Capital structure
Total funds including long term creditors at the end of the period amounted to £ 854.620 million ( 2017 : £ 824.814 million ), of which £ 147.529 million ( 2017 : £ 136.781 million ) comprised the income and expenditure account reserve . The increase is due to an increase in tangible fixed assets , social housing grant , investments increased borrowing and the surplus for the year . Long term borrowings at the end of the period have increased to £ 430 million from £ 414 million in 2017 . Gearing of Accord at the year-end is 46.3 % ( 2017 : 46.7 %) and has remained comfortably within funding covenants at all times . The Association has access to undrawn borrowing facilities and unutilised security on its statement of financial position which is sufficient to meet Accord ’ s ongoing liquidity requirements for a continuing and ambitious development programme . The net movement in cash for the year was an inflow of £ 4.238 million ( 2017 : £ 3.558 million outflow ) reflecting the net impact of our development programme , increased borrowing , increased growth linked to new developments and services and the reduction in debt management costs . The average interest rate for the year stood at 3.80 % ( 2017 : 4.02 %). Interest cover for the Association is 190.5 % ( 2017 : 190.7 %) and remains comfortably within funding covenants .
Treasury management and control
Treasury activities are controlled by the Executive Director of Resources with the assistance of external consultants as required , and are carried out in accordance with policies approved by the Board . The purpose of the treasury management function within Accord is to ensure that adequate cost-effective funding is available at all times and that exposure to financial risk is minimised . The key risks managed by the treasury function are interest rate risk and liquidity risk . Treasury management activity is subject to regular review by internal auditors and treasury specialists . Treasury activity is closely monitored on a regular basis and compliance with covenant conditions continues to be met with no breaches in the year . Quarterly monitoring information and management accounts are submitted in accordance with funder and regulatory requirements . Short , medium and longer term liquidity requirements are monitored through ongoing forecasting and the business planning process . It is the Association ’ s policy to balance the cash held by repaying debt as far as possible , whilst ensuring sufficient access to funding facilities to cover investment and business development plans .
Interest rate exposure is managed via the use of interest rate fixes . Accord ’ s policy is that between 60 % - 80 % of its total borrowing should be at fixed rates of interest . At the year-end , 65 % ( 2017 : 66 %) of borrowings were at fixed rates of interest – the levels of fixed debt remains under constant review . Accord has not used stand-alone derivative financial instruments to manage its interest rate exposure during the year . However , Accord does have the Wider Rule Change and approval from the Regulator of Social Housing to use stand-alone derivative financial instruments , and has facilities in place with three funding institutions to utilise these instruments - there have been no such facilities in place at any point throughout the financial year ( 2017 : nil ). Continuity of funding is ensured by arranging for short term borrowings and committed facilities and by limiting the amount of debt repayable in any one year . In 2017 / 18 a further £ 25m , five year revolving credit facility was secured to further bolster the Association ’ s commitment to delivering new housing supply and ensure ongoing liquidity requirements continue to be met at all times . Year-end undrawn committed facilities were £ 49.5 million ( 2017 : £ 57.1 million ). Interest payable increased to £ 16.13 million ( 2017 : £ 15.73 million ), and debt increased from £ 414.07 million to £ 430.33 million . Increased total funding facilities highlights Accord ’ s commitment to the development of new homes and the regeneration of communities . Principal financial covenants are in respect of loan gearing and interest cover . The Board believes that the financial covenants entered into are appropriate for Accord ’ s operations . The table below provides an analysis of when the debt falls due for repayment .
26 Accord Housing Association