West Kent Housing Association: Annual Review and Group ...

West Kent Housing Association: Annual Review and Group Consolidated Financial Statements
for the Year ended 31 December 2010

West Kent Housing Association: Annual Review and Group Consolidated Financial Statements for the Year ended 31 December 2010
Our Vision is “to create
thriving and sustainable
communities and
neighbourhoods across
Kent”. Our corporate
values of compassion,
honesty, integrity, selfawareness,
learning,
flexibility, working hard
and having fun, help us
deliver this vision.

Contents
Executives and advisors............................3
Contents
Chairman’s introduction...........................4
Report of the board and operating
and financial review..................................6
Independent auditor’s report
to the members of West Kent
Housing Association...............................23
Accounts.................................................26
Income and expenditure accounts................. 27
Statements of total recognised
surpluses and deficits..................................... 28
Balance sheets................................................ 29
Consolidated cash flow statement................. 30
Notes to the
financial statements....................... 32 – 56
1

West Kent Housing Association: Annual Review and Group Consolidated Financial Statements for the Year ended 31 December 2010
2

Executives and advisors
Board
Alan Knight (Chairman)
Frank Czarnowski (Chief Executive)
Larry Domingo (Appointed February 2010)
Joanne Frawley (Appointed February 2010)
Sarah Hartles (Resigned September 2010)
Graham Hill
Martin Jelbart (Resigned May 2010)
Angela Painter
Caroline Phillips (Appointed July 2010)
Rowland Pocock
Maureen Pullen
Malcolm Robinson
Peter Robinson (Vice Chairman)
Rosie Serpis
Barbara Thorndick OBE (Resigned March 2010)
Executive team
Frank Czarnowski Chief Executive
Will Campbell-Wroe Managing Director West Kent Extra
Hilary Knight Business Services Director
Mark Leader Development & New Business Director
Craig Reynolds Finance Director
Shan Shivji Property Services Director
Deborah White Housing & Communities Director
Auditors
BDO LLP
Emerald House, East Street
Epsom, Surrey
KT17 1HS
Solicitors
Trowers & Hamlins
Sceptre Court, 40 Tower Hill
London W1A 4ZW
Bankers
Royal Bank of Scotland
67 High Street, Sevenoaks
Kent TN13 1LA
Funders
Bank of Scotland Royal Bank of Scotland
155 Bishopsgate 135 Bishopsgate
London EC2M 3YB London EC2M 3UR
Secretary and registered office
Craig Reynolds
West Kent Housing Association
101 London Road
Sevenoaks
Kent TN13 1AX
Registered numbers
Registered as a charitable social landlord under the Industrial
and Provident Societies Acts, number 26278R.
Registered by the Tenant Services Authority, number LH3827.
VAT Registration number 927 5219 12 West Kent Housing
Association and West Kent Extra Limited
VAT Registration number 991 7828 61
West Kent Ventures Limited
Executives and advisors
3

Chairman’s introduction
A message from the Chairman
Alan Knight
This year has seen
us work closer than
ever with our tenants
to develop a new
set of tenant driven
standards and better
tenant scrutiny of
all our services.
What a change we’ve seen in the world of social housing over the
past 12 months; the economic climate, plans for benefit reform
and the reduction in government funding have made it a very
challenging time and we can expect further changes to come.
Many of these changes will have a significant impact on the role
of West Kent Housing Association going forward, in particular
the major changes to the way new homes are financed. This year
has seen us complete the most new houses in our history, but the
changes to the grant we receive for each house will mean that in
future, we will have to fund more of our developments through
our own finances.
At times like these any organisation needs to ensure that its
finances are strong, its direction clear and its people are up for the
tasks ahead, and I am pleased to say that West Kent scores highly
in all these areas.
During 2010 we produced a good surplus which we’ll be
reinvesting back into the business, to plug some of the holes
left by the reduction in grants. This was achieved by keeping our
costs under control and excellent treasury management, while
still delivering a high level of service to our tenants.
This year has seen us work closer than ever with our tenants to
develop a new set of tenant driven standards and better tenant
scrutiny of all our services. This work, coupled with the valuable
information we gained from our Big Day Out, has led to changes
in both our resident involvement plans and the way our customers
will access our services in the future.
4

The Tenant Services Authority (TSA) required all social landlords to
publish an account of performance to their residents by October
2010. Our plan going forward is to tie that report in with our
financial reporting timetable therefore, along with this report we
have produced a separate document aimed specifically at our
residents, focussing on the issues that residents think are important.
Chairman’s introduction
Our residents told us what they wanted to appear in the report
and how it should look, and we’ll be taking that format forward
in future years. Copies of the Annual Residents’ Report can be
found on our website. This year we announce the launch of the
new service standards we’ll monitor all future performance against,
marking an important point in our development – the standards
have been written closely with our residents.
We are of course a social business that goes well beyond just housing.
All our activities focus on both improving our neighbourhoods and
our tenants’ lives. Our community charity West Kent Extra has also
had a very successful year attracting new investment and involving
many more people in the projects it runs than ever before. It is
ongoing involvement in giving many young people valuable work
experience (through the Future Jobs Fund project) that will lead to
other development, training and job opportunities for our residents.
I would like to thank all our staff and residents for their
dedication and hard work during challenging times, which has
led to these excellent results, and also my special thanks go to
all our volunteer board members for giving so generously of their
time and experience.
Lastly, although I do not normally single out board members for
special mention, this year it seems right to offer our special thanks
to Rowland Pocock who stands down at the end of the year.
Rowland has been a resident for 32 years and has made enormous
contributions not only through the board but also through the
tenants’ association. He has worked tirelessly to improve the lives
of our tenants and his input will be missed.
Alan Knight Chairman
5

Report of the board and operating and financial review
6

The board presents its report and the audited consolidated
financial statements of West Kent Housing Association (West
Kent) and its subsidiary undertakings, for the year ended 31
December 2010.
Overview of business
West Kent was established in 1989 to accept the transfer of
6,300 homes from Sevenoaks District Council - one of the first
large scale voluntary transfer associations in the country. West
Kent has diversified both in terms of geography and the services
we provide to customers. We are now managing, developing
homes or providing support services in eight boroughs across
Kent and Medway.
West Kent is in business to help create thriving and sustainable
communities and neighbourhoods across Kent.
West Kent’s principal activities are the development,
management and maintenance of affordable homes, and the
provision of support for elderly and vulnerable people who need
extra help to remain living independently in their own homes.
West Kent operates in a region where there is a high demand
for housing and insufficient supply. Providing more affordable
housing for a range of tenures is a priority.
Report of the board and operating and financial review
West Kent has 6,098 homes in management. This is fewer than
at the time of transfer, owing to a large number of tenants
exercising their right to buy. In recent years we have reversed the
downward trend and our development programme will deliver
over 500 new homes over the next three years.
7

Report of the board and operating and financial review
Homes managed by West Kent
2006 2007 2008 2009 2010
Rented 5,404 5,423 5,465 5,540 5,641
Shared Ownership 152 219 236 251 279
Intermediate – – – 20 22
Leasehold 158 155 151 152 156
Group structure
5,714 5,797 5,852 5,963 6,098
West Kent Housing
Association
(The Group and
The Association)
West Kent Housing Association, the group parent, is an asset holding,
exempt charity registered under the Industrial and Provident Society Acts
(26278R) and the Tenant Services Authority (LH3827). These financial
statements include accounts for the group, including two subsidiaries, and
West Kent Housing Association’s accounts (the ‘Association’).
The group’s two subsidiary companies are West Kent Extra Limited (WKE)
and West Kent Ventures Limited (WKV).
WKE is a registered charity that runs community development projects
to help to create more inclusive neighbourhoods. West Kent and the
Association of West Kent Tenants and Residents (AWKTR) jointly sponsor
WKE. West Kent financially supports both AWKTR and WKE to ensure that
people living in the areas where we work have a voice that is heard and
which we respond to.
WKV is a wholly owned commercial subsidiary with a trading name of WK
Consulting. WK Consulting provides social housing consultancy to other
housing associations and local authorities. The consultancy was born out
of West Kent’s success in gaining three stars from the Audit Commission in
2006 and was set up as a separate company in 2010.
WEst kent
extra LIMITED
(wke)
WEst kent
ventures LIMITED
(wkV)
(Trading as WK Consulting)
Since West Kent controls the boards of these entities they are classified as
subsidiary undertakings.
8

The year in review
After nine successful years, Barbara Thorndick stood down as Chief
Executive and moved across to head up our new consultancy venture –
WK Consulting. Frank Czarnowski, who had been Finance Director since
2001, was appointed as Chief Executive.
As the government’s Affordable Homes Programme 2008-11 drew to a
close, we seized a number of opportunities to increase the number of
homes that West Kent has delivered under the programme to 635 homes,
with £35m of government grant. During 2010 we provided 143 homes
in Sevenoaks (39), Dartford (5), Gravesend (1), Tonbridge and Malling (4),
Medway (47) and Ashford (47). The five new homes in Dartford were
developed in partnership with the local Primary Care Trust to house adults
with learning difficulties.
Beckett Court,Dartford. Built in partnership with Dartford PCT
Our third tenant board member, Joanne Frawley, joined in
February 2010. Ensuring residents influence our work at the
highest level is of great importance to us. The Association
of West Kent Tenants and Residents (AWKTR) continued
to provide us with vital consultation. Resident involvement
continued at a pace. We began recruiting for the Resident
Scrutiny Team and introduced resident mystery shopping to
improve some of the areas where residents told us they were
unhappy. Residents played a crucial part in the development
of our new website. They told us how it should look, advised
on the structure and modelled for the photographs. The new
site has been well received by partners, stakeholders and
residents alike.
Report of the board and operating and financial review
9

Report of the board and operating and financial review
There were 4,500 resident engagements in the year. Resident
engagements may count an individual twice if they have been
to more than one event. Activities included:
• Website user group meetings
to help us design and
populate the new site
• Tenant training planning
• Swanley Whiteoak Action
Group (SWAG) meeting
• Meet Frank night
• Ashford resident involvement
meeting
• TSA local standard for home
– postal surveys and planning
meetings
• Quest steering group
• Scrutiny Team interviews
The TSA invited us to join the pilot scheme to develop the local
(south east) standard for repairs and maintenance. We surveyed
residents and asked what their repair priorities were. We fed the
results into the new Home Standard launched in April 2010.
In August we shut the offices for our Big Day Out and visited
nearly every home we manage. We asked residents how they
wanted to be involved and how satisfied they are with the
appearance of their neighbourhood. We had a 46% response rate
to the survey method – one of the highest we have ever had.
Our Asset Management Strategy will continue to provide decent
homes and focus on increasing choice for residents. We will
maximise the use of existing stock with extensions and remodelling
to reflect future demand and residents’ needs. Environmental
improvements will continue with a focus on neighbourhood charters
and delivering on our commitment to greener communities.
As part of our Environmental Sustainability Strategy, we replaced
the Sevenoaks office windows to improve energy efficiency.
We achieved bronze SHIFT accreditation (Sustainable Homes Index
for Tomorrow) again. Staff who volunteered as ‘Green Champions’
introduced a range of office initiatives to motivate staff to reduce,
reuse and recycle. They implemented:
• Recycling points
• A car-sharing scheme
• Green tips on the intranet and notice boards.
WKE grew with the Abacus Furniture Project increasing its turnover by
8.5%, despite the poor weather at the end of 2010. Furniture and items
donated went up by 20% and Abacus reused around 129 tonnes – up 5%
on the previous year. In total, the charity secured funding of over £426,000
(against a target of £200,000). Boomerang, our volunteering project,
banked over 6,500 hours of volunteer activity and is now delivering the
project in communities across north and west Kent.
We welcomed over 40 young people through the West Kent doors on the
government funded Future Jobs Fund Trainee Programme. The six-month
placements have helped us deliver our objectives and supported front line
services including community involvement, the new website and helping
the office support teams. Many have got jobs after their time with us –
either here or elsewhere. Kent County Council reports 85% of participants
do not return to the benefits system. We have been amazed at the quality,
commitment and dedication of these young people and they have made a
huge difference to us and our partners who also took part in the scheme.
We focused heavily on older people in 2010, rebranding the service as
Emerald and consulting users on the design of the rebrand. Fresh, modern,
well-received and quickly established, the brand formed part of our strategy
to make ‘Age – a positive experience’. This three year programme will:
• modernise our offer to older people
• implement the accommodation strategy to take into account our
residents’ diverse and changing needs
• improve the information and advice we give to older people
• offer targeted advice at assessments.
10

We launched our Financial Well-Being Strategy, to ensure residents are
supported and able to access quality financial advice if they need it. We are
working closely with Kent Savers to target our residents with basic bank
accounts and affordable loans.
During the year we set up a commercial subsidiary - West Kent Ventures
Limited. West Kent Ventures was incorporated on 14 May 2010 and began
trading under the name of WK Consulting from 1 August 2010, from a
small central London office. WK Consulting held a formal launch on 30
September, which was attended by over 100 people and at which Will
Hutton spoke. In a difficult market WK Consulting is growing in terms
of clients and reputation and is performing within the parameters of its
business plan.
We have achieved a lot in 12 months, and in uncertain times have managed
to deliver on the majority of our objectives. We are proud of what we have
done and what we are about to do. We are in a strong position both in
the sector and the areas we are working in. We will capitalise on every
opportunity to continue to deliver quality affordable housing, support and
community services.
Our Business Plan for 2011
Our five strategic objectives in our business plan for 2011 are:
1. Putting our residents and customers at the centre
of what we do
In 2010 we completed our Quest self-assessment. The findings and
recommendations form our corporate continuous improvement plan and
in April we launched our new service standards, written from the findings
of the Big Day Out and the consultation on the Home Standard.
It’s your call – Customer Access Strategy
Over the next three to five years we will deliver our strategy to improve
customer access and provide a right person, right answer, first time
response for at least 80% of enquiries. This long term investment marks
an important turning point in West Kent’s history – in 2009 we ‘grew up’
celebrating 20 years of delivering quality services, now in 2011
we are designing our next cycle of growth.
We have always wanted to be the best and now is the time to
review old systems, ask ourselves if they are still current, seize
new technology and software to offer modern services to
customers and create a culture ready and willing for change.
It is a big challenge, but one we are ready for.
Our new Resident Involvement Strategy will offer
opportunities which have the highest level of impact on our
services and continue to drive customer service excellence by
maintaining external accreditation through the Customer
Service Excellence (CSE) standard.
2. Providing more than simple landlord services, caring
and investing in the people and places where we work
The Home Standard, published in August 2010, will continue
to provide choice and maximise use of our existing stock. Our
partnering contracts will continue to be managed effectively
to provide homes that are fit now and in the future.
During 2010 we undertook a range of neighbourhood
projects including preparation for a Neighbourhood Charter
in Edenbridge and work with Swanley Whiteoak Action Group
(SWAG) to help residents improve where they live. We will
use the knowledge we have about our residents to develop
an up-to-date community safety strategy, prevent anti-social
behaviour (ASB) and increase the support we offer to victims.
WKE will support strong cohesive and inclusive
neighbourhoods by providing projects in the four core strands
that support the needs of our tenants and their communities.
We will expand our social enterprise work and support and
develop a range of apprenticeship opportunities both at West
Kent and with our partners.
Report of the board and operating and financial review
11

Report of the board and operating and financial review
3. Working at both a strategic and operational level in all
local authorities where we provide homes and services
We will update our development strategy to take into account the
new grant and policy environment and continue to deliver quality,
sustainable homes across Kent. We will work with and support our local
authority and other partners to improve and shape the places where we
have homes. We are optimistic our Private Finance Initiative (PFI) bid to
Kent County Council for ‘Excellent Homes for All’ will be successful and
produce more than 220 extra care and supported living homes.
4. Enhancing our capacity to deliver and remaining an
independent, values driven organisation
Our governance structure will be enhanced with resident-led
self regulation mechanisms and delivery of our Value for Money
Standard from April 2011. We will maintain our Gold IiP status and
continue to attract high calibre, committed staff. Our focus on
voids management will improve the time taken to let our homes
and improve satisfaction with the process. We will continue to
benchmark our services with other housing associations and
involve residents in allocating and prioritising resources. We will
develop our financial and IT capacity to deliver and review rent
strategy in light of the spending review.
5. Promote and support active ageing
‘Age – a Positive Experience’ is our strategy to ensure we are delivering
housing and support services based on peoples’ needs now and
into the future. In 2011 we will complete our strategic review of all
Emerald homes and programme improvements as appropriate. We
will focus on identifying new models of tenure including shared
ownership products marketed directly to older people, and research
and identify services for excluded and vulnerable groups including
Gypsy and Traveller older people and people with dementia.
Our Lifeways support services restructure will be completed
and we will continue to make competitive bids for new business
offered for tender in Kent and Medway.
12

Key Performance Indicators Target 2006 2007 2008 2009 2010
Turnover of stock 7.0% 7.0% 7.4% 7.7% 6.9% 6.7%
Average re-let times – general needs 25 days 26 days 25 days 30 days 27 days 28 days
Complaints responded to within timescales 90% 83% 86% 83% 84% 76%
Rent arrears – current tenants 2.3% 2.3% 1.9% 2.1% 1.6% 1.7%
Satisfaction with repairs 96% 98% 98% 95% 96% 96%
Repairs completions within timescales 97% 98% 99% 99% 98% 97%
Decent Homes 97% 99% 98% 97% 99% 99%
Gas services overdue 0 0 0 0 1 11
Staff turnover 12% 11% 16% 8% 10% 8%
Operating and financial review
West Kent uses a number of key performance indicators to monitor its
performance and these are reviewed by the board on a quarterly basis.
We maintained arrears below our target of 2.25%; rent arrears increased to
1.7%. This increase is most likely due to the difficult economic environment.
The implementation of the Financial Well-being Strategy in 2011 will help
our residents to manage their money and we will actively work with them
to prevent arrears. The average re-let time is based on the Continuous
Reporting (CORE) definition and excludes major and modernisation voids.
We will prioritise improving our average time to let homes in 2011. We
appreciate that choice based lettings, which gives a two week bidding cycle
for applicants, has increased the length of time properties are empty for. A
review group is looking into the whole process to see how the process can
be improved.
Repairs and maintenance is the most important service for
residents. Overall satisfaction here has been maintained at 96%.
We are completing 97% of jobs within target times and over
99% of our homes now meet the Decent Homes Standard. There
were 11 gas services overdue at year end due to the extremely
bad weather we had. This has now been resolved.
In 2010 we received 561 complaints and responded to 76%
(429) within timescale. Our target is to respond to 90% within
timescale. We have increased satisfaction with complaints
handling by 3% and no complaints progressed to the
independent Housing Ombudsman. During our Big Day Out we
asked residents about our complaints service and followed this
up with some further consultation in specific areas. The results of
this consultation have led us to begin keeping residents informed
during the complaint process; this has been added to our service
standards and we are committed to improving our complaints
service further.
Report of the board and operating and financial review
13

Report of the board and operating and financial review
Financial performance in the year
Financial performance in the year –
Group financial results: five year summary (£’000) 2006 2007 2008 2009 2010
Income and expenditure account
Turnover 23,734 26,297 29,748 30,647 32,468
Operating costs and costs of sales (16,341) (16,688) (20,720) (19,228) (21,186)
Operating surplus 7,393 9,609 9,028 11,419 11,282
Net interest charge (8,003) (8,536) (8,902) (6,828) (5,268)
Surplus on sale of fixed assets 422 419 306 41 360
Other finance costs (98) 6 (105) (253) (284)
Surplus/(deficit) for the year (286) 1,498 327 4,379 6,090
Balance sheet
Housing properties at cost less depreciation 181,814 194,664 198,212 219,509 247,889
Social housing and other grants (69,543) (72,371) (74,233) (85,309) (96,421)
Revaluation reserve 159,536 158,726 159,474 165,447 164,327
271,807 218,019 283,453 299,647 315,795
Other tangible fixed assets 2,618 2,644 2,565 2,586 2,716
Net current assets (2,850) 743 2,428 1,552 851
271,575 284,406 288,446 303,785 319,362
Creditors due after one year 98,388 108,468 110,064 114,644 125,708
Other long term liabilities 4,593 4,743 4,154 8,844 3,430
Reserves 168,594 171,195 174,228 180,297 190,224
271,575 284,406 288,446 303,785 319,362
Statistics
Operating surplus per unit 1,294 1,656 1,543 1,915 1,850
Operating margin 31% 37% 30% 37% 35%
Earnings before interest, tax and depreciation (EBITDA) 114% 132% 120% 193% 256%
Gearing – Loan to Valuation 38% 39% 39% 38% 40%
Gearing – Loan to Housing properties at cost 57% 56% 55% 52% 51%
14

Income and expenditure
The group surplus for the year has increased by £1.7m. The group accounts
consolidate the accounts of West Kent and 100% of West Kent Extra
Limited and West Kent Ventures Limited. West Kent Extra made a deficit
of £26,100 (surplus in 2009: £52,390) during the year. West Kent Ventures
made a loss of £74,900 which is in line with the business plan for this newly
formed company, which only traded for five months of the year.
Fig 1.1 Income and expenditure summary (£’000)
23,734
7,393
(286)
26,297
29,748
9,609 9,028
1,498
327
30,647
32,468
11,419 11,282
4,379
2006 2007 2008 2009 2010
Turnover Surplus/(deficit) for the year Operating surplus
6,090
Management costs reduced by £0.2m; we spent £375 per home
in the year (2009: £413).
We invested £9.6m (2009: £9.4m) on maintaining our homes
in the year. This equates to £1,575 per home. We have a very
good working knowledge of our stock and by applying a just in
time methodology we maximise the investment and extend the
useful economic life of assets that are not requiring replacement.
Our long term projection means we will be investing on average
£2,016 per home per year over the next 30 years.
Loan interest of £5.3m (2009: £6.8m) reflects the full year of low
interest rates even though loan borrowing increased by £11m
to finance new units. Interest cover was 214%. All our banking
covenants have been met in the year.
West Kent participates in the Kent County Council Pension Fund
as an ‘Admitted Body’. The pension scheme is a defined benefits
final salary pension scheme. West Kent’s share of the deficit
on the scheme at the year-end was £3.4m (2009: £8.8m) on a
FRS17 basis. A full actuarial valuation for funding purposes will
be carried out as at 31 March 2010 and the board will review the
results of this triennial review.
Report of the board and operating and financial review
Group turnover has increased by £1.8m. This is primarily due to an increased
number of sales of first tranche shared ownership units by £1m to £2m.
Social housing lettings income increased by £0.8m following new units
coming into management.
Operating costs excluding cost of sales, increased by £0.9m. Supported
housing broke even in the year compared with a surplus in 2009. This is due
to the reduction in contract values to the current contracts and an assessment
of the service we provide and the costs it incurs. We are restructuring our
teams to reflect the reduction in income.
15

Report of the board and operating and financial review
Balance sheet
Housing properties at valuation increased by £16.1m to £315.8m.
This increase is due to investment in new homes of £29.8m funded
through Social Housing Grant (SHG) of £11.2m. 123 homes were
built in 2010 and 20 existing properties were purchased. We now
have 6,098 homes in management.
Our gearing ratio (indicating our level of indebtedness) has
increased from 38% to 40%, based on loans drawn to housing
properties at valuation.
Financial strength
The board has agreed a medium-term financial strategy to increase
our financial capacity so that we can:
• Renew and replace our homes at the end of their lives
• Invest in our communities
• Provide additional affordable housing.
We will do this in a sustainable way by:
We have set a specific target for the operating surplus per unit of £2,000
(2007 prices), which we will achieve by:
• Moving target rents to target + 5%
• Ensuring full recovery of service costs
• Ensuring full cost recovery of support costs
• Keeping management and overhead costs in top
(lowest) quartile when compared with our peers
• Keeping maintenance costs in top (lowest) quartile
when compared with our peers.
The operating surplus per unit for 2010 is £1,850. Our medium term
target, as stated above, is £2,000 per unit, after excluding the adjustment
for FRS17 Pension obligations, and at 2007 prices. The operating surplus
excluding the pension adjustment is £2,109, when this is re-priced to 2007
the operating surplus is £1,947. This is an improvement on the last four
years.
Fig 1.2 Operating surplus per unit at 2007 prices
(excluding pension adjustment)
2,500
• Ensuring our income is enough to pay for all the expenditure
on our existing properties (whether accounted for as capital
or revenue)
• Not relying on property sales or future shared ownership
stair-casing receipts to fund existing operations or meet our
bank covenants.
2,000
1,500
1,000
£1,334
£1,728
£1,579
£1,936 £1,947
500
0
2006 2007 2008 2009 2010
Operating surplus per unit
Target
16

Risks and uncertainty
The board reviews the main risks faced by West Kent each year. The
Executive Team and Audit and Finance Committee also consider risks
throughout the year.
Emerging risks in the sector and to West Kent are:
• Adverse economic conditions, combined with changes to the benefits
system, reduce tenants’ ability to pay their rent, reducing West Kent’s
income and financial capacity.
• The degree of externally generated change, together with our major
change programme ‘It’s Your Call – Customer Access Strategy’ impacts
on our ability to deliver excellent service.
• Re-tendering of Supporting People contracts by Kent County Council and
Medway Council undermines our Lifeways Strategy with associated exit
costs and/or reduction in support services to residents.
• Reassessment of the development programme based on the Homes
and Communities Agency 2011-15 Affordable Homes Programme,
with lower grant levels, affordable rented model and conversion of
existing stock changing the way in which we use our resources to fund
the programme.
• Uncertainty whether tenants on the new affordable social housing rents
will be assessed as charitable beneficiaries. As new properties come
into management and there is turnover of tenants in existing properties,
the proportion of tenants on the new rent product could increase
significantly. The impact of this on the assessment of the overall activities
of registered providers as charitable in nature will need to be monitored
and assessed.
• Availability of finance. To be able to develop into the future we will need
to obtain further funding. Many of the traditional lenders are no longer
offering new facilities.
• The impact of International Financial Reporting Standards on the way the
accounts are presented and the impact this will have on current funding
and covenants.
Capital structure and treasury policy
The group is financed by a combination of retained reserves,
long term loan facilities and Social Housing Grant from the
Government. West Kent has committed long-term funding of
£155m. This comprises two facilities: £105m with the Bank of
Scotland (now part of the Lloyds Banking Group), of which
£101m has been drawn down; and £50m with the Royal Bank
of Scotland, of which £24.5m has been drawn down. The
remaining £29.5m on the two facilities is secured and available
to draw down. These loans are secured on our homes.
The board has approved a treasury management policy to control
the risks associated with its treasury activities. The policy sets
out a clear framework of policies, procedures and delegated
authorities, which require quarterly reporting on the operations
of the treasury function to the Audit and Finance Committee.
The Association manages its interest rate exposure by having a
mixture of fixed, index-linked and variable rate loans.
The treasury management policy sets out the target proportions
of fixed and variable rate loans. West Kent is permitted under
its rules to enter into a limited range of derivative transactions
to manage interest rate risk. It does not engage in foreign
currency transactions.
The treasury management policy states:
• A minimum of 40% of drawn funds should be hedged
• A minimum of 30% of drawn funds should be held on
variable rates
• The remaining 30% can be fixed, hedged or kept at
variable rates depending on prevailing market conditions
and business need.
Report of the board and operating and financial review
17

Report of the board and operating and financial review
Hedged borrowing includes fixed, capped, collared and RPI linked
interest rates. Fixed interest periods will be staggered to avoid
excessive interest rate risk in a particular period. The amount of
fixed interest loans requiring re-pricing in any one year should not
exceed 10% of total loans outstanding.
Currently 56% of West Kent’s drawn loans are hedged.
160
140
120
100
80
60
40
20
0
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
2026
2027
2028
2029
2030
2031
2032
2033
2034
2035
2036
2037
2038
2039
2040
2041
Turnover
Debt
Current liquidity
At 31 December 2010 the Group’s balance sheet shows net current
assets of £0.9m. West Kent’s liquidity policy is to have committed
borrowing facilities in place, secured and ready to draw down to
cover all capital commitments (taking a prudent view of any capital
receipts) while minimising the amount of cash we hold. Where
there is surplus cash, this is used to repay debt, using the £12m
revolving loans that are part of the overall £155m facilities.
Corporate governance
The board has adopted the code of governance ‘Excellence in Governance
– Code For Members’ published by the National Housing Federation. The
board reviewed its compliance with the code in 2010. The Association
complies in full with the code.
The board is committed to high standards of corporate governance based
on the following principles:
• The board is effective in leading and controlling the organisation and
acting wholly in its best interest. Board members must ensure that the
interests of the organisation are placed before any personal interests.
• The board is clear about its duties and responsibilities.
• Board members will receive induction on joining the board and will
regularly refresh and update their skills.
• Recruitment to board vacancies is open and transparent, based on merit,
objective selection and assessment techniques. The board undertakes a
formal and rigorous annual appraisal of its members and of the board
as a whole.
• The board is headed by a properly appointed and skilled chair who
is aware of their duties as head of the board and the clear division of
responsibilities between the board and executive.
• The board acts effectively, making clear decisions based on timely and
accurate information.
• There are clear working arrangements between the board and the chief
executive and clear delegation of duties.
• Committees of the board will provide expertise and enable the board to
scrutinise and deliver effective corporate governance and manage risk.
• The board provides leadership in operating in an open and transparent
manner, having satisfactory dialogue with key stakeholders including
tenants. The board will demonstrate accountability to shareholders and
other key stakeholders.
18

• The board demonstrates leadership and commitment to equality,
diversity and inclusion as outlined in the Equality Act 2010, across the
organisation’s activities.
• The board establishes a formal and transparent arrangement for
considering how the organisation ensures financial viability, maintains
a sound system of internal controls, manages risk and maintains an
appropriate relationship with external auditors.
• The organisation maintains the highest standards of probity and conduct.
The board currently comprises 11 non-executive members, three of
whom are tenants, plus one executive member. It normally meets with
the executive directors seven times a year. The chair of the board is
remunerated. The board thanked Sarah Hartles, Martin Jelbart and Barbara
Thorndick OBE, who stood down during the year, for their contributions to
West Kent. The board members of West Kent are listed on page 3.
Statement of board’s responsibilities in respect of the
board’s report and the financial statements
The board members are responsible for preparing the report of the board
and the financial statements in accordance with applicable law and
regulations.
Industrial and Provident Society law and social housing legislation require
the board members to prepare financial statements for each financial
year for the Group and Association in accordance with United Kingdom
Generally Accepted Accounting Practice (United Kingdom Accounting
Standards and applicable law). The directors must not approve the financial
statements unless they are satisfied that they give a true and fair view of the
state of affairs of the Association and of the surplus or deficit of the Group
and Association for that period.
In preparing these financial statements, the board members
are required to:
• select suitable accounting policies and then apply
them consistently
• make judgements and accounting estimates that are
reasonable and prudent
• state whether applicable UK Accounting Standards and
the Statement of Recommended Practice: Accounting by
Registered Social Landlords (2008) have been followed,
subject to any material departures disclosed and explained
in the financial statements
• prepare the financial statements on the going concern basis
unless it is inappropriate to presume that the Association
will continue in business.
The board members are responsible for keeping adequate
accounting records that are sufficient to show and explain the
Association’s transactions and disclose with reasonable accuracy
at any time the financial position of the Association and enable
them to ensure that the financial statements comply with
the Industrial and Provident Societies Acts 1965 to 2002, the
Industrial and Provident Societies (Group Accounts) Regulations
1969, the Housing and Regeneration Act 2008 and the
Accounting Requirements for Registered Social Landlords General
Determination 2006. They are also responsible for safeguarding
the assets of the Association and hence for taking reasonable
steps for the prevention and detection of fraud and other
irregularities.
The board is responsible for ensuring that the report of the board
is prepared in accordance with the Statement of Recommended
Practice: Accounting by Registered Social Landlords (2008).
Report of the board and operating and financial review
19

Report of the board and operating and financial review
Financial statements are published on the Group’s website in
accordance with legislation in the United Kingdom governing the
preparation and dissemination of financial statements, which may
vary from legislation in other jurisdictions. The maintenance and
integrity of the Group’s website is the responsibility of the board
members. The board members’ responsibility also extends to the
ongoing integrity of the financial statements contained therein.
Internal control
The board is the ultimate governing body and is responsible for
ensuring that an adequate system of internal control is in place
and for reviewing its effectiveness. The system of internal control is
designed to manage risk and to provide reasonable assurance that
key business objectives will be met. It also exists to give reasonable
assurance about the preparation and reliability of financial and
operational information and the safeguarding of the Association’s
assets and interests. The board recognises that no system of
internal control can provide absolute assurance or eliminate all risk.
Risks are defined as those factors that could adversely affect the
achievement of the West Kent business plan. The internal control
framework manages and mitigates the risks by identifying those
risks and ensuring that controls are in place.
To assess the effectiveness of the control systems the board considers the
major risks facing West Kent and the appropriate procedures to manage
them. These include health and safety, legal compliance, quality assurance,
insurance, security and social, ethical and environmental risks.
The key elements of internal control include:
• Corporate governance arrangements including the adoption of the
National Housing Federation’s Code of Governance.
• An annual planning process within which the board approves strategy and
business plan objectives supported by long-term financial projections.
• The preparation and review of annual budgets which are approved by
the board; monthly review of actual results against the approved budget,
and revised forecasts prepared at three monthly intervals.
• Performance indicators to identify trends in current financial and
non-financial data in order to monitor progress towards objectives
and to identify changes which require intervention.
• Written financial regulations and delegated authorities.
• Board approved policies to control exposures in connection with treasury
management activities.
• Financial control procedures to ensure accurate accounting for financial
transactions including authorisation procedures, physical controls,
segregation of duties and procedures to ensure compliance with laws
and regulations.
• A fraud policy, fraud response plan and whistle blowing policy that have
been communicated to all staff.
• All major investments in existing properties, new properties, plant,
equipment and software are subject to appraisal and individual approval
by the executive team or the board.
• An internal audit function structured to deliver the Audit and Finance
Committee’s risk based audit plan. West Kent uses the services of Mazars
to provide internal audit services.
20

The effectiveness of the controls is assured by:
• Independent assurance by internal auditors as to the existence and
effectiveness of the risk management activities described by management
• Board / Audit and Finance Committee overview
• External audit
• Assurances from management
• External regulatory and other reports.
The internal control framework and the risk management process are
subject to regular review by internal audit, who are responsible for
providing independent assurance to the board via its Audit and Finance
Committee. The Audit and Finance Committee considers internal control
and risk at each of its meetings during the year.
The board has received the Chief Executive’s annual report, has conducted
its annual review of the effectiveness of the system of internal control and
has taken account of any changes needed to maintain the effectiveness of
the risk management and control process.
The board confirms that there is an ongoing process for identifying, evaluating
and managing the significant risks faced by West Kent. This process has
been in place throughout the year under review and up to the date of the
Annual Report and Financial Statements and is reviewed by the board.
Going concern
Report of the board and operating and financial review
After reviewing West Kent’s budget for 2011 and long-term financial
projections, and based on normal business planning and control
procedures, the board has a reasonable expectation that West Kent has
adequate resources to continue operational existence for the foreseeable
future. For this reason the going concern basis has been adopted in
preparing the financial statements.
21

Report of the board and operating and financial review
Disclosure of information to auditors
The members of the board who held office at the date of approval
of this report of the board of management confirm that, so far as
they are each aware, there is no relevant audit information which
the Association’s auditors are unaware of. Each member of the
board has taken all the steps that he or she ought to have taken
as a member of the board to make himself or herself aware of any
relevant audit information and to establish that the Association’s
auditors are aware of that information.
Auditors
A resolution to re-appoint BDO LLP will be proposed at the
Annual General Meeting. BDO LLP have expressed their willingness
to continue in office.
The AGM will take place on 26 May 2011.
On behalf of the Board
Alan Knight
Chairman of the Board of Management
Date of approval: 28 April 2011
22

Independent auditor’s report to the members of West Kent Housing Association
Continuing commitment to meet local and rural housing needs.
Sustainable development of five family homes in Farningham for shared
ownership, providing much needed affordable homes for local people.
Independent auditor’s report to the members of West Kent Housing Association
23

Independent auditor’s report to the members of West Kent Housing Association
We have audited the financial statements of West Kent Housing Association
for the year ended 31 December 2010 which comprise the consolidated
and association income and expenditure accounts, the consolidated and
association balance sheets, the consolidated statement of total recognised
surpluses and deficits, the consolidated note of historical cost surpluses and
deficits, the consolidated cash flow statement and the related notes. The
financial reporting framework that has been applied in their preparation is
applicable law and United Kingdom Accounting Standards (United Kingdom
Generally Accepted Accounting Practice).
This report is made solely to the Association’s members as a body, in
accordance with the Housing and Regeneration Act 2008 and section
9 of the Friendly and Industrial and Provident Societies Act 1968.
Our audit work has been undertaken so that we might state to the
Association’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 Association and the Association’s members as a body,
for our audit work, for this report, or for the opinions we have formed.
24

Respective responsibilities of the board and auditors
As explained more fully in the statement of board member responsibilities,
the board members are responsible for the preparation of the financial
statements and for being satisfied that they give a true and fair view.
Our responsibility is to audit the financial statements in accordance with
applicable law and International Standards on Auditing (UK and Ireland).
Those standards require us to comply with the Auditing Practices Board’s
(APB’s) Ethical Standards for Auditors.
Scope of the audit of the financial statements
A description of the scope of an audit of financial statements is provided
on the APB’s website at www.frc.org.uk/apb/scope/private.cfm.
Opinion on financial statements
In our opinion the financial statements:
• give a true and fair view of the state of the Group’s and Association’s
affairs as at 31 December 2010 and of the Group’s and Association’s
surplus for the year then ended.
• have been properly prepared in accordance with United Kingdom
Generally Accepted Accounting Practice.
• have been prepared in accordance with the requirements of the
Industrial and Provident Societies Acts 1965 to 2002, the Industrial and
Provident Societies (Group Accounts) Regulations 1969, the Housing and
Regeneration Act 2008 and the Accounting Requirements for Registered
Social Landlords General Determination 2006.
Matters on which we are required to report
by exception
We have nothing to report in respect of the following matters where
we are required to report to you if, in our opinion:
• the information given in the report of the board for the financial
year for which the financial statements are prepared is not
consistent with the financial statements.
• adequate accounting records have not been kept by the parent
association, or returns adequate for our audit have not been
received from branches not visited by us.
• a satisfactory system of control has not been maintained over
transactions; or
• the Association financial statements are not in agreement with the
accounting records and returns; or
• we have not received all the information and explanations we
require for our audit.
BDO LLP, statutory auditor
Epsom, Surrey
United Kingdom
BDO LLP is a limited liability partnership registered in England and
Wales (with registered number OC305127).
Date: 28 April 2011
Independent auditor’s report to the members of West Kent Housing Association
25

Accounts
26

Income and expenditure accounts
Notes
Group
2010
£’000
Association
2010
£’000
Group
2009
£’000
Association
2009
£’000
Turnover 2 32,468 32,087 30,647 30,418
Cost of sales 2 (2,093) (2,093) (1,064) (1,064)
Operating costs 2 (19,093) (18,613) (18,164) (17,987)
Operating surplus 2 11,282 11,381 11,419 11,367
Surplus on sale of fixed assets 5 360 360 41 41
Interest receivable and similar income 6 2 2 2 2
Interest payable and similar charges 7 (5,270) (5,270) (6,830) (6,830)
Other finance costs 18 (284) (284) (253) (253)
Surplus for the year 8 & 20 6,090 6,189 4,379 4,327
Accounts
The above results relate wholly to continuing activities.
The notes on pages 32 to 56 form part of these financial statements.
27

Accounts
Statement of total recognised surpluses and deficits
Notes
Group
2010
£’000
Association
2010
£’000
Group
2009
£’000
Association
2009
£’000
Surplus for the year 6,090 6,189 4,379 4,327
Actuarial gain/(loss) on pension scheme 18 3,837 3,837 (5,203) (5,203)
Unrealised surplus on revaluation of housing properties 10 – – 6,893 6,893
Total recognised surplus relating to the year 9,927 10,026 6,069 6,017
Note of historical cost surpluses and deficits
Notes
Group
2010
£’000
Association
2010
£’000
Group
2009
£’000
Association
2009
£’000
Reported surplus on ordinary activities before taxation 6,090 6,189 4,379 4,327
Realisation of property revaluation gains of previous years 20 112 112 156 156
Differences between historical cost depreciation charge and the actual depreciation
charge for the year calculated on the revalued amount
20 1,008 1,008 764 764
Historical cost surplus on ordinary activities before and after taxation 7,210 7,309 5,299 5,247
The notes on pages 32 to 56 form part of these financial statements.
28

Balance sheets at 31 December 2010
Notes
Group
2010
£’000
Association
2010
£’000
Group
2009
£’000
Association
2009
£’000
Fixed assets Housing properties 10 315,795 315,795 299,647 299,647
Other tangible fixed assets 11 2,716 2,708 2,586 2,573
Investment Investment in subsidiary undertaking 12 – 85 – –
318,511 318,588 302,233 302,220
Current assets Properties for sale 13 2,572 2,572 1,126 1,126
Stock 72 72 53 53
Debtors 14 1,374 1,442 1,536 1,533
Cash at bank and in hand 15 1,289 1,107 1,667 1,545
5,307 5,193 4,382 4,257
Creditors Amounts falling due within one year 16 (4,456) (4,441) (2,830) (2,813)
Net current assets 851 752 1,552 1,444
Total assets less current liabilities 319,362 319,340 303,785 303,664
Creditors Amounts falling due after more than one year 17 125,708 125,708 114,644 114,644
Pension liability 18 3,430 3,430 8,844 8,844
Capital and reserves Share capital 19 – – – –
Revaluation reserve 20 164,327 164,327 165,447 165,447
Restricted reserve 20 33 – 121 –
Income and expenditure account 20 25,864 25,875 14,729 14,729
319,362 319,340 303,785 303,664
Accounts
The financial statements were approved and authorised for issue by the Board on 28 April 2011 and were signed on its behalf by:
A Knight G Hill C Reynolds
Chairman Board Member Secretary
The notes on pages 32 to 56 form part of these financial statements.
29

Accounts
Consolidated cash flow statements
Net cash inflow from operating activities 1 12,248 13,411
Returns on investment and servicing of finance
Interest received 2 2
Loan interest paid (5,380) (6,963)
Net cash outflow from returns on investments and servicing of finance (5,378) (6,961)
Capital expenditure
Acquisition and construction of housing properties (29,501) (21,994)
Purchase of other fixed assets (394) (324)
Capital grants received 11,112 11,076
Proceeds from sale of housing properties 519 118
Net cash outflow from capital expenditure and financial investment (18,264) (11,124)
Financing
Loan advances received 11,016 4,517
Net cash inflow from financing 2 11,016 4,517
Decrease in cash in the year 2 (378) (157)
Notes
2010
£’000
2010
£’000
2009
£’000
2009
£’000
30

Notes to the cash flow statement
1 Reconciliation of operating surplus to net cash inflow from operating activities
Operating surplus 11,282 11,419
Depreciation and impairment of housing properties 2,187 1,738
Depreciation of other tangible assets 248 303
Difference between pension charge and cash contribution (1,861) (766)
Decrease in debtors and (increase) in stocks (1,303) 266
Increase in creditors 1,695 451
2010
£’000
2009
£’000
12,248 13,411
Accounts
2 Analysis of changes in debt
2009
£’000
Cash flow
£’000
Cash at bank and in hand 1,667 (378) 1,289
Net cash at bank and in hand 1,667 (378) 1,289
Debt due after more than one year (114,088) (11,016) (125,104)
Net debt (112,421) (11,394) (123,815)
2010
£’000
31

Notes to the Financial Statements
32

Notes to the financial statements
1 Accounting policies
1.1 Basis of accounting and consolidation
The financial statements have been prepared in accordance with applicable
Accounting Standards in the United Kingdom, the National Housing
Federation’s 2008 Statement of Recommended Practice ‘Accounting by
Registered Social Landlords’ (SORP), and comply with the Accounting
Requirements for Registered Social Landlords General Determination 2006.
We have reviewed these accounting policies in line with the Financial
Reporting Standard 18 – Accounting Policies (FRS 18).
The financial statements are prepared on the historical cost basis of
accounting, as modified by the revaluation of housing properties.
The West Kent Group accounts consolidate the accounts of West Kent
Housing Association, 100% of West Kent Ventures Limited and 100% of
West Kent Extra Limited. West Kent has the right to remove the board of
West Kent Extra Limited and West Kent Ventures Limited and therefore
exercises control.
Ink Development Company Limited is accounted for using the equity
method.
1.2 Turnover
Turnover represents rental income, service charges and management fees
receivable, supporting people income, service and travel income, and
fees, these are recognised when they fall due. Grants receivable from local
authorities and the Tenant Services Authority in respect of revenue are
credited to Income and Expenditure in the same period as the expenditure
to which it relates. Proceeds from first tranche sales of shared ownership
properties are recognised on completion of sale.
in year three. This note also shows the amount by which the valuation of
the properties exceeds costs less Social Housing Grant (SHG). The excess
of value over cost less SHG has been credited to a revaluation reserve.
Housing properties under construction have been included at cost less
SHG.
The cost of properties includes the cost of acquiring land and buildings,
new capital expenditure and related development administration costs.
Donated land is included in cost at its valuation on donation, with the
donation treated as a capital grant. Development administration costs are
capitalised to the extent that they are directly attributable to bringing the
properties into their intended use.
Depreciation is charged so as to write down the cost, (net of SHG) or
re-valued amount of freehold housing properties, other than freehold
land, to their estimated residual value on a straight-line basis over their
expected useful economic lives. Depreciation is calculated on the opening
balance and movement in the year.
The expected useful economic lives are:
General needs and supported
houses and flats
Leasehold properties
Scheme fixed assets
100 years
Over the term of the lease
5 –20 Years
For properties with an estimated useful life of more than 50 years,
impairment reviews are carried out on an annual basis in accordance with
Financial Reporting Standard 11 - Impairment of fixed assets and goodwill
(FRS 11).
Notes to the Financial Statements
1.3 Housing properties
Completed housing properties are stated at valuation as detailed in note
10. A full valuation is carried out every five years, with an interim valuation
33

Notes to the Financial Statements
Expenditure on schemes, which are subsequently aborted, is written off in
the period in which it is recognised that the scheme will not be developed
to completion.
Under shared ownership arrangements, the Association disposes of a long
lease on low cost home ownership housing units to persons who occupy
them at a share equal to between 25% and 75% of value. The occupier has
the right to purchase further proportions up to 100% at the then current
valuation. Under SORP 2008, low cost home ownership properties are
split between current and fixed assets on initial recognition rather than on
completion. The related sale proceeds from the sale of the first tranche are
included in turnover. The remaining element of the property (‘staircasing
element’) is accounted for as a fixed asset and any subsequent tranche sale
treated as a part disposal of a fixed asset. Social Housing Grant in respect
of low cost home ownership properties is allocated against the retained
element of the low cost home ownership property and is treated as a
deduction from fixed assets.
1.4 Works to existing properties
Major works expenditure is charged to the Income and Expenditure
Account, unless it meets the strict requirements set out in the SORP.
This requirement is that the works to existing properties result in an
enhancement of the economic benefits of the property beyond the
standard anticipated when the assets were first acquired or constructed.
Such enhancement can occur if the improvement works result in an
increase in rental income, a material reduction in future maintenance
costs or a significant extension in the life of the property.
No provision is made for major repairs except to the extent that they
represent contractual obligations at the balance sheet date. Contractual
obligations for major repairs are shown under creditors falling due
within one year.
1.5 Other fixed assets and depreciation
Other fixed assets are depreciated on a straight-line basis over their
estimated economic lives as follows:
Years
Freehold buildings 50
Furniture and equipment 5
Fixtures and fittings 5-25
Computer equipment 5
Motor vehicles 3
1.6 Recognition of finance costs
Interest on loans financing development is capitalised up to the date of
practical completion of the scheme.
All costs of financing are charged to the Income and Expenditure account.
The costs of arranging all loan facilities are amortised over the term of the
loan.
1.7 Social Housing Grant (SHG)
Where developments have been financed wholly or partly by SHG,
the cost of these developments has been reduced by the amount of
grant receivable.
SHG may be repayable, but is usually recyclable under certain circumstances,
such as the sale of a property. This amount would normally be restricted to
the net proceeds of the sale. The cumulative unspent recycled balances are
shown separately in creditors under the heading ‘Recycled Capital Grant’.
SHG received in advance of the expenditure in respect of schemes in the
course of construction is shown as a current liability.
34

1.8 Pension costs
The difference between the fair value of the assets held in the Association’s
defined benefit pension scheme and the scheme’s liabilities measured
on an actuarial basis using the projected unit method is recognised in
the Association’s balance sheet as a pension scheme asset or liability as
appropriate. The carrying value of any resulting pension scheme asset is
restricted to the extent that the Association is able to recover the surplus
either through reduced contributions in the future or through refunds from
the scheme.
Changes in the defined benefit pension scheme asset or liability arising from
factors other than cash contributions by the Association are charged to
the Income and Expenditure account or the Statement of Total Recognised
Surpluses and Deficits in accordance with FRS17 ‘Retirement Benefits’.
1.9 Leases
Operating lease rentals are charged to the income and expenditure account
in equal annual amounts over the term of the lease.
1.11 Provision for doubtful debts
The estimation technique used in calculating the provision for doubtful
debts is:
Arrears Type Balances Provision
Previous tenants All 100% provided
Current tenants £0 to £500 No provision
£500 to £1,000 80% provided
Over £1,000 100% provided
Notes to the Financial Statements
1.10 Taxation
West Kent charges value added tax (VAT) on some of its income and is
able to recover part of the VAT it incurs on expenditure. The financial
statements include VAT to the extent that it is suffered by the Group
and not recoverable from HM Revenue and Customs. Recoverable VAT
arises from partially exempt activities and is credited to the income and
expenditure account.
West Kent has charitable status and therefore is not subject to Capital Gains
Tax or Corporation Tax on surpluses derived from charitable activities.
West Kent Ventures Limited is a commercial company and is separately
registered for VAT. Its activities are fully VAT recoverable. The company’s
profit is also subjected to Corporation Tax.
35

Notes to the Financial Statements
2a Particulars of turnover, cost of sales, operating costs and operating surplus
Group
Turnover
£’000
Cost of
sales
£’000
Operating
costs
£’000
2010
Operating
surplus
£’000
Turnover
£’000
Cost of
sales
£’000
Operating
costs
£’000
2009
Operating
surplus
£’000
Social housing lettings 29,980 - (18,152) 11,828 29,189 – (17,423) 11,766
Other social housing activities
Supporting people contract income 40 - (40) – 60 – (60) –
Development costs not capitalised – - (28) (28) – – (102) (102)
Training and consultancy 55 - (173) (118) 75 – (105) (30)
Shared ownership first tranche sales 2,041 (2,093) – (52) 1,036 (1,064) – (28)
Community regeneration 340 - (700) (360) 229 – (474) (245)
32,456 (2,093) (19,093) 11,270 30,589 (1,064) (18,164) 11,361
Non-social housing activities
Other 12 – – 12 58 – – 58
Total 32,468 (2,093) (19,093) 11,282 30,647 (1,064) (18,164) 11,419
36

2a Particulars of turnover, cost of sales, operating costs and operating surplus
Association
Turnover
£’000
Cost of
sales
£’000
Operating
costs
£’000
2010
Operating
surplus
£’000
Turnover
£’000
Cost of
sales
£’000
Operating
costs
£’000
2009
Operating
surplus
£’000
Social housing lettings 29,980 – (18,152) 11,828 29,189 – (17,423) 11,766
Other social housing activities
Supporting people contract income 40 – (40) – 60 – (60)
Development costs not capitalised – – (28) (28) – – (102) (102)
Training and consultancy 14 – (58) (44) 75 – (105) (30)
Shared ownership first tranche sales 2,041 (2,093) – (52) 1,036 (1,064) – (28)
Community regeneration – – (335) (335) – – (297) (297)
32,075 (2,093) (18,613) 11,369 30,360 (1,064) (17,987) 11,309
Notes to the Financial Statements
Non-social housing activities
Other 12 – – 12 58 – – 58
Total 32,087 (2,093) (18,613) 11,381 30,418 (1,064) (17,987) 11,367
37

Notes to the Financial Statements
2b Particulars of turnover, cost of sales, operating costs and operating surplus
Group and Association
General
housing
£’000
Sheltered
housing
£’000
Supported
housing
£’000
Shared
ownership
£’000
Leasehold
£’000
Turnover from social housing lettings
Rent receivable net of service charges 21,522 3,326 264 773 1 25,886 25,046
Charges for support services – 803 1,532 22 – 2,357 2,598
Service charges 647 627 36 142 36 1,488 1,342
Net rental income 22,169 4,756 1,832 937 37 29,731 28,986
Revenue grants 148 101 – – – 249 203
Turnover from social housing lettings 22,317 4,857 1,832 937 37 29,980 29,189
Expenditure on social housing lettings
Management (1,744) (328) (32) (125) (56) (2,285) (2,463)
Services (716) (643) (35) (91) (34) (1,519) (1,390)
Care and support – (781) (1,543) (30) – (2,354) (2,185)
Routine maintenance (2,906) (534) (36) (9) (12) (3,497) (2,870)
Planned maintenance (1,655) (316) (16) (16) (31) (2,034) (2,238)
Major repairs (3,387) (646) (38) – – (4,071) (4,329)
Bad debts (103) (19) (8) (3) (6) (139) (136)
Property lease charges (8) (30) (27) (1) – (66) (74)
Depreciation and impairment of housing properties (1,708) (387) (19) (73) – (2,187) (1,738)
Expenditure on social housing lettings (12,227) (3,684) (1,754) (348) (139) (18,152) (17,423)
Operating surplus / (deficit)
on social housing lettings 10,090 1,173 78 589 (102) 11,828 11,766
2010
Total
£’000
2009
Total
£’000
Void losses (329) (50) (52) (13) – (444) (389)
38

3 Directors’ emoluments
Directors are defined as members of the board, the chief executive and
other members of the executive team.
Payments were made to the chair, co-opted executives Frank Czarnowski
and Barbara Thorndick and members of the executive team. No payments
by way of fees or other remuneration were made during the year to any
other members of the board. Total expenses reimbursed to members of
the board not chargeable to United Kingdom income tax were £637
(2009: £1,698).
The remuneration committee consists wholly of non-executive members.
The members who served during the year were Angela Painter (Chair of the
Committee), Rosie Serpis, Alan Knight and Rowland Pocock. In framing its
remuneration policy for executive directors, the remuneration committee is
guided by competitive evidence from the social housing and related market
sectors for the skills it seeks to attract and retain.
Emoluments of the directors of the group, including pension
contributions and benefits in kind were:
2010 2009
Non executive director / Chair of the Board £10,000 £10,000
Executive team £672,590 £685,002
£682,590 £695,002
The emoluments of the highest paid director of the group, the Chief
Executive of West Kent, excluding pension contributions were £95,750
(2009: £110,205). The chief executive is an ordinary member of West
Kent’s pension scheme.
Notes to the Financial Statements
The general terms of employment of the executive directors are similar to
those of all other staff. There are no share options for executives or nonexecutives.
West Kent does not provide company cars nor private health
insurance. Particulars of the Association’s pension scheme into which West
Kent pays contributions on behalf of it’s executive directors and other
employees are detailed in note 18.
39

Notes to the Financial Statements
4 Employees
Group
2010
No.
Association
2010
No.
Group
2009
No.
Association
2009
No.
The average monthly number of employees (including directors) employed during the year was:
Full time equivalent posts 199 197 199 190
Employee costs
Group
2010
£’000
Association
2010
£’000
Group
2009
£’000
Association
2009
£’000
Wages and salaries 5,896 5,896 5,356 5,356
Social security costs 451 451 442 442
Other pension costs (Note 17) (584) (584) 468 468
5,763 5,763 6,266 6,266
Less amounts recharged to group entities – (401) – (287)
5,763 5,362 6,266 5,979
5 Surplus on sale of fixed assets
Group
2010
£’000
Association
2010
£’000
Group
2009
£’000
Association
2009
£’000
Proceeds
Right to buy sales 486 486 107 107
Shared ownership sales 494 494 187 187
Other income 35 35 16 16
1,015 1,015 310 310
Cost of sales (655) (655) (269) (269)
Surplus 360 360 41 41
40

6 Interest receivable and similar income
Group
2010
£’000
Association
2010
£’000
Group
2009
£’000
Association
2009
£’000
Interest receivable on deposits 2 2 2 2
7 Interest payable and similar charges
Group
2010
£’000
2 2 2 2
Association
2010
£’000
Group
2009
£’000
Association
2009
£’000
On loans repayable in more than five years
Housing loan interest 5,380 5,380 6,963 6,963
5,380 5,380 6,963 6,963
Less: Capitalised interest (110) (110) (133) (133)
5,270 5,270 6,830 6,830
Notes to the Financial Statements
Capitalised interest has been applied at 0.94% (2009: 1.72%), being the average variable interest rate payable on loans used to finance the development
programme during the year.
41

Notes to the Financial Statements
8 Surplus for the year
Group
2010
£’000
Association
2010
£’000
Group
2009
£’000
Association
2009
£’000
The surplus on ordinary activities before taxation is stated after charging:
Depreciation and impairment on housing properties 2,187 2,187 1,738 1,738
Depreciation on other tangible fixed assets 248 243 303 301
Auditors’ remuneration:
In their capacity as auditors 53 45 48 43
In respect of other services 2 2 22 22
Operating lease rentals
Land and buildings 122 122 91 91
Other 35 35 34 34
9 Taxation
UK Corporation Tax
Group
2010
£’000
Association
2010
£’000
Group
2009
£’000
Association
2009
£’000
Current Tax on surplus for the period – – – –
Tax on surplus on ordinary activities – – – –
Factors affecting the tax charge for the current year
The tax assessed for the period differs from the standard rate of corporation tax in the UK applied to the loss before tax. The differences are
explained below:
Surplus on ordinary activities before tax 6,090 6,189 4,379 4,327
Surplus on ordinary activities at the standard rate of corporation tax in the UK of 21% 1,279 1,300 920 909
Charitable income (1,295) (1,300) (920) (909)
Losses carried forward 16 – – –
Total current tax charge – – – –
42

Group and Association
10 Housing properties Housing properties
under construction
Shared
Rented ownership
£’000 £’000
Housing properties held
for lettings
Shared
Rented ownership
£’000 £’000
Cost or valuation
At 1 January 2010 7,413 1,387 277,021 13,826 299,647
Additions at cost of new properties 25,038 4,635 – – 29,673
Additions to cost of existing properties – – 316 – 316
Interest capitalised 78 32 – – 110
Schemes completed (8,005) (3,509) 8,005 3,509 –
Social housing grant/capital grant (9,378) (1,868) – – (11,246)
Disposals – cost – – (51) (355) (406)
Disposals – revaluation – – (112) – (112)
At 31 December 2010 15,146 677 285,179 16,980 317,982
Depreciation and impairment
At 1 January 2010 – – – – –
Depreciation charged in year – – (2,089) (98) (2,187)
At 31 December 2010 – – (2,089) (98) (2,187)
Net book value
At 31 December 2010 15,146 677 283,090 16,882 315,795
At 31 December 2009 7,413 1,387 277,021 13,826 299,647
Cost or valuation at 31 December 2010 is represented by:
Gross cost 24,142 2,252 202,532 28,210 257,136
Less: SHG (8,996) (1,575) (80,859) (4,991) (96,421)
Less: Depreciation – – (9,075) (172) (9,247)
15,146 677 112,598 23,047 151,468
Revaluation reserve – – 170,492 (6,165) 164,327
15,146 677 283,090 16,882 315,795
Total
£’000
Notes to the Financial Statements
43

Notes to the Financial Statements
10 Housing properties (continued)
Additions to housing properties in the course of construction during
the year include capitalised interest of £109,835 (2009: £133,309).
Cumulative capitalised interest included in housing properties is £2,312,053
(2009: £2,202,218).
Completed housing properties were independently valued by FPD Savills
(Chartered Surveyors), on an EUV-SH (Existing Use Value-Social Housing)
basis as at 31 December 2009, as set out within the RICS Appraisal and
Valuation Manual. The valuation assumes a disposal of the stock to a
Registered Social Landlord for the continued use of providing affordable
social housing. A full valuation is carried out every five years, with an
interim valuation in year three. An interim valuation was completed for
31 December 2009 and a full valuation will be completed for
31 December 2011.
As at the 31 December 2010 the Association owned and managed 6,098
homes (2009: 5,963), the breakdown of which is as follows:
2010 2009
Properties held for letting 5,641 5,540
Shared ownership properties 279 251
Intermediate market rents 22 20
Leasehold properties 156 152
6,098 5,963
In addition West Kent owned 4 units (2009: 4) comprising 15 bed spaces
(2009: 15) which are managed by other organisations.
This valuation reflects that current rents will rise in real terms in order
to reach target rents.
Key assumptions adopted within the discounted cash flow used for the
valuation include:
• discount rate – 4.75% real
• long term underlying inflation rate – 2.5%
• long term planned maintenance cost inflation – 0% real
• long term responsive and cyclical repairs cost inflation – 0.5% real
• long term management cost inflation – 0.5% real
44

11 Other tangible assets
Group
Freehold
offices
£’000
Leasehold
office
£’000
Fixtures
& fittings
£’000
Computers,
furniture &
equipment
£’000
Motor
vehicles
£’000
Cost or valuation
At 1 January 2010 2,397 114 561 1,674 286 5,032
Additions 2 – 180 173 39 394
Disposals – – – (20) (29) (49)
At 31 December 2010 2,399 114 741 1,827 296 5,377
Depreciation
At 1 January 2010 418 114 334 1,351 229 2,446
Charge for the year 54 – 31 129 34 248
Disposals – – – (4) (29) (33)
At 31 December 2010 472 114 365 1,476 234 2,661
Net book value
At 31 December 2010 1,927 – 376 351 62 2,716
At 31 December 2009 1,979 – 227 323 57 2,586
Total
£’000
Notes to the Financial Statements
45

Notes to the Financial Statements
11 Other tangible assets (continued)
Association
Freehold
offices
£’000
Leasehold
office
£’000
Fixtures
& fittings
£’000
Computers,
furniture &
equipment
£’000
Motor
vehicles
£’000
Cost or valuation
At 1 January 2010 2,397 114 561 1,674 271 5,017
Additions 2 – 180 173 39 394
Disposals – – – (20) (29) (49)
At 31 December 2010 2,399 114 741 1,827 281 5,362
Depreciation
At 1 January 2010 418 114 334 1,351 227 2,444
Charge for the year 54 – 31 129 29 243
Disposals – – – (4) (29) (33)
At 31 December 2010 472 114 365 1,476 227 2,654
Net book value
At 31 December 2010 1,927 – 376 351 54 2,708
At 31 December 2009 1,979 – 227 323 44 2,573
Leasehold office comprises one short leasehold property.
Total
£’000
12 Investment in subsidiaries
The financial statements consolidate the results of West Kent Extra Limited
and West Kent Ventures Limited, which are subsidiaries of West Kent.
West Kent has the right to appoint members to the board of West Kent
Extra and West Kent Ventures, and thereby exercises control over them.
West Kent Extra is a registered charity. West Kent Ventures is a commercial
company, which has a trading name of WK Consulting. West Kent Housing
Association is the ultimate parent undertaking.
Investment in associated companies
West Kent owns a one third share of Ink Development Company Limited
(Ink). Ink is a building contractor, completing design and build services in
South-East England.
West Kent provided £85,000 in the form of a loan to West Kent Ventures
during the year 2010.
46

13 Properties for sale – shared ownership
Group
2010
£’000
Association
2010
£’000
Group
2009
£’000
Association
2009
£’000
Properties under construction 2,092 2,092 899 899
Properties completed and unsold 480 480 227 227
14 Debtors
2,572 2,572 1,126 1,126
Group
2010
£’000
Association
2010
£’000
Group
2009
£’000
Association
2009
£’000
Amounts falling due within one year:
Rental debtors 623 623 575 575
Less: provision for doubtful debts (358) (358) (314) (314)
265 265 261 261
Staff loans 13 13 7 7
Amounts due from group undertakings – 110 – –
Other debtors 166 136 340 340
Prepayments and accrued income 495 483 325 322
939 1,007 933 930
Amounts falling due after more than one year:
Staff loans 26 26 11 11
Prepayments and accrued income 409 409 592 592
435 435 603 603
1,374 1,442 1,536 1,533
Notes to the Financial Statements
47

Notes to the Financial Statements
15 Cash at bank and in hand
Group
2010
£’000
Association
2010
£’000
Group
2009
£’000
Association
2009
£’000
Cash at bank and in hand 1,021 839 1,435 1,313
Leaseholder accounts 268 268 232 232
1,289 1,107 1,667 1,545
16 Creditors: Amounts falling due within one year
Group
2010
£’000
Association
2010
£’000
Group
2009
£’000
Association
2009
£’000
Trade creditors 2,864 2,849 1,433 1,416
Other creditors including taxation and social security 565 565 419 419
Accruals and deferred income 853 853 911 911
Recycled capital grants 174 174 67 67
4,456 4,441 2,830 2,813
Recycled capital grant fund (RCGF)
Group
2010
£’000
Association
2010
£’000
Group
2009
£’000
Association
2009
£’000
Opening balance at 1 January 353 353 288 288
Transferred into fund 153 153 87 87
Utilised during the year (67) (67) (22) (22)
Closing balance at 31 December 439 439 353 353
RCGF amounts falling due less than one year 174 174 67 67
RCGF amounts falling due more than one year 265 265 286 286
Closing balance at 31 December 439 439 353 353
48

Group and Association
17 Creditors: Amounts falling due after more than one year
2010
£’000
2009
£’000
Housing loans* 125,104 114,088
Recycled capital grants 265 286
Leasehold contribution scheme deposits 339 270
125,708 114,644
West Kent has committed long-term funding of £155,000,000. This funding
comprises two facilities:
• £105,000,000 with the Bank of Scotland (BoS), of which £101,000,000
has been drawn down;
• £50,000,000 with Royal Bank of Scotland (RBS), of which £24,500,000
has been drawn down.
Loan facilities comprise:
Facility
£’000
The remaining £29,500,000 on the two facilities is secured and available
to draw down. All loans are secured by charges on the housing properties
of the Association. The BoS loans will be repaid in instalments by 2036.
The RBS loans will be repaid in instalments by 2041. All loans are repayable
in more than five years.
Interest rate hedges have been put in place as shown in the table below.
The BoS RPI and fixed rate hedges will convert to variable rates on the
dates shown below. Forward dated fixes totalling £35m have been put in
place on the BoS facility: £15m fixed for seven years at 4.47% plus margin
commencing 23 March 2014; and £20m fixed for 12 years at 5.00% plus
margin commencing 2 January 2014.
Drawn
2010
£’000
Drawn
2009
£’000 Interest Rate
Housing loans
BoS Tranche A 28,000 28,000 27,500 Libor + 0.25%
Fixed rate
expires
BoS Tranche A 20,000 20,000 20,000 RPI + 2.24% 23 December 2015
BoS Tranche A 20,000 20,000 20,000 Fixed 4.62% 23 March 2019
BoS Tranche A 30,000 30,000 30,000 Fixed 11.27% 23 March 2014
BoS Tranche B 7,000 3,000 – Libor + 0.25%
RBS Tranche A 40,000 15,500 10,000 Libor + 0.20%
RBS Tranche B 5,000 4,000 2,000 Libor + 0.20%
RBS Tranche C 5,000 5,000 5,000 Base + 0.20%
155,000 125,500 114,500
Notes to the Financial Statements
* Housing loans at 31 December 2010 include £396,035 of un-amortised loan issue costs.
49

Notes to the Financial Statements
18 Pension obligations
West Kent participates in the Kent County Council Pension Fund as an
‘Admitted Body’. The pension scheme is a defined benefit final salary
pension scheme. The fund is subject to the regulations of the Local
Government Superannuation Scheme. Contributions to the scheme are
determined by a qualified actuary on the basis of valuations, using the
projected unit method.
A full actuarial valuation for funding purposes was carried out as at 31
March 2007 and updated to 31 December 2010 by a qualified independent
actuary.
The total contribution by West Kent in the year ended 31 December 2010
was £1,277,000 (2009: £1,237,000). West Kent’s actual contribution rate
as a percentage of pensionable salaries for the year ended 31 December
2010 was 31.8%, and for employees it ranged from 5.5% to 7.5%. The
2010 contribution rate assumed investment returns of 6.5%, pay increases
of 4.3% and inflation of 2.8%. West Kent’s estimated contribution rate as a
percentage of pensionable salaries for 2011/12 is 28.6%.
The Government has announced that it plans to increase future pensions in
line with the Consumer Price Index (CPI) rather than the Retail Price Index
(RPI). This is not technically a rule change as the increases are just published
annually and so it’s actually a policy change from RPI increases to CPI.
Kent County Council’s standard approach, therefore, is to account for this
as a past service cost in the revenue account costs, as we assume that CPI
will increase at a lower rate than the RPI (and so pension increases and
therefore the FRS17 liabilities will be lower.)
Balance sheet disclosure as at 31 December
Financial assumptions
Dec
2010
Dec
2009
Price increases 3.5% 3.8%
Salary increases 5.0% 5.3%
Pension increases 3.0% 3.8%
Discount rate 5.4% 5.7%
The long-term expected rate of return and the value of the West Kent’s
share of the scheme assets:
Assets and rate of return
Return
2010
Value
2010
£’000
Return
2009
Value
2009
£’000
Equities 7.4% 13,318 7.7% 11,020
Gilts 4.2% 175 4.5% 412
Bonds 5.4% 2,103 5.7% 1,863
Property 5.3% 1,577 5.6% 893
Cash 3.0% 350 3.0% 855
6.9% 17,523 7.0% 15,043
The average future life expectancies at age 65 are:
Mortality Males Females
Retiring today 19.73 years 23.78 years
Retiring in 20 years 21.79 years 25.72 years
Financial Reporting Standard 17 – Retirement benefits
Financial Reporting Standard 17 – Retirement benefits requires additional
disclosure in respect of the pension scheme. The disclosures required by
FRS17 are set out below.
50

Net pension liability
Estimated employer assets (A) 17,523 15,043 12,110
Present value of scheme liabilities (20,670) (23,499) (15,924)
Present value of unfunded liabilities (283) (388) (340)
Total value of liabilities (B) (20,953) (23,887) (16,264)
Net pension liability (A+B) (3,430) (8,844) (4,154)
Revenue account costs for the year to 31 December
Service cost 510 468
Past service costs (1,094) –
Curtailment and settlements – –
Total operating charge (A) (584) 468
Expected return on employer assets 1,085 807
Interest on pension scheme liabilities (1,369) (1,060)
Net return credited to other finance income (B) (284) (253)
Net revenue account cost (A-B) (300) 721
Actual return on plan assets 1,484 2,083
Dec
2010
£’000
Dec
2009
£’000
Dec
2010
£’000
Dec
2008
£’000
Dec
2009
£’000
Notes to the Financial Statements
51

Notes to the Financial Statements
18 Pension obligations (continued)
Reconciliation of defined benefit obligation
Opening defined benefit obligation 23,887 16,264
Current service cost 510 468
Interest cost 1,369 1,060
Contributions by members 267 265
Actuarial (gains) / losses (3,488) 6,479
Past service costs (1,094) –
Gains on curtailment – (3)
Estimated unfunded benefits paid (22) (23)
Estimated benefits paid (476) (629)
Closing defined benefit obligation 20,953 23,887
2010
£’000
2009
£’000
Reconciliation of fair value of employer assets
Opening fair value of employer assets 15,043 12,110
Expected return on assets 1,085 807
Contributions by members 267 265
Contributions by the employer including unfunded benefits 1,277 1,237
Actuarial gains / (losses) 349 1,276
Benefits paid including unfunded benefits (498) (652)
Closing fair value of employer assets 17,523 15,043
2010
£’000
2009
£’000
52

Movement in deficit during the year
Deficit at beginning of year (8,844) (4,154)
Current service cost (510) (468)
Other finance costs (284) (253)
Contributions by the employer 1,255 1,214
Contributions in respect of unfunded benefits 22 23
Past service costs 1,094 –
Settlements/curtailments – (3)
Actuarial surplus / (deficits) 3,837 (5,203)
Deficit at end of year (3,430) (8,844)
2010
£’000
2009
£’000
Notes to the Financial Statements
Amounts for the current and previous accounting periods
Fair value of employer assets 17,523 15,043 12,110 13,985 12,456
Present value of defined benefit obligation (20,953) (23,887) (16,264) (18,728) (17,101)
Deficit (3,430) (8,844) (4,154) (4,743) (4,645)
Experience gains / (losses) on assets 349 1,276 (3,890) (360) 399
Experience gains / (losses) on liabilities 1,895 – 4 (1,127) (80)
Dec
2010
£’000
Dec
2009
£’000
Dec
2008
£’000
Dec
2007
£’000
Dec
2006
£’000
Amount recognised in statement of total recognised surpluses and deficits
Actuarial surplus / (deficit) recognised in the statement of total recognised
surpluses and deficits (STRSD) 3,837 (5,203) 289 (568) 1,306
Cumulative actuarial deficits (1,987) (5,824) (621) (910) (342)
Dec
2010
£’000
Dec
2009
£’000
Dec
2008
£’000
Dec
2007
£’000
Dec
2006
£’000
53

Notes to the Financial Statements
19 Share Capital
Group
2010
£’000
Association
2010
£’000
Group
2009
£’000
Association
2009
£’000
Allotted, issued and fully paid
At 1 January 43 43 45 45
Issued during the year 3 3 – –
Cancelled during the year (6) (6) (2) (2)
At 31 December 40 40 43 43
Each member of the board holds one share of £1 in the Association. The shares provide members with the right to vote at general meetings, but do not
provide any rights to dividends, redemption of share capital or distribution on a winding up.
20 Reserves
Group
Restricted
reserve
£’000
Income and
expenditure
account
£’000
Housing
properties
revaluation
reserve
£’000
At 1 January 2010 121 14,729 165,447 180,297
Surplus for the year (19) 6,109 – 6,090
Actuarial deficit on pension scheme – 3,837 – 3,837
Realisation of revaluation surplus in year – 112 (112) –
Transfer for depreciation relating to revaluation – 1,008 (1,008) –
Transfers between reserves (69) 69 – –
At 31 December 2010 33 25,864 164,327 190,224
Total
£’000
54

20 Reserves (continued)
Association
Restricted
reserve
£’000
Income and
expenditure
account
£’000
Housing
properties
revaluation
reserve
£’000
At 1 January 2010 – 14,729 165,447 180,176
Surplus for the year – 6,189 – 6,189
Actuarial deficit on pension scheme – 3,837 – 3,837
Realisation of revaluation surplus in year – 112 (112) –
Transfer for depreciation relating to revaluation – 1,008 (1,008) –
At 31 December 2010 – 25,875 164,327 190,202
Total
£’000
Notes to the Financial Statements
21 Capital commitments
Group
2010
£’000
Association
2010
£’000
Group
2009
£’000
Association
2009
£’000
Capital expenditure that has been contracted for but has not been provided for in the financial
statements. £9.9 million (2009: £17.3 million) of SHG is receivable against this expenditure. 28,292 28,292 27,235 27,235
Capital expenditure that has been authorised by the board but has not yet been contracted
for. £11.4 million (2009: £7.9 million) of SHG is receivable against this expenditure. 32,369 32,369 22,737 22,737
The capital commitments will be funded through undrawn loan facilities, first tranche sales and SHG. Those contracts authorised but not yet contracted
will not be entered into until funding has been secured.
22 Contingent liabilities
There were no undisclosed contingent liabilities at the year end as recognised by the board.
55

Notes to the Financial Statements
Group and Association
23 Operating leases
At 31 December 2010 the annual commitments under operating leases are as follows:
2010
Land &
Building
£’000
2010
Other
£’000
2009
Land &
Building
£’000
Leases which expire less than 1 year 7 – 43 –
Leases which expire between 1 & 5 years 46 36 7 35
Leases which expire after 5 years 58 – 51 –
2009
Other
£’000
111 36 101 35
24 Related party transactions
The board of West Kent includes tenant representatives. Transactions
between these individuals and West Kent are in accordance with
West Kent’s normal terms for all tenants.
There were no related party transactions with members of the board
of management other than those already disclosed in note 3 to the financial
statements.
West Kent provided grant funding amounting to £326,724 to West Kent
Extra Limited during the year (2009: £287,002).
West Kent provided a loan of £85,000 to West Kent Ventures Limited
during the year (2009: £nil).
West Kent grant aids the Association of West Kent Tenants and Residents
(AWKTR) of which all tenants of West Kent are members. AWKTR seeks to
encourage and extend tenant participation throughout all of West Kent’s
activities. West Kent provides offices and computers. The relationship
between AWKTR and West Kent is governed by a detailed financial
memorandum.
Ink Development Company Limited was set up in 2006 by the InKent
Alliance, which comprises West Kent, AmicusHorizon and Russet Homes.
West Kent owns one third of the shares of Ink and appoints two of the
seven Board members. West Kent provides financial services to Ink.
Ink commenced trading during 2006 and its first financial year end
was 31 March 2007. Investment represents 1 share of £1 in Ink.
56

If you would like to receive this information in another format, for example in large print, in another
language, in Braille, on tape or CD, please telephone 01732 749400 or ask any member of staff.
0800 1691122
0800 1691122
0800 1691122
Sie möchten den Text übersetzt? Rufen Sie 0800 1691122.
Potrzebujesz przetłumaczyć ten tekst? Dzwoń na numer tel. 0800 1691122.
Precisa disto traduzido? Contacte 0800 1691122.
- 0800 1691122.
Bunun tercümesini istiyor musunuz? 0800 1691122 no.lu telefonu arayınız.
West Kent Lifeways
01732 749451 or 01732 749452
West Kent out of hours service
0800 1691122
Repairs freephone
0800 1691122
West Kent Housing Association
Head Office • 101 London Road • Sevenoaks • Kent • TN13 1AX
t: 01732 749400 • f: 01732 749419 • e: enquiries@wkha.org.uk • www.westkent.org Date of publication May 2011