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Group Structuresand AncillaryHousing ActivitiesAnumber of AHBs are part of larger groupstructures or operate subsidiary companies. Itis important that AHBs manage relationshipand performance within a group structureso that any risk to the AHB and to tenants’ and otherstakeholders’ interests are managed effectively.9.1 Group StructuresWhile we require AHBs to submit financial reports atan individual level, some AHBs may be a subsidiary ofa larger parent company, or may be a parent companyitself with subsidiaries whose business activities havethe potential to affect the AHBs own business. Inthese instances, the Regulator will need to know thegovernance arrangements and where responsibility andcontrol lie within the group, particularly in relation to thehousing assets.The Regulator expects there to be some type of aninter-group agreement in place which defines all aspectsof the parent / subsidiary relationship and how thegroup operates. Where relevant, the Regulator requiresfinancial statements related to the parent company andthe consolidated group entity. Our primary concern isthe viability of the AHB and to understand if there arerisks to the AHB from a group structure. In this context,the Regulator requires to be notified if a member ofthe group structure is providing guarantees that couldpotentially impact on the AHBs business (as stated inNotifiable Events at Section 8).The Regulator expects the AHB to have a sufficientlyrobust model in its own right and not to be overlyreliant on another group company.9.2 Ancillary ActivitiesWe recognise that many AHBs carry out ancillaryactivities, typically in education, training, health, careand/or support areas. Indeed for some, the provisionof social housing forms a minor part of their operations.It is necessary for the Regulation Office to collect datarelating to the whole of the business in its entirety.It would be inappropriate to focus only on the housingelement of an organisation’s activities for severalreasons, including the following:n A severe financial crisis would affect the wholelegal entity, not just the housing elementn The financial performance of the non-housingactivities has the potential to impact on thehousing assets, andn Funders will assess the financial strength of thewhole entity when taking lending decisions.The Financial Standard and Assessment Framework23