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2021-03-31-accounts

%transform housing & support Financial statements 31 March 2021

Contents

Strategic report

Auditor’s report and financial statements

1

About Transform Housing & Support

Transform is a registered provider of social housing and support to more than 1,800 people each year. With a central office in Leatherhead, Surrey, Transform covers Surrey and surrounding areas including West Sussex, Berkshire and south west London. Many Transform clients are homeless, feel excluded from society, are battling multiple health challenges and often have little, or no, family support. We not only offer many individuals a safe place to live and somewhere to call their own, we also provide the support they need to prosper in their own home. Transform keyworkers empower clients to live happier, healthier and more fulfilling lives.

The Board of Trustees

Chair

Mark Austen FCMA

Executive team

Chief Executive

Lawrence Santcross

Deputy Chair and Senior Independent Director

Oliver Smedley FCMA

Director of Asset Management & Capital Development

Michael O’Brien (appointed as Director October 2020)

Trustees

Jane Bolton BA (Hons) FCIH

Julie Bradley

Chris Deacon BSc (Hons) MSc

Natalia Kolotneva MSc MRICS (appointed July 2021)

Robert Mills BA (Hons) MCIH (retired September 2020)

Paul Rees MA FCA

Michael Ryan (appointed June 2020)

David Turner DSc FRICS (retired September 2020)

Director of Asset Management & New Business Andrea Cannon (retired August 2020)

Director of Client Services

Adele Duncan

Director of Finance & Resources

Ratna Sukumaran

Director of People

Simone Bartley

Head of External Affairs & Communications Anita Gupta

Katie Wadey

Committees

Client Services & Performance Chair: Chris Deacon

Development & Asset Management Chair: Katie Wadey

Finance & Audit Chair: Paul Rees

Nominations Chair: Mark Austen

People Chair: Julie Bradley

2

Patrons

Royal Patron

Company Secretary

Ratna Sukumaran

HRH The Countess of Wessex GCVO DStJ CD

The Rt Hon Baroness Bottomley of Nettlestone PC DL Michael More-Molyneux, HM Lord-Lieutenant of Surrey Professor Patrick J Dowling CBE DL FREng FRS Dame Penelope Keith DBE DL

David Hypher OBE DL (Hons) Elizabeth Kennedy FCIPD

Prof G. Q. Max Lu AO, DL, FREng, FAA, FTSE, FIChemE, FRSC, FCAS, FNAI, President and Vice-Chancellor, University of Surrey

Gavin Stephens QPM, Chief Constable, Surrey Police Sir Richard Stilgoe OBE DL

Sally Varah MBE DL The Rt Revd Andrew Watson, Bishop of Guildford

Ambassadors

Dame Elizabeth Anson DBE JP DL His Hon Christopher Critchlow DL Desmond McCann BA FCA David McNulty PhD

Greg Melly Lesley Myles MBE JP DL MA Kim Rippett The Hon Mrs Lavinia Sealy DL Bernard Stevens FCA FCMA Lady Elizabeth Toulson CBE DL Paul Wates FRICS Cllr Fiona White Malcolm Young FRICS

Registered office

Transform Housing & Support Bradmere House Brook Way Leatherhead Surrey, KT22 7NA 01372 387100 www.transformhousing.org.uk info@transformhousing.org.uk

Registrations

Registered charity: 264133 Company limited by guarantee registered in England: 01057984 Registered provider of social housing: H2452 CQC registered: 1-2756361790 (de-registered May 2021)

Auditor

Nexia Smith & Williamson LLP 25 Moorgate London, EC2R 6AY

Principal solicitors

Devonshires Solicitors LLP 30 Finsbury Circus London, EC2M 7DT

Banker

Barclays Bank PLC 1 Churchill Place Canary Wharf London, E14 5HP

3

Highlights, facts and figures 2020-21

Previous year’s figures in brackets

Client satisfaction

Transform people

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Number of
clients
1,806
(2,004)
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1,591 housing and support clients (1,734)

This reduced number is the result of fewer people accessing the Wokingham drop-in service due to Covid-19 restrictions.

215 care clients (270)

Client outcomes

92% (91%)

of housing and support clients felt more confident after receiving Transform support

93% (95%)

of housing and support clients were satisfied with the quality of Transform accommodation

98% (99%)

of homecare clients were satisfied with the care and support they received

At the time of publishing 85% colleagues had received their first Covid vaccinations.

Our colleague wellbeing survey found:

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93%
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felt informed about how the pandemic affected Transform and their role

felt they have been given 90% enough advice and support to do their job safely

of clients 86% moved on in a planned way (82%) (short-term impact)

65%

felt their Transform job contributed positively to their mental wellbeing

91% (85%) felt improvements in emotional and mental wellbeing (short-term impact)

100% (92%)

of clients felt more secure (long-term impact)

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Financial performance
8.6%
(6.8%)
underlying operating margin
(excluding exceptional items)
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72%

said they had been provided with the equipment needed to work from home effectively

4

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Our Chairman reflects on 2020-21

Transform’s Covid journey

To say that 2020-21 was a challenging year would be more than an understatement. This was especially the case for the clients we support who have been among those facing the greatest difficulties during the pandemic.

I am, though, very proud of how we have weathered the Covid storm. All services have remained open, all care appointments carried out and all colleagues have gone above and beyond to ensure clients have continued to receive outstanding support from us, as shown by our client surveys.

During the year, Transform robustly followed the Government’s social distancing, self-isolation and personal protective equipment (PPE) requirements.

Essential maintenance services have continued throughout the pandemic. We experienced the initial national shortage, and subsequent rapid cost increases, in PPE supplies. We managed this through effective planning and advanced purchasing. We also secured crucial additional grants from Surrey County Council and extra supplies of PPE and funding from external donors.

Colleagues working in our central support functions were provided with IT equipment to work from home.

Vaccinations

At time of publishing, 85% of Transform employees have confirmed they have received their first vaccination and 75% their second vaccine. A large number of Transform clients have also now had their jabs.

Winter shelter/Covid cabins

Covid put those who were homeless in even greater peril. Transform teamed up with Elmbridge Borough Council, Rentstart, Molesey Churches Night Shelter and other organisations, and, with support from Surrey County Council and Public Health England, installed temporary accommodation in the form of 12 studio cabins in Elmbridge. The cabins took a number of the most vulnerable people – including some with Covid – off the streets and gave them respite during the winter months while reducing the spread of the virus. We are delighted that the cabins have now been relocated to Camberley, after Surrey County Council and Surrey Heath Borough Council secured funding for them.

Growth and development

Transform has made significant advances during the year in developing its supporting systems, technology and processes with the aim of continually improving the way we deliver services. We also have a deliberate strategy to

grow, either organically or through merger. This year we have delivered an extra four new units. On 15 May 2020, we completed a merger with Reigate Quaker Housing Association through which we added sheltered housing for 60 people and two redevelopment sites. We also secured the opportunity to merge with a small Guildford-based provider, Wey Valley Housing Association.

Care sale

Transform took on care services four years ago. Since this time, we sought to strike a balance between providing the best services for clients and delivering them in a financially sustainable way. We were very proud of the high-quality care staff had been providing, however we were not able to achieve the level of financial viability we required to continue and grow the care services in a sustainable way. Following a review, we concluded that care would be better placed with a specialist provider. The care services were sold to Apex Prime Care on 28 February 2021.

In summary

As you will see from this report, Transform has continued to flourish and we are all looking forward enthusiastically and energetically to the future. We shall build further on the platform we have established and intend to bid successfully for new contracts as well as re-tender for existing ones. We hope to play an even greater leadership role in reducing homelessness in Surrey and the surrounding areas and refresh our property portfolio addressing its sustainability and future fitness.

Finally, we very much look forward to celebrating our 50[th] anniversary with you next year.

Mark Austen, Chairman

6

Strategic report

Key strategic achievements – 2020-21

Despite the challenges this year, we have achieved our key objectives including keeping clients and colleagues safe. We discovered how agile colleagues could be in addressing Covid challenges while still ensuring clients received the support they needed.

Achievement highlights

Clients

People

8

Growth and funding

Developments within Transform

9

66 very dfferert fcr Me, 99

Future plans – strategic objectives 2021-24

Use our resources Improve, innovate Continue to focus and partnerships to and develop housing on quality and create positive social and support services, compliance and and environmental increase the volume be proactive in impact, including and diversity of client communicating implementing engagement and use positive outcomes. measures to fully technology wherever Increase our understand this it can add value. reputation by building impact. Consistently maintain on relationships property assets to a with commissioners, high standard. trusted partners and other stakeholders.

Further build colleague engagement, embed inspiring leadership approaches that align with outstanding client outcomes and focus on colleague wellbeing and inclusivity.

Invest in new housing supply and ensure all existing assets are fit for purpose, financially viable and relevant. Extend our operating footprint, monitor opportunities for asset investment and possible mergers while ensuring financial sustainability of all services.

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property assets to a with commissioners,
high standard. trusted partners and
other stakeholders.
Client
experience
Social and
environmental impact
Corporate
responsibility
£
People Financial
resilience
----- End of picture text -----

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Social impact – client outcomes

Transform provides people with a home. We also enable them to take greater control of their lives and build their overall confidence by supporting them to address their challenges, learn life skills, improve their health and wellbeing, and participate in educational, training and employment opportunities.

During the year, 1,591 clients received housing-related support services from Transform, and 327 (86%) clients moved on in a planned way (2020: 82%). We also provided care for 215 clients between April 2020 and 28 February 2021 before the care services were sold.

Our main aim is to support clients to find a home and to live independent and fulfilling lives; we therefore seek to ensure that the accommodation and support we provide meets their needs and aspirations. To enable us to better understand how effective our services are and to continually improve, we carry out exit surveys as well as long-term outcome and client satisfaction surveys.

Current housing and support client satisfaction

The 2021 client satisfaction survey compiled responses from clients across five aspects – what they thought of our services; how they felt our services had helped them; whether their personal wellbeing had improved; how we had supported them through the pandemic and how they felt we had dealt with complaints.

Homecare client satisfaction

The 2020 homecare survey covered questions across four areas – how satisfied clients were with our care services; how effective clients found us – including how well protected they felt from contracting Covid-19; complaints and compliments and their overall assessment of the care services received.

Highlights from housing and support clients’ satisfaction survey (previous year in brackets)

Highlights from homecare clients’ satisfaction survey (previous year in brackets)

96%

(n/a)

were satisfied with actions taken to keep them safe during the pandemic

98%

(n/a)

of homecare clients felt protected from Covid-19 by the use of PPE

82%

(84%)

feel their ability to manage their emotional/mental health has improved

98%

(99%)

of homecare clients satisfied with the care and support received

87%

(86%)

feel their ability to manage their alcohol or drug use has improved

98%

(100%)

of homecare clients satisfied that Transform staff treated them with dignity, respect and compassion

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Short-term impact of services

When housing and support clients are ready to move on from Transform, we ask them to compare how they feel when leaving our services with how they felt when they began to receive support from us. The exit survey comprises exit questionnaires completed from April 2020 to March 2021.

Highlights from 2020-21 exit survey (previous year in brackets)

100% (100%) satisfied with the quality of Transform accommodation

95% (97%) satisfied with the support received

90% (94%) feel more secure

Long-term impact on outcomes

To obtain information on how services affect clients in the longer-term, we carry out an outcome survey each year. This year’s survey, carried out in December 2020, collected the views of former clients who left Transform’s services between four months and two and a half years ago.

Highlights from 2020 long-term impact survey (previous year in brackets)

95% (92%) feel happier

88% (91%) feel more confident

100% (100%) have settled accommodation

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Financial performance

Summary

Transform’s turnover increased by 8% to £12.4m and the operating costs by 6% to £11.3m (2020: £10.7m), increasing the underlying operating surplus to £1.1m (2020: £0.8m). The overall surplus for the year was £4.4m, which exceeded budget expectations and covenant requirements and was largely a result of the merger with RQHA.

The financial performance for the care operations had improved, resulting in a reduction in the operating deficit to £63k (2020: £464k). This was achieved through more efficient service delivery and better cost management.

We had been monitoring the viability of the care business and, following a review, concluded it was no longer sustainable. It was therefore sold in February 2021. The financial performance of the care business up to the date of sale, is reported as ‘discontinued operations’ and the surplus on the sale of £98k is reported as ‘other operating surplus’.

Reserve policy

The reserve policy is regularly reviewed and updated. The merger with RQHA increased the reserves generated during the year.

Transform holds reserves for the following purposes:

  1. To meet the working capital requirements.

  2. To mitigate operational risks such as those arising from pandemics, staffing shortages, and reactive asset management requirements.

  3. To protect against any income fluctuations.

  4. To smooth cash flows.

We hold three types of reserves:

Continuous operations – housing, support and fundraising activities show a drop in underlying operating surplus to £1.1m (2020: £1.2m). This is due to operating cost increases from continuing investments in management, staff and IT infrastructure to enhance our service delivery.

The RQHA merger, completed in May 2020, increased turnover by £397k alongside a proportionate cost increase. The merger increased Transform’s net assets by £3.6m.

As at March 2021, Transform’s net assets of £52.4m (2020: £47m) comprised of £12.1m in grants, £13.4m in bank loans and the remainder as reserves of £26.9m (2020: £22.6m).

As of March 2021, our free reserves amounted to circa £1.5m. This exceeded the target by £750k, a consequence of holding larger than normal cash reserves to fund planned property acquisitions that were due to be completed by year end but were delayed.

The Board reviewed our reserve policy, then – taking into consideration the ability to draw down from our loan facility at short notice – they set a free reserve target of £500k for the year 2021-22. This represents two months’ operating costs for Transform.

We had strong liquidity at year end, with the £2.5m cash providing a good buffer to manage short-term cash flow pressures.

Capital structure and treasury

As at 31 March 2021, Transform had secured loan facilities of £20.5m, of which £13.4m has been drawn. Of the drawn loan balances, £8.6m was on variable interest rates and the remaining £4.8m on fixed interest rates. Our weighted average cost of capital was 2.4% (2020: 3.1%).

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Fundraising – true generosity highlighted during Covid-19 pandemic

Transform has been overwhelmed by the generous and continued support received from donors and supporters. We have received vital emergency funds that have helped us purchase additional PPE, as well as donations to keep clients digitally connected.

We have continued to invest in safe and affordable homes for vulnerable people to live in, alongside specialist support and interventions. The pandemic has shone a light on the challenges faced by homeless and vulnerable people. Transform continues to commit its resources to providing increased opportunities and services to enable people to live independent and fulfilled lives.

In addition to many donations in kind, we have received £110k from donors. Every single penny has been used to support clients who have been facing even more challenges during the Covid-19 pandemic.

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r• ¢4 Value for money

Our approach

Our Value for Money (VfM) approach aims to optimise the benefits we derive from our resources in an economic, cost-effective and efficient manner.

The key aim underpinning our strategy is to maintain long-term financial viability so we can continue to support more clients in the future.

Strategic decision on care services

During the year, we completed a strategic review of Transform’s care activities and concluded that we should exit this market. Through a selection process based on our core values, we identified a home care purchaser and completed the sale on 28 February 2021.

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Low cost
Value for
money
High High
satisfaction performance
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Performance

Our performance is measured against our strategic goals. Our performance indicators are based on the VfM metrics set out by the Regulator of Social Housing (RSH). Our services create social value for clients and also to society. This is further illustrated by our client success story.

During the year, Transform participated in a pilot for supported housing benchmarking co-ordinated by Housemark which included wide participation from several care and support providers. This pilot confirmed that Transform’s services are cost-effective and provide good value for money.

The RSH’s Global Accounts 2019-20 included VfM metrics. We have used these metrics related to supported housing providers as a basis for benchmarking.

We measure Transform’s value for money performance as follows:

As the care business was sold on 28 February 2021, the social housing costs per unit cited are presented inclusive and exclusive of care and support activities.

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Value for money performance metrics Value for money performance metrics Actual performance Actual performance Actual performance Benchmark
performance		 Target performance Target performance
2020-21 2019-20 RAG RSH’s Supported
Housing Median		 2020-21 2021-22
RSH metrics
1 Operating margin (overall) 39.2% 6.8% n 6.5% 6.8% 7.9%
2 Operating margin (excluding RQHA gift) 10.2% 6.8% n
3 Operating margin (social housing) 16.2% 21.1% n 10.4% 20.0% 18%
4 Interest cover ratio (EBITDA MRI) 303% 280% n 259% 170% 180%
5 Social housing cost per unit
Including care and support costs £11,707 £11,911 n £9,900 £11,500 £10,183
Excluding care and support costs £6,467 £5,964 n £6,449 £6,673
6 Gearing 18.8% 24.5% n 14.2% 25.0% 26%
7 New supply % (social housing units) 8.9% 1.2% n 0.4% 1% 1.9%
8 Reinvestment % 4.5% 2.7% n 4.4% 3% 5%
9 Return on Capital Employed (ROCE) 9.2% 1.7% n 3.1% 1.8% 1.4%
Other metrics
10 Occupancy rate 93.1% 93.9% n 99.8% 94% 94%
11 Rent collected 98.9% 97.5% n 98.6% 98.5% 98.5%
12 Client satisfaction 94.6% 95.8% n 86.9% 95% 95%
Key Key
Exceeds last year's performance n
Below last year's performance n

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Operating margin

The overall operating margin was nearly 40% and, excluding exceptional surplus, the underlying margin was 8.6%. The social housing operating margin has reduced due to increased investments in IT infrastructure and management capabilities.

Interest cover ratio (EBITDA MRI)

This provides an approximation of cash generation compared to interest payments. The improvements in underlying surplus have contributed to the enhancement in this interest cover ratio. In addition, this satisfies loan covenants.

Social housing cost per unit

This is the key cost measure used by RSH and our unit cost has reduced by 1.7% in 2021. However, this cost is higher than the median cost for supported housing providers published by the RSH. Their publication on the ‘cost regression analyses’ recognises that supported housing providers’ unit costs can vary significantly between £8k and £14k per unit/annum. A supported housing provider’s average unit cost is dependent on (a) its income/cost proportions from supported housing (b) clients’ support needs (c) size of the organisation and (d) regional cost variances. Therefore, due to Transform’s south east location and size, our unit costs (including care and support) are in the higher end of this band.

Gearing ratio

Gearing is the proportion of borrowings in relation to the size of the asset base. During the year, we increased our asset base through the 2020-21 merger without an increase in loans, reducing the ratio. This satisfies loan covenant requirements.

Housing units acquired

There were four new units of accommodation acquired during the year and 76 units transferred through the 2020-21 merger of which 16 units are empty awaiting redevelopment or sale.

Re-investment

The re-investment levels have increased during the year. We made capital investments on both existing and new property units. As identified and reported last year, two sheltered housing schemes required significant capital investments to comply with fire safety recommendations.

1 9

Return on Capital Employed (ROCE)

The return is based on the overall operating surplus including a gift through merger and asset sales. The ROCE is 9.2% which exceeded budget expectations and the median for the sector.

The occupancy rate for Transform is in the lower quartile performance among the benchmarking group. Transform is committed to making future improvements in this area.

Social value

Our service delivery includes three components:

Occupancy rate

The occupancy rate declined during the year and was below target. This was mainly due to the pandemic causing delays in local authority referrals and subsequent difficulties processing applications.

  1. Housing services – the provision of safe and secure homes for clients, providing independence and stability to improve lives.

  2. Support and advice – this enhances clients’ independence and quality of life.

  3. Community activities – participation in training, education and volunteering improves clients’ wellbeing and provides future opportunities.

Rent collection rate

The rent collection rate for 2020-21 was influenced by the effects of the pandemic and the resulting financial difficulties faced by clients. Despite these challenges, Transform’s collection rate increased during the year and is comparable to the median for supported housing providers. We recognise that further work may be required to maintain a similar, or better, collection level going forward.

The impact of our services can be measured as a creation of social value at two levels – benefitting individual clients and benefitting society overall.

Why do we measure social value?

Client satisfaction

A range of measures is used to ascertain satisfaction levels. The overall satisfaction for 2020-21 was 94.6% (2020: 95.8%), despite the pandemic effects. Service satisfaction remained high for (a) quality of housing 92.7% (2020: 95%) and (b) quality of support 96.9% (2020: 98.2%). Moreover, 96.4% of clients were satisfied with the actions taken by Transform to keep them safe and secure during the pandemic.

Social value measurement – key questions

  1. Has the service delivery achieved positive outcomes for clients?

  2. What value can be placed on the outcomes delivered?

Social value measurement tools

Future improvement plans

Our social housing operating margin has declined and this was mainly due to investments made in upgrading our management and IT infrastructure. This margin is likely to come under further pressure with the increasing regulatory compliance requirements arising from the fire safety bill, the Government’s 2050 net carbon zero target and the social housing white paper. This emphasises the need to exercise effective cost controls.

Client wellbeing gains

The client satisfaction survey for 2020-21 reported an average wellbeing rating of 85.3% (2020: 86.4%). This covers a range of wellbeing measures to improve financial, physical, emotional and mental health wellbeing. This figure has dipped slightly from the previous year despite the challenges during the difficult period marked by the pandemic.

2 0

Social value success story

To provide an example of the benefits realised by our work, we have assessed the social value of our services for one client, Jon. We considered Jon’s story and the journey he has been on since receiving support from Transform. We then used social value tools to measure the impact of the support provided by Transform and placed a financial value on the outcomes achieved. We used the following two established social value tools:

HACT wellbeing valuation

This was used to calculate the wellbeing benefits to Jon of the support provided by Transform. We have used the standard values provided by HACT to place a financial value on these improvements. These values represent the amount of extra income a person would need to be able to increase their wellbeing by the same amount as the support provided.

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Cost of
support and
accommodation
£15.4k
per year
Social value Wellbeing value
to society to Jon
£12k £38.7k
(Capgemini) (HACT)
Every £1
----- End of picture text -----

Capgemini benefits realisation tool

We used this to ascertain the financial savings to the public purse as a direct result of the support provided by Transform.

By combining the two, we can determine the overall social value of the support provided to Jon by Transform. We are then able to compare the social value with the cost to Transform of providing support to Jon and hence the related cost/benefit ratio.

Financial value

Social value to society £12k

Wellbeing value to Jon:

n Relief from alcohol/drug problems £10.8k
n Confdence and feeling in control £10.8k
n Relief from depression/anxiety £13.4k
n Employment and voluntary work £1.8k
n Managing fnances and paying debts £1.9k
Total wellbeing value to Jon £38.7k

Cost of support and accommodation per year £15.4k

Total social value for every £1 invested £3.29

2 1

Jon’s story

Things started getting tough when I was 16. I joined the army but didn’t stay long so when I was home my parents kept asking me what I was doing with my life. I started smoking weed and, when I turned 18, I’d go straight to the pub whenever I had any money.

to see mum, he told me she was dying. Things got heated, we got into a fight, and I ended up slashing his face with a knife so I got arrested for GBH and burglary.

I pled guilty and was sent to prison. I saw a forensic psychologist and he diagnosed me with antisocial personality disorder, borderline personality disorder and ADHD – he also said that the alcohol and my circumstances had a huge part to play in that.

Both my parents were drinkers, and I didn’t really get on with my dad, we would argue a lot. We’d end up having a fight or they’d tell me to leave and then they’d call the police. There’s been over 27 arrests, over a period of years.

When I came out of prison, I didn’t think anywhere would take me in because of how serious my crime was. But the woman from probation arranged for me to have an assessment with Transform on the day I got out and a few days later they offered me a five-day ‘guesting period’.

The final straw was after I got a job with a delivery company. My mum said: “promise me you won’t drink when you get paid”, but there wasn’t much to do where I lived so when some friends invited me to the pub, I went. I came home drunk, and dad told me I had to get out. That was December 2016.

The deputy manager Sally was really stern with me. She said any antisocial behaviour or drinking, and I’d be gone. I couldn’t believe I had a whole flat to myself. I didn’t think it would go well so I asked if I should bother unpacking, but she said: “Yeah, unpack your stuff.” Every day I came downstairs to do a breathalyser test and, when they said I could stay, it felt really good.

I took everything I owned and found this place called the “All Night Café”. If you’re homeless, you could just rock up there and sleep on the floor. I went to the Council for help, and they found me a place to stay, but I moved a few times which was tough because I was getting further and further away from anyone I knew.

“I didn’t have a reason to change before but thanks to Transform, now I do.”

That was when things began to change for me. I realised that if they were going to trust me with a whole flat, I could manage to get sober. All that time spent staring out of my cell window thinking: “What am I going to do?”, well this is it now. Having people believe in me has definitely helped me stay away from alcohol.

The last place I stayed wasn’t great for a few reasons. Eventually they told me I had to leave the shared house but there was a bed for me at the night shelter. I didn’t really want to go there but I had no choice. They would kick us out in the morning and because there was nothing to do, I would just sit and drink in the park.

My Transform keyworker Simon is brilliant, he’s got a great sense of humour and we’ve been through everything together. The support I get from Transform is more like guidance, they don’t just do everything for you. I thought I’d be useless at budgeting and paying bills because I used to spend all my money on drink, but they helped me budget; and now I’m really good at it. I even like saving money! I just got a job, which I didn’t think I’d ever have. I work in a charity shop and I haven’t been arrested since June 2019. The goal now is to get a full-time job and live a normal life.

My mental health went downhill quickly when I was homeless – it was a downward spiral. I tried killing myself a few times – I didn’t want to die; I just wanted the craziness to stop.

I was running out of options. I’d been staying with a friend but that didn’t work out. I was banned from the All Night Café and had no money, so I tried the Council again, but only managed to get back to where my parents lived. It was freezing cold and raining, so I walked to my parents’ house even though I hadn’t seen them for months.

I had so many chaotic years but it’s not until you talk about it and realise – that was actually my life. When you’re running away from the police, people are shouting at you and you’re in the middle of court cases, it seems fairly normal. I didn’t have a reason to change before but thanks to Transform, now I do.

There was no answer, so I hopped over the gate and climbed through the open back window – which was how I used to get in. My mum wasn’t there, but there was a bag full of alcohol, so I just stayed in the house drinking. My brother came home and found me. When I said I’d come

2 2

Simon, Jon’s Keyworker

I’ve worked with Jon since he came to Transform in 2020. When I looked at his history on his referral form we thought he was going to have a challenge to maintain abstinence from alcohol, but his motivation has been amazing. He has not drunk at all – not even a mini relapse since he moved in. He has fully accepted that alcohol ruined his life. Jon has demonstrated a model recovery to date and shown what can be achieved when people choose abstinence.

There were times in our weekly sessions where Jon would tell me he was having a bad day but couldn’t identify why. It was clear that there was an underlying mental health issue, so I encouraged Jon to get a referral for therapy which he has, and I think it is really helping him. I’m a great believer in getting people to take responsibility for their own mental health. There’s no magic cure. If you can learn to manage your challenges, you can get on with life and do whatever you want to do.

He is very personable and enthusiastic. When Jon moved in we developed a support plan together so he could identify his goals and how to achieve them. One of the challenging parts of supporting Jon is that he can be very compulsive and will get an idea in his head and want to do it immediately. After about a month of being with Transform, Jon felt like he was ready to move on. We’re not here to hold people back, so if they want to move on, then of course we’ll help as much as we can, but we do try and ensure they are ready first. It took a while to slow Jon down, but he realised in the end that it was too soon.

Jon’s main support need when he came here was learning how to live independently, including maintaining a tenancy, which he’d never done before. That included budgeting and helping him sort out his debt. Jon’s motivation to abstain from drugs and alcohol has been strong, however he has benefitted from discussions in the weekly support sessions around relapse prevention and how to manage emotionally without using substances. I think he would agree he’s a lot happier now.

We always try and get clients involved in the local community through voluntary work as structure is important. Jon was resistant at the beginning as he felt he didn’t need to build a life here as he would be moving. Now, though, he’s started voluntary work in a local charity shop. He decided he wanted to do part-time work, so once we’d sorted out what he could earn while being on Universal Credit without it affecting benefits, he just went out and got a job.

We’ve seen some great changes in Jon and we are pleased to have been able to help him to start to rebuild his life. The foundation for Jon moving forward is to maintain his abstinence and to continue to manage his mental health. It is very positive to see Jon having the confidence to start work and I hope he now believes in the great potential he has.

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Improvements in Jon’s wellbeing

With the support of Transform, Jon has achieved the following improvements in his life:

Alcohol and drug use

Alcohol played a key part in the problems Jon experienced in his past. To move on in his life, it was vital that Jon addressed his drinking. Since moving to Transform, Jon has been completely abstinent from alcohol and this has given him the firm foundation he needs to start rebuilding his life.

Finances

When Jon first moved to Transform he had debts and was unable to budget his money as most would be spent on alcohol. He has since managed to repay his debts and has taken firm control of his finances. With support from Transform colleagues, Jon now carefully budgets his money. He is no longer spending money on alcohol and even finds he is able to save a small amount each month for when he eventually moves on.

Mental health

Jon can struggle with depression. To help him address this he is now receiving support from the Mental Health Integrated Service and is attending a ‘Managing Emotions’ group. Jon can still experience low moods, but for the first time he is receiving support to help him cope.

Employment

In the time that Jon has been living with us he has made incredible progress with structuring his time. He now volunteers two mornings a week at a local charity shop and, more recently, he has started part-time paid employment as a cleaner.

Offending

Jon regards the time he spent in prison as having been a wake-up call for him. Since leaving prison and receiving housing and support from Transform, Jon has been able to turn his life around. He has not re-offended, is reliably attending meetings with his Probation Officer and intends to complete his order in January 2022.

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1 14,1 IIA 4 1 yll I"IP Risk management 40

Principal risks and uncertainties

Transform’s approach to risk management

The Board is responsible for the risk management process and continually assessing which risks are relevant to Transform in the context of the current climate including, the current Covid-19 pandemic and the post-Brexit transition. The Executive team maintains a register which covers various risks including those related to development, operations, cyber-security and finances. The risks and mitigations within this register are regularly updated and communicated to the Board.

The Board has identified the following as Transform’s principal risks and has approved the related controls detailed below.

Covid-19 pandemic ongoing effects

Non-compliance with legislative and regulatory standards

Potential failure to discharge safeguarding responsibilities

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Non-compliance with health and safety legislative and regulatory requirements

Management capacity to deliver change

Potential cyber-attacks on Transform’s IT systems

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Social Housing White Paper

This was published in November 2020 and outlines seven commitments for social housing providers including enhancing the existing Decent Homes Standard. There is also a requirement to have three nominated people within Transform responsible for health and safety, consumer standards and building standards respectively. Some of these commitments may have a cost implication.

Sustainability target

Transform is committed to meeting the Government’s sustainability targets – EPC ratings C by 2030 and the net zero carbon targets by 2050. These targets, along with the increased fire safety measure costs, require a significant capital commitment both for retrofitting existing properties and for ensuring new developments meet these standards. These commitments are factored in to our asset management programme and long-term business plan.

Going concern

The Board has reviewed our latest financial forecasts incorporating the necessary investment in existing and new stock to meet all the above commitments. Our trustees are, to the best of their knowledge, satisfied that the covenant compliance will be maintained throughout the period of the plan and have modelled a number of scenarios to test the headroom in the plan. After making adequate enquiries, the Board has a reasonable expectation that Transform has adequate resources to continue to operate for at least 12 months from the date of approval of the financial statements. Therefore, the Board believes that Transform is well-placed to manage its risks successfully. For this reason, we continue to adopt the going concern basis in preparing the financial statements.

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vernance, regulation and- compliance- 21

Governance

Board of Trustees

As at 31 March 2021, the Board of Trustees (the Board) comprised eight non-executive members. All Trustees share the same responsibilities and legal status and ultimately ensure Transform complies with all regulatory and statutory requirements. Trustees are appointed through an open and transparent process based on regular assessment of the required skills and experience for the Board to discharge its duties effectively.

Board members are appointed for a term of three years and may serve no more than three consecutive terms. As the Board is considering adopting the new National Housing Federation’s (NHF) Code of Governance, which recommends a maximum tenure of two terms, the Board is also reflecting on board renewal and suitable continuity arrangements to ensure Transform transitions to the new Code successfully.

Following the conclusion of an open recruitment process, two Trustees were elected at the Annual General Meeting (AGM) in September 2020. The merger with Reigate Quaker Housing Association led to an additional Trustee joining the Transform Board at the same AGM.

Transform’s Articles provide for the Chair to be elected for a three-year term, which can be extended at the discretion of the Board. The Chair’s term was extended for a further three years, recognising the challenges presented to Transform due to the pandemic and the benefit of having continuity in this pivotal role for the organisation. Due to lockdown restrictions, all board and committee meetings, including the AGM, were carried out remotely during the year.

Board and committee focus

The Board is responsible for the governance of Transform. Its role is to lead, direct, control, scrutinise and evaluate Transform’s work.

During the year, the Board considered key issues which included:

The Board delegates specific responsibilities to five committees and they each report to the Board where their recommendations are considered and approved where necessary.

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Committee Key matters 2020-21
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Committee Key matters 2020-21
Client Services &
Performance		 ■
Maintained oversight on client services performance.
■
Considered the detail of the care services sale.
■
Approved policies including those relating to domestic abuse and complaints.
■
Approved the extension of the winter shelter and Covid cabins in Camberley, following the
success of the Elmbridge cabins.
Development &
Asset Management		 ■
Asset management compliance and oversight of performance.
■
Health and safety compliance.
■
Property investment/disposal decisions.
■
Commissioned a full stock condition survey.
Finance & Audit ■
Risk management.
■
Internal/external audit.
■
Financial management.
■
Financial due diligence for care sale and mergers.
Nominations ■
Reviewed Board/committee composition.
■
Recommended Board appointments.
■
Reviewed succession planning for Board/Executives.
People ■
Completed a pay and reward review.
■
Focused on Transform providing the best working environment for colleagues,
especially during the pandemic, including wellbeing, change management and other
colleague-related matters.

Board effectiveness

The Board recognises the importance of monitoring and improving its performance. This is primarily achieved through annual appraisals and ongoing development activities. Trustees are also encouraged to attend events and networking opportunities held by recognised sector bodies such as the National Housing Federation.

In recognition of the preparation required to adopt the NHF Code of Governance 2020, the Board commissioned a review of the governance framework. The implementation of the actions for improvement will form part of the work of the newly created Head of Governance & Assurance role.

Governance and Financial

Client engagement

We have begun to refresh our client involvement strategy. We hold regular client forum meetings comprising of a cross-section of clients and have been assessing how we can increase engagement opportunities.

Code of Governance

Viability Standard

Transform is required to formally certify compliance with the Regulator of Social Housing’s Governance and Financial Viability Standard and supporting Code of Practice on an annual basis. A detailed and evidence-based assessment was completed against each requirement and the Board approved this at its meeting on 29 July 2021.

Transform has adopted the National Housing Federation’s (NHF) Code of Governance 2015 and Code of Conduct 2012 and the Board can confirm compliance with these codes.

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Regulation and compliance

Public benefit reporting

Transform’s aims, objectives and activities demonstrate public benefit as defined by the Charity Commission. The Board ensures that planned activities meet the organisation’s objectives. Transform’s work supports those on the margins of society to overcome the challenges they face in their lives.

Fundraising code compliance

The Code of Fundraising Practice sets out the responsibilities that apply to fundraising carried out by charitable institutions and third-party fundraisers in the UK. To provide reassurance to donors and supporters, and to demonstrate high standards for our fundraising activities, we are registered with the Fundraising Regulator. We have adopted the Regulator’s Code of Fundraising Practice and the Board received a statement of full compliance at its 29 July 2021 meeting.

We are committed to protecting our donors and the public from any unreasonably intrusive or persistent fundraising approaches and will not apply any undue pressure on them to donate. Colleagues deal gently and with extreme care with existing and potential donors, protecting our charity’s reputation and values. We do not use any external professional fundraising services.

Complaints 2020-21

In July 2020, the Housing Ombudsman Service published a new Complaint Handling Code which set out good practice in how landlords respond to complaints effectively and fairly. The Code is part of the Ombudsman’s new powers in the revised Housing Ombudsman Scheme.

At its 15 December 2020 meeting, the Board approved Transform’s revised Complaints Policy and Procedure, which is fully compliant with the new requirements. At the same meeting, the Board approved the self-assessment against the new Code, which certified its full compliance. The updated Transform policy and the self-assessment were published on the Transform website and we have committed to completing the self-assessment annually.

In 2020-21 Transform handled a total of 18 reported complaints (2019-20: 19). No complaints were referred to the Housing Ombudsman during the year. This number of reported complaints is in line with the past two years. There were no significant spikes highlighting any team which received more complaints than any other.

Of the 18 complaints recorded, two related to the same property, with the remaining 16 all relating to different properties. In terms of the type of property, 59% of complaints were made by, or about, clients living in flats and 41% by, or about, clients living in shared houses.

We use the Fundraising Regulator’s logo on fundraising communications. Transform has not yet received any requests to remove or suppress donor data from the regulator’s Fundraising Preference Service.

The fundraising management team continually monitor guidance and regulations from the Charity Commission and the Fundraising Regulator, and staff are kept abreast of changing regulations through training, one to ones and team meetings.

We received no complaints relating to fundraising. We have carried out an internal review and have no evidence of non-compliance with the Fundraising Regulator’s standards, as required by the Charities (Protection and Social Investment) Act 2016.

As part of our commitment to continual improvement, we value the opportunity to learn from such complaints to help us get things right first time and, in addition to resolving the individual complaints, we have carefully scrutinised them and taken action across services to mitigate against future complaints.

One example noted this year has been a rise in complaints from clients about other clients’ behaviour. We believe this may be due to the impact of the pandemic with clients spending more time at home and in the company of their fellow clients. We will continue to monitor this type of complaint as lockdown measures are lifted and will be looking at ways to mitigate such occurrences in the event of future lockdowns. Actions may include increased communications with clients and more discussions at house meetings.

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Statement of Board responsibilities

The Board is responsible for the preparation of the Strategic Report (incorporating the Board Members’ Report) and the financial statements in accordance with the applicable law and regulations.

Company law requires the Board to prepare financial statements each year. Under the law, the Board has elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards as reflected in FRS 102 and applicable laws). Under Company law, the Trustees must not approve the financial statements unless they are satisfied that they give a true and fair view of the statement of affairs and surplus or deficit of the company.

In preparing these financial statements, the Board is required to:

The Trustees are responsible for keeping adequate accounting records that are sufficient to show and explain the company’s transactions and disclose them with reasonable accuracy at any time. They ensure that the financial statements comply with the Companies Act 2006. They are responsible for safeguarding the assets of the company and for taking reasonable steps for the prevention and detection of fraud and other irregularities.

In so far as all the Board Trustees are aware:

The Trustees are responsible for the maintenance and integrity of the corporate and financial information, including Transform’s website.

Internal control framework

The Board acknowledges its overall responsibility for establishing and maintaining the system of internal controls and for annually reviewing its effectiveness. The system of internal controls is designed to manage, rather than to eliminate, the risk of failure to achieve the business objectives and to provide reasonable assurance against material misstatement or loss. The process of identifying, evaluating, and managing significant risks facing the organisation is ongoing. It has been in place from 1 April 2020 to the date of board approval (29 July 2021).

The key elements of the framework include:

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The fraud register is maintained and is inspected by the internal auditors and we have regular fraud updates reporting any such occurrences to the Finance and Audit Committee. During the year 2020-21, there were no incidents of fraud. With the increasing incidence of cyber fraud, we have reviewed the controls around this and have also obtained a cyber-essentials certificate which recognises good practice in the industry. The internal audit partner from TIAA attends a Finance and Audit Committee meeting every year, providing assurance to the Committee and Board.

External auditors

Nexia Smith & Williamson were re-appointed as external auditor at our Annual General Meeting on 24 September 2020 and a resolution for their re-appointment will be proposed at the Annual General Meeting on 23 September 2021.

By order of the Board.

Mark Austen Chairman

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Auditor’s report and financial statements Front page

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Auditor’s report

Nexia Smith & Williamson

Report of the independent auditor to the members of Transform Housing & Support

Opinion

We have audited the financial statements of Transform Housing & Support (the ‘Company’) for the year ended 31 March 2021 which comprise the Statement of Comprehensive Income, the Statement of Financial Position, the Statement of Changes in Reserves, the Statement of Cash flows and the notes to the financial statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (United Kingdom Generally Accepted Accounting Practice).

In our opinion, the financial statements:

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the financial statements section of our report. We are independent of the Company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Conclusions relating to going concern

In auditing the financial statements, we have concluded that the Board Members’ use of the going concern basis of accounting in the preparation of the financial statements is appropriate.

Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the Company’s ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.

Our responsibilities and the responsibilities of the Board Members with respect to going concern are described in the relevant sections of this report.

Other information

The other information comprises the information included in the Financial Statements, other than the financial statements and our auditor’s report thereon. The Board Members are responsible for the other information. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.

In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements, or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or

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apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. If, based on the work we have performed, we conclude that there is a material misstatement of this other information; we are required to report that fact.

We have nothing to report in this regard.

Opinion on other matters prescribed by the Companies Act 2006

In our opinion, based on the work undertaken during the audit:

Matters on which we are required to report by exception

In the light of the knowledge and understanding of the Company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report (incorporating the Board Members’ report).

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

Responsibilities of Board Members

As explained more fully in the Statement of Board’s Responsibilities, the Board Members are the directors of the Company for the purposes of company law. The Board Members are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal controls as the Board Members determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, the Board Members are responsible for assessing 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 the Board Members either intend to liquidate the Company or to cease operations, or have no realistic alternative but to do so.

Auditor’s responsibilities for the audit of the financial statements

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 an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance but is not a 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 the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed on the next page:

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We obtained a general understanding of the company’s legal and regulatory framework through enquiry of management in respect of their understanding of the relevant laws and regulations. We obtained an understanding of the company’s policies and procedures in relation to compliance with relevant laws and regulations. We also drew on our existing understanding of the company’s industry and regulation.

We understand that the company complies with the framework through:

In the context of the audit, we considered those laws and regulations which determine the form and content of the financial statements, those which are central to the company’s ability to conduct operations and those where failure to comply could result in material penalties. We have identified the following laws and regulations as being of significance in the context of the company:

We performed the following specific procedures to gain evidence about compliance with the significant laws and regulations above:

The senior statutory auditor led a discussion with senior members of the engagement team regarding the susceptibility of the company’s financial statements to material misstatement, including how fraud might occur. The key areas identified as part of the discussion were:

These areas were communicated to the other members of the engagement team not present at the discussion.

The procedures carried out to gain evidence in the above areas included:

The senior statutory auditor was satisfied that the engagement team collectively had the appropriate competence and capabilities to identify or recognise irregularities. In particular, both the senior statutory auditor and the audit manager have a number of years’ experience in dealing with group’s with similar risk profiles.

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A further description of our responsibilities is available on the Financial Reporting Council’s website at: www.frc.org.uk/auditorsresponsibilities . This description forms part of our auditor’s report.

Use of our report

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. 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.

Jacqueline Oakes

Senior Statutory Auditor for and on behalf of Nexia Smith & Williamson Statutory Auditors Chartered Accountants 25 Moorgate, London WC2R 6AY

2021

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Statement of comprehensive income for year ending 31 March 2021

Turnover Note
3		 Continuing
operations
£000s
10,561		 Discontinued
operations
£000s
1,803		 2021 total
£000s
12,364		 Continuing
operations
£000s
9,723		 Discontinued
operations
£000s
1,725		 2020 total
£000s
11,448
Operatingexpenditure 3 (9,432) (1,866) (11,298) (8,483) (2,189) (10,672)
Underlyingoperatingsurplus 1,129 (63) 1,066 1,240 (464) 776
Gain on disposal of housing properties 9 100 - 100 - - -
Donation of RQHA net assets 31 3,577 - 3,577 - - -
Operating surplus/(defcit) 4,806 (63) 4,743 1,240 (464) 776
Surplus on sale of care activity 32 - 98 98 - - -
Interest receivable 7 3 - 3 10 - 10
Interest and other fnancingcosts 8 (395) - (395) (422) - (422)
Surplus/(defcit) for the year 4,414 35 4,449 828 (464) 364
Other comprehensive income:
Actuarialgain/(loss) in respect of pension scheme (131) - (131) 217 - 217
Total comprehensive income for the year 4,283 35 4,318 1,045 (464) 581

The accompanying notes form part of these financial statements. The financial statements were authorised and approved by the Board on 29 July 2021.

Mark Austen

Paul Rees

Ratna Sukumaran

Chairman

Chairman of the Finance & Audit Committee

Director of Finance & Resources and Company Secretary

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Statement of financial position as at 31 March 2021

Fixed assets Note 2021 2020
£000s £000s
Tangible fxed assets – housingproperties and other fxed assets 11 50,846 46,346
Current assets
Trade and other debtors 12 1,551 1,094
Cash and cash equivalents 13 2,556 1,607
4,107 2,701
Creditors: amounts falling due within oneyear 14 (2,559) (2,034)
Net current assets 1,548 667
Total assets less current liabilities 52,394 47,013
Less: creditors – amounts falling due after more than oneyear 15 (25,109) (24,260)
Pension – defned beneft liability 24 (159) (67)
Other provisions for liabilities and charges 19 (182) (60)
Total net assets 26,944 22,626
Capital and reserves
Restricted reserve 237 176
General reserve - invested inproperty 25,260 21,664
- free reserve 1,447 786
26,944 22,626

The accompanying notes form part of these financial statements. The financial statements were issued and approved by the Board on 29 July 2021.

Company number: 01057984

Mark Austen Chairman

Paul Rees

Chairman of the Finance & Audit Committee

Ratna Sukumaran

Director of Finance & Resources and Company Secretary

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Statement of changes in reserves for year ending 31 March 2021

Balance at 1 April 2019 Restricted
reserves		 General reserves Total
Invested in
property		 Free reserves
£000s
146		 £000s
21,311		 £000s
588		 £000s
22,045
Surplus for theyear - 364 - 364
Other comprehensive income for theyear - 217 - 217
Total comprehensive income for theyear - 581 - 581
Transfer between reserves 30 (228) 198 -
At 31 March 2020 176 21,664 786 22,626
Surplus for theyear - 4,449 - 4,449
Other comprehensive income for theyear - (131) - (131)
Total comprehensive income for theyear - 4,318 - 4,318
Transfer between reserves 61 (722) 661 -
Balance at 31 March 2021 237 25,260 1,447 26,944

The accompanying notes form part of these financial statements.

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Statement of cash flows for the year ending 31 March 2021

Net cashgenerated from operating activities Note
22		 2021 2020
£000s
1,984		 £000s
1,215
Cash fow from investing activities
Purchase and refurbishment of housing properties (2,604) (1,683)
Proceeds from sale of tangible fxed assets 9 144 -
Netproceeds from disposal of care business 32 154 -
Cash received on merger 31 806 -
Merger expenses 31 (116) -
Grants received 345 40
Grants repaid (13) -
Interest received 3 10
Net cash used in investing activities (1,281) (1,633)
Cash fow from fnancing activities
Interestpaid (428) (358)
Further borrowing 944 862
Repayment of borrowings (270) (270)
Net cash used in fnancing activities 246 234
Net change in cash and cash equivalents 949 (184)
Cash and cash equivalents at:
Beginning of theyear 1,607 1,791
End of theyear 2,556 1,607

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Notes to the financial statements

1. Legal status

Transform Housing & Support is

Principal activity – the provision of housing and support to clients.

2. Accounting policies

The principal accounting policies are summarised below. Except as explained below, they have all been applied consistently throughout the year and to the preceding year.

Basis of accounting

The financial statements have been prepared in accordance with the UK Generally Accepted Accounting Practice (UK GAAP) including Financial Reporting Standard 102 (FRS 102) and the Housing SORP 2018: Statement of Recommended Practice for Registered Social Housing Providers. They comply with the Accounting Direction for Private Registered Providers of Social Housing 2019.

Transform’s objectives are to provide housing and support services and to improve the wellbeing for vulnerable and socially excluded clients. It is therefore considered as a Public Benefit Entity (PBE), in accordance with FRS 102.

Going concern

In preparing the financial statements, management has assessed the company’s ability to continue as a going concern. In this assessment management considered all available information about the future, which is at least, but is not limited to, 12 months from the date when the financial statements are authorised.

Our scenario analysis covered the potential impact of the following events:

Transform’s business activities, our current financial position, and the factors that are likely to affect our future development are set out in the Strategic Report. The company has in place adequate long-term debt facilities to fund our commitments on the strategic investments and development programmes, along with the company’s day- to-day operations. The company has a long-term business plan which shows that it can service these debt facilities whilst continuing to comply with lenders’ covenants. A wide range of multivariant stress tests have been run on the business plan including a normal suite of scenarios that are tested regularly. The multivariant stress tests include the impact of sensitivities on the company’s cash flow requirements, compliance with the debt facilities as well as covenants compliance. Mitigating actions, for instance, delays in non-essential expenditure, staff reductions, increased fire safety costs and the appropriate governance support has been factored for all scenarios. This stress test found that the business plan is robust and does not affect the company’s ability to meet its obligations.

On this basis, the Board has reasonable expectation that Transform has adequate resources to continue in operational existence for the foreseeable future, being a period of at least 12 months after the date on which the report and the financial statements are signed. For this reason, it continues to adopt the going concern basis in the financial statements.

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Significant management judgements

The following are management judgements in applying the accounting policies for the company that have the most significant effect on the amounts recognised in the financial statements.

Other key sources of estimation uncertainty

Information about estimates and assumptions that have the most significant effect on recognition and the measurement of assets, liabilities, income and expenses, is provided below. Actual results may be substantially different.

Turnover and revenue recognition

Turnover represents the income received or receivable from the following sources:

Rental and service charge income – this represents the rental and service charge income receivable for the year, net of any voids. The rental and service charge income from properties developed during the year is recognised from the point at which these properties reach practical completion or are otherwise available for letting. The enhanced housing management fees receivable that is funded by housing benefit is also included here.

Housing related support income – income is recognised as it falls due under the contractual agreements. The ‘block subsidy’ housing related support income is classed as social housing income and ‘block gross’ income as other social housing income in the Statement of Comprehensive Income.

Charitable donations – grants and donations from charitable trusts and voluntary sources for the development of property or for the acquisition of other tangible fixed assets are treated as income. Income is recognised on any significant pledges only after the grant conditions are fulfilled.

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Donation of net assets – in a merger or otherwise, when an entity donates its assets and liabilities to Transform, the donated assets and liabilities are recognised at their fair value. Any excess of the net fair value of assets and liabilities donated over costs incurred is then recorded as an exceptional income within the Statement of Comprehensive Income. This income is recognised, on legal completion of the agreement for the transfer of engagement.

Financial instruments

Financial instruments which meet the criteria of a basic financial instrument as defined in Section 11 of FRS 102 are accounted for under an amortisation cost model.

Non-basic financial instruments are recognised at fair value using a valuation technique with any gains or losses being reported in surplus or deficit. At the year end, the instruments are revalued to fair value, with the movements posted to the income and expenditure account.

Transform’s significant financial liability is the bank loan, and this is classed as a basic financial instrument, measured at amortised cost. The values are similar to those previously shown with no significant adjustments.

Any payment arrangements entered into with tenants are also classed as basic instruments and need to be measured at their present value. Our assessment shows that Transform has a limited number of such agreements at the year end, and these are not considered to be material. Transform does not have any other financial instruments falling into the category of financing transactions.

Housing properties and depreciation

Housing properties are properties held for the provision of social housing or otherwise to provide social benefit. Housing properties are principally properties available for rent and stated at cost less accumulated depreciation and impairment losses. Cost includes the cost of acquiring the land and building, development costs, and the interest cost capitalised during the development period. Works to existing properties which replaces a component that has been treated separately for depreciation purposes, along with those works that result in increase in net rental income over the lives of the properties, thereby enhancing the economic benefits of the assets, are capitalised as improvements.

Housing properties under construction are stated at cost and are not depreciated. Donated land and other assets are included within costs at fair value at the time of the transfer.

The property disposals are recognised in the financial statements only when the legal completion for the transaction is concluded, realising any surplus or deficit on the disposal.

Depreciation is charged over the estimated useful lives of the structure and major components of the housing properties, so as to write down the cost of each component to its estimated residual value, on a straight line basis, over its estimated economic life. No depreciation is charged on freehold land. Leasehold properties are amortised over the life of the lease or their estimated useful economic lives in the business, if shorter. Depreciation is charged on qualifying fixed assets on the following estimated useful lives:

Components identifed within housing properties
Structure
100years		 Components identifed within housing properties
Structure
100years		 Other fxed assets
Furniture and fttings
7years		 Other fxed assets
Furniture and fttings
7years
Roofs 70years Offce equipment 7years
Flat roofs 15years Offce fttings 10years
Windows 30years Specialist software 7years
Kitchens 15-20years Computer equipment 3years
Bathrooms 25-30years
Boilers 15years
Fire doors 30years
Other buildingfacilities 10years

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Impairment of housing properties

Housing properties are assessed annually for impairment indicators. Where indicators are identified, an assessment for impairment is undertaken comparing the schemes carrying amount to its recoverable amount.

For the purposes of impairment assessments, housing properties are grouped together into schemes. Each scheme typically comprises one or more buildings in the immediate locality, and each building consists of one or more accommodation units. Schemes are typically developed or acquired as a single block of units.

When comparing a scheme’s carrying amount with its recoverable amount, any excess carrying amount on the scheme is written down to its recoverable amount. The resulting impairment loss is recognised as an operating expenditure.

With regard to supported housing schemes, management deems the properties are held not just to generate future cash, but to provide an additional social value i.e. these properties are held for their service potential. Therefore, the recoverable amount for these properties should be higher than (a) fair market value less cost of sale, and (b) its Value In Use Service Potential (VIU-SP).

Value in Use Service Potential (VIU-SP) – This can be used when the schemes can be let in the current condition and that fulfils a social purpose in addition to generating net rental cash flow. The ‘depreciated replacement cost’ (DRC) methodology can be used to measure this.

The DRC basis considers (a) cost of purchasing an equivalent property on the open market, and (b) the rebuilding cost of the property (of a similar condition, age, location, and type) less depreciation, considering the age and condition of the property. However, when establishing no active market for these properties, then (b) above (i.e. rebuilding costs less depreciation) can be considered as value in use for the properties under DRC basis.

Other fixed assets

Other tangible fixed assets are measured at cost less accumulated depreciation. Depreciation is provided evenly throughout the assets’ estimated useful lives.

Government grants

Government grants include grants receivable from Homes England, Local Authorities and other government organisations. Government grants received for housing properties are treated as deferred income and recognised in turnover over the estimated useful life of the housing property structure, under the accrual model.

Revenue grants are recognised in the Statement of Comprehensive Income over the same period as the expenditure to which they relate, once reasonable assurance has been gained that the entity will comply with the conditions and that the funds will be received. Grants due from government organisations or received in advance are included as current liabilities.

Government grants released on the sale of the property may be repayable but are normally available to be recycled and are credited to a Recycled Capital Grant Fund and are included in the balance sheet in creditors. If there is no requirement to recycle or repay the grant on disposal of the asset, any unamortised grant remaining within creditors is released and recognised as income in the Statement of Comprehensive Income.

Other grants

Grants received from non-government sources are recognised using the performance model. A grant which does not impose specific future performance conditions is recognised as revenue when the grant proceeds are received. A grant that imposes specific future performance related conditions on the company is only recognised when these conditions are met. A grant received before the revenue recognition criteria are satisfied is shown as a liability in the Statement of Financial Position.

Leases

Leases are classified as finance leases where the terms of the lease transfer substantially all the risks and the rewards of ownership of the leased asset to the company. All other leases are classified as operating leases.

Rental payable under operating leases is charged to income and expenditure on a straight-line basis over the lease term. With regard to lease incentives, the aggregate benefits of the lease incentive are recognised as a reduction in expenses recognised over the term of the lease.

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Cash and cash equivalents

This includes all forms of cash and deposits repayable on demand, overdraft repayable on demand and short-term deposits held with various banks. These cash balances are used in our cash flow statements and future cash projections.

Interest payable

Interest costs are capitalised on borrowing to finance the development of qualifying assets to the extent that it accrues in respect of the period of the development. Other interest payable is charged to the Statement of Comprehensive Income.

Pension

Transform participates in two defined contribution pension schemes – the group personal pension scheme operated by Aviva Group (Friends Life) and the Social Housing Pension Scheme (SHPS) defined contributions scheme – as well as the SHPS multi-employer defined benefits scheme.

Defined contribution pension schemes

For the SHPS, the association has been able to identify its share of the scheme assets and scheme liabilities from 1 April 2018 and has applied defined benefit accounting from this date onwards.

The scheme assets are measured at fair value. Scheme liabilities are measured on an actuarial basis using the projected unit credit method and are discounted at appropriate high-quality corporate bond rates. The net surplus or deficit is presented separately from other net assets on the statement of financial position. This has been recognised within the defined benefit pension liability on the face of the Statement of Financial Position.

The current service cost and costs from settlements and curtailments are charged against operating surplus. Interest is calculated on the net defined liability. Re-measurements are reported in the Statement of Comprehensive Income.

Provision for liabilities

Provisions are recognised when the company has a present obligation as a result of a past event, and it is probable that the company is required to settle the obligation, and a reliable estimate can be made of the amount of the obligation.

The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation, at the end of the reporting period, taking into account the risks and uncertainties surrounding the obligation.

Value Added Tax

Transform is not registered for Value Added Tax (VAT) and VAT is accounted for as a cost to the organisation within the respective expenditure heading.

Reserves

The reserves comprise the general reserves and restricted reserves. The restricted reserves are provided by donors to be spent on specific client activities and general reserves have no restrictions on their use. Our Reserve Policy is shown in the strategic report.

Free reserves

Free reserves are unrestricted reserves that are currently not invested in the property assets and are freely available to fund charitable activities.

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3. Particulars of turnover, operating expenditure and operating surplus

2021
Note
Continuing operations		 2021
Note
Continuing operations		 Turnover Operating
expenditure		 Operating
surplus
(defcit)
£000s £000s £000s
Social housing lettings 4 7,445 (6,241) 1,204
Other social housing activities
Housingrelated support income 2,910 (3,098) (188)
Charitable donations 110 (77) 33
Other income 96 (16) 80
10,561 (9,432) 1,129
Discontinued
Other social housing activities
Home based care 1,803 (1,866) (63)
12,364 (11,298) 1,066
Gain on disposal ofproperty, plant and equipment 9 100
Donation of RQHA net assets 31 3,577
4,743
2020
Note
Continuing operations		 Turnover Operating
expenditure		 Operating
surplus
(defcit)
£000s £000s £000s
Social housing lettings 4 6,775 (5,361) 1,414
Other social housing activities
Housingrelated support income 2,715 (2,938) (223)
Charitable donations 166 (140) 26
Other income 67 (44) 23
9,723 (8,483) 1,240
Discontinued
Other social housing activities
Home based care 1,725 (2,189) (464)
11,448 (10,672) 776

As detailed in note 4, the basis of cost allocations was refined in the year and the comparative information has been restated to be consistent. This results in the 2020 costs analysis above being amended from those previously reported.

4 9

4. Particulars of turnover and operating expenditure from social housing lettings

Rents receivable net of identifable service charges Note 2021 Restated 2020
£000s
4,554		 £000s
4,183
Charges for housingrelated support services 980 932
Service charges income 1,707 1,458
Amortisedgovernmentgrants 16 204 202
Turnover from social housing lettings 3 7,445 6,775
Operating expenditure:
Service charge costs 1,620 1,382
Management 1,656 1,178
Routine maintenance 1,219 886
Planned maintenance 140 419
Bad debts 118 98
Propertycharges – lease/management agreement 560 540
Depreciation of housing properties 11 865 798
Other costs 63 60
Operating expenditure on social housing lettings 3 6,241 5,361
Operating surplus on social housing lettings 3 1,204 1,414
Void losses (522) (417)

During the year we refined the calculations of the above note and thereby adjusted the comparative costs to be consistent with those reported in 2021.

The operating costs have increased due to the RQHA merger and additional investment in IT and management staff costs.

5 0

5. Directors and key management personnel salary cost

Executive team covers those shown in page 2. None of the Board members received any salary.

----- Start of picture text -----
2021 2020
£000s £000s
----- End of picture text -----

2021
2020
£000s
£000s		 2021 2020
Aggregate emoluments including pension scheme contributions, payable to:
Executive team(2021: 6.3 FTEs, 2020: 4.7 FTEs) 492 380
The highestpaid Executive team member:
Emoluments 113 112
Pension contributions 10 10

The Executive team represents the key management personnel under FRS 102 and their aggregate emoluments including employer’s national insurance contributions were £542k (2020: £419k). There were no compensation payments for loss of office to any previous members of the Executive team (2020: nil).

The Chief Executive was the highest paid Executive member during the year. His pension arrangements are similar to those of other colleagues – a money-purchase pension scheme with no additional benefits.

6. Employee information

6. Employee information
The average number of employees employed (headcount)
Housing, care and support staff		 2021 2020
Number
149		 Number
166
Administration staff 39 35
Maintenance staff 7 7
195 208
The average number of employees employed (FTEs)
Housing, care and support staff		 2021 2020
Number
127		 Number
141
Administration staff 33 27
Maintenance staff 7 7
167 175

The number of full-time employees is calculated based on a 39-hour working week. Following the sale of the care activity to Apex Prime Care on 28 February 2021, 65 staff were TUPE transferred.

Staff costs for the above persons:
Wages and salaries		 2021 2020
£000s
4,805		 £000s
4,727
Social securitycosts 393 359
Other pension costs 176 171
5,374 5,257

5 1

The number of full-time equivalent staff who received remuneration (including pension contributions) above £60k (including the Executive team) is shown in the following bands:

(including the Executive team) is shown in the following bands:
The average number of employees employed (headcount)
More than £60,000 but not more than £70,000		 2021
4		 2020
1
More than £70,000 but not more than £80,000 1 1
More than £120,000 but not more than £130,000 1 1

7. Interest receivable

7. Interest receivable
Interest from bank deposits 2021 2020
£000s
3		 £000s
10

8. Interest and financing costs

8. Interest and fnancing costs
Interestpayable on bank loans 2021 2020
£000s
394		 £000s
416
Net interest expense on SHPS pension scheme 1 6
395 422

9. Surplus on property disposal

9. Surplus on property disposal
Disposalproceeds 2021 2020
£000s
144		 £000s
-
Carryingcost of the property (44) -
100 -

There was no capital grant allocation that requires recycling.

10. Surplus for the year

10. Surplus for the year
The operating surplus is arrived at after charging: 2021 2020
£000s
£000s
Depreciation of housing properties 865 798
Depreciation of other tangible fxed assets 150 69
Surplus on disposal ofproperty,plant and equipment 100 -
Operating lease rentals:
Land and buildings 471 467
Other leases 40 34
Auditor’s remuneration(excluding VAT):
Audit fees 27 19
Other services 1 7

5 2

11. Tangible fixed assets – housing properties and other fixed assets

Cost Housing
properties		 Properties
under
construction		 Total
housing
properties		 Furniture
and
equipment		 Total
£000s £000s £000s £000s £000s
At 1 April 2020 52,824 23 52,847 920 53,767
Additions 1,308 24 1,332 590 1,922
Transfer of engagement 2,438 435 2,873 21 2,894
Works to existing properties. 798 - 798 - 798
Disposals (137) - (137) (64) (201)
At 31 March 2021 57,231 482 57,713 1,467 59,180
Depreciation
At 1 April 2020 7,013 - 7,013 408 7,421
Charges for theperiod 865 - 865 150 1,015
Disposals (93) - (93) (9) (102)
At 31 March 2021 7,785 - 7,785 549 8,334
Net book value
At 31 March 2021
At 31 March 2020		 49,446 482 49,928 918 50,846
45,811 23 45,834 512 46,346

Works to existing properties £798k (2020: £386k) includes, fire safety improvement works costs of £550k (2020: £61k) and component replacement costs of £248k (2020: 325k).

The additions during the year include:

Housing properties book value, net of depreciation, comprises:

Housing properties book value, net of depreciation, comprises:
Freehold land and buildings 2021 2020
£000s
43,393		 £000s
40,126
Longleasehold land and buildings 4,778 4,072
Short leasehold land and buildings 1,757 1,636
49,928 45,834

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12. Debtors

----- Start of picture text -----
2021 2020
£000s £000s
----- End of picture text -----

12. Debtors
2021
2020
£000s
£000s		 2021 2020
Due within one year
Rent and service charges receivable 534 410
Less: provision for bad and doubtful debts (355) (241)
179 169
Trade debtors 832 507
Other debtors 109 128
Prepayments and accrued income 431 290
1,551 1,094

13. Cash and cash equivalents

2021 2020
£000s
2,556		 £000s
1,607
Cash in bank and in hand

The cash balances include deposits to meet Transform’s future working capital requirements.

14. Creditors: amounts falling due within one year

Housingloans Note
17		 2021 2020
£000s
270		 £000s
270
Deferredgrant income 16 207 202
Trade creditors 869 403
Loan interest due 107 141
Rent and service charges received in advance 115 57
Recycled capitalgrant fund 18 153 117
Capital accruals and retentions 13 19
Other creditors 581 553
Other taxation and social security 82 120
Other accruals and deferred income 162 152
2,559 2,034

15. Creditors: amounts falling due after more than one year

15. Creditors: amounts falling due after more than one year
Housingloans Note
17		 2021 2020
£000s
13,121		 £000s
12,416
Deferredgrant income 16 11,988 11,794
Recycled capitalgrant fund 18 - 50
25,109 24,260

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16. Deferred grant income

16. Deferred grant income
Balance at 1 April 2021 2020
£000s
11,996		 £000s
12,158
Grant received in theyear 403 40
Released to Statement of Comprehensive Income (204) (202)
Balance at 31 March 12,195 11,996
Deferred income to be released to the Statement of Comprehensive Income
Amount to be released inless than oneyear 207 202
Amount to be released inmore than one year 11,988 11,794
12,195 11,996

The above summary excludes grants transferred through the merger and grants which have been written off to income; the total grants received to date in respect of properties owned are detailed in note 28.

17. Housing loan debt analysis

17. Housing loan debt analysis
Due withinone year 2021 2020
£000s
270		 £000s
270
Due aftermore than oneyear
Loan 13,300 12,570
Less: issue costs (179) (154)
13,121 12,416
13,391 12,686

We have the following loan facilities in place:

Repayment profile:

Of the drawn loan facility £4.8m is on fixed interest rates and divided into several fixed-rate loan tranches with Barclays. These tranches have different interest rates ranging from 2.9% to 5.9% and varying maturity dates. Once they mature all tranches revert to variable rates.

The remainder is comprised of floating rate loans, with interest that is based on LIBOR (Barclays) rate or the bank’s base rate (Unity). We expect the SONIA transition for the LIBOR-linked Barclays loans to complete by September 2021.

The loan facilities are secured by fixed charges on a selected property portfolio. However, there are several other properties that are free from this charge and can be charged in the future to cover further borrowings, if required.

5 5

18. Recycled capital grant fund – Homes England

18. Recycled capital grant fund – Homes England
Balance at 1 April 2021 2020
£000s
167		 £000s
166
Grant repaid (14) -
Interest ongrant fund - 1
Balance at 31 March 153 167
Due withinone year 2021 2020
£000s
153		 £000s
117
Due aftermore than oneyear - 50

Included within the amount due within one year is £103k which is more than three years old. It has been agreed that this can be carried over and utilised in 2021-22.

19. Provisions for liabilities and charges

Balance at 1 April 2021 2020
£000s
60		 £000s
16
Spend in theyear (15) -
Release ofprovision (15) -
Increase in provision 152 44
Balance at 31 March 182 60

During the year dilapidation work at the Tern House office was completed and the balance of the provision released. The provision is to cover the cost of office dilapidations of the Mill Street office and entrance doors at several schemes as recommended by the scheme Fire Risk Assessments. This provision will be utilised in the next financial year.

20. Financial and other commitments

Capital expenditure commitments at the year-ends were as follows:

Expenditure contracted for but notprovided in the accounts 2021 2020
£000s
33		 £000s
142
Expenditure authorised bythe Board but notyet contracted 2,735 564

The above commitments will be financed primarily through borrowings, which are available for drawdown under existing loan arrangements with the balance through social housing grant.

5 6

Leasing commitments

The future minimum lease payments are set out below.

Within oneyear 2021 2021 2020 2020
Property Others Property Others
£000s
454		 £000s
13		 £000s
453		 £000s
20
Between one and fveyears 1,194 10 974 12
Over fveyears 952 - 1,287 -
At 31 March 2,600 23 2,714 32

21. Social housing units

The number of housing units under management at the end of the period:

The number of housing units under management at the end of the period:
Supported housingunits 2021 2020
864 786
Housingfor older people units 36 36
Total owned and managed 900 822
Not owned but managed 65 74
965 896

22. Notes to the statement of cash flow

Surplus for the year 2021 2020
£000s
4,449		 £000s
364
Adjustments for non-cash items
Surplus on disposal ofproperty,plant and equipment (100) -
Depreciation of tangible fxed assets 1,015 867
Surplus on sale of care activity (98) -
Gift on merger (3,577) -
Amortisation of loan arrangement fee 30 18
1,719 1,249
Movements in working capital
(Increase)in debtors (377) (195)
Increase/(decrease)in creditors 494 (59)
Increase in provisions - 50
1,836 1,045
Adjustments for investing or fnancing activities
Governmentgrants amortised in theyear (204) (202)
Pension costs less contributions (40) (40)
Interestpayable 395 422
Interest received (3) (10)
Net cash generated from operating activities 1,984 1,215

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23. Analysis of changes in net debt

----- Start of picture text -----
At 1 April Non-cash
Cash flow Total
2020 changes
£000s £000s £000s £000s
----- End of picture text -----

At 1 April
2020
Cash fow
Non-cash
changes
Total
£000s
£000s
£000s
£000s		 At 1 April
2020		 Cash fow Non-cash
changes		 Total
Housing loans
Due in less than oneyear 270 (270) 270 270
Due after more than oneyear 12,416 1,000 (295) 13,121
12,686 730 (25) 13,391
Cash at bank and in hand (1,607) (949) - (2,556)
At 31 March 11,079 (219) (25) 10,835

24. Social Housing Pension Scheme (SHPS)

Transform participates in SHPS, a multi-employer pension scheme which provides benefits to non-associated participating employers. The scheme is classed as a defined benefits scheme in the UK. The scheme is classed as a ‘last man standing’ arrangement. Therefore, the association is potentially liable for other participating employers’ obligation 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.

The most recent formal actuarial valuation was completed as at 30 September 2017 and rolled forward, allowing for the different financial assumptions required under FRS 102, to 31 March 2021 by a qualified independent actuary.

The net defined benefit liability at the year ended 31 March 2021 is £159k (2020: £67k).

Present value of defined benefit obligation

Present value of defned beneft obligation
Fair value ofplan assets 31 March 2021 31 March 2020
£000s
1,236		 £000s
1,120
Present value of the scheme liabilities 1,395 1,187
Defcit in plan (159) (67)
Defned beneft liabilities to be recognised (159) (67)

Reconciliation of the opening and closing present value of scheme liabilities

Opening Scheme liability 2021 2020
£000s
1,187		 £000s
1,428
Expenses 3 3
Interest expense 28 27
Actuarial losses/gains 229 (211)
Net benefts paid (52) (60)
Closing scheme liability 1,395 1,187

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Reconciliation of the opening and closing balances of the fair value of the plan assets

Openingfair value of theplan assets 2021 2020
£000s
1,120		 £000s
1,111
Interest income 27 21
Return onplan assets 98 6
Contributions bythe employer 43 42
Benefts paid (52) (60)
Fair value of assets 1,236 1,120

The actual return on plan assets (including any changes in share assets) over the period from 3 March 2020 to 31 March 2021 was £125k.

Amounts recognised in the surplus

2021 2020
£000s £000s
Amounts charged to operatingcosts 3 3
Amounts charged to interest costs 1 6
Total charge for theyear 4 9

Defined benefits costs recognised in the other comprehensive income

Experience to plan assets (excluding amounts included in net interest cost) – gain
(loss)		 2021 2020
£000s
98		 £000s
6
Experience gains and losses arising on plan liabilities – gain (loss) 2 19
Effects of changes in the demographic assumptions underlying the present value of
the defned beft obligation – gain (loss)		 (6) 13
Effects of changes in the fnancial assumptions underlying the present value of the
defned beneft obligation – gain (loss)		 (225) 179
Total actuarial gains or losses (before restriction due to some of the surplus not
being recognisable) – gain (loss)		 (131) 217
Total amount recognised in other comprehensive income –gain(loss) (131) 217

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Principal actuarial assumptions: Financial assumptions

Principal actuarial assumptions:Financial assumptions
Discount rate 31 March 2021 31 March 2021
% per Annum
2.04		 % per Annum
2.42
Future salaryincrease 3.82 2.71
Infation(RPI) 3.35 2.71
Infation(CPI) 2.82 1.71
Allowance for commutation ofpension for cash at retirement 75% of max. allowance 75% of max. allowance

Mortality assumptions

Mortality assumptions
Male retiringin 2021 31 March 2021 31 March 2020
Life expectancy at age of 65 years
21.6
21.5
Female retiringin 2021 23.5 23.3
Male retiringin 2041 22.9 22.9
Female retiringin 2041 25.1 24.5

Analysis of pension scheme assets

Analysis of pension scheme assets
Global equity 31 March 2021 31 March 2020
£000s
197		 £000s
164
Absolute return 68 58
Distressed opportunities 36 22
Credit relative values 39 31
Alternative riskpremia 47 78
Fund of hedge funds - 1
Emergingmarkets debts 50 34
Risk sharing 45 38
Insurance linked securities 30 34
Property 26 25
Infrastructure 82 83
Private debt 29 23
Opportunistic illiquid credit 31 27
Highyield 37 -
Opportunistic credit 34 -
Corporate bond fund 73 64
Liquid credit 15 -
Longleaseproperty 24 19
Secured income 51 42
Liabilitydriven investments 314 372
Net current assets 8 5
1,236 1,120

None of the fair value 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.

6 0

25. Fundraising activities

We receive fundraising income from individuals, companies and trusts and report performance on a cash basis. Based on the accounting policy, fundraising income is recognised in the financial statements only after the grant conditions are fulfilled.

Fundraising cashgenerated 2021 2020
£000s £000s
Fundraisingcash 110 166
Fundraising costs
Salarycosts 55 106
Other costs 22 34
77 140
Net fundraisingcontributions 33 26
Return on investment(ROI) 1.4 1.2
Fundraising cost ratio 70% 84%
Allocation of funds
Capitalprojects
Woking, Surrey - 19
Futuregenerations - 8
Move on Grants 8 41
Reigate, Surrey - 3
Redhill, Surrey - 3
Spelthorne, Surrey - 17
8 91
Revenueprojects
For specifc clientgroups/projects 102 75
102 75
Restricted funds allocated 110 166
Total fundraising cash allocation 110 166

As detailed in note 4, the basis of cost allocations was amended in the year and the comparative information has been restated to be consistent. This results in the 2020 costs above being amended from those previously reported.

6 1

26. Share capital

Transform is limited by guarantee and therefore has no share capital. Each member (see numbers below) agrees to contribute £5 in the event of the organisation winding up.

contribute £5 in the event of the organisation winding up.
Number of members
At 1 April		 2021 2020
No
24		 No
23
Joiningduringtheyear 1 2
Leavingduringtheyear (2) (1)
At 31 March 23 24

27. Related party transactions

The members of the Board and Executive Team are considered related parties as defined by FRS 102. Transform retains a register of members’ interests. We can confirm that we do not have any transactions that require disclosure.

28. Government grants

Government grants are Social Housing Grants and other grants received to enable us to acquire properties for social housing use. Should the properties to which the grants relate ceases to be used for social housing, the grants may be repayable in full.

Total grants received:
Grants credited to the income statement or arisingon merger/acquisition		 2021 2020
£000s
9,525		 £000s
9,321
Deferredgrants (note 16) 12,195 11,996
21,720 21,317

29. Taxation status

Transform is a registered charity and as such is exempt from taxation on its charitable activities.

30. Post year-end events

During the year merger discussions with Wey Valley Housing Association (WVHA) were well advanced, with both Boards and the WVHA shareholders approving the merger. On 1 April 2021 we received consent for the transfer of engagement from the FCA, and we notified the Regulator of Social Housing (RSH) accordingly. Our pre-merger financial due diligence has shown that Transform will gain approximately £700k of WVHA’s net assets through this merger.

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31. Donation of Reigate Quaker Housing Association (RQHA) net assets

RQHA transferred all its assets and liabilities as at 15 May 2020 to Transform, through a transfer of engagement. The table below sets out the net book value of the identifiable assets and their value to Transform.

The fair values of the housing properties were assessed as follows:

The valuations were undertaken by Savills.

The only social housing grant on the properties transferred relates to the properties which are to be retained and which will be used for social housing purposes for the foreseeable future. As such it is not expected that the grant will become repayable in the foreseeable future and the grant is not recognised in the financial statements (see also note 28).

----- Start of picture text -----
Restated to Fair value to
Book value
fair value Transform
£000s £000s £000s
----- End of picture text -----

Book value
Restated to
fair value
Fair value to
Transform
£000s
£000s
£000s		 Book value Restated to
fair value		 Fair value to
Transform
Housing loans
Housing property 2,205 668 2,873
Other fxed assets 21 - 21
Debtors 22 - 22
Short term liabilities (29) - (29)
Cash 806 - 806
3,025 668 3,693
Less: merger costs (116)
3,577

32. Sale of care activity

Transform’s Board made a strategic decision in September 2020 to exit from all care activity. Consequently, the income and the operating cost relating to the care activity is shown as discontinued activity in the Statement of Comprehensive Income. As of 28 February 2021, we completed the sale of the care business to Apex Prime Care. Through this sale process, all the care-related staff, clients and the goodwill were transferred to Apex Prime Care and Transform retained the care-related net assets as at that date; the surplus arising on the sale is shown below.

the care-related net assets as at that date; the surplus arising on the sale is shown below.
Saleproceeds 2021 2020
£000s
200		 £000s
-
Less: sellingcosts (46) -
unrecoverable care related asset write-off (56) -
98

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If you would like this document in another format please contact us

Transform Housing & Support Bradmere House Brook Way Leatherhead Surrey KT22 7NA 01372 387100

www.transformhousing.org.uk info@transformhousing.org.uk