paid and expenses|(69)
(129)| |Liabilities acquired in a business combination|-
-| |Liabilities extinguished on settlements|-
-| |Losses (gains) on curtailments|-
-| |Losses (gains) due to benefit changes|-
-| |Exchange rate changes|-
-| |Defined benefit obligation at end of period|12,248
9,211| Reconciliation of opening and closing balances of the fair value of plan assets: ||**Period ended**|Period ended| |---|---|---| ||**31 March 2021**|31 March 2020| ||**£’000**|£’000| |Fair value of plan assets at start of period|7,808|7,606| |Interest income|184|184| |Experience on plan assets (excluding amounts
included in interest income) - gain (loss)|865|(115)| |Contributions by the employer|264|229| |Contributions by plan participants||-| |Benefits paid and expenses|(69)|(129)| |Assets acquired in a business combination|-|-| |Assets distributed on settlements|-|-| |Exchange rate changes|-|-| |Fair value of plan assets at end of period|**9,052**|7,808| 97 The actual return on the plan assets (including any changes in share of assets) over the period ended 31 March 2021 was £1,049,000 (2020: £69,000) ## **25 Related Parties** ## **Non-Executive Directors** One Non-Executive Director who served during the year (2020: one) has a standard tenancy agreement and is required to fulfil the same obligations and receive the same benefit as other Customers. There are no rental arrears to report as at year-end (2020: £nil). ## **Subsidiary companies** Coastline Housing (CHL) has subsidiaries which are not regulated by the Regulator of Social Housing: Coastline Services Limited (CSL); Coastline Care Limited (CCL); Coastline Design and Build Limited (CDB); and Coastline Homes Limited (CHM) (see note 28). CSL’s main business is the provision of building, maintenance and technical management services, which includes property and grounds maintenance work undertaken for CHL. The total value of work undertaken by CSL on behalf of CHL during the year was £4,563,707 (2020: £4,557,626). This is removed on consolidation in the Group financial statements. The total balance due to CSL from CHL at 31 March 2021 was £530,779 (2020: £666,938). CCL was Dormant throughout the period to 31 March 2021 (2020: Dormant). CDB’s main business is that of a commercial design and build contractor for new builds whose principal client is CHL. The total value of work undertaken by CDB on behalf of CHL during the year was £34,633,843 (2020: £30,831,043). This is removed on consolidation in the Group financial statements. The total balance due to CHL from CDB at 31 March 2021 was £3,525,113 (2020: £3,452,649). CHM’s main business is the delivery of a wider range of housing options including an element of open market housing for sale where it forms part of wider development schemes that the Group is undertaking. The company commenced trading during the year ended 31 March 2019. Coastline Housing provides certain administrative functions for the other Group companies, including financial, human resources and IT. These are recharged on the most appropriate basis, either on head count or on floor area of office space occupied. All transactions with Group companies are on an arm’s-length basis and on commercial terms. 98 ## **26 Tax on Surplus on Ordinary Activities** ## **Total tax expense recognised in the statement of comprehensive income, other comprehensive income and equity:** |
Current tax:
UK Corporation tax on profits for the year at
19% (2020 19%)
Adjustments in respect of previous periods
Deferred tax:
Origination and reversal of timing
differences
Adjustments in prior periods
Effect of tax rate change on opening
balance
Tax on profit of ordinary activities|**GROUP**
**2021**
**£’000**
2020
£’000
**-**
-
**-**
(16)
**-**
(16)
**(5)**
(12)
**(1)**
(18)
**-**
2
**(6)**
(28)
**(6)**
(44)|**COMPANY**
**2021**
**£’000**
2020
£’000
**-**
-
**-**
-
**-**
-
**-**
-
**-**
-
**-**
-
**-**
-
**-**
-| |---|---|---| A UK corporation tax rate of 19% (effective 1 April 2020) was substantively enacted on 17 March 2020, reversing the previously enacted reduction in the rate from 19% to 17%. This will increase the company’s future tax charge accordingly. Deferred tax has been calculated at 19% (2020: 19%). Factors affecting the tax charge for the current year: The current tax credit of £6,000 (2020: £44,000 credit) for the year is lower (2020: lower) than the standard rate of corporation tax in the UK of 19% (2020: 19%). The differences are explained below: 99 |**Current tax reconciliation**
Profit on ordinary activities before gift
aid and taxation
Current tax at 19% (2020: 19%)
Income not taxable in determining
taxable surplus
Effect of gift aid
Effect of tax change in previous period
Deferred tax not recognised
Effect of deferred tax in previous
periods
Effect of tax rate on opening deferred
tax balance
Losses carried forward
**Total current tax (credit) / charge**
**(see above)**|**GROUP**
**2021**
**£’000**
2020
£’000
**5,480**
10,892
**1,041**
2,070
**(979)**
(2,023)
**(54)**
(59)
**-**
(16)
**(13)**
**(1)**
(18)
**-**
2
**-**
-|**COMPANY**
**2021**
**£’000**
2020
£’000
**-**
-| |---|---|---| |||**-**
-
**-**
-
**-**
-
**-**
-
**-**
-
**-**
-
**-**
-| ||**(6)**
(44)|**-**
-| ## **27 Provision for Liabilities** ## **Deferred tax** |**eferred tax**|| |---|---| |At 1 April
(Released)/ charged in the year
Change in underlying rate of tax
At 31 March
Comprising:
Accelerated capital allowances|**GROUP**
**2021**
**£’000**
2020
£’000
**6**
33
**(6)**
(28)
**-**
-| ||**-**
5| ||**-**
5| The deferred tax liability at 31 March 2021 has been calculated based on the rate of 19%. 100 ## **28 Group Members** Coastline Housing Limited is the parent undertaking and has four subsidiaries being Coastline Services Limited; Coastline Care Limited; Coastline Design and Build Limited; and Coastline Homes Limited (see note 14). ## **29 Legislative Provision** The Company is a company limited by guarantee and is registered with the Regulator of Social Housing under the Housing and Regeneration Act 2008. The registered provider number for Coastline Housing Limited is LH4165. The Company is also a registered charity (registration charity no. 1066916). ## **30 Accounting Estimates and Judgements** ## _**Key sources of estimation uncertainty**_ The Group makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, seldom equal the related actual results. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are addressed below. ## _**Useful economic lives of tangible assets**_ The annual depreciation charge for tangible assets is sensitive to changes in the estimated useful economic lives of the assets so these are re-assessed annually and amended when necessary to reflect current estimates. See note 13 for the carrying amount of the property plant and equipment, and note 1 for the useful economic lives for each class of assets. ## _**Impairment of debtors**_ The Group makes an estimate for the recoverable value of rental arrears, trade and other debtors. When assessing impairment of trade and other debtors, management considers factors including the current credit rating of the debtor, the ageing profile of debtors and historical experience. See note 15 for the net carrying amount of the debtors and associated impairment provision. ## _**Pensions**_ FRS 102 requires that certain assumptions are made in order to determine the amount to be recorded for retirement benefit obligations and pension plan assets, in particular for defined benefit plans. These are mainly actuarial assumptions such as expected inflation rates, employee turnover, expected return on plan assets and discount rates. Substantial changes in the assumed development of any one of these variables may significantly change the Group’s retirement benefit obligation and pension assets. The impact of Covid-19 on Coastline’s (closed to further accrual) defined benefit pension scheme assets and liabilities has been reflected in the accounts based on this year’s actuarial assumptions. The expected triennial valuation is expected to lead to further changes, in particular because there will have been an opportunity for the scheme’s Trustees to more fully assess the long term impacts of Covid-19. 101 In response to the ongoing reform of RPI there has been a change in the estimate used by TPT in how to set the CPI assumption relative to RPI. The impact of this change is approximately £1.1 million and would increase the deficit from our current estimates. Further work in considering the wider management of the SHPS Defined Benefit Deficit is on-going, with professional advisors appointed, and will shortly reflect the final results of the September 2020 tri-annual revaluation which is being published during 2021/22. ## _**Valuation of housing properties**_ The Group tests annually whether there are any impairment triggers that would require the Group to undertake a full impairment review of housing properties under FRS 102. In July 2015 the Government announced a 1% reduction for the next four years of rental income for social housing properties effective from 1 April 2016. This announcement was identified as an impairment trigger and accordingly a full impairment review was undertaken at the March 2016 year end. There have been no such impairment triggers during the year ended 31 March 2021. The recoverable value is assessed as the higher of fair value or value in use. The SORP considers depreciated replacement cost as a reasonable estimate for value in use taking into consideration the service potential of social housing. The valuation of housing properties at the year-end have therefore been assessed using depreciated replacement cost. These calculations require the use of assumptions and estimates, in particular in relation to the identification of cash generating units, expected replacement cost and the service potential of the asset. ## _**Recoverability of stock and WIP**_ Completed properties and properties under construction for open market sales are recognised at the lower of cost and net realisable value. Assessing net realisable value requires the use of estimation techniques. In making this assessment, management considers publicly available information and internal forecasts on future sales activity. Net realisable value is based on estimated sales price after allowing for all further costs of completion and disposal. ## _**Critical accounting judgements in applying the Group’s accounting policies**_ There are no such judgements in either the current or prior year. 102 Coastline Housing Limited Coastline Housing Limited Financial Statements Consolidated Financial Statements For the year ended 31 March 2007 For the year ended 31 March 2021 **Registered Number 3284666** **Registered Number 03284666** Registered Office: Coastline House 4 Barncoose Gateway Park Pool, Redruth Cornwall TR15 3RQ ## **Contents** |**ontents**|| |---|---| |Directors, Executive Team and Advisors…………………………………………………………|2| |Report of the Board (incorporating the Statement of Board’s Responsibilities)………………|4| |Strategic Report (incorporating the Value for Money Statement)………………………………|24| |Report of the Independent Auditor to the Members of Coastline Housing Ltd…....................|53| |Statement of Comprehensive Income for the year ended 31 March 2021…………..………..|57| |Other Comprehensive Income for the year ended 31 March 2021....…………………………|57| |Statement of Financial Position as at 31 March 2021..…………………………………………|58| |Consolidated Statement of Cash Flows for the year ended 31 March 2021…………………|60| |Consolidated Statement of Changes in Equity………………………..…………………………|62| |Notes to the Financial Statements…………………………………………………………………|63 to 102| 1 ## **Directors, Executive Team and Advisors** |**The Board**||**From**|**To**|**Committee**|**Meeting Attendance**|**Meeting Attendance**|**Meeting Attendance**| |---|---|---|---|---|---|---|---| |||||**Membership**|**(Inc.**|**Committees)**|| ||||||**No**|**Max**|**%**| |||||||**Avail**|| |D Law MBE|Chair|9 May 2012|23 September 2020|$|5|5|100| |P Stephens|Deputy Chair|1 Jan 2013||$, %|13|15|87| ||_(Interim Chair_|_24 September 2020_|_30 June 2021)_||||| |M Duddridge|_Chair Designate_|_1 April 2021_||$|-|-|-| ||Chair|1 July 2021|||||| |A Young|Chief Executive|9 Oct 2014||$, %|16|16|100| |F Perrin||1 Jan 2018|13 November 2020|$|7|7|100| |M J Waldron||1 Oct 2013||$|10|11|90| |P A W Bearne||18 May 2015||%, &|13|13|100| |S Harrison||27 Sept 2018||!, &|13|13|100| |S Roberts||1 Oct 2013||!, %, &|18|18|100| |C Pears|Independent|1 July 2020||!|4|5|80| ||ARAC member||||||| |||1 March 2021|||||| ||Board member||||||| |K Harris||1 September 2020||!|8|8|100| |A Moore||1 September 2020||$|7|7|100| |E Chapman|Independent|1 February 2021||&|1|1|100| ||CEF member||||||| |J De-Ville|Independent|1 February 2021||&|1|1|100| ||CEF member||||||| |K Kemp|Independent|1 February 2021||&|1|1|100| ||CEF member||||||| |L Denmead|Independent|1 February 2021||&|1|1|100| ||CEF member||||||| 2 ## **Committee Membership Key** **!** Audit, Risk and Assurance Committee **$** Property and Investment Committee **%** Coastline Services Board & Customer Experience Forum |**The Executive**|**Team**|**From**| |---|---|---| |A Young|Chief Executive|9 Oct 2014| |L Beard|Deputy CEO (with responsibility for Housing, Assets and Communities) 26 Nov 2007|| |N Mallows|Director of Finance and ICT|25 Jan 2016| |C Weston|Director of Development and Commercial Services|1 Mar 2016| |D Wingham|Director of HR and Governance|1 Oct 2007| **Advisors** Principal Solicitors Trowers and Hamlins, The Senate, Southernhay Gardens, Exeter EX1 1UG Stephens and Scown, Osprey House, Malpas Road, Truro, Cornwall TR1 1UT Funders Abbey National Services, 2 Triton Square, Regent’s Place, London NW1 3AN MandG Investments, Laurence Pountney Hill, London, EC4R 0HH Affordable Housing Finance, 3rd Floor, 17 St. Swithin’s Lane, London EC4N 8AL NatWest plc, 9th Floor, 250 Bishopsgate, London EC2M 4RB Homes England, 50 Victoria Street, Westminster, London SW1H 0TL Lloyds Bank plc, 10 Gresham Street, London, EC2V 7AE Bankers NatWest plc, 4 Commercial Square Camborne TR14 8EB External Auditors KPMG, Regus, 4th floor, Salt Quay House, 6 North East Quay, Plymouth PL4 0HP Internal Auditors Bishop Fleming, Chy Nyverow, Newham Road, Truro TR1 2DP 3 ## **Report of the Board** ## **Introduction** Coastline is pleased to present the 2020/21 Annual Report and Accounts. The financial results continue to represent strong progress towards the targets set out in the 2016-2021 Corporate Plan and provide a sustainable and resilient base as we focus on the new Coastline Plan for 2021-2026 which is being launched during 2021. The year to 31 March 2021 has seen continued unprecedented impacts from the Covid-19 pandemic. We experienced a severe lockdown at the start of the year and have had to learn and adapt during the various phases. Our response strategy has been to ensure that we are well placed to maintain the highest levels of customer service possible, while keeping Customers and colleagues safe. We continue to review and adapt our plans and approach to ensure that we offer a caring and responsive service to our Customers. However it is clear that we will not be able to catch up all of the backlog from 2020/21 in the year just started, and so we are carefully considering how that catch up can be accomplished smoothly over a number of years. Our response during the pandemic is set out fully in the Strategic Report but the Board would like to express its appreciation of the professional and caring response delivered by all colleagues. Coastline remains committed to delivering its mission of ‘Great Homes, Great Services, Great People’, and the Strategic Report sets out both the considerable progress towards delivering the previous Corporate Plan as well as our ambition for the future. ## **Legal Structure** Coastline Housing Limited (‘CHL’ or ‘the Company’) was incorporated in November 1996 and is an independent registered charity and social business, run on a non-distribution basis. This means that all profits generated are retained for furtherance of Coastline’s charitable objectives. CHL is a public benefit entity. It has four wholly-owned subsidiaries: - Coastline Services Limited (‘CSL’), a building maintenance and grounds contractor; - Coastline Design and Build Limited (‘CDB’), a design and build contractor; - Coastline Homes Limited (‘CHM’), a design, construction and sale of residential housing contractor; and - Coastline Care Limited (‘CCL’), which has remained Dormant throughout 2020/21. Together these companies form Coastline Housing Group (‘the Group’). CHL is registered with the Charity Commission as a charitable company and with the Regulator of Social Housing (‘the RSH’) as a provider of social housing; both of these provide the primary regulatory framework for Coastline with the Regulator of Social Housing as principal regulator. CHL is also registered with the Care Quality Commission (CQC) for the services provided at Miners Court. CHL is a company Limited by Guarantee registered at Companies House. CSL, CDB, CCL and CHM are all companies limited by shares and are registered at Companies House. 4 The Group is governed by a paid Board of Non-Executive Directors and the Chief Executive. The Directors of the Company who have served during the year and up to the date of the signing of these financial statements are listed on page 2. ## **Principal Activities** The principal activity of the Group is the provision of affordable housing for people on low incomes. Any financial surplus from our activities is reinvested into improving existing homes, communities and services, and developing new homes. The investment into new affordable housing remains a key strategic deliverable and represents an expected level of investment in excess of £200 million over the next five years. This is in addition to the investment in improvements for existing stock which is forecast to be in excess of £21 million over the same period, separate and above any other expenditure in relation to day to day repairs and maintenance. The Group via CSL, provides property and grounds maintenance services to CHL and to a number of public and private sector clients across Cornwall. CDB is a commercial design and build contractor for new builds whose principal client is CHL. CHM was incorporated in September 2017 in preparation for delivery of a wider range of housing options including an element of open market housing for sale where it forms part of wider development schemes that the Group is undertaking. The company commenced trading in the year ended 31 March 2019. Due to significant changes in contracts and the delivery of care and support across Cornwall the trade and activities of CCL were transferred back into CHL from 1 April 2015. The company was Dormant for the year ended 31 March 2021 as it was for the previous year. ## **Corporate Plan: Mission, Values and Objectives** Coastline exists to provide housing for those in need, to help improve the neighbourhoods that people live in, and to provide services that improve the quality of our Customers’ lives. We are an independent, charitable, not-for-profit housing association owning and managing over 5,000 homes throughout Cornwall. We aim to make a financial surplus to support our mission and vision. All of our surpluses are reinvested into our charitable work. ## Our **mission statement** is: - Great Homes - • Great Services - Great People This is our ‘brand promise’ to our Customers, partners and other stakeholders – a clear and succinct statement of our purpose and what we stand for. It is also underpinned by a fourth statement of “Great Foundations”, which ensures the business fundamentals are in place that enable and support our charitable mission. 5 Our impact doesn’t end with the bricks and mortar. We work hard to ensure our Customers are living in happy and thriving communities, and we also provide opportunities for our Customers to change their lives by re-entering the workplace or starting on the path to training or volunteering. We recognise the current challenging times for many and we remain committed to helping people improve their financial wellbeing in a number of ways. Additionally, we provide a helping hand to those members of our society who find themselves in the unenviable position of being homeless, offering a range of essential services – day and night. Our Corporate Plan for 2017-2021 set out a number of clear, measurable and challenging targets. These targets and progress against them are further detailed in the Strategic Review. The new Coastline Plan, ‘Great Futures’, is being launched during 2021 and provides the context and mission detail for the next four years to 2025. It seeks to further stretch our ambitions to alleviate housing and related issues across Cornwall, whilst making positive changes towards addressing the impacts of climate change. ## **Values** Our values are what we as an organisation care most about and they underpin everything that we do. We will: - Put our Customers first; - Be open, honest and accountable; - Strive to be the best; and - Value each other ## **Objectives** The current Corporate Plan document is available on our website http://www.coastlinehousing.co.uk/corporate plan.pdf, but can also be obtained from our registered office and provides details of outcomes, milestones and performance measures for each objective. The headline targets of the Corporate Plan 2017-2021 are: - We will build 1,000 new affordable homes for rent and low cost home ownership; - We will ensure that none of our homes cost more than £600 a year to heat; - We will have all of our core customer services available on-line, and 50% of our Customers will be choosing to use these services; - We will do more for vulnerable groups, with a new homeless facility completed and 130 homes for older people; - We will grow our income while ensuring that we also increase our productivity, improving our operating margin to 38%, allowing us to invest more in homes and services; and - We will be recognised as a brilliant company to work for, reaching the Top 50 of The Sunday Times Best Companies not-for-profit list. 6 ## **Governance Structure** ## **Charitable Objects** The Group is headed by Coastline Housing Limited which is a registered charity with the following objects: - The relief of persons in necessitous circumstances, the aged, disabled, handicapped, and chronically sick through the provision of suitable housing, amenities and services. - The provision of recreational or other facilities in the interests of social welfare with the object of improving the conditions of life for the Customers and other persons eligible for benefit from the Company. - The relief of poverty and the advancement of education for the benefit of the community. ## **The Board** The Board is led by the incoming Chair Mark Duddridge (from 1 July 2021) and during the year by Interim Chair, Peter Stephens, who in September 2020 replaced the outgoing Chair Derek Law MBE, who had served a full nine year period. The membership of the Board is given on page 2. Each Director brings a range of experiences and skills to the operation of the Board and its Committees. New Board Directors undergo a formal induction programme which includes background information about the Group and other governance-related issues. The current Board consists of nine independent Non-Executive Directors and one Executive Director. Board recruitment is based on skills, knowledge and expertise; vacancies are widely advertised. The Directors are all subject to an annual appraisal conducted by the Chair, Deputy Chair and the Chair of the Audit, Risk and Assurance Committee and one other Non-Executive Director in respect of the Chair. There have been no changes to the Board since 31 March 2021, other than those detailed above. The Board decided to pause recruitment for the Chair in April 2020 due to the pandemic and reflecting the potential impact on our ability to recruit, therefore appointing an interim chair. The recruitment process was then recommenced later in the year once conditions for recruitment were considered to be more favourable. The Board controls the Group’s strategic direction and reviews its operating and financial position. It is supplied with timely and relevant information to enable it to discharge its duties. Board papers are distributed in advance of meetings and papers are sufficiently detailed to enable the Directors to understand the Group and Company management and performance. ## **Board and Executive Officers Remuneration** Non-Executive Directors receive remuneration from the Group as well as reimbursement of expenses incurred. This has been independently reviewed during the year with no significant changes proposed. The remuneration of the Executive Officers is determined by the Board with an independent external review having been completed most recently during 2021. 7 ## **Board Committees** The Board delegates some of its responsibilities to two Committees: the Audit, Risk and Assurance Committee and the Property and Investment Committee. The Remuneration and Nominations Committee was discontinued in September 2017 following a review of governance arrangements and board effectiveness with its responsibilities being retained by the main Board reflecting the importance of colleagues, resources, executive remuneration and performance management. During the year the Board approved the creation of a Customer Experience Forum, which is part of our formal governance structure and met for the first time in 2020/21. This Forum is part of our on-going commitment to broadening Customer input into how Coastline is run, and supports the principles of the National Housing Federation’s ‘Together with Tenants’ and Coastline’s Trust Charter. ## **Audit, Risk and Assurance Committee** This Committee is chaired by Steve Harrison. The other Directors who served during the year on the Committee were Sue Roberts, Karen Harris, Charles Pears and Peter Stephens (April to September 2020). It met five times during the year and its work included: - reviewing the external auditor’s plans for the audit of the Group’s financial statements; - reviewing the external auditor’s management report and audit highlights memorandum; - reviewing the financial statements for the year; - reviewing plans and reports from the internal auditors on the Group’s system of internal control, monitoring responses to those reports and compliance with recommendations; - reviewing the processes in place for monitoring, evaluating and managing the risks facing the Group; and - completing the annual review of the Asset and Liability Register. ## **Property and Investment Committee** This Committee is chaired by John Waldron. The other Directors on the Committee who served during the year were Allister Young, Andrew Moore, Peter Stephens, Mark Duddridge and Fiona Perrin (April to November 2020). It met four times during the year and its work included: - reviewing and monitoring the Group’s 30-year Business Plan and related stress testing; - reviewing and monitoring the Defensive Action Plan; - reviewing the Group’s funding requirements and arrangements; - reviewing the performance of the Group’s development programme; - reviewing the Group’s Asset Management and Responsive repairs strategies; - reviewing the Group’s maintenance programme; - Contract Procurement; and - approving the Group’s Finance Strategy. 8 ## **Customer Experience Forum** The CEF is a new committee of Customers and NED’s, launched in January 2021 that oversees the customer experience for Coastline and makes recommendations to the Board. This approach is considered a key element of ‘co-regulation’ and provides further assurance over performance and the internal control environment. This Committee is chaired by Philip Bearne. The other Directors of the committee who served during the year were: Steve Harrison and Sue Roberts. The independent members who served during the year were: Edward Chapman, Joe De-Ville, Kelly Kemp and Lisa Denmead. The Executive members of the Group were Louise Beard and Christopher Weston. During the year CV/CEF achieved the following outcomes: - Delivered a report to each Board meeting following one of its meetings; - Scrutinised KPIs and complaints trends; - Promoted the work of the CV through CoastLines; - Received presentations from key members of staff to support scrutiny work; - Was part of the NHF ‘Together with Tenants’ Trust Charter work in Cornwall; - Involvement in setting of new Local Offers “Our Pledge To You”; - Completed a Play Park scrutiny; - Commenced a Damp and Mould scrutiny; and - Completed several mystery shops. ## **Governance Code** The Board has adopted the National Housing Federation Code of Governance (2015), and maintains the provision for up to two co-opted members in addition to the Board of up to ten within the Company’s Articles. Coastline fully complies with the NHF Code of Governance (2015). 9 ## **Staffing Structure** Although our commitment to customer care extends to every part of our business, most Customers’ first point of contact is our dedicated **Customer Access Team** . Using a centralised customer relationshipmanagement system, this team responds to queries, processes feedback and requests, and offers a single, approachable point of liaison between the Customer and our various specialist teams. The Customer Access Team forms the hub for the rest of our **Housing, Assets and Communities Directorate** which has responsibility for all maintenance and housing management issues including our supported and sheltered accommodation and related services. Our **Community Investment Team** ensures that Customers are involved in shaping, challenging and influencing our services at every level. This team also strives to improve and increase such opportunities, ensuring that our business is led by our Customers’ needs and aspirations, works to support local community initiatives and assists Customers into training, volunteering and work through the Volunteer, Inspiring Futures and Coastline Construct programmes. The Group’s development and sales programme is lead and managed by the **Development and Sales Teams** which, along with our in-house contractor team **Coastline Services,** makes up our **Development and Commercial Services Directorate** . These teams are all assisted in their work by a **Finance, Performance and Information Technology Directorate** providing financial and performance information, risk management arrangements, treasury management and information technology functions; and by a **HR and Governance Directorate** providing Governance Support, Human Resources, Public Relations/Marketing and overseeing the Group’s approach to Health and Safety and wellbeing. An **Executive Team** oversees the day-to-day operational running and, working with the Board and wider colleagues, identifies and executes the Group’s strategic direction. The members of the Executive Team are shown on page 2. ## **Employees** The Group relies on the quality and commitment of its employees in order to meet its corporate objectives. The Group ensures that sufficient staff with appropriate skills are employed and that effective employment policies are in place and good practice is followed. The Board express their thanks for the hard work and commitment shown by all employees of the Coastline Group. 10 ## **Equal Opportunities** The Group is committed to an equal opportunities policy within which it actively encourages applications for employment from all groups in society. It is also committed to an equality and diversity agenda designed to ensure equal access to its services. Coastline is an accredited Living Wage Accredited Employer. In line with our value of being open, honest and accountable we continue to voluntarily publish our Gender Pay results which are as follows: |**Gender Pay Reporting April 2020**|**Male**|**Female**| |---|---|---| |Group Head Count|144|160| |Mean Hourly Rate|£14.09|£13.21| |Median Hourly Rate|£11.21|£11.19| |Mean Bonus|£758.33|£676.36| |Median Bonus|£820.2|£694.28| |% not receivingbonus|17%|16%| |**Gender Pay Reporting April 2021**|**Male**|**Female**| |---|---|---| |Group Head Count|155|167| |Mean Hourly Rate|£14.59|£14.08| |Median Hourly Rate|£11.75|£11.99| |Mean Bonus|£295.95|£263.43| |Median Bonus|£291.65|£250.00| |% not receivingbonus|24.52%|23.95%| The most significant recent change in relation to pay was the 2018 decision to extend corporate bonus arrangements to include all extra care and supported housing staff. Staff in these areas are mainly female and had been historically excluded due to the cost pressures associated with the contracts for these services. The decision to extend was based on promoting equity across all staff employed by the Group and is treated as a corporate cost rather than a cost directly attributable to the service. During 2020/21, the Board made two operational allowance payments to colleagues who it was felt had put themselves more at risk during the different periods of Covid-19 protection measures. These payments were focussed on our Extra Care, Homeless support services and repairs delivery colleagues who continued to deliver front line services in person throughout this period. Management have also made use of the furlough and flexible furlough scheme during the course of this financial year, to ensure that our charitable financial resources are maximised and our colleagues protected from any financial impacts of the challenging and changing nature of personal and operational issues that arose as a result of the pandemic. The 2020/21 bonus was paid in May this year (in the same way as for the previous year), to separate from the other April changes relating to cost of living increase and the effects of general taxation changes, so that staff had greater transparency on the level of bonus paid. Performance related pay and arrangements for bonuses for 2021/22 remain under review as the business continues to assess, and adjust in relation to, changes resulting from Covid-19. 11 |**April 2020**|**Pay Quartiles by gender (adjusted rate which includes bonus)**|**Pay Quartiles by gender (adjusted rate which includes bonus)**|**Pay Quartiles by gender (adjusted rate which includes bonus)**| |---|---|---|---| |Band|Males|Females|Description| |1|43%|57%|Includes all employees whose hourly rate places them at or| ||||below the lower quartile| |2|51%|49%|Includes all employees whose hourly rate places them above
the lower quartile but at or below the median| |3|47%|53%|Includes all employees whose hourly rate places them above
the median but at or below the upper quartile| |Highest|49%|51%|Includes all employees whose hourly rate places them above
the upper quartile| **April 2021 Pay Quartiles by gender (adjusted rate which includes bonus)** |Band|Males|Females|Description| |---|---|---|---| |1|35%|65%|Includes all employees whose hourly rate places them at| ||||or below the lower quartile| |2|66%|34%|Includes all employees whose hourly rate places them
above the lower quartile but at or below the median| |3|44%|56%|Includes all employees whose hourly rate places them
above the median but at or below the upper quartile| ||||Includes all employees whose hourly rate places them| |Highest|47%|53%|above the upper quartile| Coastline’s median pay difference is marginally towards employees identifying as female in 2021, broadly consistent with previous years where there has been limited or no differential between pay of different genders. Management believe any current differential to be within a reasonable tolerance level and demonstrative of the effectiveness of our pay policy and commitment to equality. The movement in proportions of colleagues that fall into different pay quartiles is more difficult to assess due the volume of changes during the last 12 months. Particularly, as an increase in overall headcount may reflect changing priorities as a result of Covid-19. Another key measure for Coastline reflecting the outputs from the Hutton review is the ratio of highest paid to the median salary level (excluding the highest paid). The ratio based on April data in line with the gender reporting above (i.e. excluding pension contributions) showed that the ratio for Coastline was 5.46:1 (2020, 6.02:1). Further details of Executive and staff salaries can be found in the Notes to the Financial Statements (note 9, page 78). 12 ## **Internal Control and Risk Management** ## **Approach** The Group has adopted a risk-based approach to internal control. This approach includes regular evaluation of the nature and extent of risks to which the Group is exposed and is consistent with the approach expected by the Financial Reporting Council and the Regulator of Social Housing. The Board recognises that no system of internal control can provide absolute assurance or eliminate all risk. The system of internal control is designed to manage risk and to provide reasonable assurance that key business objectives and expected outcomes will be achieved. It also exists to give reasonable assurance about the preparation and reliability of financial and operational information and the safeguarding of the Group’s assets and interests. Assurance over the internal control environment is provided in a number of ways, the most significant of which are set out below. ## **Culture and ‘Tone at the Top’** The Group takes internal control seriously. Disregard of control procedures is treated as a potential disciplinary offence. Training in appreciation of risk and methods of control forms a part of Board and management development. ## **Health and Safety** Our vision is to create and maintain an environment where care for our people, and those who work with us, is our top priority; where the belief that all accidents are preventable prevails. ## **External and Internal Audit** The external auditors have a duty to report to the Board significant matters relating to control weaknesses and inefficiencies that come to their attention during the course of their audit work under the Code of Audit Practice. The Group maintains an independent internal audit function whose principal objective is to assess the appropriateness and effectiveness of the systems of internal control and risk management. Initial findings reports are presented to the Audit, Risk and Assurance Committee, which receives a follow-up report at each meeting setting out the progress on all outstanding recommendations. In addition to the external and internal audit functions a number of independent specialist compliance audits are commissioned each year to supplement the assurance framework. These cover areas such as our Gas Servicing programme, Health and Safety Arrangements, Fire Risk Assessments, Legionella Management and Asbestos Management. ## **Customer Scrutiny** The Company has an effective customer scrutiny function (previously known as the ‘Customer Scrutiny Committee’, relaunched as the Customer Voice in 2020). The Customer Voice (CV) receives all forms of customer feedback and engagement through our Coastline Conversation. This is where we enable Customers to get involved in matters that are important to them and their neighbourhoods, building relationships with Coastline, and creating opportunities in communities to build on existing strengths. We work closely with the Customer Voice, who we see as our ‘critical friends’, and use the performance information to identify areas that require scrutiny, and make recommendations to the Customer Experience Forum. In holding us to account against our Mission Statement, the Trust Charter, and ‘Our Pledge to You’, they bring their lived experience in Coastline communities to the fore. 13 We have maintained a proactive stance in relation to potential changes in consumer standards within the White Paper and have set up the Customer Experience Forum (CEF) to enable the lived experience to be embedded within the governance structure. We have also been engaging with the Housing Ombudsman requirements and in discussions with the CEF we are progressing towards a new two stage complaints policy in July, with roles in the decision making process for customer mentors to provide support to complainants and for CEF customer members to be on the complaints panel. 14 ## **Risk Management** Management responsibility has been clearly defined for the identification, evaluation and control of significant risks throughout the Group. There is a formal and on-going process of management review which is co-ordinated through a quarterly reporting framework from management, through the Executive Team to the Audit, Risk and Assurance Committee. This process has been in place throughout the year but subject to continual review and improvement and is consistent with best practice and regulatory requirements. One of the areas that continues to be developed is the consideration of Strategic or Principal Risks in addition to risks that are significant. Whilst the assessment of significant risks follows a specific methodology the consideration of strategic risks has been completed as a separate exercise to supplement and enhance Coastline’s overall approach to risk management. Strategic or Principal Risks are those which are considered to be of fundamental importance to the formulation and delivery of Corporate Plan objectives. Our initial work which will be taken forward as part of our Risk Management Policy has identified the following as strategic risks, noting that Covid-19 is not explicitly listed below but is included in the current risks which have been reassessed rather than as a separate risk below: |**Strategic / Principal**
**Risk**|**Risk Mitigation Strategy**| |---|---| |**Product Safety**
(including landlord health
and safety)|Detailed assurance map on property related requirements coupled with
third party expert reviews for example CORGI accredited Landlord Gas
Safety processes.
Development handover process review by internal auditors and all new
build defect repairs treated the same as responsive repairs.
Pro-active identification of RADON potential issue and reporting to Board.
Pro-active review of all buildings in relation to fire safety despite no
buildings over 18m.| |**Human Resources and**
**Governance**
(including
Board,
Executive,
staff
and
volunteers in relation to
skills)|Rolling programme of NED recruitment
Investment in apprenticeships across the business to build skills and
capacity for the future
Significant investment in safer working practices for staff
Investors in People Silver Rated employer.
Investors in Volunteers accreditation and effective deployment of
additional resources within business to support charitable activities.
Health and Wellbeing Strategy with significant focus on colleagues’ mental
health.| 15 |**Government**
**Policy,**
**legislation**
**and**
**regulation**|Active involvement with trade body the National Housing Federation and
PlaceShapers group of Housing Associations alongside maintaining
effective dialogue with Cornwall Council, local MP’s and Parish Councils.| |---|---| |**Funding and financial**
**viability**|Annual finance strategy and constant market engagement to maintain
existing and develop additional sources of finance.| |**Wider Economic**
(including sales, rental
level exposures as well
as interest and inflation
rates)|Exposure to sales limited to ensure that change of product mitigates risk.
Regular reporting to Property and Investment Committee and Board on
key economic indicators alongside stress testing and scenario planning to
inform Defensive Action Plan.| |**Programme**
(impact
of
planned
expansion on internal
systems of governance,
management
and
delivery)|Investment into ICT to provide systems and infrastructure that can support
growth.
Cross departmental working supporting issues of peak delivery. Board
recruitment focussed on skills that will help support and challenge delivery
of extensive ICT and new homes investment.| |**Reputation and Trust**
(including
potential
communications failure
exacerbating issues)|Business continuity planning and communications strategy in place to
mitigate risk.
New customer charter pledge commitments to replace previous Local
Offers to residents includes response time promise of four days coupled
with simplified complaints process to ensure that any service failures are
promptly dealt with.| |**Technology, Data and**
**Cybersecurity**|On-going programme of training and upgrading of core systems across the
business coupled with regular sessions led by the Head of ICT to promote
and co-ordinate opportunities for technology based improvements across
the business.
Cyber insurance provides access to experts in case of major incident.
Regular Data Quality Meetings chaired by Director of Finance and ICT with
representation from across Coastline teams.
Data standards enforced with all changes to key fields in housing
management, CRM or Service Connect needing to be approved at Data
Quality or Applications Steering Group.| |**Markets and Supply**
**Chain**(including market
consolidation, securing
development
opportunities and overall
consideration of supply
chain
considerations|Digital access and customer first strategy coupled with ICT strategy to
improve service offering to Customers and colleagues to improve
interactions with and across Coastline.
Active discussions with Cornwall Council, Homes England and others on
potential strategic alliances to maximise development opportunities.| 16 |across all aspects of
operations
and
development
investment)|Strategic alliance with Legal and General Affordable Homes providing
scope to engage and shape new entrant in social housing markets
offering.| |---|---| |**Climate Change**and
related impacts across
all of the above strategic
risks.|Presentation to November 2019 and June 2021 Board Away Days to
consider impact of climate change on Cornwall.
Coastline Plan post 2021-25 includes objectives to contribute towards
alleviating both the causes and impact of climate change on the
communities we work in.| The Audit, Risk and Assurance Committee reviews the Group’s significant risks and the overall risk position compared to the Board’s agreed risk appetite each quarter, and the minutes of the meeting are subsequently reviewed by the Board. The Board receives an update on the Group’s risk position three times a year, and also formally reviews the risk map and sets the Group’s risk appetite on an annual basis. The Group risk appetite was amended from ‘cautious to medium’ to ‘cautious’ following review in April 2020 and has been confirmed as ‘cautious’ as part of the Annual Risk Review as recommended by the Audit, Risk and Assurance Committee. This has then been subsequently agreed and approved by the Board as part of the same Annual Risk Review in May 2021. This appetite reflects the concerns about the increased level of uncertainty in housing operations, the UK Economy and in particular the impacts on the local Cornish economy resulting from Covid-19 as well as the fuller impacts on supply chain in relation to the UK exit from the European Union. The Group recognises that our Customers and our assets are vital to the on-going success of the Group, and we operate within a ‘cautious’ overall risk range which we consider to be appropriate for our business. Our vision in relation to health and safety risks is to create and maintain an environment where care for our people, and those who work with us, is our top priority; where the belief that all accidents are preventable prevails. In other areas we are willing to accept some risk within acceptable financial parameters to enable us to grow our business and achieve our charitable mission which is reflected in our corporate objectives. ## Significant Risks (taken from the Significant Risk Register) Significant Risks are identified as those having a combined likelihood/impact score of 12 or above (on a scale of one to 25). ## **Great Homes** |**Great Homes**|| |---|---| |**Risk**|**Action being taken**| |Landlord health and safety
compliance|•
Fire Risk Assessments reviewed by external advisors
•
CO and Smoke Alarms installed and annually serviced
•
CORGI accredited gas safety process| 17 |Increased costs associated
with changes in building /
letting
or
registered
provider regulations.|•
Decent Homes standards maintained and fully costed in
business plan
•
Stock condition surveys brought in-house to improve overall
data quality and service to Customers
•
Corporate Plan target in relation to heating affordability| |---|---| |Quality of new homes|•
Clerk of works service supported by outsourced elements to
ensure access to technical support
•
Employers agent used on all new build schemes
•
Development Managers and Development Officers assigned to
individualprojects| |Shared Ownership sales
below forecast|•
Detailed forward sales projections with targets and intervention
levels
•
Weekly sales meeting chaired by Director of Development and
Commercial Services
•
Regular reporting of performance via the Group Finance and
Performance Report to Board supplemented by detailed
development performance reporting to both Property and
Investment Committee and Board.| |Build costs increase|•
Regular benchmarking of costs and value for money
assessments undertaken by independent quantity surveyors.
•
Appraisal and commitment to schemes largely based on build
contract already being in place.| |Development
handover
timings|•
Forward estimates of practical completion dates reviewed by
Executive monthly and communicated across business
•
2-week Development team ‘grace’ period between practical
completion and customer move-in to ensure quality and
certainty of home and timing.| ## **Great Services** |**Great Services**|| |---|---| |Responsive
repairs
performance deteriorates|•
Corporate Plan sets out on-going development of customer
service offer
•
Customer Scrutiny arrangements include new Customer
Experience Forum with direct access and feedback to Board
•
Customer Voice meetings in 2020/21 combined increased
Board oversight of this area with greater customer involvement.
•
Regular performance monitoring and satisfaction information
provided to the Board and Senior Leadership Team.
•
Monthly monitoring and reporting of key performance indicators
and budgets to Board| |Supported Housing / CQC
related service failure|•
Detailed policies and procedures in relation to safeguarding,
record keeping and service delivery
•
Monthly operational report on Extra Care, Homeless Crisis and
Homeless day centre to Executive Team
•
Detailed KPI suite for supported housing contracts reviewed
monthly and quarterly| 18 **Great People** |**Great People**|| |---|---| |Low colleague morale|•
Investment in Coaching and Leadership programme with Jack
Russell Coaching and programme of embedding
•
HR Strategy
•
Wellbeing Strategy
•
Operational allowances paid during Covid-19 restriction period
•
Regular virtual QandA sessions with CEO and Executive Team
•
Regular surveying of colleagues during last year to gauge
concerns and wellbeing and direct support
•
Investors in People assessment currently in progress| |Health and Safety problems
not highlighted or addressed|•
Significant investment in safer working practices for staff
•
Adverse incident reporting available online to staff| |Absence rates increase and
or loss of key staff member|•
Detailed Business Continuity Plan
•
Regular Incident Management Team meetings
•
Return to Work process and detailed absence reporting| |Industrial injury as a result of
exposure to significant risks|•
Accidents/incidents/RIDDORS (reasons and actions taken),
sickness (and reasons) reported monthly to Senior Leadership
Team
•
Health and Wellbeing information included in quarterly HR
Report to Health and Safety Committee and in monthly Board
updates
•
CSL (biggest risk area) specific Health and Safety report to every
Board| |**Great Foundations**|| |Rent policy changes|•
Stress testing and defensive action planning review by the Board
includes modelling of different rental scenarios
•
New affordable rent properties considered separately to
conversions in terms of risk exposure
•
Detailed legal advice taken in relation to Welfare Reform and
Work Act and Housing and Planning Act to ensure accuracy and
maximisation of available income
•
Spread of housing products now offered including Shared
Ownership and Rent to Buy| |Failure to achieve Business
Plan and/or other financial
targets|•
Business Plan reviewed quarterly
•
Triannual review on performance against targets as part of
Corporate Plan updates to Board
•
Quarterly reporting and forecasting information to Board| |Rent arrears increase|•
Customer insight data embedded as part of pro-active arrears
management
•
Weekly reporting on arrears including average cash balance
outstanding
•
Support based approach to arrears management
•
Very low levels of arrears compared to peers and wider sector| |Business Plan assumptions
incorrect|•
Business Plan assumptions reviewed by Property and
Investment Committee on a quarterly basis and reported to Board
•
Regular sensitivity testing and scenario planning| 19 |Failure to adapt to a
changing environment|•
Regular Board Strategy days
•
Involvement of Executive Team in National forums
•
Engagement through National Housing Federation and
PlaceShapers| |---|---| |Company
pension
contributions in relation to
frozen
defined
benefit
(2016) increase|•
Previous work completed to date so that remaining risk is only in
relation to SHPS DB which was frozen as at March 2016.
•
Triennial valuation exercise undertaken by Social Housing
Pension Scheme
•
Annual estimate of SHPS DB deficit provided in statutory
accounts and assumptions reviewed by external audit and
retained pensions consultant
•
Pro-active consideration of pensions options included in 2021/22
Finance Strategy.| The on-going review of risk includes consideration of the completeness of the principal risks identified, of the relative significance of those risks and of the risk management techniques that are applied to mitigate those risks. The Board agreed that a range of risk mitigation techniques should be used including assurance, preparation of contingency plans and internal controls. A system of internal control is present in all aspects of the Group’s operations and is essential to its management of risk. ## **Fraud and Significant Control Failings** Coastline complies with the regulator’s requirements with respect to fraud and has a clear policy that has been approved by the Board. The policy requires a register to be maintained of all actual and attempted fraud. All such cases are reported to the Board through the Audit, Risk and Assurance Committee. All cases are reported to the Regulator of Social Housing. Contingency plans exist to be invoked in the case of suspected fraud. These are designed to prevent further loss and to maximise the chance of recovery of any losses that might have been incurred. No significant control failings or fraud have been identified during the period. ## **Overall Assessment** The Board is satisfied that the Group's risk management and internal control systems remained effective during the year and up to the date of the approval of these financial statements. No weaknesses in internal control which resulted in material misstatement or loss have been identified which would have required disclosure in these financial statements. 20 ## **Regulatory Compliance** The Board reviews and confirms compliance annually with the RSH Regulatory Framework and the National Housing Federation Code of Governance (2015). Open communication has been maintained with the Regulator throughout the year which including completion of the new Covid-19 Operational Response Survey. Following a robust self-assessment undertaken by the Executive Team and approved by the Board, Coastline certifies compliance with all standards within the Regulatory Framework for Social Housing (April 2015). As part of the Regulatory Framework registered providers of social housing are required to annually publish evidence in the statutory accounts that enable stakeholders to understand the providers: - Performance against its own value for money targets and metrics set out by the Regulator, and how that performance compares to peers; and - Measurable plans to address any areas of underperformance, including clearly stating any areas where improvement would not be appropriate and the rationale for this. The Board believes that the requirements of the Regulatory Framework are consistent with the values of Coastline as set out on page 4, which include commitments to ‘being open, honest and accountable’ and ‘striving to be the best’. The Strategic Report (page 24) sets out information regarding Coastline’s activities, including detailed performance information and benchmarking and meets the requirements of the Regulatory Framework. As part of a planned routine programme of reviews the Regulator of Social Housing undertook an In Depth Assessment (IDA) during the period May to July 2021 and subsequently published a refreshed regulatory judgement for Coastline Housing that confirmed there were no changes to the existing grades. The current regulatory ratings for financial viability and governance are as follows: ## **Viability (V1)** “The provider meets the requirements set out in the Governance and Financial Viability standard of the Regulatory Framework in relation to financial viability”. ## **Governance (G1)** “The governing body, supported by appropriate governance and executive arrangements, maintains satisfactory control of the organisation”. Further details of the regulatory approach and assessment of Coastline are available at: https://www.gov.uk/government/publications/a-guide-to-regulation-of-registered-providers/a-guide-toregulation-of-registered-providers https://www.gov.uk/government/publications/regulatory-judgement-coastline-housing-limited Coastline Housing Group complied with the RSH Governance and Financial Viability Standard during 2020/21. 21 ## **Merger Code** In March 2016 the Board considered and adopted the NHF Merger Code. This voluntary code sets out ten principles which form a framework for considering the various ‘partnering’ opportunities that may arise. The Board regularly reviews its position, the latest being in May 2020, re-asserting Coastline’s commitment to the principles within that code. Coastline’s corporate values and approved policy includes involving the Board and Executive Team for evaluating merger and strategic alliance opportunities. ## **Other Disclosures** ## **Directors’ and Officers’ Liability Insurance** The Company has maintained directors’ and officers’ liability insurance throughout the year. This cover is provided through our affiliation fee with the National Housing Federation (NHF). From April 2021 this cover has been provided by Weald Insurance Brokers Ltd following the discontinuation of the offering from the NHF. ## **Charitable and Political Donations** No political donations were made during the year (2020: £nil). Donations made to charity or other community funding arrangements during the year totalled £35,169 (2020: £6,050). ## **Disclosure of Information to Auditors** The Board members who held office at the date of approval of this Board report confirm that: - so far as they are each aware, there is no relevant audit information of which the Group’s auditors are unaware; and - each Director has taken all the steps that they ought to have taken as a Director to make themselves aware of any relevant audit information and to establish that the Group’s auditors are aware of that information. ## **Auditor** A resolution to re-appoint KPMG LLP as Auditor of the Group will be proposed at the Annual General Meeting. ## **Going Concern** The Board confirms it has a reasonable expectation that the Group and Company has adequate resources to continue in operational existence for a period of 12 months from the date of approval of these financial statements. Accordingly it continues to adopt the going concern basis in preparing the Group’s and Company’s financial statements. The considerable impact of Covid-19 on the country, the housing industry and Cornwall is considered in more detail as part of the Strategic Review and despite the challenges that this unprecedented period of history has presented for Coastline the underlying business model remains financially robust and viable in the long-term. 22 ## **Statement of directors’ responsibilities in respect of the Strategic Report, the Directors’ Report and the financial statements** The directors are responsible for preparing the Strategic Report, the Directors’ Report and the financial statements in accordance with applicable law and regulations. Company law requires the directors to prepare financial statements for each financial year. Under that law they have elected to prepare the financial statements in accordance with UK Accounting Standards and applicable law (UK Generally Accepted Accounting Practice), including FRS 102 _The Financial Reporting Standard applicable in the UK and Republic of Ireland_ . Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Company and of the surplus or deficit for that period. In preparing these financial statements, the directors are required to: - select suitable accounting policies and then apply them consistently; - make judgements and estimates that are reasonable and prudent; - state whether applicable UK Accounting Standards and the Statement of Recommended Practice have been followed, subject to any material departures disclosed and explained in the financial statements; and - assess the Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern; and - use the going concern basis of accounting unless they either intend to liquidate the Company or to cease operations, or have no realistic alternative but to do so. The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company’s transactions and disclose with reasonable accuracy at any time the financial position of the Company and enable them to ensure that the financial statements comply with the Companies Act 2006, the Housing and Regeneration Act 2008 and the Accounting Direction for Private Registered Providers of Social Housing 2019. They are responsible for such internal control as they determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error, and have general responsibility for taking such steps as are reasonably open to them to safeguard the assets of the Company and to prevent and detect fraud and other irregularities. The directors are responsible for the maintenance and integrity of the corporate and financial information included on the Company’s website. Legislation in the UK governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions. ## **By order of the Board** ## **M Duddridge Chair – Coastline Housing Ltd** 13 September 2021 Coastline House 4 Barncoose Gateway Park Pool, Redruth Cornwall TR15 3RQ 23 ## **Strategic Report** ## **Five-year Performance Summary** The tables below set out the Group’s five-year Statement of Consolidated Income and Statement of Financial Position: |||**2017**|**2018**|**2019**|**2020**|**2021**| |---|---|---|---|---|---|---| |**Statement of Consolidated Income**||**£m**|**£m**|**£m**|**£m**|**£m**| |Turnover: continuing activities||23.6|23.7|25.1|30.5|29.5| |Turnover: Shared Ownership Sales||2.4|6.0|4.2|6.5|3.9| |Cost of sales||(1.8)|(4.8)|(3.6)|(5.5)|(3.2)| |Operating costs||(15.4)|(15.9)|(16.6)|(21.8)|(21.3)| |Pension cessation adjustment||-|2.1|-|-|-| |**Operating surplus**||**8.8**|**11.1**|**9.1**|**9.7**|**8.9**| |Surplus on sales of properties||0.9|3.2|4.6|5.3|3.3| |Net interest payable and similar charges||(4.4)|(3.8)|(4.0)|(4.1)|(4.4)| |One- off costs relating to treasury activities||
**(0.9)**|(1.9)|**-**|-|(2.3)| |**Surplus before taxation**||**4.1**|**8.7**|**9.7**|**10.9**|**5.5**| |**Statement of Financial Position**||**£m**|**£m**|**£m**|**£m**|**£m**| |Housing properties||157.7|
185.9|
218.1|
245.7|
277.9| |Other fixed assets||4.3|
4.2|
4.3|
4.8|
5.0| |**Total fixed assets**||**162.0**|
**190.1**|
**222.4**|
**250.5**|
**282.9**| |Net current assets||15.0|
5.5|
9.6|
8.8|
13.2| |**Total assets less current liabilities**||**177.0**|
**195.6**|
**232.0**|
**259.3**|
**296.1**| |Loans and long term liabilities||(144.2)|
(158.5)|
(185.3)|
(201.9)|
(233.5)| |Pensions liabilities||(6.2)|
(1.6)|
(3.1)|
(1.6)|
(3.4)| |**Total assets less liabilities**||**26.6**|
**35.5**|
**43.6**|
**55.8**|
**59.2**| |Revenue reserves||26.6|
35.5|
43.6|
55.8|
59.2| |**Total reserves**||**26.6**|
**35.5**|
**43.6**|
**55.8**|
**59.2**| Turnover in relation to continuing activities over the last five years is characterised by growth in rental income through the delivery of new affordable homes and has risen from £23.6 million in 2017 to £29.5 million in 2021, an increase of 25% over that period, against a backdrop of the 1% per annum rent reduction (as required by legislation) for the period 2017-2020. Turnover in relation to continuing activities was unusually high in 2020 due to the novation of two schemes as part of the commencement and mobilisation of the new strategic alliance with Legal and General Affordable Homes. Turnover in relation to shared ownership sales is more variable than rental income reflecting the timings of different new build development schemes being contracted and delivered. Operating and net margins have continued to improve steadily but have been impacted by shared ownership and disposals activity and one-off events such as the pension cessation in 2018 and the treasury management actions in other years. The investment in existing and new housing properties sees an increase in the balance sheet for both the assets and loans over the last five years rising by 76% over this period for housing properties and 62% for loans and long term liabilities over the same period. The differential is demonstrative of the strong 24 cash generation of underlying social housing rentals and is a key element of our continued financial success. ## **Operating Environment and Highlights** This review focuses on the financial year as a whole and such a review cannot ignore the considerable and unprecedented impact of Covid-19, which has led to periods of limited activity due to the government mandated protection measures (ranging from complete lockdown in the early months to restricted working due to social distancing and restricted working at our suppliers and partners leading to additional delays). Despite the vaccination roll-out, the new wave of Delta variant infections has meant that there remains on-going uncertainty around the economic recovery and it is likely that Covid-19 infections will impact on following financial periods. As an example of this, it will take us a few years to catch up fully on our repairs programmes and consequently work on repairs will need to be carefully scheduled to address the needs of our Customers and communities. The impact of the Covid-19 pandemic has impacted locally on Cornwall, and will continue to be felt for a long time to come. The impact is felt not just in the sad additional losses of life suffered as a direct result of the pandemic, but also through the economic impact on a Cornish economy that is highly reliant on hospitality and tourism, which have both been badly affected though now fortunately recovering strongly. As a locally based charity focussed on serving our communities, Coastline’s Board recognised the importance of a swift and comprehensive response to the pandemic, and the work of colleagues across the Group has been and continues to be exceptional. The wide range of activities that Coastline operates has needed our teams to be flexible and adaptable and this is especially true in the case of our Extra Care scheme at Miners Court and across our Homeless Supported Housing projects including the new purpose built unit at Chi Winder. Colleagues have covered additional shifts, absences, made phone calls to vulnerable Customers, been involved in delivering shopping, assisted other charities and volunteer organisations and been fully engaged personally and professionally in helping our communities. Our senior managers have provided strong leadership in guiding the Group through the most difficult year for business that many of us can remember. Against this operating backdrop Coastline has developed a phased plan for returning services to normal and this supplements the work of the detailed Business Continuity Plan by giving a framework for Customers and colleagues to understand how service levels may be impacted by any further outbreak. In performance terms Coastline has fared better than many other comparable housing associations as evidenced by recent performance information informed by Housemark (Covid-19 Impact Report, March 2021): 25 Proportion of unitsl•tin-month UK-vJidv +Yourofgan15ation rx2 "/.>//// • PrOP￿rt￿n otvnitF gthd ¥vqilpbleto let UK-*41de +Y￿ror{SnI$￿tIon 14% YA rFppirB por I,￿0 propertie vK-w //,, )0%¥ o¥ The success on arrears reflects a starting point of sector leading arrears levels and pro-active tenancy sustainment work which has been further enhanced during the last year by reallocating staff resources to support and signpost Customers towards further sources of support. In relation to lettings activity this has been an area with more variable performance and has seen our results be behind industry averages. We have enhanced our digital sign-up process to support more remote lettings and this has clearly been an area where the impact on our business has been more significant than others. There was the initial period of lockdown where moving homes was not permitted and then the challenges of bringing this service back on-line with new and changing restrictions. We are content that we have reached a position of more ‘normal’ service and expect to see performance improve over 2021/22. In terms of liquidity Coastline signed its first SONIA based loan with Lloyds Banking Group adding a further £30 million of facilities to our existing arrangements and signed revised terms with Santander UK plc to extend some of our existing Revolving Credit Facilities (RCF’s) to 2025. These new arrangements increased available facilities from £186 million to £221 million. One of the key elements of our Charitable Mission is addressing the shortage of **‘great homes’** at affordable prices in Cornwall. Delivery for the year ended 31 March 2021 finished at 160 new homes including 16 delivered as part of the Strategic Alliance with Legal and General Affordable Homes. The new homes are offered on a variety of different tenures reflecting our ambition to tackle every aspect of affordable housing shortage. Whilst the final number of completions was below expectation as a result of Covid-19 related delays it is a level of completions which sees Coastline within the top 10 fastest growing housing providers for the fourth year in a row. We are the only organisation to deliver that level of growth consistently over that period. 2020/21 saw continuing strong performance on property sales both on first tranche shared ownership and in relation to disposals of existing assets. The impact of Covid-19 largely being on completion times as opposed to any impacts on value. The Corporate Plan highlights a notional asset churn of 2% per annum which has been informed by the analysis completed as part of the Asset Investment and Viability Strategy. This work demonstrated that an optimal asset hold was in the order of 50-years and matched the next phase of required component replacement. This work in isolation could lead to a net reduction in affordable housing and as such has been matched by a commitment to provide energy efficient new build affordable accommodation across Cornwall. This ensures that there is always a net growth in affordable homes, with the new build programme contributing positively to economic growth and the disposal of older less efficient affordable properties providing a source of entry level properties to purchase on the open market. Demonstrating this commitment to net growth, Coastline's new housing supply (gross as per the Regulator’s VfM metric) was: |||||||| |---|---|---|---|---|---|---| ||16/17|
17/18|18/19|
19/20|20/21|21/22 (planned)| |||||||| |Coastline|3.4%|
7.3%|3.3%|
6.3%|3.3%|6.5%| |||||||| |Industry Median|
1.2%|
1.2%|1.4%|
1.3%|Not yet
published|n/a| |Average||||||| |||||||| Coastline is planning to continue delivering more net new affordable homes a year than the national average for the sector. Whilst this is not an achievement in itself, it is a demonstration of one of the intentions of the Board and reflects the commitment to ensuring that any home sold is replaced on at least a one for one basis irrespective of how the disposal occurs. The other consideration in relation to development of new housing is our regional context. Analysis from the RSH shows that development delivery is inversely related to areas of economic deprivation, i.e. poorer areas see less new build housing. Cornwall has a number of areas of economic deprivation and lower wage and house price levels. Coastline’s performance against this backdrop highlights further the rationale for our continued investment in new build properties as this helps stimulate local economies and communities. The alliance with Legal and General Affordable Homes provides the scope for investment of an additional 100 homes a year going forwards with discussions already well underway as to how this can be increased. Our focus on ‘great homes’ includes an absolute focus on product safety and it is important to note that whilst Coastline owns no high rise buildings we have completed and continue to review all Fire Risk Assessments, as well as physically inspecting all properties of three storeys or higher with an internal communal access. Another important area of product safety in Cornwall is Radon, as much of Cornwall is significantly impacted as a Radon Affected Area (https://www.ukradon.org/information/ukmaps). All of our properties have been previously surveyed and any confirmed as above ‘action level’ given remedial measures. As part of Coastline’s commitment to product safety, re-testing of these properties commenced during 2019 as part of a five-year cyclical risk-based programme. This level of detail continues to be included in our financial statements, although immaterial in monetary terms, to demonstrate Coastline’s commitment to both housing safety and one of our values of being open, honest and accountable. In relation to the ‘great services’ challenge of our customer promise 2020/21 saw the third and final year of our Customer First Survey which is designed to survey one third of our Customers each year on a geographical basis. The survey includes a number of ‘core comparator’ questions and statements, as well as a number of new measures to respond to themes emerging from the Social Housing Green Paper and the Together with Tenants agenda. The backdrop to this year’s survey is the global Covid-19 pandemic; it is difficult to know the extent to which this could affect our Customers’ responses. The survey window coincided with our recovery period for repairs backlogs, as well as other key service areas not being fully re-mobilised. The survey this time 28 included two questions which were specific to Coastline’s response to supporting Customers through Covid-19. In comparing Customer Satisfaction through the average of the 2018-20 results with those from 2015, when the last full survey of our Customers was carried out we see that Customers report improved satisfaction with value for money in rent (from 88% to 93%) and that Coastline listens to views and acts upon them (from 74% to 83%). The remaining four core measures show a reduction in satisfaction of 1 or 2% as shown in the table above. The Customer First survey has identified some key areas where we can deliver improvements to Customers; these have been developed as action and improvement plans and reflected in the relevant strategies across the business. These documents have been developed differently to previous iterations, with involvement and ownership from the Senior Leadership Team and by sharing with the new Customer Experience Forum at their inaugural meeting in February 2021. Updates have been and continue to be provided at subsequent meetings to enable Customers to hold us to account on the delivery of the improvements. From 2021, the Customer First survey will be replaced by the ‘Business Benchmarking’ survey, carried out via the UK Institute of Customer Service (UKCSI). This will reflect wider business sector satisfaction measures than those of the traditional housing association sector, and will provide a new benchmark of satisfaction across a range of areas. In terms of business preparedness and the potential for disruption in relation to continued Covid-19 protection measures and the UK exit from the EU, Coastline has continued a review of our supply chain, suppliers generally, funding and considered the potential impact on our Customers. Financial forecasts continue to be made on a prudent basis using the most recently available market data and Coastline’s defensive action planning has considered a variety of scenarios including those that might reasonably be expected to occur if a either a further wave of Covid-19 occurs, and/or there is a more market disruption in relation to trading arrangements with the EU or wider global market conditions. As part of considering the rent changes and the regulatory Rent Standard, from April 2020 Coastline’s Rent Policy reflects the consideration of local affordability by capping all rents at Local Housing Allowance Levels. The value of this affordability capping for 2020/21 is £14,000 and is considered entirely consistent with both regulatory requirements and our charitable mission. Coastline continues to benefit from the current low interest rate environment and forecast low long-term rates. This increasingly needs to be balanced with providing a stable platform and managing the risk of rates increasing over the yield curve as a whole, which would then impact on longer term business assumptions. Part of this balance was addressed via a long-term 30 year loan with Scottish Widows which completed on the 23 June 2021 and provides for fixed rate interest for the whole of that time. This loan also provides an additional refinancing buffer in relation to the notional repayment dates of our current revolving credit facilities, although these are expected to be refreshed as part of normal on-going treasury management actions during 2021/22. Coastline’s overall approach during both more recent and medium-term periods of change and uncertainty has been to continue an ambitious programme of investment in new social housing and delivery of much needed supported housing services in both extra care and homeless accommodation. This year marks the final year of the Corporate Plan covering the period 2017-2021 and whilst it retains a focus on high levels of service to existing Customers, it also has a strong focus on growth, reflecting the need for housing associations to continue building and delivering the much needed homes that our communities require. This aspiration and ambition has been carried through into the new Coastline Plan for 2021-25 and “Great Futures”. The core principle of maximising our delivery of new housing investment is a central part of our approach to value for money as this investment delivers additional housing without adding significantly to our management cost base. This objective maintains the benefit of focusing our attention on housing delivery as well as generating value for money savings over time, which allows us to maintain our investment in wider community-based initiatives which are part of delivering high quality services. In such a working environment there is no room for complacency and it is critical that our business remains focussed on maintaining and improving levels of customer service, operational efficiency and financial performance. However, it is also important to take stock of and communicate what we have achieved to date, so that we can both celebrate and understand where we have further work to do. To this end, we have set out below some of our most significant achievements over the last year. The remainder of this report provides more detail of what we have achieved against our Corporate Plan aims, and what we plan to do in the coming years: - During 2020/21 we completed 160 homes; - For the fourth year running, one of the top ten fastest growing Housing Associations in Inside Housing Survey - At the end of March 2021 we had 485 homes on site and forecast completions for 2021/22 are in excess of 300; - We spent £9.6 million maintaining our homes during the year, of which £2.3 million was long-term investment made possible by our strong operating surplus; - Coastline Housing’s operating margin of 26.7% (2020: 26.2%), and in cash terms the operating surplus was £8.8 million (2020: £9.7 million); and - Work completed on new Coastline Plan for 2021-2025 and launch with Customers and other stakeholders during 2021/22. The operating margin shows how efficient we are in running the business; and the operating surplus provides the cash we need to fund the construction of new homes and invest in improvements to our existing homes. This strong performance is the result of an ongoing focus on delivering efficient, customer focussed services. Our strong financial performance, combined with our high levels of customer 30 satisfaction, provide strong evidence that we are, in the main, delivering the right services in an efficient and cost effective way. ## **Financial Structure** During 2020/21 Coastline Housing maintained a stable financial platform with the only transactions of note being a sector leading ‘day one’ SONIA facility negotiated with Lloyds Bank plc for £30.0 million, and the cancellation of embedded fixed interest rate within existing NatWest loans totalling £7.0 million which crystallised breakage costs of £2.3 million. The cancellation of high rate embedded fixed rate loans has the benefit of reducing future cashflow in relation to interest payable which the Board was keen to see to facilitate additional spending in the next two to three years in relation to planned investments in existing properties that has been delayed as a result of the Covid-19 pandemic. The current finance platform is sufficiently stable and flexible to enable Coastline to deliver the next phase of Coastline’s ambitions as reflected in the 2021-2025 Coastline Plan “Great Futures”. Long term borrowings increased by £30.0 million during the year to cover projected capital expenditure and manage treasury risk during the year and now stand at £173.4 million (2020: £143.4 million) against facilities at year end of £221.4 million (2020: £186.4 million). Treasury activities are controlled and monitored by the Property and Investment Committee, under delegated authority from the Board, and are executed by the Director of Finance and ICT with the assistance of external consultants as required. This helps ensure that adequate cost-effective funding is available for the requirements of the business and that financial risk is minimised. The process is periodically subject to review by internal auditors. Cash flows are monitored and forecast regularly to minimise cash held and ensure further funds are drawn down as required to cover the investment plans of the Group. Coastline Housing’s financial instruments comprise borrowings, some cash and liquid resources and various items such as trade debtors and trade creditors that arise directly from its operations. The main purpose of these financial instruments is to finance Coastline Housing’s operations. The main risks arising from Coastline Housing’s financial instruments are interest rate risk, liquidity risk and re-financing risk. The Property and Investment Committee reviews and agrees the management of these risks as summarised below; **Interest rate risk:** Coastline finances its operations through a mixture of generated surpluses, and short, medium and long term borrowings. This position is reported to the Property and Investment Committee on a quarterly basis. At the year-end 50% (2020: 64%) of the Group’s borrowings were at fixed rates of interest. Of the debt with fixed interest rates the average duration of the Group’s interest rate hedging was 14 years (2020: 13 years), the increase reflecting a smaller notional debt than last year end being at fixed rates for slightly longer. **Liquidity risk:** Liquidity risk is managed by setting and monitoring required levels of cash and available facilities as well as monitoring the availability of loan security. A three-year, monthly cashflow and a three-month, weekly cashflow are monitored on a monthly basis by the Board and more detailed information on liquidity and loan security is reported to the Property and Investment Committee on a quarterly basis. Total facilities available increased in line with commentary above to £221.4 million, 2020: 31 £186.4 million) during the year, with undrawn facilities totalling £47.3 million (2020: £43.0 million). The average maturity of net debt remained at over five years. Cash available has increased during the year to £10.8 million (2020: £5.1 million) which is at a level consistent with the move to achieving liquidity through undrawn, charged, available loan facilities in addition to immediately available cash balances. Charged ‘available to draw’ facilities were £35.1 million (2020: £23.0 million) making liquid resources £45.9 million (2020: £26.9 million). **Re-financing risk:** Re-financing risk is managed by setting targets of how much debt can be repayable within certain timeframes. This position is reported to the Property and Investment Committee on a quarterly basis. At the year-end 21.8% (2020: 21.8%) of the Group’s debt fell due within the next three years, the majority of this being related to a revolving credit facility. During 2020/21 the amount of debt due within the next three years has fallen to nil% as a result of signing the agreement with Santander UK plc in 2020 which extended £45 million of revolving credit facilities to 2025 and the new £30 million revolving credit facility with Lloyds Banking Group. In addition to these facilities a new £25 million 30-year term loan was signed with Scottish Widows on the 23 June 2021 providing bond type finance within a more typical loan agreement documentation. ## **Operating and Financial Performance (Value for Money)** ## **Property numbers** The table below summarises how many properties Coastline has owned and managed over the last five years: ||**2017**
**2018**
**2019**
**2020**
**2021**| |---|---| |**Property Stock**|**No.**
**No.**
**No.**
**No.**
**No.**| |Social housing rented
Shared ownership
Market rented
Managed but not owned
Leasehold properties
Total Housing Stock
Garages
Total Property Stock|3,951
4,181
4,246
4,364
**4,426**
196
263
300
370
**409**
9
9
9
6
**5**
14
14
14
54
**69**
95
97
103
114
**117**| ||4,265
4,564
4,672
4,908
**5,026**
706
716
685
685
**660**| ||4,971
5,280
5,357
5,593
**5,686**| ## **Performance overview** To deliver ‘value for money’ (VfM), Coastline must continually look at how resources are used to achieve continuous improvement and excellence in running the business and improving productivity. When viewed in this way, it is clear that value for money is not a stand-alone activity, but something that is intrinsic to all core activities and decision-making processes. There is therefore no single policy or strategy that sets out how value for money will be achieved. The various threads are pulled together in the Corporate Plan and there is a particularly strong link with 32 performance management and improvement processes, with robust and effective management integral in the process of delivering and improving business productivity. Our approach to ‘value for money’ is firmly embedded in our culture. From an ambitious Corporate Plan that is led by the Board and Executive Team and has clear, measurable and stretching objectives, to a suggestion scheme where all staff are empowered to propose ideas that will improve how the organisation is run, and rewarded for those that are implemented. We have a Senior Leadership Team that meets monthly to review financial and non-financial performance indicators, to share knowledge and to make decisions based on this information. Our Customers are also involved – with the Customer Voice and Customer Experience Forum being presented with a suite of performance information that they have reviewed and provided details of their expectations. Performance reporting to Customer Voice is primarily via the Coastline Conversation which receives a regular update from the Customer Experience Forum meetings. This report provides a self-assessment to our stakeholders of how we are achieving ‘value for money’ in what we do. It sets out a summary of Coastline’s financial and operational performance during 2020/21 and reports our progress against the four themes of our Corporate Plan: - Great Homes; - Great Services; - Great People; and - Great Foundations. For Coastline this aim was embedded within the Corporate Plan objectives through the expectation of increased growth in units delivering improvements in overall cost efficiencies. Coastline continues to use operating margin as proxy for operating cost per unit and this measure of improving operating margin, from 36% in 2017 to 38% by 2021, was a key measure within the Corporate Plan. The biggest benefit of using a simple measure like this is that everyone understands its calculation and staff can see their impact on it. The operating margin target of 38% when set excluded shared ownership sales and broadly matched the Regulator’s Value for Money Metric of Operating Margin – Social Housing lettings. Initial performance against this in 2015/16 and 2016/17 showed positive movement towards the target but was not met at the end of the Corporate Plan period in 2021. This was not a surprise and has been reported as being off target for the last two years reflecting increasing pressures on property costs, a slower than planned delivery of new affordable housing and the additional reduction in short-term operating margin resulting from viability property disposals, which do however improve long-term margins and returns. Coastline’s performance in this regard mirrors the position across the industry as operating margins have continued to decline over the last three years. Our relative position on this aim and VfM Metric has improved over this time however seeing a move from more median performance to upper quartile based on the most recently available information for the financial year 2019/20 for the wider sector. The Board have taken a strategic view to maintain levels of investment in customer service and property quality, as well as staff health and wellbeing, rather than reducing spend to protect the margin. We still maintain that the focus on measuring this metric and understanding the reasons behind any changes helps with assessing Coastline’s performance both in isolation and in the wider industry setting. The Board has considered Coastline's approach to VfM at separate strategy days reviewing comparative performance across the Sector Scorecard and the regulator’s VfM Metrics. 33 As part of the regulatory standard on value for money Coastline is required to: - clearly articulate our strategic objectives; - have an approach agreed by the Board for achieving value for money in meeting these objectives and demonstrating their delivery of value for money to stakeholders; - through our strategic objectives, articulate our strategy for delivering homes that meet a range of needs; and - ensure that optimal benefit is derived from resources and assets and optimise economy, efficiency and effectiveness in the delivery of our strategic objectives. The standard also makes wider reference to expectations of registered providers as follows: - have a robust approach to achieving value for money – this must include a robust approach to decision making and a rigorous appraisal of potential options for improving performance; - regular and appropriate consideration of potential value for money gains – this must include full consideration of costs and benefits of alternative commercial, organisational and delivery structures; - consideration of value for money across their whole business and where they invest in non-social housing activity, they should consider whether this generates returns commensurate to the risk involved and justification where this is not the case; and - that they have appropriate targets in place for measuring performance in achieving value for money in delivering their strategic objectives, and that they regularly monitor and report their performance against these targets. Coastline retains a subscription to the HouseMark benchmarking service for performance measures but has dropped the detailed activity cost benchmarking service as analysing costs below a certain level is not productive for three main reasons: - i. the different approaches to recording and analysing costs at a low level; - ii. the interplay between how teams are set up to work within different businesses; and iii. we focus on outcomes and overall business efficiency and therefore the focus remains on operating margin and performance measures such as arrears, voids and development of new homes. The broader approach for value for money activities and management within Coastline is contained within our Value for Money Framework which was most recently updated during 2019/20 and is available on request. In line with our commitment to demonstrating transparency and value for money Coastline joined the pilot Sector Scorecard programme in January 2017 and has continued membership since that date. Our performance against these metrics and the RSH’s value for money metrics (# noted in table below) is provided below. For many of these metrics the reasons for changes in performance are detailed in the sections prior to this. Summary commentary is added to supplement this and provide greater transparency. The Sector Scorecard reports on an agreed set of metrics upon which housing providers can compare their performances as part of demonstrating that they are providing value for money for their Customers. The Sector Scorecard measures 15 indicators across five general areas focusing on: business health, development, outcomes delivered, effective asset management and operating efficiencies. 34 The specific indicators are: |||||Results|||IndustryMedian|IndustryMedian|Commentary| |---|---|---|---|---|---|---|---|---|---| |Theme|Indicator|2016/17|2017/18|2018/19|2019/20|2020/21|2019|2020|| |Business
Health|1Operating
Margin
(overall) #|34.0%|30.5%|31.1%|26.2%|26.7%|25.5%|21.5%|Coastline
performance
improving relative
to wider industry.
.| ||1Operating
Margin
(social
housing
lettings) #|35.6%|36.0%|35.9%|31.8%|29.3%|27.2%|23.6%|| ||~~1~~EBITDA
MRI
(as a
percentage
of interest)#|141.1%|163.3%|177.2%|161.3%|105.0%|197.9%|196.1%|Current year
reflects break
costs of circa
£2.3million within
interest payable.| |Developmen
t – capacity
and supply|Units
developed
(absolute)|139|331|150|302|160|n/a|n/a|Delivery
represents top-10
fastest growing RP
performance.| ||Units
developed
(as
a
percentage
of
units
owned)#|3.4%|7.3%|3.3%|6.3%|3.3%|1.4%|1.3%|Covid-19 impact
on 2020/21
delivery and
intention is for
growth at 5%+
levels| ||Gearing#|57.1%|59.4%|58.3%|56.1%|58.1%|33.8%|33.8%|Gearing increasing
reflecting
investment
generally in new
build properties.| |Outcomes
delivered|Customers
satisfied with
the
service
provided by
their
social
housing
provider|90.0%|90.0%|92.0%|89.5%|88.0%|87.5%|86.9%|Work commencing
on UK Institute of
Customer Service
project to improve
customer service.| ||£’s invested
for
£
generated
from
operations in
new housing
supply #|£3.28|£4.55|£2.79|£3.67|£7.01|n/a|n/a|Metric
demonstrates
commitment to
investment in new
supply.| ||Reinvestmen
t#|17.5%|16.8%|18.4%|13.0%|13.3%|5.4%|6.1%|Reinvestment is
high reflecting
both commitment
to new build and
improving existing
homes.| |Effective
asset
managemen
t|Return
on
capital
employed
(ROCE)#|5.0%|5.6%|5.9%|5.8%|4.1%|3.2%|2.8%|Fall in ROCE
reflects additional
capital within work
in progress not yet
producing assets
for rental due to
Covid-19.| 35 ||Occupancy|99.9%|96.3%||98.8%|98.8%|99.5%|99.5%|98.5%|99.5%|99.28%|Performance in
line with industry
average| |---|---|---|---|---|---|---|---|---|---|---|---|---| ||Ratio
of
responsive
repairs
to
planned
maintenance
spend|0.68|0.71||0.27||0.27||0.14|0.65|0.64|Ratio is subject to
accounting
differences and is
an area of focus in
line with in-house
stock condition
surveys.| |Operating
Efficiencies|~~1~~Headline
social
housing cost
per unit#|£3,256|£2,924||£3,220||£3,316||£3,404|£3,725|£4,023|Performance
relative to industry
has improved but
cost pressures
relating to growth
can create in-year
capacityissues.| ||Rent
collected|99.96%|99.84%|99.56%||99.45%||98.9%||99.80%|99.84%|Reduction in rent
collected matches
increase in
arrears, but noting
that arrears levels
are of the lowest in
the Housing
Sector.| ||1Overheads
as
a
percentage
of
adjusted
turnover|13.8%|12.5%|13.9%||13.1%||11.6%||12.8%|13.9%|Level of
overheads reflects
upfront investment
in systems that
should deliver
efficiencies in the
longer term.| |||||||||||||| |||||||||||||| _Definitions for all of the above measures can be found at http://www.sectorscorecard.com/about-the-sector-scorecard/about_ ## _Sector Scorecard Analysis Report 2020_ _Details of the value for money metrics as specified by the Regulator of Social Housing can be found at_ https://www.gov.uk/government/publications/value-for-money-metrics-technical-note Coastline continues to support the Sector Scorecard and notes that further analysis of the elements under management, service charges, maintenance and major repairs will require the sector to work together to ensure more consistency in approach. The current results from the scorecard as with the RSH regression analysis output at a detailed level is subject to the different approaches to cost allocations that are made by providers and as such, in line with our overall approach to value for money, Coastline prefers a focus on a limited number of high level performance measures. The Sector median is as reported in the RSH Consolidated Global Accounts Dataset and “Value for Money metrics report – annex to Global Accounts 2020” |**RSH Reference Indicator**|||**Results**|||**Sector**
**Median**|***SW**
**Median**| |---|---|---|---|---|---|---|---| ||||||||| ||2016/17|2017/18|2018/19|2019/20|2020/21|2019/20|2019/20| |Metric 1 – Reinvestment %|17.5%|16.8%|17.1%|13.0%|13.3%|7.2%|8.7%| |Metric
2
–
New
Supply
Delivered % (a – Social housing
units)|3.4%|7.3%|3.3%|6.3%|3.3%|1.5%|1.7%| 36 |Metric
2
–
New
Supply
Delivered % (b – Non-social
housingunits)|0.0%|0.0%|0.0%|0.0%|0.1%|0.0%|0.0%| |---|---|---|---|---|---|---|---| |Metric 3 – Gearing|57.1%|59.4%|57.9%|56.1%|58.1%|44.0%|44.0%| |Metric 4 – EBITDAMRI Interest
Cover|141.1%|163.3%|177.2%|161.3%|105.0%|170.0%|186.2%| |Metric 5 – Headline Social
HousingCost Per Unit|£3,256|£2,924|£3,260|£3,316|£3,404|£3,830|£3,610| |Metric 6 – Operating Margin (a
– Social HousingLettings)|35.6%|36.0%|35.0%|31.8%|29.3%|25.7%|26.8%| |Metric 6 – Operating Margin (b
– Overall)|34.0%|30.5%|31.0%|26.2%|26.7%|23.1%|23.5%| |Metric 7 – Return on Capital
Employed(ROCE)|5.0%|5.6%|5.9%|5.8%|4.13%|3.4%|3.5%| * _The SW Median is a calculated reference group of 17 organisations operating in the South West region (or relevant precursor organisations to now merged entities._ The Board has decided that using the Corporate Plan targets in addition to the RSH VfM Metrics provides the most effective way of assessing Coastline’s performance and commentary against both the regulatory metrics and Coastline’s chosen measures follows under the headings of our Corporate Plan: - Great Homes - Great Services - Great People - Great Foundations In previous years the format has provided the headline measure, an indication of the target for the year ahead and an assessment of the progress as at the end of the current financial year. The Corporate Plan for 2016-2021 came to an end on 31 March 2021, and 2021 sees the launch of our new Coastline Plan “Great Futures” which covers 2021-2025. Reflecting this transition the update below confirms the results to the end of March 2021 with an introduction to the new plan at the end. The final outturn from the Corporate Plan 2017-21 Plan was reported to the Board in May 2021 and showed that overall, 18 of the 25 objectives were rated ‘green’, four as ‘yellow’ and three as ‘amber’. The final position of performance against the Corporate Plan was also subject to an independent assessment by the Group’s internal auditors (Bishop Fleming). ## **Great Homes** |**Objective**|**Corporate Plan**
**Headline**
**Measure**|**March 2021 Target**|**Position at March 2021**| |---|---|---|---| |To build our share of the
new homes needed to
meet the needs of those
that live in Cornwall|• 1,000 new
affordable
homes
completed,
including 130
homes for older
persons|• A cumulative total
of 1,320 new
affordable homes
completed:
2020/21: 387.
• Have at least two
initiatives agreed
after “Spring
Forward” to work
more closely with
our Supply Chain.|• A total of 1,066 new affordable homes have
been completed during the 5 years of the
plan and we have been in the top ten
fastest growing providers in each of the last
four years_(Inside Housing – development_
_survey)_
• 160 homes were completed in the year to
March 21. This was less than the revised
target as a result of Coivid-19 delays on
sites.
• Team have collated feedback from ‘Spring
Forward’ event. Work on this has been| 37 |**Objective**|**Corporate Plan**
**Headline**
**Measure**|**March 2021 Target**|**Position at March 2021**| |---|---|---|---| ||||delayed due to Covid-19 but is now being
picked up again.
• The number of homes delivered for older
persons was not achieved due to challenges
in securing consistent support from
Cornwall Council for a new scheme.| |To continue to improve
the overall quality of our
homes|• No home
costing more
than £600 a
year to heat|• 18 homes costing
more than £600 to
heat
• Upgrade heating
systems and
repairs completion
of retained homes
• New
environmental
strategy in place,
setting out
Coastline’s
approach to
meeting the
challenge of
Cornwall’s Climate
Change Emergency|• As at 31 March 2021, 21 homes do not
meet the £600 target. 18 homes have
received a letter explaining they cannot be
upgraded further, and where the home is
already identified for disposal, the
customer has been made aware of the
incentive to move scheme. The remaining
three homes could meet target with
investment but; two have refused mains
gas connections and one elected for a new
oil boiler in 2017 so at this time these
cannot be resolved.
• This target has effectively run its course; as
and when the remaining properties fall void
a decision on their future can be taken at
that time but most likely they will be
considered for disposal.
• Heating upgrades have been refused as
above but remain programmed in all
homes, with a detailed 50 year plan in place
to inform the Business Plan; this will be
subject to change dependent on the future
of gas and net carbon zero strategic
objectives.
• The Environmental Strategy is under
development and is expected to be finalised
later in 2021.
• 284 homes above £600 in 2017, and
progressed to beyond 90% of the target,
and those that are above £600 are where
achievingit would not bepossible.| |To transform how we
manage our assets,
replacing our older
more expensive homes
with higher quality new
ones|• Bringing
forward up to
2% of our
existing homes
a year for
disposal|• 70 disposals of
existing homes
• Feasibility study of
Cornish Units
• Viability review of
garage and
appropriate
additions to the
model|• Under the Asset Investment and Viability
Strategy (updated Jan 2020) 654 properties
have been identified for potential disposal
when they fall vacant; the viability model
will be reviewed later in 2021 and is likely
to incorporate further triggers related to
net-zero carbon.
• The Cornish Unit feasibility study was
delayed due to the Covid-19 pandemic but
is scheduled to recommence in mid-2021. In
the interim, to prevent disrepair, a
specification for a pilot project for
insulation and re-roofing has been
developed for a small number of more
pressingunits.| 38 |**Objective**|**Corporate Plan**
**Headline**
**Measure**|**March 2021 Target**|**Position at March 2021**| |---|---|---|---| ||||• All garages have been surveyed following
development of a more granular new stock
condition survey template. The more
detailed garage review will take place in
2021.| ||• Selling up to 2%
of our existing
homes a year|• A cumulative total
of 199 existing
homes sold:|• 165 homes sold in total in plan period.
• Note that Covid-19 has impacted on supply
of voids available for sale in year and is also
impacting on sales speed as mortgage
valuations and searches are taking longer.
Interest, prices and sales holding up. This
has reduced finalyear numbers.| ||• All the proceeds
re-invested in
new homes|• Further
reinforcement and
distribution of
Film.|• Film completed and uploaded to Coastline
YouTube channel.
• Wider supply chain and BtoB update day
took place Feb 2020.
• Ethical Sales Statement agreed with ET and
PIC. Now being implemented with all sales,
e.g. all disposals notified to local
Parish/Town councils to allow local
purchasers to be sought in first instance.| |To establish a profit
making private homes
model to cross subsidise
our charitable work|• 45 homes for
private sale
completed with
the proceeds
re-invested in
building new
affordable
homes for rent
and sale|• A cumulative total
of 29 private
homes sold:
• Planning
Application
submitted for
Pencoose Farm.
• All homes sold at
Pisky Farm|• Total Sales Completed 4.
• Pisky Farm, at year end four homes
occupied, two sold SSTC. Post year end
note – all plots sold by end of June 2021.
• Quintrell Downs – Contractor (MiSpace)
appointed and progressing on site.
Specification discussions with MiSpace and
sales team reviewing likely sales agent.
• Pencoose abandoned following reduction in
likely planning prospects.| ## **Great Services** |**Objective**|**2021 Measure**|**March 2021 Target**|**Position at March 2021**| |---|---|---|---| |To ensure our customer
service offer is digitally
accessible and easy to
use|• All of our core
customer
services
available for
Customers on-
line|• New contact
system phases 1-5
implemented
• Work to plan
introduction of
WebChat
• Training for all staff
• On-line Tenancy
style test added to
sign up process
• Digital customer
engagement - new
CSC format
introduced
• Identified
preferred E-|• All core services are available on-line via
MyCoastline and other digital means.
• A number of functional and cosmetic
enhancements, continue to be developed
as a part of a cyclical review, with a work
beginning on ‘My Community’ in
MyCoastline, as a space for information,
advice and guidance, as well as information
about our programme of Community
Standard visits and improvements.
• Planning and design is now underway for
the next phase of our contact solution, Web
Chat. On-line payments of rent in advance
is live, and DD and payment gateway,
supporting changes made to our face to| 39 |**Objective**|**2021 Measure**|**March 2021 Target**|**Position at March 2021**| |---|---|---|---| |||signature process
for tenancy
agreements sign up
• Rent in advance
payments on-line
as part of the
digital sign up
• New customer 6
week visits on-line|face and phone offer supporting this digital
shift.
• On-line settling-in visits for new Customers
are in development.| ||• 50% of
Customers
choosing on-
line services|• 40% of Customers
using on-line
services
• 2,000 portal sign
ups
• Enhanced usage of
on-line systems by
Customers to
increase self-serve
• Incentive schemes
for Customers to
engage digitally
introduced
• Training for staff
on the MyCoastline
app and digital
upskilling
• Engage with the
Smartline project
to maximise digital
shift opportunities
• Digital skills
training for
Customers
• Interrogate
frequent and
repeat caller data
to target
Customers and
resolve issues and
change behaviours|• MyCoastline portal registrations stand at
2,340. Taking into other forms of digital
contact, we continue to exceed both the
registrations target and the 50% of contacts
now being made on-line. Whilst we have
seen steady progress towards this over the
life of the Plan, it is likely that changes
made during the COVID-19 era regarding
contacting Coastline digitally wherever
possible has accelerated this.
• Customer profiling work is now complete
with a segmentation model. This allows us
to determine Customers’ propensity to
engage digitally and the likely level of
resource needed to support those
Customers who are less able to choose
digital services.
• MyCoastline continues to be promoted
externally with Customers and internally
with staff. A more focussed approach to
digital engagement for both Customers and
colleagues is in place, with the re-allocation
of an existing manager to focus primarily on
digital campaigns and existing project
delivery now embedded to support
customer and colleague channel shift.
• On-line applications and assessment
processes are now business as usual, with
digital/remote sign up continuing as part of
our response under COVID-19, and likely to
become the norm.| ||• 50% of our
existing homes
re-let through
our
‘HomeZone’
letting portal|• Explore options for
future lettings
platform including
ATLAS (HomeHunt
replacement)
• Review and
relaunch the
Lettings policy|• This financial year 52% of properties have
been let through Homehunt. Our
agreement with Cornwall Council is to
make at least 50% of properties available to
let on Homechoice in the first instance. 58%
were initially advertised on Homechoice
but only 48% were allocated due to the
poor quality of nominations through
Homechoice.
• The Lettings Policy was approved by Board
in May 2020 and has now been ‘launched’
with relevant changes to Homehunt
bandings.| 40 |**Objective**|**2021 Measure**|**March 2021 Target**|**Position at March 2021**| |---|---|---|---| |To achieve exceptional
levels of customer
satisfaction|• Customer
satisfaction
levels of 93%|• 93% overall
customer
satisfaction
• Phase three of the
Customer First
survey completed
• Action plan in
place and feedback
to Customers on
improvements
following surveys
(“you said, we
did”)
• On-line
transactional
surveying
developed on the
new contact
system|• Customer satisfaction monitoring is
changing through new CRM Customer
Voice software for our transactional
surveys.
• To challenge and improve our approach to
Customer feedback, we make active use of
our membership of the UK Institute of
Customer Service and continue to change
our approach to collecting, measuring and
acting on feedback, ultimately creating a
more joined up view of feedback and real
time responses, owned by the relevant
service area. This work will continue into
the life of the new Coastline Plan, with the
next priority service area being responsive
repairs.
• Our Year 3 bespoke perceptional
satisfaction survey, Customer First, is
complete with the final report and
Improvement Plan having been to Senior
Leadership Team (SLT) and Board in
November and Customer Experience Forum
(CEF) in February. The geographical
approach to surveying 100% of Customers
over three years is now complete. Year 3
results show 86% overall satisfaction, and
the combined three year average is 88%.
• We are currently planning for the Business
Benchmarking survey as part of the UK
Institute of Customer Service membership
offer, and the first survey of all Customers
is scheduled for April 2021, with initial
results expected in June.| ||• Transactional
monitoring of
customer
satisfaction in
place|• Institute of
Customer Service
best practice
review
• Options agreed
and established on
new contact
system
• Feedback to
Customers on
performance and
improvements
• Together with
Tenants Charter
published and
measured and
reported to
Customers
• Review and launch
of new Local Offers
to Customers|• Transactional surveys are in place for all key
services, and our approach to collecting and
using this data is being developed to bring
consistency and best practice across the
group.
• We see making use of our membership
with the UK Institute of Customer Service
as an opportunity to challenge ourselves to
deliver excellence and be sector-leading.
• New customer feedback surveys have been
developed to enable the new
communication software solution to
capture an increased range of customer
experience at the point of transaction.
• New Pledges linked to the Trust Charter
commitments have been developed, and
are beginning to be rolled out. Full launch
will tie in with the Coastline Plan to
maximise opportunities to promote these
key documents with colleagues and
Customers.| 41 |**Objective**|**2021 Measure**|**March 2021 Target**|**Position at March 2021**| |---|---|---|---| |To provide a repairs
service that is easy to
use and delivers choice
and quality|• Customers able
to manage
repairs
appointments
on-line|• Regular monthly
transactions via
portal
• Communal repairs
reporting added to
the portal
• Community
Standard work
recorded digitally
and actions
automated via My
Coastline|• On-line appointments can be made by the
customer at the point of reporting. In the
financial year 20/21, 1,459 repairs were
raised via MyCoastline (currently running at
approximately 10% of all repairs reported
per calendar month).
• Mobile working is operational but further
enhancements and integration will be
necessary to make it fully effective.
• The newly developed remote video
diagnostic tool which utilises Customers’
mobile phones during repairs calls has been
fully implemented, however not popular
with all Customers.
• Further enhancements are planned for the
portal which will take into account
customer feedback and findings from the
repairs review, including some ‘how to’
videos to support Customers with on-line
processes. This work will continue into the
new Coastline Plan.
• A new mould and condensation survey has
now been implemented which regularly
surveys Customers electronically to
proactively collate repairs in homes.
Follow-up home surveys are used to assess
ventilation issues and confirm remedial
action required.
• The Smartline team has now finalised the
current project and planning procurement
and planning of the extension whilst
COVID-19 reduces customer home visits
and contact. The extension will focus on
learning from the first project and
implementing innovative solutions to issues
raised which can then be monitored to
confirm success levels.
• The Smartline Project is now focussing on
increasing digital inclusion of Customers via
“Getting Online – Stay Connected” and on-
line coffee mornings which are growing in
popularity.| ||• 99% customer
satisfaction
with repairs
service|• 99% transaction
satisfaction from
repairs service
(note – wider
project during year
to review
collection of
satisfaction data)
• New voids process
pilot complete
• Void Standard
reviewed,|• The recommendations from the Void Lean
Review have been approved and
implemented and it is now complete.
• The Homeless property standard has been
reviewed, finalised and is now used for all
homeless accommodation.
• Despite the continuing challenges of Covid-
19 throughout the year, at the end of
March 2021 in terms of performance
against the 5 Year Programme 3,020
surveys have been completed from an
overall stock level of 5,950,equatingto| 42 |**Objective**|**2021 Measure**|**March 2021 Target**|**Position at March 2021**| |---|---|---|---| |||approved and
published
• Year 3 of SCS
completed 60%
July 2021|50.75% of overall stock, or 92.3%
performance against the expected target of
3,273. The information gained from the
competed surveys to date have been
utilised to develop the financial
programmes and inform the business
planning process.
• During the Covid-19 period there have been
lower than normal volumes of customer
satisfaction returns for the repairs service
as the service was moved to an emergency
only provision.
• Customer satisfaction with repairs has
increased from the previous 82.4% to
92.4% for the financial year to end of
March 2021.| ||• 99% of repairs
completed
‘right first time’|• 99% repairs
completed ‘right
first time’
• Improve diagnosis
of complex
maintenance
issues with a
reduction in
number of
complaints|• The ongoing outstanding repairs have
reduced significantly and are very much in
line with previous years. February and
March has seen a large increase in general
repairs reported by Customers however the
increased resources put in place to deal
with Covid-19 backlog have performed
exceptionally to keep these on track.
• At the end of March 2021 the ‘right first
time’ performance was 90.54%, a slight
decrease from October at 93.83%, and from
March 2020 at 96.6%. Further work is
required on the accuracy of this, as
feedback suggests operatives find it difficult
to classify ‘right first time’ consistently and
accurately.| |To help people back into
work and training|• 500 people
helped back
into work or
training|• 550 people helped
into work or
training (since
2017)
• 2 cohorts of
inspiring futures
Spring and Winter
• Construct live at
Quintrell or
alternative site
with Newquay
Orchards
• Completion of
Together For
Families support
contract extension
March 2021|• Work programmes have been paused due
to COVID-19, but planning is underway to
deliver Coastline Construct in the new
financial year, and inspiring futures will be
‘reimagined’ to adapt to our new ways of
working.
• Despite the COVID-19 restrictions, we have
been able to support 11 people into work
and 16 into training – this includes taking
on new volunteers
• We have now exceeded the 500 target,
with 545 people supported into work or
training since 2017.
• Together for Families (TFF) is now into
project wind-down as the contract ends in
July 2021.
• Funding for a new countywide partnership
project ‘Building Futures’ has been secured,
and a mobilisationplan is inplace.| |To establish a
sustainable model for
deliveringhomeless|• A new
permanent
home for our|• Move on Pathway
created to ensure
clients have|• Our ‘Offer’ document showing the services
available from Coastline for people| 43 |**Objective**|**2021 Measure**|**March 2021 Target**|**Position at March 2021**| |---|---|---|---| |services and expand the
support we provide|Homeless
Service opened|accommodation
options to move on
to and creating
spaces for new
homeless clients
• Contract delivered
and targets met for
crisis revenue
support, supported
accommodation
and supported
outreach|experiencing homelessness has been
refreshed.
• RSAP funding announced and exploring
opportunities alongside Cornwall Council.
• Active support provided to Cornwall
Council to assist with pandemic related
‘Everybody In’ initiative.| ||• 250 vulnerable
people helped
each year|• 92% satisfaction
from clients using
the Homeless
Service
• Evidence of PIE
Framework
outcomes
• Annual Volunteer
Statement
• Crisis and
supported
contractual
requirements
exceeded
• Replacement of
East Charles Street
with new builds in
Trevu
• Disposal of East
Charles Street
• Bring the 6 market
rents at Lamorak
into management
and use for
Homeless move-on|• 363 people have been supported by the
Homeless Service as at 31 December 2020.
• Replacement units for East Charles Street at
Trevu started on site on 22 March 2021 -
project expected to take 6-12 months.
• Replacement for three bedspaces from
Strawberry Cottage are due for completion
on 9 April 2021. Two further units are in the
process of being identified.
• Units at Lamorak being converted from
Market Rent as current tenancies end.
• Homeless Service team have been
undertaking a review and update of their
PIR approach to providing services.| |To increase the number
of older Customers that
we support|• 130 new homes
for older
people,
including a new
Extra Care
Complex|• Start on site at
Bodmin or
alternate site
identified.|• To date 4 homes for older people
completed at Pengover (Redruth), 22 flats
for older people at Quarry Car Park
(Helston), 23 homes at Heartlands (Pool)
and 22 homes at Miners Row (Redruth)
• It has not been possible to identify a
suitable site for the provision of Extra Care
that received full support from Cornwall
Council in relation to Care funding. A
meeting has taken place with CC to explain
that Coastline will not be actively pursuing
this now unless firm support is given at an
earlystage.| 44 ## **Great People** |**Objective**|**2021 Measure**|**March 2021 Target**|**Position at March 2021**| |---|---|---|---| |To be recognised as one
of the best places to work
in Cornwall, and one of
the best housing
associations in the
country|• Sunday Times
Top 50 Not For
Profit employer|• Conclude on
whether using Best
Companies or IiP to
measure._(Former_
_would be consistent_
_with original target,_
_latter is now felt to_
_be more robust, but_
_will not be known_
_until late 2021)_
• Implementation of
new HR Strategy,
including review of
overall benefits
package
• Evaluation of Health
and Wellbeing
Strategy|• Annual Health and Wellbeing Report to
Board May 2020.
• IiP interim reviews in 2019 and 2020
positive
• New T and C’s agreed for Coastline
Services colleagues from October 2020 to
harmonise across the Group.
• Strategic discussion held at November
2020 Board Strategy Day.
• Wellbeing remains front and centre
during current lockdown with briefings,
‘Hugs in a box’, virtual events taking place
• Introduction of Headspace App for all
colleagues.
• We have not achieved ‘Top 50’ or ‘IIP
Gold’, we have made significant progress
on culture, health and wellbeing, and
consistency of ‘offer’ across the Group.| |To invest in our staff so
that they can deliver to
their full potential|• All staff have
continuous
career
development
plan in place|• All staff have
Personal
Development Plans
in place and
regularly reviewed
through the
quarterly
performance review
process
• Review of
performance review
process and
implementation of
any changes
• Successful rollout of
year 2 of the
leadership training
programme with
Jack Russel Coaching
(to include all
managers)|• New Performance Review scheme
launched in January 2019.
• Organisational development leadership
programme for SLT for 2019/20,
facilitated by Jack Russell has been
completed.
• One day leadership programme for all
other managers facilitated by SLT in
November 2019. We planned in 2020 to
focus on bringing all managers on board
with the full leadership programme –
dates were scheduled, some of which had
to be cancelled due to COVID-19. These
are now taking place with more sessions
held in April 2021.| |To ensure that we live up
to the values we share|• At least 90% of
staff feel that our
behaviours are in
line with our
values|• At least 90% of staff
feel that our
behaviours are in
line with our values
– survey scheduled
for Q4 2020/21|• Values Survey undertaken December
2019. Results similar to 2016 but slight
increase in how we value one another
• Covid-19 survey results were
overwhelmingly positive on how the
response had been managed, the
communications, support for wellbeing,
the ability to work remotely and
confidence that safety would be
maintained as we return.
• 2ndCovid-19 survey still positive and
wider responses achieved.| 45 ## **Great Foundations** |**Objective**|**2021 Measure**|**March 2021 Target**|**Position at March 2021**| |---|---|---|---| |To grow our income
while ensuring that we
become more productive
in how we work|• Operating margin
of 38%|• Coastline Housing
Operating margin of
27.2%_(note this is_
_not directly_
_comparable to the_
_Corporate Plan_
_target which is more_
_closely linked to_
_statutory accounts_
_social housing_
_lettings margin)_
• Coastline Group
operating surplus of
£9.4 million
• Coastline Group net
surplus of £11.3
million|• Position approved in July-20 :
`o`
CHL Operating Margin (exc SO)
25.8%
`o`
CHL Operating Margin (inc SO)
24.7%
`o`
CHL Net Margin £7.6m
• Position at 31 March 2021
`o` CHL Operating Margin (exc SO)
29.3%
`o`
CHL Operating Margin (inc SO)
27.2%
`o`
CHL Net Margin £5.4m
• Operating Margin has not reached 38%
as originally set in the Corporate Plan for
a number of factors previously
highlighted. The closest comparator to
the 38% target is the Social Housing
Lettings Operating Margin, which at
March 19 was 35.9% and for March 20
was 33.8%
• Whilst this measure of efficiency remains
a key financial metric for Coastline the
absolute target has been considered less
important than ensuring adequate
resources in place to support
communities and colleagues in the
shorter-term due to Covid-19.| |To continue to drive
down our average cost of
debt so that our
operating surpluses go
further|• Average cost of
debt of 4.5%|• Average cost of debt
under 4.0%
(reflecting potential
for increased fixed
rate debt being
taken on at higher
than variable rate).
• Other specific
targets will be set as
part of the annual
finance strategy for
2020/21|• Average cost of debt:
`o` 31/03/20 – 3.46% (67% of debt fixed)
`o` 31/03/21 – 2.61% (50% of debt fixed)
• Interest rate significantly better than
target reflecting low interest rate
environment and pro-active
management of embedded interest rate
position.| |To ensure that our Board
and governance
arrangements remain
strong and keep pace
with the changing
dynamics of the Group|• Retention of the
highest possible
‘G1 V1’
regulatory status
throughout the
life of this
Corporate Plan.|• Chair and NED
succession plan
complete, with new
Chair, NED and Co-
optee recruited and
inducted.
• Customer Service
Forum embedded in
the Governance
Framework
• Governance action
plan in place and on
track|• Board Effectiveness review completed by
Altair in June 2019
• Articles updated in January and May 2019
• 2 NED’s and 2 ARAC members recruited.
• Chair recruitment completed
• Board approved new ‘Customer
Experience Forum’ at March meeting
• G1/V1 retained
• New NHF Code of Governance 2020
adopted
• Group Standing Orders reviewed and
updated March 21| 46 |**Objective**|**2021 Measure**|**March 2021 Target**|**Position at March 2021**| |---|---|---|---| ||||• Updated Governance Action Plan
approved at March 2021 meeting| |To ensure that Coastline
has the capacity and
capability to deliver the
objectives of this
Corporate Plan|• We will pursue
joint /
partnership
working and
other strategic
alliances where
this will
contribute
towards
achieving the
aims and
objectives of this
Corporate Plan|• New Coastline 2020-
25 Plan complete
and launched
• Cornwall Strategic
Housing Group
(CSHG) in place with
HA representation
• Cornwall Affordable
Housing MoU in
place
• LandG Affordable
Homes relationship
strong
• Triannual report to
Board on Corporate
Plan progress
• Annual report to
Board on ‘state of
play’ of housing
association market
in south west|• Coastline Plan 2021-25 now signed off by
Board and being launched in 2021.
• CSHG starting to operate more effectively
with better private sector
engagement. Agreement reached that it
will have a strategic role in the production
of the new Cornwall Housing Strategy.
• Cornwall Affordable Housing MoU
delayed again by local elections, planning
for this to go to the first CSHG meeting
after the new administration is in place.
• LandG relationship remains strong, albeit
volumes are lower than we would like.
• November Strategy Day including
consideration of Coastline’s
benchmarking position on key metrics
against SW peer group.| 47 ## **Coastline Plan 2021-2025** While the work to produce the Plan was structured around six ‘themes’, the final Plan uses Coastline’s vision/mission statement (‘Great Homes, Great Services, Great People’) as its structure. It also retains ‘Great Foundations’ as a key area, but without any specific aims. Key points to note with regards to the aims of the Coastline Plan are: - Some, particularly those around climate change and ending homelessness in Cornwall, are deliberately aspirational (and inspirational) and are not likely to be achieved. - The importance of ‘place’ and of the environment is stronger than in previous plans, with a focus on green spaces, community, bio-diversity and climate change. - As well as including a specific aim about keeping the pledges we make to Customers, the wording is consistent with and echoes the aims of the Coastline Trust Charter and Pledges developed with the Customer Voice and Customer Experience Forum. - Some of the aims (under Great Services and Great People) are arguably more about our ‘values’, but have been included as aims as they are areas where we have more work to do to really live up to those particular values. - For the first time we have included aims in the ‘Great People’ heading that are outward, rather than inward, looking. This is because while having a team of ‘great people’ is crucial to Coastline’s success, it is not in itself the reason why the charity exists. ## **Setting and monitoring specific targets for the 2021-25 Coastline Plan** While the new approach deliberately results in a less detailed, published strategic plan, detailed measurable objectives are still needed. These will be approved by the Board annually, enabling the Board and other stakeholders to hold the organisation to account. This also enables us to be flexible in response to our risk appetite and an uncertain environment (e.g. Covid-19, the Social Housing White Paper, building safety reviews, and Brexit). Progress against targets will continue to be reported to the Board three times a year, as has been the practice with previous plans (and will include consideration of the strategic risk map). This reporting will also continue to form the basis for the commentary in the annual accounts that summarises for stakeholders how Coastline is performing against its strategic objectives. 48 The Plan will be launched with Customers (with a focus on the ‘Pledges’ that have been developed with involved Customers) in July, and with external stakeholders in September. ## **Section 172 Statement** The revised UK Corporate Governance Code (‘2018 Code’) was published in July 2018 and applies to accounting periods beginning on or after January 1, 2019. The Companies (Miscellaneous Reporting) Regulations 2018 (‘2018 MRR’) require Directors to explain how they considered the interests of key stakeholders and the broader matters set out in section 172(1) (A) to (F) of the Companies Act 2006 (‘S172’) when performing their duty to promote the success of the Company under S172. This includes considering the interest of other stakeholders which will have an impact on the long-term success of the company. This S172 statement, which is reported for the first time, explains how Coastline Directors: - have engaged with employees, suppliers, customers and others; and - have had regard to employee interests, the need to foster the company’s business relationships with suppliers, customers and other, and the effect of that regards, including on the principal decisions taken by the company during the financial year. - The S172 statement focuses on matters of strategic importance to Coastline, and the level of information disclosed is consistent with the size and the complexity of the business. ## **How the Board complied with its Section 172 duty** The Board welcomes the new reporting requirement as a further opportunity to explain how dialogue with stakeholders has been woven into the fabric of Coastline decision making. Recent examples of this are: the workshop and presentation from Cornwall Council planning team on the strategic housing plan for Cornwall at the June 2019 strategy day, a presentation from the Co-Chair of the Cornwall Nature Partnership at the November 2019 Strategy Day and Matt Barton presenting the strategic Covid-19 recovery in Cornwall to the June 2020 Strategy Day. The new Coastline plan “Great Futures” has been built up using engagement from Customers, colleagues and input from wider stakeholders following on from the November 2019 strategy day. Whist the impact of the Covid-19 has delayed elements of the formation and engagement the new plan is set for launch during 2021 and was presented to Board for approval by the colleagues involved in the process. The previous Chair, Derek Law MBE finished his appointment by virtue of having completed a nine year term (the maximum recommended in the NHF Code of Governance) at the September 2020 AGM and the process to recruit a replacement concluded in March 2021 with the appointment of Chair Designate Mark Duddridge. Since September 2020 and up to 1 July 2021 Peter Stephens, the Vice-Chair, has acted as interim Chair. The process of recruitment involved significant dialogue with the current Board, Executive management and Customers. This process will then also dovetail with the arrangements for production of the new ‘Coastline Plan’ to replace the existing Corporate Plan which finishes in March 2021. The new plan will seek to provide targets for the homes and services that Coastline provides that stretches both our financial and human resources and maximises delivery against our charitable mission. ## **Delegation of authority** The Board believes that governance of Coastline is best achieved by delegation of its authority for the executive management of Coastline to the CEO, subject to defined limits and monitoring by the Board and Committee structures (for reference see page 8). The Board routinely monitors the delegation of authority, ensuring it is regularly updated, while retaining ultimate responsibility. The most recent review was completed as part of an independent Board effectiveness review which reported back to the Board in May 2019 and defined an action plan which has been monitored on the Board’s behalf by the Audit, Risk and Assurance Committee and delivered by Management. The Board has a long-standing corporate governance framework which reflects the charitable status of Coastline and the regulatory frameworks for Social Housing, Supported Housing and Extra Care services. The current framework covers the following principle areas: 1. **Company Purpose** - Pursuing Coastline’s charitable objectives and accountability to communities and other stakeholders for the company’s actions. This means focussing primarily on strategic issues, while having regard to economic, political and social issues and other external factors particularly with reference to those impacting Cornwall. 2. **Strategy** - Responsibility for establishing and reviewing the long-term strategy, Corporate Plan and the financial business plan for Coastline, based on proposals made by management for achieving Coastline’s purpose. 3. **Monitoring decisions on the management team and the performance of Coastline** Including implementation of, and performance against the strategy and the business plan and the exercise of authority delegated to committees and management. The Board satisfies itself that emerging and principal risks to Coastline are identified and understood, systems of risk management, compliance and controls are in place to mitigate such risks and expected conduct of Coastline’s business and its employees is reflected in a set of values established by the CEO. 4. **Succession** Ensuring that systems and processes are in place for succession, evaluation and compensation of the CEO, executive and non-executive directors and all colleagues at Coastline. During 2020/21 the directors continued to exercise all their duties, while having regard to these and other factors as they reviewed and considered proposals from management and governed the company on behalf of its charitable purpose through the Coastline board. |**Section 172 Factor**|**Key Examples**|**Page(s)**| |---|---|---| |_Section 172 (1) (A)_
Consequence of any decision in the
long term|Charitable objectives
New Coastline Plan – all aspects|5
6 and 37-47| |_Section 172 (1) (B)_
Interests of employees|Living Wage Accreditation
Gender Pay Reporting
Coastline Plan – Great People|11-12
45| |_Section 172 (1) (C)_
Fostering business relationships
with suppliers, customers
and
others|Development Supply Chain event
European funding initiatives such as SmartLine
Coastline Plan – Great Services|37-38
42
39-44| |_Section 172 (1) (D)_
Impact
of
operations on
the
community and the environment|Charitable Objectives
Coastline Plan – Great Homes|6
37-39| |_Section 172 (1) (E)_
Maintaining high
standard
of
business conduct|Governance and Committee Structures|8-9| |_Section 172 (1) (F)_
Acting fairly between members|Balanced long-term decision making
Code of Governance|6
9 and 46| 50 ## **Streamlined Energy and Carbon Reporting (SECR)** Coastline is a social housing landlord and therefore the majority of environmental impact is drawn from the energy used by domestic property portfolio. As at 1 April 2021 Coastline owned 4,430 domestic homes which includes general needs, supported and Extra Care accommodation. For the purposes of SECR operational impacts include utility costs from office spaces, fleet vehicle and staff vehicle mileage. In terms of corporate impact which is directly accountable to the operations of the business; **Green House Gas Emissions (GHG) and Energy 1 April 2020-31 March 2021** |**Green House Gas Emissions (GHG) and Energy 1 April 2020-31 March 2021**|**Green House Gas Emissions (GHG) and Energy 1 April 2020-31 March 2021**|**Green House Gas Emissions (GHG) and Energy 1 April 2020-31 March 2021**| |---|---|---| ||Total Tonnes CO2|Units| |**Scope 1 – Direct Emissions**||| |Fleet Vehicle Mileage|172.52|434,620| |Staff Mileage|71.2|51,059| |Natural Gas|281|5,129.58| |**Scope 2 – Indirect Emissions**||| |Electricity|13.2|18,854.08| |Water|999.26|3,353.23| |**Total – Scope 1 + 2**|**1,537.18**|| |**Scope 3 – Other Indirect Emissions**||| |Housing Stock|9254.27|4430| |**Grand Total**|**10,791.45**|| |**Intensity Ratio**|291.66 Tonnes of Co2 per £M Turnover|| ## **Methodology** Each activity has been calculated in the appropriate units of measure and then converted to metric carbon tonnes to provide consistency. ## **Energy Efficiency Action** New contracts for all utility supplies commence September 2021 and have been secured with ‘green’ suppliers. The development of a new c environmental strategy during 2021 will assist Coastline in targeting the reduction of carbon impact using agreed Key Performance Indicators. In addition Coastline is working to decarbonise the housing stock working with partners to secure energy improvement funds. 51 By order of the Board **Mark Duddridge Chair – Coastline Housing Ltd 13 September 2021** 52 ## **Independent auditor’s report to the members of Coastline Housing Limited** ## **Opinion** We have audited the financial statements of Coastline Housing Limited (“the Company”) for the year ended 31 March 2021 which comprise the Group and Company Statement of Comprehensive Income, the Statement of Financial Position, the Consolidated Statement of Cash Flows, the Statement of Changes in Equity and related notes, including the accounting policies in note 1. In our opinion the financial statements: - give a true and fair view of the state of affairs of the Company as at 31 March 2021 and of its surplus/(deficit) for the year then ended; - have been properly prepared in accordance with UK accounting standards, including FRS 102 _The Financial Reporting Standard applicable in the UK and Republic of Ireland_ ; and - have been prepared in accordance with the requirements of the Companies Act 2006, the Housing and Regeneration Act 2008 and the Accounting Direction for Private Registered Providers of Social Housing 2019. ## **Basis for opinion** We conducted our audit in accordance with International Standards on Auditing (UK) (“ISAs (UK)”) and applicable law. Our responsibilities are described below. We have fulfilled our ethical responsibilities under, and are independent of the company in accordance with, UK ethical requirements including the FRC Ethical Standard. We believe that the audit evidence we have obtained is a sufficient and appropriate basis for our opinion. ## **Going concern** The directors have prepared the financial statements on the going concern basis as they do not intend to liquidate the company or to cease its operations, and as they have concluded that the company’s financial position means that this is realistic. They have also concluded that there are no material uncertainties that could have cast significant doubt over its ability to continue as a going concern for at least a year from the date of approval of the financial statements (“the going concern period”). In our evaluation of the directors’ conclusions, we considered the inherent risks to the company’s business model and analysed how those risks might affect the company’s financial resources or ability to continue operations over the going concern period. Our conclusions based on this work: - we consider that the directors’ use of the going concern basis of accounting in the preparation of the financial statements is appropriate; - we have not identified, and concur with the directors’ assessment that there is not, a material uncertainty related to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for the going concern period. However, as we cannot predict all future events or conditions and as subsequent events may result in outcomes that are inconsistent with judgements that were reasonable at the time they were made, the above conclusions are not a guarantee that the company will continue in operation. 53 ## **Fraud and breaches of laws and regulations – ability to detect** To identify risks of material misstatement due to fraud (“fraud risks”) we assessed events or conditions that could indicate an incentive or pressure to commit fraud or provide an opportunity to commit fraud. Our risk assessment procedures included: - Enquiring of directors, the group audit, risk and assurance committee, internal audit and inspection of policy documentation as to the Group’s high-level policies and procedures to prevent and detect fraud, including the internal audit function, and the Group’s channel for “whistleblowing”, as well as whether they have knowledge of any actual, suspected or alleged fraud. - Reading Board, and group audit, risk and assurance committee minutes. - Using analytical procedures to identify any unusual or unexpected relationships. We communicated identified fraud risks throughout the audit team and remained alert to any indications of fraud throughout the audit. As required by auditing standards, and taking into account possible pressures to meet loan covenants and regulatory performance targets, we perform procedures to address the risk of management override of controls and the risk of fraudulent revenue recognition, in particular the risk that income from development is recorded in the wrong period and the risk that Group management may be in a position to make inappropriate accounting entries. We did not identify any additional fraud risks. In determining the audit procedures we took into account the results of our evaluation and testing of the operating effectiveness of the Group-wide fraud risk management controls We also performed procedures including: - Identifying journal entries to test for all full scope components based on risk criteria and comparing the identified entries to supporting documentation. These included journal entries containing key words, unbalanced journal entries and unexpected journals posted to cash at bank and in hand. _Identifying and responding to risks of material misstatement due to non-compliance with laws and regulations_ We identified areas of laws and regulations that could reasonably be expected to have a material effect on the financial statements from our general commercial and sector experience, and through discussion with the directors and other management (as required by auditing standards), and from inspection of the Group’s regulatory and legal correspondence and discussed with the directors and other management the policies and procedures regarding compliance with laws and regulations. We communicated identified laws and regulations throughout our team and remained alert to any indications of non-compliance throughout the audit. The potential effect of these laws and regulations on the financial statements varies considerably. The Group is subject to laws and regulations that directly affect the financial statements including financial reporting legislation (including related companies legislation), taxation legislation, pensions legislation and specific disclosures required by housing legislation and we assessed the extent of compliance with these laws and regulations as part of our procedures on the related financial statement items. 54 ## **Other information** The directors are responsible for the other information, which comprises the strategic report, the Report of the Board and the Statement on Internal Control. Our opinion on the financial statements does not cover the other information and, accordingly, we do not express an audit opinion or, except as explicitly stated below, any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether, based on our financial statements audit work, the information therein is materially misstated or inconsistent with the financial statements or our audit knowledge. Based solely on that work: - we have not identified material misstatements in the other information; - in our opinion the information given in the strategic report and the report of the board for the financial year is consistent with the financial statements; and - in our opinion those reports have been prepared in accordance with the Companies Act 2006. ## **Matters on which we are required to report by exception** Under the Companies Act 2006 we are required to report to you if, in our opinion: - adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or - the financial statements are not in agreement with the accounting records and returns; or - certain disclosures of directors’ remuneration specified by law are not made; or - we have not received all the information and explanations we require for our audit. We have nothing to report in these respects. ## **Directors’ responsibilities** As explained more fully in their statement set out on page 23, the directors are responsible for: the preparation of financial statements which give a true and fair view; such internal control as they determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error; assessing the group and the company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern; and using the going concern basis of accounting unless they either intends to liquidate the group or the company or to cease operations, or have no realistic alternative but to do so. ## **Auditor’s responsibilities** Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue our opinion in an auditor’s report. Reasonable assurance is a high level of assurance, but does not guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of the financial statements. A fuller description of our responsibilities is provided on the FRC’s website at www.frc.org.uk/auditorsresponsibilities. 55 ## **The purpose of our audit work and to whom we owe our responsibilities** This report is made solely to the company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006 and section 128 of the Housing and Regeneration Act 2008. Our audit work has been undertaken so that we might state to the company’s members those matters we are required to state to them in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company’s members, as a body, for our audit work, for this report, or for the opinions we have formed. ## **Mark Dawson (Senior Statutory Auditor)** ## **for and on behalf of KPMG LLP, Statutory Auditor** _Chartered Accountants_ Regus, 4th floor Salt Quay House, 6 North East Quay Plymouth PL4 OHP 22 September 2021 56 ## **Group and Company Statement of Comprehensive Income for the year ended 31 March 2021** |**ear ended 31 March 2021**||| |---|---|---| |**Note**
Turnover: continuing activities
2
Cost of sales
2
Operating costs
2
**Operating surplus**
2
Gift aid receivable
Surplus on sales of properties
5
Other finance expenditure
6
Interest receivable and other income
Interest payable and similar charges
7
**Surplus for the year before taxation**
4
Tax on surplus
26
**Surplus for the year**
**Other Comprehensive Income**
Actuarial Gain/(loss) on pension scheme
24
**Total recognised surplus for the year**|**GROUP**
**2021**
**£’000**
2020
£’000
**33,364**
36,996
**(3,239)**
(5,536)
**(21,209)**
(21,780)
**8,916**
9,680
**-**
-
**3,314**
5,270
**(572)**
(364)
**5**
89
**(6,183)**
(3,783)
**5,480**
10,892
**6**
44
**5,486**
10,936
**(2,123)**
1,290
**3,363**
12,226|**COMPANY**
**2021**
**£’000**
2020
£’000
**31,815**
36,738
**(3,239)**
(5,536)
**(19,813)**
(21,700)| |||**8,763**
9,502
**280**
645
**3,314**
5,270
**(572)**
(364)
**126**
89
**(6,183)**
(3,783)| |||**5,728**
11,359
**-**
-| |||**5,728**
11,359| |||**(2,123)**
1,290| |||**3,605**
12,649| All the above results derive from continuing operations and are on a historic cost basis. The Statement of Comprehensive Income and Other Comprehensive Income was approved by the Board on 13 September 2021 and signed on its behalf by: **M Duddridge Chair** **P Stephens Deputy Chair** **S Harrison Chair of Audit, Risk and Assurance Committee** 57 ## **Statement of Financial Position as at 31 March 2021** (Reg. Number: 03284666) |**Fixed assets:**
Intangible fixed assets
Housing properties
Other tangible fixed assets
Investments
**Total fixed assets**
**Current assets:**
Stock
Rental and other debtors
Cash and cash equivalents
**Total current assets**
**Creditors: amounts falling due within one year**
**Net current assets**
**Total assets less current liabilities**
Creditors: amounts falling due after more than
one year
Pension deficit funding liabilities
Pension defined benefit (liability) / surplus
Provision for tax liabilities
**Net assets**
**Represented by:**
**Capital and reserves:**
Revenue reserves|**Note**
11
12
13
14
16
15
17

18|**GROUP**
**2021**
**£’000**
2020
£’000
**375**
315
**277,929**
245,667
**4,550**
4,434
**-**
-
**282,854**
250,416
**8,396**
7,042
**4,322**
6,608
**12,065**
5,128
**24,783**
18,778
**(11,536)**
(9,967)
**13,247**
8,811
**296,101**
259,227
**(233,533)**
(201,822)
**(184)**
(172)
**(3,196)**
(1,403)
**-**
(5)
**59,188**
55,825
**59,188**
55,825
**59,188**
55,825|**COMPANY**
**2021**
**£’000**
2020
£’000
**375**
308
**278,797**
246,288
**4,524**
4,387
**75**
75| |---|---|---|---| ||||**283,771**
251,058
**6,249**
4,265
**4,246**
6,569
**11,721**
4,507| ||||**22,216**
15,341
**(9,636)**
(7,169)| ||||**12,580**
8,172| ||||**296,351**
259,230| ||19||**(233,533)**
(201,822)
**(184)**
(172)
**(3,196)**
(1,403)
-
-| ||23
23
27||| ||||**59,438**
55,833| ||||**59,438**
55,833| ||||**59,438**
55,833| 58 These financial statements were approved by the Board on 13 September 2021 and signed on its behalf by: **M Duddridge Chair** **P Stephens S Harrison Deputy Chair Chair of Audit, Risk and Assurance Committee** 59 ## **Consolidated Statement of Cash Flows for the year ended 31 March 2021** |**021**|| |---|---| |**Cash flows from operating activities**
Surplus for the year
**_Adjustments for non-cash items:_**
Depreciation and impairment charges
Amortisation of intangible fixed assets
Profit on sale of housing properties
Loss on sale of tangible fixed assets
Taxation
Increase / (Decrease) in trade and other debtors
Increase in stocks
Increase in trade, other creditors and provisions
Pension costs less contributions payable
**_Adjustments for investing or financing activities:_**
Interest receivable and similar income
Interest payable and similar charges
Amortisation of loan arrangement fees
Government grants utilised in the year
Tax paid
**Net cash from operating activities**
**Cash flows from investing activities**
Sale of housing properties
Sale of other fixed assets
Interest received
Acquisitions of housing properties
Capital improvements to existing properties
Acquisitions of other fixed assets
Grants received to support capital expenditure
**Net cash from investing activities**
**Cash flows from financing activities**
Interest paid
New secured loans
Repayment of loans
Loan arrangement fees
**Net cash from financing activities**
Net increase / (decrease) in cash and cash equivalents
Cash and cash equivalents at 1 April
(i)
**Cash and cash equivalents at 31 March**|**2021**
2020
**£000**
£000
**5,486**
10,936
**4,625**
3,488
**126**
112
**(3,314)**
(5,270)
**-**
-
**(6)**
(44)
**2,286**
(2,139)
**(1,354)**
(2,168)
**1,211**
3,357
**-**
-
**(126)**
(89)
**4,684**
3,078
**(184)**
(92)
**(956)**
(820)
**-**
-| ||**12,478**
10,349| ||**3,921**
5,790
**-**
-
**-**
-
**(31,867)**
**(2,402)**
(27,880)
(2,856)
**(847)**
(875)
**2,668**
8,412| ||**(28,527)**
(17,409)| ||**(7,007)**
(4,862)
**31,000**
8,998
**(1,007)**
-
**-**
-| ||**22,986**
4,136| ||**6,937**
(2,924)
**5,128**
8,052| ||**12,065**
5,128| 60 ## **(i) Analysis of changes in net debt** |**GROUP**
**Cash and cash equivalents**
Cash
Overdrafts
Cash equivalents
**Borrowings**
Debt due within one year
Debt due after one year
**Total**|**At 1 April**
**2020**
**Cash**
**flows**
**Other non-**
**cash**
**changes**
**At 31**
**March**
**2021**
**£000**
**£000**
**£000**
**£000**
5,128
6,937
-
12,065
-
-
-
-
-
-
-
-| |---|---| ||**5,128**
**6,937**
**- 12,065**| ||(1,032)
1,032
-
-
(142,400)
(31,026)
-
(173,426)| ||**(143,432)**
**(29,994)**
**-**
**(173,426)**| ||| ||**(138,304)**
**(23,057)**
**-**
**(161,361)**| 61 ## **Statement of Changes in Equity** |**tatement of Changes in Equity**|| |---|---| |**GROUP**
**Balance at 1 April 2019**
Surplus for the year
Other comprehensive income (see note 24)
**Total comprehensive income for the year**
Transfer from Garlidna Reserve
**Balance at 31 March 2020**
**Balance at 1 April 2020**
Surplus for the year
Other comprehensive income (see note 24)
**Total comprehensive income for the year**
Transfer to Garlidna Reserve
**Balance at 31 March 2021**
**COMPANY**
**Balance at 1 April 2019**
Surplus for the year
Other comprehensive income (see note 24)
**Total comprehensive income for the year**
Transfer from Garlidna Reserve
**Balance at 31 March 2020**
**Balance at 1 April 2020**
Surplus for the year
Other comprehensive income (see note 24)
**Total comprehensive income for the year**
Transfer to Garlidna Reserve
**Balance at 31 March 2021**|**Revenue**
**reserve**
**Garlidna**
**reserve**
**Restricted**
**reserve**
**Total**
**equity**
**£000**
**£000**
**£000**
**£000**| ||**43,530**
**37**
**32**
**43,599**
10,936
-
-
10,936
1,290
-
-
1,290| ||**12,226**
**-**
**-**
**12,226**
25
(25)
-
-| ||
**55,781**
**12**
**32**
**55,825**| ||**55,781**
**12**
**32**
**55,825**
5,486
-
-
5,486
(2,123)
-
-
(2,123)| ||**3,363**
**3,363**
(193)
193
-
-| ||
**58,951**
**205**
**32**
**59,188**| ||**Revenue**
**reserve**
**Garlidna**
**reserve**
**Restricted**
**reserve**
**Total**
**equity**
**£000**
**£000**
**£000**
**£000**| ||**43,115**
**37**
**32**
**43,184**
11,359
-
-
11,359
1,290
-
-
1,290| ||**12,649**
**-**
**-**
**12,649**
25
(25)
-
-| ||
**55,789**
**12**
**32**
**55,833**| ||**55,789**
**12**
**32**
**55,833**
5,728
-
-
5,728
(2,123)
-
-
(2,123)| ||**3,605**
**-**
**-**
**3,605**
(193)
193
-
-| ||
**59,201**
**205**
**32**
**59,438**| 62 ## **Notes to the Financial Statements** ## **1 Accounting Policies** These Group and parent company financial statements were prepared in accordance with Financial Reporting Standard 102. The Financial Reporting Standard _is_ applicable in the UK and Republic of Ireland ( _“FRS 102”_ ). The presentation currency of these financial statements is sterling. All amounts in the financial statements have been rounded to the nearest £1,000. The parent company is included in the consolidated financial statements, and is considered to be a qualifying entity under FRS 102 paragraphs 1.8 to 1.12. The following exemptions available under FRS 102 in respect of certain disclosures for the parent company financial statements have been applied: - No separate parent company Cash Flow Statement with related notes is included. The accounting policies set out below have, unless otherwise stated, been applied consistently to all periods presented in these financial statements. Judgements made by the directors, in the application of these accounting policies that have significant effect on the financial statements and estimates with a significant risk of material adjustment in the next year are discussed in note 30. ## **Measurement Convention** The financial statements are prepared on the historical cost basis. ## **Legal Status** The Company is a company limited by guarantee, and is registered in England under the Companies Act 2006. It is a registered social housing provider and a registered charity. ## **Basis of Preparation** The consolidated financial statements include the financial statements of the Company and its subsidiary undertakings made up to 31 March 2021. A subsidiary is an entity that is controlled by the parent. The results of subsidiary undertakings are included in the consolidated profit or loss account from the date that control commences until the date that control ceases. Control is established when the Company has the power to govern the operating and financial policies of an entity so as to obtain benefits from its activities. In assessing control, the Group takes into consideration potential voting rights that are currently exercisable. In the parent financial statements, investments in subsidiaries, jointly controlled entities and associates are carried at cost less impairment. The financial statements have been prepared under the historical cost convention and in accordance with applicable Accounting Standards, the Accounting Direction for Private Registered Providers of Social Housing 2019 and the Statement of Recommended Practice, “Accounting by Registered Social Housing Providers 2018” (SORP 2018) and the Companies Act 2006. The following accounting policies have been applied consistently in dealing with items which are considered material in relation to the Company’s financial statements. 63 ## **Going Concern** The financial statements have been prepared on a going concern basis which the Board consider to be appropriate for the following reasons. The Group prepares a 30 year business plan which is updated and approved on an annual basis. The most recent business plan was approved in March 2021 by the Board. As well as considering the impact of a number of scenarios on the business plan the Board also adopted a stress testing framework against the base plan. The stress testing impacts were measured against loan covenants and peak borrowing levels compared to agreed facilities, with potential mitigating actions identified to reduce expenditure. Following the outbreak of Covid-19 the Group has undertaken a series of further scenario testing including severe but plausible downsides in the worst case assessment. The Board, after reviewing the group and company budgets for 2021/22 and the Group’s medium term financial position as detailed in the 30-year business plan including changes arising from the Covid-19 pandemic, is of the opinion that, taking account of severe but plausible downsides, the Group and Company have adequate resources to continue in business for the foreseeable future. In order to reach this conclusion, the Board have considered: - The property market – budget and business plan scenarios have taken account of delays in handovers, lower numbers of property sales, reductions in sales values and potential conversion of market sale to social homes; - Maintenance costs – budget and business plan scenarios have been modelled to take account of cost increases and delays in maintenance expenditure, with major works being phased into future years; - Rent and service charge receivable – arrears and bad debts have been increased to allow for customer difficulties in making payments and budget and business plan scenarios to take account of potential future reductions in rents; - Liquidity – available cash and unutilised loan facilities of £45.9m as at 31 March 2021, which gives significant headroom for committed spend and other forecast cash flows that arise; - The Group’s ability to withstand other adverse scenarios such as higher interest rates increased periods for relets in addition to a higher number of void properties. The Board believe the Group and Company has sufficient funding in place and expect the Group to be in compliance with its debt covenants even in severe but plausible downside scenarios. Consequently, the Board are confident that the Group and Company will have sufficient funds to continue to meet its liabilities as they fall due for at least 12 months from the date of approval of the financial statements and therefore have prepared the financial statements on a going concern basis. ## **Consolidation** The consolidated financial statements include the financial statements of the Company and its four subsidiaries Coastline Services Limited; Coastline Care Limited; Coastline Homes Limited and Coastline Design and Build Limited. The acquisition method of accounting has been adopted. Transactions between the Company and its subsidiaries are eliminated on consolidation. ## **Basic Financial Instruments** _Trade and other debtors/ creditors_ Trade and other debtors/ creditors are recognised initially at transaction price less attributable transaction costs. Subsequent to initial recognition they are measured at amortised cost using the effective interest method, less any impairment losses in the case of trade debtors. If the arrangement constitutes a financing 64 transaction, for example if payment is deferred beyond normal business terms, then it is measured at the present value of future payments discounted at a market rate of interest for a similar debt instrument. ## _Interest-bearing borrowings classified as basic financial instruments_ Interest-bearing borrowings are recognised initially at the present value of future payments discounted at a market rate of interest. Subsequent to initial recognition, interest-bearing borrowings are stated at amortised cost using the effective interest method, less any impairment losses. ## _Investments in preference and ordinary shares_ Investments in equity instruments are measured initially at fair value, which is normally the transaction price. Transaction costs are excluded if the investments are subsequently measured at fair value through profit or loss. Subsequent to initial recognition investments that can be measured reliably are measured at fair value with changes recognition in profit or loss. Other investments are measured at cost less impairment in profit or loss. ## _Cash and cash equivalents_ Cash and cash equivalents comprise cash balances and call deposits. Bank overdrafts that are repayable on demand and form an integral part of the Company’s cash management are included as a component of cash and cash equivalents for the purpose only of the cash flow statement. ## **Turnover** Group and Company turnover comprises rental income receivable net of voids, income from property sales, service charges and other services which are included at the invoiced value of goods and services supplied in the period with grant income recognised under either the performance method or accruals method dependent on the type of grant. ## **Stock** Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. The Company’s stock figure includes the proportion of shared ownership properties intended for first tranche sales, whether these have been completed and are ready for sale or in the course of construction. ## **Outright sale** Completed properties and properties under construction for open market sales are recognised at the lower of cost and net realisable value. ## **Interest Payable** Interest payable and similar charges include interest payable on long term borrowings. Borrowing costs that are directly attributable to the acquisition, construction or production of an asset that takes a substantial time to be prepared for use, are capitalised as part of the cost of that asset. ## **Other Interest Receivable** Other interest receivable and similar income include interest receivable on funds invested. Interest income and interest payable are recognised in profit or loss as they accrue, using the effective interest method. Gift aid income is recognised in the profit or loss account on the date the entity’s right to receive payments is established. 65 ## **Retirement Benefits** The Group operates a defined contribution pension scheme through the Social Housing Pension Scheme operated by The Pensions Trust. The assets of the schemes are held separately from those of the Company in an independently administered fund. The amount charged to the profit or loss account represents the contributions payable to the schemes in respect of the accounting period. The Group also participated in the defined benefit section of the Social Housing Pension Scheme operated by The Pensions Trust providing benefits based on final pensionable pay or on career average salary, although it is closed to future accrual. The assets of the scheme are held separately from those of the Group. For financial years ending on or after 31 March 2019, The Pensions Trust is able to obtain sufficient information to enable the Company to account for the Scheme as a defined benefit scheme. ## **Housing Properties** Housing properties are principally properties available for rent and are stated at cost less depreciation. Cost includes the cost of acquiring land and buildings, directly attributable development costs, interest at the average cost of borrowing for the development period, and expenditure incurred in respect of improvements which comprise the modernisation and extension of existing properties. Following the adoption of component accounting, completed housing properties are now split between their land and structure costs and a specific set of major components that require periodic replacement. Depreciation is charged to the profit or loss account on a straight-line basis over the estimated useful lives of each component part of housing properties. Land is not depreciated. The estimated useful lives are as follows: |Structure|80 years| |---|---| |Cladding (as part of the structure)|20 years| |Windows and doors|40 years| |Roofs|75 years| |Kitchens|20 years| |Bathrooms|30 years| |Lifts (excluding stairs)|15 years| |Heating|30 years| |Gas boilers/ Heat Pumps|15 years| Properties are reviewed for impairment annually. Where housing properties have suffered a permanent diminution in value, the impairment after deducting any related Social Housing Grant is recognised in the statement of consolidated income and included within cumulative depreciation. Shared ownership properties are included in housing properties at cost related to the percentage of equity retained, less any provisions needed for impairment or depreciation. Development costs which arise directly from the construction or acquisition of a property are capitalised to housing properties in the course of construction. 66 Capital expenditure on schemes which are aborted is charged to the statement of consolidated income in the year in which it is recognised that the schemes will not be developed to completion. ## **Social Housing Grant** Social housing grant (SHG) is initially recognised at fair value as a long term liability, specifically as deferred grant income and released through the statement of consolidated income as turnover income over the life of the structure of housing properties in accordance with the accrual method applicable to social landlords accounting for housing properties at cost. On disposal of properties, all associated SHG is transferred to the Recycled Capital Grant Fund (RCGF) until the grant is recycled or repaid to reflect the existing obligation under the social housing grant funding regime. Where, following the sale of a property, SHG becomes repayable, to the extent it is not subject to abatement, it is included as a liability until it is recycled or repaid. SHG is subordinated in respect of loans by agreement with the Regulator of Social Housing. ## **Government Grants** These include grants from local authorities and other organisations. Other grants are initially recognised at fair value as a long term liability, specifically as deferred grant income and released through the statement of consolidated income as turnover over the life of the structure of housing properties in accordance with the accrual method applicable to social landlords accounting for housing properties at cost. Grants in respect of revenue expenditure are credited to the statement of consolidated income in the same period as the expenditure to which they relate. ## **Sale of Housing Properties** Surpluses on sales of housing accommodation comprise proceeds from property sales, which are recognised at the date of completion, less the net book value of the properties and take into account any liabilities under the original Transfer Agreement with Cornwall Council in relation to Right to Buy sales. ## **Sale of Housing Properties – Shared Ownership** Under shared ownership arrangements, the Company sells an interest of between 25% and 75% in a Low Cost Home Ownership housing property at open market value. The owner of a low cost home has the right to purchase further proportions up to 100% (subject to occasional restrictions) at the then current valuation. Proceeds of sale of first tranches are accounted for as turnover in the statement of consolidated income. Subsequent tranches sold are disclosed in the profit or loss account after the operating result as a surplus or deficit on the sale of fixed assets. ## **Improvements, Major Repairs, Cyclical Repairs and Day to Day Repairs** The amount of expenditure incurred which relates to an improvement, which is defined as an increase in the net rental stream or the life of a property, has been capitalised. Expenditure incurred on other major repairs, cyclical and day-to-day repairs to housing properties is charged to the statement of consolidated income in the period in which it is incurred. 67 ## **Other Tangible Fixed Assets** Other tangible fixed assets are stated at cost less accumulated depreciation and accumulated impairment losses. Where parts of an item of tangible fixed assets have different useful lives, they are accounted for as separate items of tangible fixed assets, for example land is treated separately from buildings. Other tangible assets include those assets with an individual value in excess of £500 and community alarm equipment, which is specifically associated with an income stream. Depreciation is provided evenly on the cost of other tangible fixed assets to write them down to their estimated residual values over their expected useful lives. No depreciation is provided on freehold land. The principal annual rates used for other assets are: Freehold office buildings 50 years Solar PV panels 20 years Smoke and carbon monoxide detectors 10 years Furniture, fixtures and fittings 5 years Motor vehicles 5 years Plant and equipment 4 years Computer hardware 3 years Community alarm equipment 3 years Grounds plant and equipment 3 years ## **Intangible Fixed Assets** Intangible fixed assets are stated at cost less accumulated amortisation and accumulated impairment losses. Amortisation is provided evenly on the cost of intangible fixed assets to write them down to their estimated residual values over their expected useful lives. The principal annual rates used for intangible assets are: Computer software 3 years ## **Operating Leases** Payments (excluding costs for services and insurance) made under operating leases are recognised in the profit or loss account on a straight-line basis over the term of the lease unless the payments to the lessor are structured to increase in line with expected general inflation; in which case the payments related to the structured increases are recognised as incurred. Lease incentives received are recognised in profit or loss over the term of the lease as an integral part of the total lease expense. ## **Bad and Doubtful Debts** Provision is made against rent arrears of current and former tenants as well as miscellaneous debts to the extent that they are considered irrecoverable. All former tenant arrears are fully provided for in the year that they occur. ## **Capitalisation of Interest** Interest on loans financing development is capitalised up to the end of the month in which practical completion occurs. ## **Capitalisation of Development Costs** Development costs which arise directly from the construction or acquisition of a property are capitalised to housing properties in the course of construction. 68 Capital expenditure on schemes which are aborted is charged to the statement of consolidated income in the year in which it is recognised that the schemes will not be developed to completion. ## **Taxation** Coastline Housing Limited is considered to pass the tests set out in Paragraph 1 Schedule 6 Finance Act 2010 and therefore it meets the definition of a charitable company for UK corporation tax purposes. Accordingly, the charity is potentially exempt from taxation in respect of income or capital gains received within categories covered by Chapter 3 Part 11 Corporation Tax Act 2010 or Section 256 of the Taxation of Chargeable Gains Act 1992, to the extent that such income or gains are applied exclusively to charitable purposes. The profit making companies within the Group (CSL, CCL, CDB and CHM) are liable to UK corporation tax. The credit for taxation for the year includes current tax on the taxable profits for the year for these companies, where the profits are not relieved by losses brought forward. Tax on the profit or loss for the year comprises current and deferred tax. Tax is recognised in the profit or loss account except to the extent that it relates to items recognised directly in equity or other comprehensive income, in which case it is recognised directly in equity or other comprehensive income. Current tax is the expected tax payable or receivable on the taxable income or loss for the year, using tax rates enacted or substantively enacted at the balance sheet date, and any adjustment to tax payable in respect of previous years. Deferred tax is provided on timing differences which arise from the inclusion of income and expenses in tax assessments in periods different from those in which they are recognised in the financial statements. Deferred tax is not recognised on permanent differences arising because certain types of income or expense are non-taxable or are disallowable for tax or because certain tax charges or allowances are greater or smaller than the corresponding income or expense. Deferred tax is measured at the tax rate that is expected to apply to the reversal of the related difference, using tax rates enacted or substantively enacted at the balance sheet date. Deferred tax balances are not discounted. Unrelieved tax losses and other deferred tax assets are recognised only to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. ## **Value Added Tax** The Company is registered for VAT, but a large proportion of its income, including rents, is exempt for VAT purposes and the majority of its expenditure is subject to VAT which cannot be reclaimed. Expenditure is therefore shown inclusive of VAT. The Company recovers VAT where appropriate and this is credited to the statement of consolidated income account and back against capital expenditure where appropriate. ## **Gift aid payment presented within shareholders’ funds** Gift Aid payment is only recognised as a liability at the year end to the extent that it has been paid prior to the year end, there is a deed of covenant prior to the year-end or a Companies Act s288 written 69 resolution has been approved by the shareholder in the year to pay the taxable profit for the year to its parent by a certain payment date. ## **Income statement** Tax charge to be recorded to the extent that a tax charge is payable (i.e. includes any tax credit related to gift aid) ## **2 Turnover, Operating Costs and Operating Surplus** |**GROUP**
**Social housing lettings**
**Support contracts**
**Care and support**
**Other activities**
**Shared ownership first**
**tranche sales**|**2021**
2020
**Turnover**
**Cost of**
**sales**
**Operating**
**costs**
**Operating**
**surplus**
Turnover
Cost of
sales
Operating
costs
Operating
surplus
**£’000**
**£’000**
**£’000**
**£’000**
£’000
£’000
£’000
£’000
26,094
- (18,461)
**7,633**
24,473
-
(16,688)
**7,785**
657
-
(657)
**-**
569
-
(569)
**-**
858
-
(592)
**266**
852
-
(852)
**-**
1,834
-
(1,323)
**511**
4,643
-
(3,604)
**1,039**
3,921
(3,239)
(176)
**506**
6,459 (5,536)
(67)
**856**| |---|---| ||**33,364**
**(3,239) (21,209)**
**8,916**
**36,996** **(5,536)**
**(21,780)**
**9,680**| |**COMPANY**
**Social housing lettings**
**Support contracts**
**Care and support**
**Other activities**
**Shared ownership first**
**tranche sales**|**2021**
2020
**Turnover**
**Cost of**
**sales**
**Operating**
**Costs**
**Operating**
**Surplus**
Turnover
Cost of
sales
Operating
costs
Operating
surplus
**£’000**
**£’000**
**£’000**
**£’000**
£’000
£’000
£’000
£’000
26,094
- (18,276)
**7,818**
24,473
-
(16,787)
**7,686**
657
-
(657)
**-**
569
-
(569)
**-**
858
-
(592)
**266**
852
-
(852)
**-**
285
-
(112)
**173**
4,385
-
(3,425)
**960**
3,921
(3,239)
(176)
**506**
6,459 (5,536)
(67)
**856**| |---|---| ||**31,815**
**(3,239) (19,813)**
**8,763**
**36,738** **(5,536)**
**(21,700)**
**9,502**| 70 |**GROUP**
**Income and expenditure**
**Income from lettings**
Rent receivable
Service charges receivable
Grant income amortised
**Total income from lettings**
**Expenditure on letting activities**
Management
Services
Routine maintenance
Planned maintenance
Major repairs expenditure
Rent losses from bad debts
Depreciation of housing properties
Other costs
**Operating costs on lettings**
**Operating surplus on lettings**|**General**
**needs**
**Sheltered**
**housing**
**Shared**
**ownership**
**2021**
2020
**£’000**
**£’000**
**£’000**
**£’000**
£’000
18,968
4,087
955
**24,010**
22,582
679
286
163
**1,128**
1,071
956
-
-
**956**
820| |---|---| ||**20,603**
**4,373**
**1,118**
**26,094**
24,473| ||(3,749)
(715)
(398)
**(4,862)**
(3,984)
(1,180)
(235)
(131)
**(1,546)**
(1,644)
(908)
(181)
(100)
**(1,189)**
(2,297)
(3,773)
(751)
(416)
**(4,940)**
(3,720)
(890)
(177)
(98)
**(1,165)**
(1,251)
(70)
(14)
(8)
**(92)**
(127)
(3,114)
(620)
(345)
**(4,079)**
(3,540)
(449)
(89)
(50)
**(588)**
(125)| ||**(14,133)**
**(2,782)**
**(1,546)**
**(18,461)**
(16,688)| ||**6,470**
**1,591**
**(428)**
**7,633**
7,785| ## **Total income from lettings is shown net of void rents losses:** Rent losses from voids **(294) (285) (6) (585)** (403) 71 |**COMPANY**
**Income and expenditure**
**Income from lettings**
Rent receivable
Service charges receivable
Grant income amortised
**Total income from lettings**
**Expenditure on letting activities**
Management
Services
Routine maintenance
Planned maintenance
Major repairs expenditure
Rent losses from bad debts
Depreciation of housing properties
Other costs
**Operating costs on lettings**
**Operating surplus on lettings**|**General**
**needs**
**Sheltered**
**housing**
**Shared**
**ownership**
**2021**
2020
**£’000**
**£’000**
**£’000**
**£’000**
£’000
18,968
4,087
955
**24,010**22,582
679
286
163
**1,128**
1,071
956
-
-
**956**
820| |---|---| ||**20,603**
**4,373**
**1,118**
**26,094**
24,473| ||(3,590)
(715)
(398)
**(4,703)**
(3,853)
(1,180)
(235)
(131)
**(1,546)**
(1,644)
(905)
(180)
(100)
**(1,185)**
(2,368)
(3,758)
(748)
(416)
**(4,922)**
(3,839)
(886)
(177)
(98)
**(1,161)**
(1,291)
(70)
(14)
(8)
**(92)**
(127)
(3,114)
(620)
(345)
**(4,079)**
(3,540)
(449)
(89)
(50)
**(588)**
(125)| ||**(13,952)**
**(2,778)**
**(1,546)**
**(18,276)**
(16,787)| ||**6,651**
**1,595**
**(428)**
**7,818**
7,686| ## **Total income from lettings is shown net of void rents losses:** Rent losses from voids **(294) (285) (6) (585)** (403) During the year the Company spent £9.642 million (2020: £10.176 million) on maintaining and improving its existing property stock of which £2.373 million (2020: £2.856 million) was capitalised. £0.01 million grant was received in respect of this expenditure during the year (2020 £0.216 million). 72 ## **3 Accommodation in Management** At the end of the year accommodation in management for each class of accommodation was as follows: ## **GROUP and COMPANY** |**GROUP and COMPANY**|| |---|---| |General needs – social rent
General needs – affordable rent
Supported housing / housing for older people – social rent
Supported housing / housing for older people – affordable rent
Other social housing
Shared ownership
Market rented
Managed but not owned
Leasehold|**2021**
**Properties**
2020
Properties
**2,310**
2,406
**1,084**
1,110
**649**
581
**115**
-
**268**
267
**409**
370
**5**
6
**69**
54
**117**
114| ||**5,026**
4,908| 73 ## **4 Surplus for the Financial Year before Taxation** ||**GROUP**|**GROUP**|**COMPANY**|**COMPANY**| |---|---|---|---|---| |This is stated after charging/ (crediting):|**2021**|2020|**2021**|2020| ||**£’000**|£’000|**£’000**|£’000| |Depreciation on housing properties|**4,079**|3,150|**4,079**|3,150| |Depreciation of other tangible fixed assets|**545**|340|**514**|354| |Amortisation of intangible fixed assets|**126**|112|**119**|95| |Amortisation of grant income|**956**|820|**956**|820| |Gain on disposal of tangible fixed assets|**3**|2|**-**|-| |Operating lease rentals:||||| |- vehicles, plant and equipment|**34**|32|**7**|7| |- land and buildings|**13**|27|**-**|-| |Auditor’s remuneration:||||| |- audit of these financial statements|**28**|18|**28**|18| |- audit of the financial statements of
subsidiary companies|**13**|12|**2**|-| |- tax services|**5**|12|**-**|1| |- other services|**19**|5|**19**|5| 74 ## **5 Surplus on Sale of Housing Properties** |**GROUP and COMPANY**
Proceeds from sale of housing properties (gross)
Less: costs of sales
Less: Council share of proceeds under Right to Buy
**6**
**Other Finance Expenditure**
**GROUP and COMPANY**
Unwinding of discount on the SHPS (note 24)
Unwinding of discount on the Coastline Pensioners (note 23)
Amortisation of loan note fees
Valuation / Searches|**2021**
**£’000**
2020
£’000
**4,474**
7,021
**(960)**
(1,402)
**(200)**
(349)| |---|---| ||**3,314**
5,270| ||**2021**
**£’000**
2020
£’000
**214**
66
**-**
-
**325**
259
**33**
39| ||**572**
364| ## **7 Interest Payable and Similar Charges** |**7**
**Interest Payable and Similar Charges**|| |---|---| |**GROUP and COMPANY**
On loans and bank overdrafts
Break costs
Interest capitalised on developments under construction|**2021**
**£’000**
2020
£’000
**4,774**
4,853
**2,908**
-
**(1,499)**
(1,069)| ||**6,183**
3,784| The capitalisation rate used to determine the amount of finance costs capitalised in the period was 5.25% (2020: 5.49%). 75 ## **8 Employees** ## **(a) Number of employees** |**GROUP**
Average total full-time and part-time employees during the year
Average number of full-time equivalents employed during the year
**COMPANY**
Average total full-time and part-time employees during the year
Average number of full-time equivalents employed during the year
**b)**
**Staff Costs for the above employees**
**GROUP**
Staff costs:
- gross wages and salaries
- employer National Insurance contributions
- employer pension costs
**COMPANY**
Staff costs:
- gross wages and salaries
- employer National Insurance contributions
- employer pension costs|**2021**
**Number**
2020
Number
**315**
295
**280**
260| |---|---| ||**2021**
**Number**
2020
Number
**213**
201
**181**
171| ||**2021**
**£’000**
2020
£’000
**7,307**
7,027
**607**
577
**959**
318| ||**8,873**
7,922| ||**2021**
**£’000**
2020
£’000
**5,213**
5,000
**445**
434
**268**
245| ||**5,926**
5,679| ## **(b) Staff Costs for the above employees** 76 (c) The full time equivalent number of staff who received remuneration above £60,000: |**GROUP**
£130,001 to £140,000
£120,001 to £130,000
£110,001 to £120,000
£100,001 to £110,000
£90,001 to £100,000
£80,001 to £90,000
£70,001 to £80,000
£60,001 to £70,000
**COMPANY**
£130,001 to £140,000
£120,001 to £130,000
£110,001 to £120,000
£100,001 to £110,000
£90,001 to £100,000
£80,001 to £90,000
£70,001 to £80,000
£60,001 to £70,000|**2021**
**No.**
2020
No.
**1**
1
**-**
-
**1**
-
**2**
3
**1**
1
**-**
-
**2**
1
**5**
5| |---|---| ||**2021**
**No.**
2020
No.
**1**
1
**-**
-
**1**
-
**2**
3
**1**
1
**-**
-
**2**
1
**4**
4| This includes the remuneration of Executive Officers, which is also disclosed in note 9. 77 ## **9 Board Members’ and Executive Officers’ Emoluments** Key management personnel are the Executive Team who oversee the day-to-day operational running and, working with the Board and wider colleagues, identify and execute the Group’s strategic direction. They are detailed on page 2 of these accounts. The remuneration paid to the Executive Officers of the Group and the Board members during the year was as follows: |**EXECUTIVE OFFICERS**
Chief Executive
A Young
Deputy Chief Executive (with
specific responsibility for
Housing, Assets and
Communities)
L Beard
Director of HR and
Governance
D Wingham
Director of Finance and ICT
N Mallows
Director of Development and
Commercial Services,
C Weston
**TOTAL – COMPANY and**
**GROUP**|**Salary**
**£**
**Other**
**emoluments**
**£**
**Pension**
**£**
**2021 Total**
**£**
2020 Total
£
116,548
9,426
9,674
**135,648**
132,526
96,405
8,191
7,986
**112,582**
107,616
82,419
7,457
6,841
**96,717**
94,226
96,062
8,094
3,843
**107,999**
105,348
90,133
7,700
7,481
**105,314**
102,769| |---|---| ||**481,567**
**40,868**
**35,825**
**558,260**
542,485| 78 |**NON - EXECUTIVE DIRECTORS**|**2021**|2020| |---|---|---| ||**£**|£| |D Law MBE|**6,250**|12,500| |P Stephens (Chair)|**9,961**|7,500| |S Harrison|**6,298**|5,000| |P Bearne|**7,500**|7,500| |S Roberts|**5,000**|5,000| |J Waldron|**7,500**|7,500| |F Perrin|**3,125**|5,000| |C Pears|**2,083**|-| |A Moore|**3,021**|-| |K Harris|**2,897**|-| |**TOTAL – COMPANY AND GROUP**|**53,635**|50,000| |**INDEPENDENT COMMITTEE**|**2021**|2020| |**MEMBERS**|**£**|£| |E Chapman|**333**|-| |J De-Ville|**333**|-| |K Kemp|**333**|-| |L Denmead|**333**|-| |**TOTAL – COMPANY AND GROUP**|**1,332**|-| Expenses paid during the year to Board Members amounted to £956 (2020: £8,260). No Non-Executive Directors participate in any of the four Group pension schemes. At the year-end five Executive Officers were members of one of the schemes (2020: five). At the year-end £nil of pension scheme contributions relating to Executive Officers remained unpaid (2020: Nil). One of the Executive Officers; Allister Young, was a statutory director in the year. In respect of the officer who held the Chief Executive’s position during the year, pension arrangements were: - (a) As an ordinary member of the Social Housing Defined Contribution Pension Scheme. - (b) No enhancement or special terms were applied. - (c) No individual pension arrangement to which the Group makes a contribution. 79 ## **10 Trusts** The Company is Sole Corporate Trustee of Garlidna (Penzance Almshouses) Trust, a registered charity. The income and expenditure of the Trust and its assets and liabilities, are incorporated within the Company and Group’s financial statements. A transfer between reserves is performed annually for the deficit or surplus of income over expenditure. This transfer is included within the statement of changes in equity. ## **11 Intangible Fixed Assets** ## **GROUP and COMPANY** |**Cost**
At 1 April 2020
Additions
Disposals
**At 31 March 2021**
**Depreciation**
At 1 April 2020
Charged in year
Disposals
**At 31 March 2021**
**Net book value**
**At 31 March 2021**
At 31 March 2020|**Group**
**£’000**
Company
£’000
Computer
Software
Computer
Software
1,525
1,475
186
186
-
-| |---|---| ||**1,711**
**1,661**| ||(1,210)
(1,167)
(126)
(119)
-
-| ||**(1,336)**
**(1,286)**| ||**375**
**375**| ||315
308| 80 ## **12 Tangible Fixed Assets – Housing Properties** |**Group**
**Cost**
**As at 1 April 2020**
**Additions**
**Components**
**Capitalised**
**Disposals**
**At 31 March 2021**
**Depreciation**
**As at 1 April 2020**
**Charge for the year**
**Eliminated on**
**Disposals**
**At 31 March 2021**
**Net Book Value**
**At 31 March 2021**
At 31 March 2020|**Freehold Properties**
**Shared Ownership**
**Properties**
**Garlidna**
**Alms**
**Total**
**Completed**
**Under**
**Construction**
**Completed**
**Under**
**Construction**
**£’000**
**£’000**
**£’000**
**£’000**
**£’000**
**£’000**
199,175
40,171
21,916
12,440
368
**274,070**
14,760
14,224
4,089
1,461
-
**34,534**
2,402
-
-
-
-
**2,402**
(868)
-
(56)
-
-
**(924)**| |---|---| ||**215,469**
**54,395**
**25,949**
**13,901**
**368**
**310,082**| ||(27,399)
-
(936)
-
(68)
**(28,403)**
(3,721)
-
(354)
-
(4)
**(4,079)**
305
-
24
-
-
**329**| ||**(30,815)**
**-**
**(1,266)**
**-**
**(72)**
**(32,153)**| ||| ||**184,654**
**54,395**
**24,683**
**13,901**
**296**
**277,929**| ||171,776
40,171
20,980
12,440
300
245,667| 81 ## **Company** |**Cost**
**As at 1 April 2020**
**Additions**
**Components**
**Capitalised**
**Disposals**
**At 31 March 2021**
**Depreciation**
**As at 1 April 2020**
**Charge for the year**
**Eliminated on**
**Disposals**
**At 31 March 2021**
**Net Book Value**
**At 31 March 2021**
At 31 March 2020|**Freehold Properties**
**Shared Ownership**
**Properties**
**Garlidna**
**Alms**
**Total**
**Completed**
**Under**
**Construction**
**Completed**
**Under**
**Construction**
**£’000**
**£’000**
**£’000**
**£’000**
**£’000**
**£’000**
199,163
40,485
21,977
12,698
368
**274,691**
14,778
14,331
4,119
1,553
-
**34,781**
2,402
-
-
-
-
**2,402**
(868)
-
(56)
-
-
**(924)**| |---|---| ||**215,475**
**54,816**
**26,040**
**14,251**
**368**
**310,950**| ||(27,399)
-
(936)
-
(68)
**(28,403)**
(3,721)
-
(354)
-
(4)
**(4,079)**
305
-
24
-
-
**329**| ||**(30,815)**
**-**
**(1,266)**
**-**
**(72)**
**(32,154)**| ||| ||**184,660**
**54,816**
**24,774**
**14,251**
**296**
**278,797**| ||171,764
40,485
21,041
12,689
300
246,288| Included in the cost of housing properties is £4.149 million in respect of cumulative capitalised development administration costs (2020: £3.606 million) and cumulative capitalised interest of £7.520 million (2020: £6.021 million). All housing properties are freehold. See note 3 for accommodation in management. ## **Valuation for disclosure only** The value of completed housing properties as at 31 March 2021 on an existing use value, Social Housing (EUV-SH) basis was £179.8 million (2020: £172.3 million). For information purposes only, completed housing properties are valued at 31 March 2021 by Savills (UK) Limited, qualified professional independent external valuers. The valuation of the properties was undertaken in accordance with the Appraisal and Valuation Manual of the Royal Institution of Chartered Surveyors. In valuing housing properties, discounted cash flow methodology was adopted with key assumptions: Social housing and shared ownership only Discount rate 5.75% Rent assumptions: Social rented CPI +1.0% thereafter, Shared ownership RPI +0.5% and Other rents RPI +1.0% or in accordance with any relevant lease or nominations agreements 82 ## **13 Tangible Fixed Assets – Other** ## **GROUP** |**Cost**
At 1 April 2020
Additions
Disposals
**At 31 March 2021**
**Depreciation**
At 1 April 2020
Charged in year
Disposals
**At 31 March 2021**
**Net book value**
**At 31 March 2021**
At 31 March 2020|**Freehold**
**offices**
**Furniture,**
**fixtures**
**and**
**fittings**
**Computer**
**hardware**
**Plant,**
**equipment**
**and**
**vehicles**
**Community**
**alarm**
**equipment**
**Total**
**£’000**
**£’000**
**£’000**
**£’000**
**£’000**
**£’000**
3,570
1,769
956
860
71
7,226
-
22
149
444
46
661
-
-
-
(23)
-
(23)| |---|---| ||**3,570**
**1,791**
**1,105**
**1,281**
**117**
**7,864**| ||(623)
(1,004)
(660)
(478)
(27)
(2,792)
(70)
(140)
(162)
(163)
(10)
(545)
-
-
-
23
-
23| ||**(693)**
**(1,144)**
**(822)**
**(618)**
**(37)**
**(3,314)**| ||**2,877**
**647**
**283**
**663**
**80**
**4,550**| ||2,947
765
296
382
44
4,434| 83 ## **COMPANY** |**COMPANY**|| |---|---| |**Cost**
At 1 April 2020
Additions
Disposals
**At 31 March 2021**
**Depreciation**
At 1 April 2020
Charged in period
Disposals
**At 31 March 2021**
**Net book value**
**At 31 March 2021**
At 31 March 2020|**Freehold**
**offices**
**Furniture**
**, fixtures**
**and**
**fittings**
**Computers**
**hardware**
**Plant,**
**equipment**
**and**
**vehicles**
**Community**
**alarm**
**equipment**
**Total**
**£’000**
**£’000**
**£’000**
**£’000**
**£’000**
**£’000**
3,570
1,752
956
358
71
6,707
-
22
149
434
46
651
-
-
-
-
-
-| ||**3,570**
**1,774**
**1,105**
**792**
**117**
**7,358**| ||(623)
(986)
(660)
(24)
(27)
(2,320)
(70)
(140)
(162)
(132)
(10)
(514)
-
-
-
-
-
-| ||**(693)**
**(1,126)**
**(822)**
**(156)**
**(37)**
**(2,834)**| ||**2,877**
**648**
**283**
**636**
**80**
**4,524**| ||2,947
766
296
334
44
4,387| 84 ## **14 Investments** |Ordinary shares of £1 each – Coastline
Services Limited
Ordinary shares £1 each – Coastline
Design and Build Limited
Ordinary shares £1 each – Coastline Care
Limited
Ordinary shares £1 each – Coastline
Homes Limited|**GROUP**
**2021**
**£**
2020
£
**-**
-
**-**
-
**-**
-
**-**
-
**-**
-|**COMPANY**
**2021**
**£**
2020
£
**75,000**
75,000
**1**
1
**1**
1
**100**
100| |---|---|---| |||**75,102**
75,102| The Company holds 100% of the share capital of Coastline Services Limited. Coastline Services Limited is a company incorporated in England and Wales (Company number 05558027). The principal activity of the company is the provision of maintenance and technical services, primarily in respect of affordable housing. Coastline Services Limited has agreements with Coastline Housing Limited for the provision of responsive and void maintenance as well as various planned investment works to existing properties. The accounts of Coastline Services Limited are available to the public and may be obtained from its registered office at Coastline House, 4 Barncoose Gateway Park, Pool, Redruth, Cornwall TR15 3RQ. The Company holds 100% of the share capital in Coastline Design and Build Limited, which was incorporated on the 3 June 2015. Coastline Design and Build Limited is a company incorporated in England and Wales (Company number 09622238). The principal activities of the company are that of a commercial design and build contractor for new builds whose principal client is CHL. The accounts of Coastline Design and Build Limited are available to the public and may be obtained from its registered office at Coastline House, 4 Barncoose Gateway Park, Pool, Redruth, Cornwall TR15 3RQ. The Company holds 100% of the share capital in Coastline Care Limited. Coastline Care Limited is a company incorporated in England and Wales (Company number 06665734). The company has been dormant since 1 April 2015. The accounts of Coastline Care Limited are available to the public and may be obtained from its registered office at Coastline House, 4 Barncoose Gateway Park, Pool, Redruth, Cornwall TR15 3RQ. The Company holds 100% of the share capital of Coastline Homes Limited. Coastline Homes Limited is a company incorporated in England and Wales (Company number 10957677). The principal activities of the company is the design, construction and sale of residential housing. The accounts of Coastline Homes Limited are available to the public and may be obtained from its registered office at Coastline House, 4 Barncoose Gateway Park, Pool, Redruth, Cornwall TR15 3RQ. 85 ## **15 Debtors** ||**GROUP**||**COMPANY**|| |---|---|---|---|---| ||**2021**|2020|**2021**|2020| ||**£’000**|£’000|**£’000**|£’000| |Due within one year:||||| |Current tenants|**1,500**|574|**1,500**|574| |Former tenants|**242**|208|**242**|208| |Less provision for bad and doubtful|**(332)**|(296)|**(332)**|(296)| |debts||||| |**Total rent and service charges**|**1,410**|486|**1,410**|486| |**receivable**||||| |Trade debtors|**54**|25|**-**|-| |Taxation and social security|**1**|-|**(3)**|-| |Other debtors|**2,702**|5,641|**2,702**|5,641| |Less provision for bad and doubtful|**(328)**|(280)|**(328)**|(280)| |debts||||| |Prepayments and accrued income|**483**|736|**465**|722| ||**4,322**|6,608|**4,246**|6,569| At 31 March 2021 the outstanding rent and service charge amount for current tenants of general needs and older persons properties (as benchmarked by ‘HouseMark’) was £155,153 (2020: £183,668) representing 0.69% (2020: 0.87%) of the annual rent debit. Within the figure of £1,500,000 for current tenants, £989,352 in receipts were received after the 31 March relating to those arrears and accordingly have not been provided for reflecting that weekly rents due are not in arrears until the end of that week (4/4/2021). 86 ## **16 Stock** |Shared ownership first tranches
-
Completed
-
Work in progress
Outright sale properties
-
Completed
-
Work in progress
Work in progress|**GROUP**
**2021**
**£’000**
2020
£’000
**1,356**
1,324
**4,893**
2,941
**1,659**
-
**-**
2,466
**488**
311
**8,396**
7,042|**COMPANY**
**2021**
**£’000**
2020
£’000
**1,356**
1,324
**4,893**
2,941
**-**
-
**-**
-
**-**
-| |---|---|---| |||**6,249**
4,265| ## **17 Cash and Cash Equivalents** |Cash at bank and in hand
Cash and cash equivalents per cash flow statement|**GROUP**
**2021**
**£’000**
2020
£’000
**12,065**
5,128
**12,065**
5,128|**COMPANY**
**2021**
**£’000**
2020
£’000
**11,721**
4,507| |---|---|---| |||**11,721**
4,507| There were no significant non-cash transactions in the year. There are no restrictions on cash and cash equivalents held. 87 ## **18 Creditors: amounts falling due within one year** |Trade creditors
Rent, service and other charges received in
advance
Taxation and social security
Accruals and deferred income
Other creditors
Amounts due to subsidiary undertakings
RCGF Amendment|**GROUP**
**2021**
**£’000**
2020
£’000
**1,391**
2,767
**1,043**
622
**-**
18
**8,047**
5,107
**1,055**
1,453
**-**
-
**-**
-
**11,536**
9,967|**COMPANY**|**COMPANY**| |---|---|---|---| |||**2021**
**£’000**|2020
£’000| ||||| |||**629**|851| |||**1,043**|622| |||**-**|11| |||**4,512**|2,647| |||**1,055**|1,453| |||**2,397**|1,585| |||**-**|0| |||**9,636**|7,169| Amounts due to subsidiary undertakings are trading balances repayable on demand and non-interest bearing. ## **19 Creditors: amounts falling due after more than one year** |**GROUP and COMPANY**
Bank loans
Bond Premium
Private placement
Arrangement fees capitalised
Deferred Capital Grant
Recycled Capital Grant Fund|**2021**
**£’000**
2020
£’000
**140,926**
110,932
**39**
41
**32,500**
32,500
**(2,006)**
(1,822)| |---|---| ||**171,459**
141,651
**61,981**
60,042
**93**
129| ||**233,533**
201,822| 88 Total additional fees of £511,000 incurred in respect of new loan facilities (2020: £352,000) were capitalised during the year. During the year £326,000 (2020: £261,000) of capitalised fees were amortised The balance on Deferred Capital Grant shown above is net of amortised grant already released to the Statement of Comprehensive Income. Total Capital Grant received is £67.7 million (2020: £65.0 million). ## **Recycled Capital Grant Fund** |Opening balance 1 April
Arising in the year
Applied to development schemes
**Closing balance 31 March**|**2021**
**£’000**
2020
£’000
**129**
314
**-**
20
**(36)**
(205)| |---|---| ||**93**
129| ## **20 Debt Analysis** **Debt is repayable as follows GROUP and COMPANY** |Less than one year
Between two and five years
After five years|**2021**
**£’000**
2020
£’000
**-**
1,032
**67,699**
36,000
**105,727**
106,400| |---|---| ||**173,426**
143,432| 89 ## **Borrowing Facilities** The Group and Company has undrawn committed borrowing facilities. Undrawn facilities available at 31 March 2021 were as follows: ## **GROUP and COMPANY** |**GROUP and COMPANY**|| |---|---| |Expiring in less than two years
Expiring between two and five years
Expiring in more than five years|**2021**
**£’000**
2020
£’000
**-**
2,000
**47,325**
41,000
**-**
-| ||**47,325**
43,000| The main bank loans are secured by fixed charges upon a defined subset of the Company’s lettable properties. ## **Financial Liabilities** The interest rate profile of the Group and Company’s financial liabilities as at 31 March 2021 was: ## **GROUP and COMPANY** |Floating rate
Fixed rate|**2021**
**£’000**
2020
£’000
**86,226**
47,527
**87,200**
95,905| |---|---| ||**173,426**
143,432| The weighted average period for which interest rates were fixed was 14 years (2020: 13 years), and the weighted average fixed interest rate was 3.86% (2020: 4.14%) including margins. The fixed rate loans are for terms maturing between five years and 30 years at interest rates ranging from 1.00% to 7.70% including margins. 90 ## **21 Non-equity Share Capital** The Company is limited by guarantee. ## **22 Financial Commitments** |**Capital expenditure commitments are as follows:**
**GROUP and COMPANY**
Expenditure contracted for but not provided in the accounts
Expenditure authorised by the Board but not contracted|**2021**
**£’000**
2020
£’000
**34,896**
51,454| |---|---| ||**33,923**
11,361| Of the £68.8 million of capital commitments at 31 March 2021, £15.1 million (2020: £31.3 million) will be funded by grant and other public finance. The remainder will be fully funded through existing loan facilities and cash balances. All contracted expenditure can be met within existing funding arrangements. ## **Operating Leases** At 31 March 2021 Group and Company future minimum lease payments payable under non-cancellable operating leases are as follows: |**Land and buildings, leases expiring**
Within one year
In two to five years
**Vehicles, plant and equipment, leases expiring**
Within one year
In two to five years|**GROUP**
**2021**
**£’000**
2020
£’000
**-**
10
**151**
17
**151**
27
**11**
1
**26**
31
**37**
32|**COMPANY**
**2021**
**£’000**
2020
£’000
**-**
-
**-**
-| |---|---|---| |||**-**
-| |||**7**
-
**-**
7| |||**7**
7| 91 ## **23 Pension Liabilities** |**GROUP and COMPANY**
Social Housing Pension Scheme (SHPS)
Coastline Pensioners|**2021**
**£’000**
2020
£’000
**3,196**
1,403
**184**
172| |---|---| ||**3,380**
1,575| The ‘Coastline Pensioners’ are historic retirees who by virtue of agreements following restructuring post stock transfer in 1998, are paid an inflating pension until they die. These pensions are increased annually in accordance with local government pension scheme rules. Payments during the year to these pensioners were £12,000 (2020: £12,000). The carrying value of the liability of £184,000 (2020: £172,000) represents the discounted value of expected future payments discounted at 2.22% (2020: 2.36%). ## **24 Pensions** The Group participated in one pension scheme: ## **(1) Social Housing Pension Scheme (SHPS): Defined Benefit Pension Scheme** The Group participates in the Social Housing Pension Scheme (the Scheme), a multi-employer scheme which provides benefits to some 500 non-associated employers. The Scheme is a defined benefit scheme in the UK. The Scheme is subject to the funding legislation outlined in the Pensions Act 2004 which came into force on 30 December 2005. This, together with documents issued by the Pensions Regulator and Technical Actuarial Standards issued by the Financial Reporting Council, set out the framework for funding defined benefit occupational pension schemes in the UK. The last triennial valuation of the scheme for funding purposes was carried out as at 30 September 2017. This valuation revealed a deficit of £1,522m. A Recovery Plan has been put in place with the aim of removing this deficit by 30 September 2026. The Scheme is classified as a 'last-man standing arrangement'. Therefore the Company is potentially liable for other participating employers' obligations if those employers are unable to meet their share of the scheme deficit following withdrawal from the Scheme. Participating employers are legally required to meet their share of the Scheme deficit on an annuity purchase basis on withdrawal from the Scheme. For financial years ending on or before 28 February 2019, it has not been possible for the company to obtain sufficient information to enable it to account for the Scheme as a defined benefit scheme, therefore the company has accounted for the Scheme as a defined contribution scheme. For financial years ending on or after 31 March 2019, it has been possible to obtain sufficient information to enable the company to account for the Scheme as a defined benefit scheme. For accounting purposes, two actuarial valuations for the scheme were carried out with effective dates of 31 March 2018 and 30 September 2018. The liability figures from each valuation are rolled forward 92 to the relevant accounting dates, if applicable, and are used in conjunction with the company’s fair share of the Scheme’s total assets to calculate the company’s net deficit or surplus at the accounting period start and end dates. ## **a) Main actuarial assumptions used for the purposes of FRS 102:** ||**31 March 2021**|
31 March 2020| |---|---|---| ||**% per annum**|
% per annum| |Discount Rate|2.22%|
2.33%| |Inflation (RPI)|3.20%|
2.51%| |Inflation (CPI)|2.87%|
1.51%| |Salary Growth|3.87%|
2.51%| |Allowance for commutation of pension for cash
at retirement|75% of
maximum
allowance|


75% of maximum
allowance| The mortality assumptions adopted at 31 March 2021 imply the following life expectancies: |||**Life**|| |---|---|---|---| |||**expectancy at**
**age 65**|

**Life expectancy at age**
**65**| |||**(Years)**|
**(Years)**| |||**31 March 2021**|**31 March 2020**| |Male retiring in 2020 (2020: 2020)||21.6|
21.5| |Female retiring in 2020 (2020: 2020)||23.5|
23.3| |Male retiring in 2040 (2020: 2040)||22.9|
22.9| |Female retiring in 2040 (2020: 2040)||25.1|
24.5| |**b)**|
**Scheme assets:**||| |||**31 March 2021**|
31 March 2020| |||**£’000**|
£’000| ||Global Equity|1,443|
1,142| ||Absolute Return|500|
407| ||Distressed Opportunities|261|
150| ||Credit Relative Value|285|
214| ||Alternative Risk Premia|341|
546| ||Fund of Hedge Funds|1|
5| ||Emerging Markets Debt|365|
237| 93 |Risk Sharing|330|
264| |---|---|---| |Insurance-Linked Securities|217|
240| |Property|188|
172| |Infrastructure|604|
581| |Private Debt|216|
157| |Opportunistic Illiquid Credit|230|
189| |High Yield|271|| |Opportunistic Credit|248|| |Corporate Bond Fund|535|
445| |Liquid Credit|108|
3| |Long Lease Property|177|
135| |Secured Income|376|
296| |Over 15 Year Gilts||-| ||-|| |Index Linked All Stock Gilts||-| ||-|| |Liability Driven Investment|2,301|
2,592| |Net Current Assets|55|
33| |Total assets|9,052|
7,808| None of the fair values of the assets shown above include any direct investments in the employer’s own financial instruments or any property occupied by, or other assets used by, the employer. 94 ## **c) The following amounts were measured in accordance with the requirements of FRS 102:** Present values of defined benefit obligation, fair value of assets and defined benefit asset (liability): ||**31 March 2021**|31 March 2020|| |---|---|---|---| ||**£’000**||£’000| |Fair value of plan assets|9,052||7,808| |Present value of defined benefit obligation|12,248||9,211| |Surplus (deficit) in plan|(3,196)||(1,403)| |Unrecognised surplus|-||-| |Defined benefit asset (liability) to be recognised|**(3,196)**||(1,403)| ||||| ## **d) Analysis of amount charged to operating profit in the period:** Defined benefit costs recognised in statement of comprehensive income (SOCI): |(SOCI):|||| |---|---|---|---| |||**Period from**|Period from| |||**31 March 2020 to**|31 March 2019 to| |||**31 March 2021**|31 March 2020| |||**£’000**|£’000| |Current service cost||-|-| |Expenses||11|11| |Net interest expense||30|66| |Losses (gains) on business combinations||-|-| |Losses (gains) on settlements||-|-| |Losses (gains) on curtailments||-|-| |Losses (gains) due to benefit changes||-|-| |Defined benefit costs recognised in
comprehensive income (SoCI)|statement of|
41|77| 95 Defined benefit costs recognised in other comprehensive income: ||||**Period ended**|Period ended| |---|---|---|---|---| ||||**31 March 2021**|31 March 2020| ||||**£’000**|£’000| |Experience on plan assets (excluding amounts
included in net interest cost) - gain (loss)|||865|(115)| |Experience gains and losses arising
liabilities - gain (loss)||on the plan|271|(110)| |Effects of changes in the demographic assumptions||||| |underlying the present value of the defined benefit|||(41)|85| |obligation - gain (loss)||||| |Effects of changes in the financial||assumptions||| |underlying the present value of the defined benefit|||(3,111)|1,431| |obligation - gain (loss)||||| |Total actuarial gains and losses (before restriction||||| |due to some of the surplus not being|recognisable) -||(2,016)|1,291| |gain (loss)||||| |Effects of changes in the amount of surplus that is not||||| |recoverable (excluding amounts included in net|||-|-| |interest cost) - gain (loss)||||| |Total amount recognised in other comprehensive
income - gain (loss)|||(2,016)|1,291| **e) Movement in deficit during the period:** 96 Reconciliation of opening and closing balances of the defined benefit obligation: ||**Period ended**
Period ended| |---|---| ||**31 March 2021**
31 March 2020| ||**£’000**
£’000| |Defined benefit obligation at start of period|9,211
10,485| |Current service cost|-
-| |Expenses|11
11| |Interest expense|214
250| |Contributions by plan participants|-
-| |Actuarial losses (gains) due to scheme experience|(271)
110| |Actuarial losses (gains) due to changes in
demographic assumptions|41
(85)| |Actuarial losses (gains) due to changes in financial
assumptions|3,111
(1,431)| |Benefits paid and expenses|(69)
(129)| |Liabilities acquired in a business combination|-
-| |Liabilities extinguished on settlements|-
-| |Losses (gains) on curtailments|-
-| |Losses (gains) due to benefit changes|-
-| |Exchange rate changes|-
-| |Defined benefit obligation at end of period|12,248
9,211| Reconciliation of opening and closing balances of the fair value of plan assets: ||**Period ended**|Period ended| |---|---|---| ||**31 March 2021**|31 March 2020| ||**£’000**|£’000| |Fair value of plan assets at start of period|7,808|7,606| |Interest income|184|184| |Experience on plan assets (excluding amounts
included in interest income) - gain (loss)|865|(115)| |Contributions by the employer|264|229| |Contributions by plan participants||-| |Benefits paid and expenses|(69)|(129)| |Assets acquired in a business combination|-|-| |Assets distributed on settlements|-|-| |Exchange rate changes|-|-| |Fair value of plan assets at end of period|**9,052**|7,808| 97 The actual return on the plan assets (including any changes in share of assets) over the period ended 31 March 2021 was £1,049,000 (2020: £69,000) ## **25 Related Parties** ## **Non-Executive Directors** One Non-Executive Director who served during the year (2020: one) has a standard tenancy agreement and is required to fulfil the same obligations and receive the same benefit as other Customers. There are no rental arrears to report as at year-end (2020: £nil). ## **Subsidiary companies** Coastline Housing (CHL) has subsidiaries which are not regulated by the Regulator of Social Housing: Coastline Services Limited (CSL); Coastline Care Limited (CCL); Coastline Design and Build Limited (CDB); and Coastline Homes Limited (CHM) (see note 28). CSL’s main business is the provision of building, maintenance and technical management services, which includes property and grounds maintenance work undertaken for CHL. The total value of work undertaken by CSL on behalf of CHL during the year was £4,563,707 (2020: £4,557,626). This is removed on consolidation in the Group financial statements. The total balance due to CSL from CHL at 31 March 2021 was £530,779 (2020: £666,938). CCL was Dormant throughout the period to 31 March 2021 (2020: Dormant). CDB’s main business is that of a commercial design and build contractor for new builds whose principal client is CHL. The total value of work undertaken by CDB on behalf of CHL during the year was £34,633,843 (2020: £30,831,043). This is removed on consolidation in the Group financial statements. The total balance due to CHL from CDB at 31 March 2021 was £3,525,113 (2020: £3,452,649). CHM’s main business is the delivery of a wider range of housing options including an element of open market housing for sale where it forms part of wider development schemes that the Group is undertaking. The company commenced trading during the year ended 31 March 2019. Coastline Housing provides certain administrative functions for the other Group companies, including financial, human resources and IT. These are recharged on the most appropriate basis, either on head count or on floor area of office space occupied. All transactions with Group companies are on an arm’s-length basis and on commercial terms. 98 ## **26 Tax on Surplus on Ordinary Activities** ## **Total tax expense recognised in the statement of comprehensive income, other comprehensive income and equity:** |
Current tax:
UK Corporation tax on profits for the year at
19% (2020 19%)
Adjustments in respect of previous periods
Deferred tax:
Origination and reversal of timing
differences
Adjustments in prior periods
Effect of tax rate change on opening
balance
Tax on profit of ordinary activities|**GROUP**
**2021**
**£’000**
2020
£’000
**-**
-
**-**
(16)
**-**
(16)
**(5)**
(12)
**(1)**
(18)
**-**
2
**(6)**
(28)
**(6)**
(44)|**COMPANY**
**2021**
**£’000**
2020
£’000
**-**
-
**-**
-
**-**
-
**-**
-
**-**
-
**-**
-
**-**
-
**-**
-| |---|---|---| A UK corporation tax rate of 19% (effective 1 April 2020) was substantively enacted on 17 March 2020, reversing the previously enacted reduction in the rate from 19% to 17%. This will increase the company’s future tax charge accordingly. Deferred tax has been calculated at 19% (2020: 19%). Factors affecting the tax charge for the current year: The current tax credit of £6,000 (2020: £44,000 credit) for the year is lower (2020: lower) than the standard rate of corporation tax in the UK of 19% (2020: 19%). The differences are explained below: 99 |**Current tax reconciliation**
Profit on ordinary activities before gift
aid and taxation
Current tax at 19% (2020: 19%)
Income not taxable in determining
taxable surplus
Effect of gift aid
Effect of tax change in previous period
Deferred tax not recognised
Effect of deferred tax in previous
periods
Effect of tax rate on opening deferred
tax balance
Losses carried forward
**Total current tax (credit) / charge**
**(see above)**|**GROUP**
**2021**
**£’000**
2020
£’000
**5,480**
10,892
**1,041**
2,070
**(979)**
(2,023)
**(54)**
(59)
**-**
(16)
**(13)**
**(1)**
(18)
**-**
2
**-**
-|**COMPANY**
**2021**
**£’000**
2020
£’000
**-**
-| |---|---|---| |||**-**
-
**-**
-
**-**
-
**-**
-
**-**
-
**-**
-
**-**
-| ||**(6)**
(44)|**-**
-| ## **27 Provision for Liabilities** ## **Deferred tax** |**eferred tax**|| |---|---| |At 1 April
(Released)/ charged in the year
Change in underlying rate of tax
At 31 March
Comprising:
Accelerated capital allowances|**GROUP**
**2021**
**£’000**
2020
£’000
**6**
33
**(6)**
(28)
**-**
-| ||**-**
5| ||**-**
5| The deferred tax liability at 31 March 2021 has been calculated based on the rate of 19%. 100 ## **28 Group Members** Coastline Housing Limited is the parent undertaking and has four subsidiaries being Coastline Services Limited; Coastline Care Limited; Coastline Design and Build Limited; and Coastline Homes Limited (see note 14). ## **29 Legislative Provision** The Company is a company limited by guarantee and is registered with the Regulator of Social Housing under the Housing and Regeneration Act 2008. The registered provider number for Coastline Housing Limited is LH4165. The Company is also a registered charity (registration charity no. 1066916). ## **30 Accounting Estimates and Judgements** ## _**Key sources of estimation uncertainty**_ The Group makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, seldom equal the related actual results. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are addressed below. ## _**Useful economic lives of tangible assets**_ The annual depreciation charge for tangible assets is sensitive to changes in the estimated useful economic lives of the assets so these are re-assessed annually and amended when necessary to reflect current estimates. See note 13 for the carrying amount of the property plant and equipment, and note 1 for the useful economic lives for each class of assets. ## _**Impairment of debtors**_ The Group makes an estimate for the recoverable value of rental arrears, trade and other debtors. When assessing impairment of trade and other debtors, management considers factors including the current credit rating of the debtor, the ageing profile of debtors and historical experience. See note 15 for the net carrying amount of the debtors and associated impairment provision. ## _**Pensions**_ FRS 102 requires that certain assumptions are made in order to determine the amount to be recorded for retirement benefit obligations and pension plan assets, in particular for defined benefit plans. These are mainly actuarial assumptions such as expected inflation rates, employee turnover, expected return on plan assets and discount rates. Substantial changes in the assumed development of any one of these variables may significantly change the Group’s retirement benefit obligation and pension assets. The impact of Covid-19 on Coastline’s (closed to further accrual) defined benefit pension scheme assets and liabilities has been reflected in the accounts based on this year’s actuarial assumptions. The expected triennial valuation is expected to lead to further changes, in particular because there will have been an opportunity for the scheme’s Trustees to more fully assess the long term impacts of Covid-19. 101 In response to the ongoing reform of RPI there has been a change in the estimate used by TPT in how to set the CPI assumption relative to RPI. The impact of this change is approximately £1.1 million and would increase the deficit from our current estimates. Further work in considering the wider management of the SHPS Defined Benefit Deficit is on-going, with professional advisors appointed, and will shortly reflect the final results of the September 2020 tri-annual revaluation which is being published during 2021/22. ## _**Valuation of housing properties**_ The Group tests annually whether there are any impairment triggers that would require the Group to undertake a full impairment review of housing properties under FRS 102. In July 2015 the Government announced a 1% reduction for the next four years of rental income for social housing properties effective from 1 April 2016. This announcement was identified as an impairment trigger and accordingly a full impairment review was undertaken at the March 2016 year end. There have been no such impairment triggers during the year ended 31 March 2021. The recoverable value is assessed as the higher of fair value or value in use. The SORP considers depreciated replacement cost as a reasonable estimate for value in use taking into consideration the service potential of social housing. The valuation of housing properties at the year-end have therefore been assessed using depreciated replacement cost. These calculations require the use of assumptions and estimates, in particular in relation to the identification of cash generating units, expected replacement cost and the service potential of the asset. ## _**Recoverability of stock and WIP**_ Completed properties and properties under construction for open market sales are recognised at the lower of cost and net realisable value. Assessing net realisable value requires the use of estimation techniques. In making this assessment, management considers publicly available information and internal forecasts on future sales activity. Net realisable value is based on estimated sales price after allowing for all further costs of completion and disposal. ## _**Critical accounting judgements in applying the Group’s accounting policies**_ There are no such judgements in either the current or prior year. 102 ## **Independent auditor’s report to the members of Coastline Housing Limited** ## **Opinion** We have audited the financial statements of Coastline Housing Limited (“the Company”) for the year ended 31 March 2021 which comprise the Group and Company Statement of Comprehensive Income, the Group and Company Statement of Financial Position, the Consolidated Statement of Cash Flows, the Group and Company Statement of Changes in Equity and related notes, including the accounting policies in note 1. In our opinion the financial statements: - give a true and fair view of the state of affairs of the Group and Company as at 31 March 2021 and of the Group’s and Company’s surplus/(deficit) for the year then ended; - have been properly prepared in accordance with UK accounting standards, including FRS 102 _The Financial Reporting Standard applicable in the UK and Republic of Ireland_ ; and - have been prepared in accordance with the requirements of the Companies Act 2006, the Housing and Regeneration Act 2008 and the Accounting Direction for Private Registered Providers of Social Housing 2019. ## **Basis for opinion** We conducted our audit in accordance with International Standards on Auditing (UK) (“ISAs (UK)”) and applicable law. Our responsibilities are described below. We have fulfilled our ethical responsibilities under, and are independent of the company in accordance with, UK ethical requirements including the FRC Ethical Standard. We believe that the audit evidence we have obtained is a sufficient and appropriate basis for our opinion. ## **Going concern** The directors have prepared the financial statements on the going concern basis as they do not intend to liquidate the company or to cease its operations, and as they have concluded that the company’s financial position means that this is realistic. They have also concluded that there are no material uncertainties that could have cast significant doubt over its ability to continue as a going concern for at least a year from the date of approval of the financial statements (“the going concern period”). In our evaluation of the directors’ conclusions, we considered the inherent risks to the company’s business model and analysed how those risks might affect the company’s financial resources or ability to continue operations over the going concern period. Our conclusions based on this work: - we consider that the directors’ use of the going concern basis of accounting in the preparation of the financial statements is appropriate; - we have not identified, and concur with the directors’ assessment that there is not, a material uncertainty related to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for the going concern period. However, as we cannot predict all future events or conditions and as subsequent events may result in outcomes that are inconsistent with judgements that were reasonable at the time they were made, the above conclusions are not a guarantee that the company will continue in operation. ## **Fraud and breaches of laws and regulations – ability to detect** To identify risks of material misstatement due to fraud (“fraud risks”) we assessed events or conditions that could indicate an incentive or pressure to commit fraud or provide an opportunity to commit fraud. Our risk assessment procedures included: - Enquiring of directors, the group audit, risk and assurance committee, internal audit and inspection of policy documentation as to the Group’s high-level policies and procedures to prevent and detect fraud, including the internal audit function, and the Group’s channel for “whistleblowing”, as well as whether they have knowledge of any actual, suspected or alleged fraud. - Reading Board, and group audit, risk and assurance committee minutes. - Using analytical procedures to identify any unusual or unexpected relationships. We communicated identified fraud risks throughout the audit team and remained alert to any indications of fraud throughout the audit. As required by auditing standards, and taking into account possible pressures to meet loan covenants and regulatory performance targets, we perform procedures to address the risk of management override of controls and the risk of fraudulent revenue recognition, in particular the risk that income from development is recorded in the wrong period and the risk that Group management may be in a position to make inappropriate accounting entries. We did not identify any additional fraud risks. In determining the audit procedures we took into account the results of our evaluation and testing of the operating effectiveness of the Group-wide fraud risk management controls We also performed procedures including: - Identifying journal entries to test for all full scope components based on risk criteria and comparing the identified entries to supporting documentation. These included journal entries containing key words, journal entries with lines containing round numbers, consistent ending numbers or being just below an authorization or review limit, journals posted to accounts linked to a fraud risk, unbalanced journal entries and unexpected journals posted to cash at bank and in hand. _Identifying and responding to risks of material misstatement due to non-compliance with laws and regulations_ We identified areas of laws and regulations that could reasonably be expected to have a material effect on the financial statements from our general commercial and sector experience, and through discussion with the directors and other management (as required by auditing standards), and from inspection of the Group’s regulatory and legal correspondence and discussed with the directors and other management the policies and procedures regarding compliance with laws and regulations. We communicated identified laws and regulations throughout our team and remained alert to any indications of non-compliance throughout the audit. The potential effect of these laws and regulations on the financial statements varies considerably. The Group is subject to laws and regulations that directly affect the financial statements including financial reporting legislation (including related companies legislation), taxation legislation, pensions legislation and specific disclosures required by housing legislation and we assessed the extent of compliance with these laws and regulations as part of our procedures on the related financial statement items. ## **Other information** The directors are responsible for the other information, which comprises the strategic report, the board report and the Statement on Internal Control. Our opinion on the financial statements does not cover the other information and, accordingly, we do not express an audit opinion or, except as explicitly stated below, any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether, based on our financial statements audit work, the information therein is materially misstated or inconsistent with the financial statements or our audit knowledge. Based solely on that work: - we have not identified material misstatements in the other information; - in our opinion the information given in the strategic report and the board report for the financial year is consistent with the financial statements; and - in our opinion those reports have been prepared in accordance with the Companies Act 2006. ## **Matters on which we are required to report by exception** Under the Companies Act 2006 we are required to report to you if, in our opinion: - adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or - the financial statements are not in agreement with the accounting records and returns; or - certain disclosures of directors’ remuneration specified by law are not made; or - we have not received all the information and explanations we require for our audit. We have nothing to report in these respects. ## **Directors’ responsibilities** As explained more fully in their statement set out on page 23, the directors are responsible for: the preparation of financial statements which give a true and fair view; such internal control as they determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error; assessing the group and the company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern; and using the going concern basis of accounting unless they either intends to liquidate the group or the company or to cease operations, or have no realistic alternative but to do so. ## **Auditor’s responsibilities** Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue our opinion in an auditor’s report. Reasonable assurance is a high level of assurance, but does not guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of the financial statements. A fuller description of our responsibilities is provided on the FRC’s website at www.frc.org.uk/auditorsresponsibilities. ## **The purpose of our audit work and to whom we owe our responsibilities** This report is made solely to the company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006 and section 128 of the Housing and Regeneration Act 2008. Our audit work has been undertaken so that we might state to the company’s members those matters we are required to state to them in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company’s members, as a body, for our audit work, for this report, or for the opinions we have formed. **Mark Dawson (Senior Statutory Auditor) for and on behalf of KPMG LLP, Statutory Auditor** _Chartered Accountants_ Regus, 4th floor Salt Quay House, 6 North East Quay Plymouth PL4 OHP 29[th] November 2021