Financial Statements 7
Notes to the Financial Statements for the year ending 31 March 2024
1. Basis of accounting The Association is registered with the Financial Conduct Authority under the Co-operative and Community Benefits Societies Act 2014 and is registered with the Regulator of Social Housing as a social housing provider. The Association is a public benefit entity. The financial statements are prepared in accordance with UK Generally Accepted Accounting Practice (UK GAAP) including Financial Reporting Standard 102 (FRS 102) and the Housing SORP 2018: (SORP) Statement of Recommended Practice for Registered Social Housing Providers and comply with the Accounting direction for private registered providers of social housing 2022. Disclosure exemptions In preparing the financial statement of Anchor Hanover Group, advantage has been taken of the following disclosure exemptions available under FRS 102: • No cash flow statement has been presented for the parent association; • Disclosures in respect of the parent company’s financial instruments have not been presented as equivalent disclosures, however have been provided in respect of the Group as a whole; and • No disclosure has been given for the aggregate remuneration of the key management personnel of the parent association as their remuneration is included in The Group financial statements comprise those of Anchor Hanover Group and its subsidiary undertakings. Intra-Group transactions are eliminated on consolidation. The Association is the ultimate parent entity and its financial statements incorporate solely the activity of Anchor Hanover Group. The consolidated financial statements incorporate the financial statements of Anchor Hanover Group and entities controlled by the Group and its subsidiaries. Control is achieved where the Group has the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities. 3. Principal accounting policies i Going concern The Group’s business activities, its current financial position and factors that are likely to affect its future development are set out within the Strategic Report. The Board’s assessment of going concern is focused on the Group’s liquidity and its compliance with loan covenants. The review period is 12 the totals for the Group as a whole. 2. Basis of consolidation months from the signing of the financial statements. The Group maintains its rigorous approach to financial planning, including the preparation of detailed budgets and forecasts for the next financial year. The Group’s budget is approved by the Board and forms the first year of the 30-year business plan (the ‘long-term financial plan’) which sets out Anchor’s long-term objectives. The plan was last reviewed and approved by the Board in May 2024.
The Board has considered Anchor's financial resilience, particularly considering the ongoing uncertainty in the macroeconomic environment as well as the financial impact of the continuing geopolitical turbulence in Europe in its short-term forecasts. Stress tests have been applied to the early years of the long-term financial plan that reflect the potential for heightened financial risk stemming from these factors. More broadly, stress testing also considers the potential consequences of significant changes in several areas of government policy and the long-tail impact of the UK’s exit from the European Union on supply chains. The Board considers these tests to represent a severe yet plausible view of the risks that may impact the Group and is assured that an appropriate and effective range of mitigations is in place to address these outcomes. In line with its treasury management policy, the Group continues to maintain sufficient resources to cover the next 18 months’ forecast net cash requirement, excluding sales income. The Group’s principal loan covenants are linked to levels of interest cover and gearing, and the Group is able to service its loan facilities while continuing to comply with lender covenants. No material uncertainties related to events or conditions that may cast significant doubt on the ability of the Group to continue as a going concern have been identified. Accordingly, the directors continue to adopt the going concern basis in preparing the Group’s consolidated financial statements. i i Significant judgements and estimates Preparation of the financial statements requires management to make significant judgements and estimates. The items in the financial statements where these judgements and estimates have been made include: • Significant management judgements The following are the significant management judgements made in applying the accounting policies of the Group that have the most significant effect on the financial statements. Classification of housing properties The Group has undertaken a detailed review of the intended use of all housing properties. In determining the intended use, the Group has considered if the asset is held for social benefit or to earn commercial rentals. The Group has determined that its housing portfolio is held for social benefit purposes. Capitalisation of property development costs Distinguishing the point at which a project is more likely than not to continue and allowing capitalisation of associated development costs requires judgement. After capitalisation, management monitors the asset and considers whether changes indicate that impairment is required. The total amount capitalised in the year was £74,465,000 (2023: £32,749,000) relating to retirement housing under construction. Impairment of housing properties, other assets and goodwill The Group has to make an assessment as to whether an indicator of impairment exists. In making the judgement, management considered the detailed criteria set out in the SORP. Details of judgements and estimates are set out fully in the accounting policy and note 12.10.
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