Source document: https://docs-lawep.s3.us-east-2.amazonaws.com/1697783215096.pdf (Fiji)
Affordable loan packages b l e a o i n s t d r e p o f r i c A f p REGISTERED OFFICE LAUTOKA LABASA SUVA Housing Authority Building, Housing Authority Building, FNPF Building, Saqa Street, Valelevu, Nasinu.

14 Tavewa Avenue, Lautoka.

Rosawa Street, Labasa.

P.O.

Box 262, Lautoka Telephone: (679) 666 0299 Facsimile: (679) 666 5602 P.O.

Box 78, Labasa.

Facsimile: (679) 881 3919 Telephone: (679) 881 1977 Facsimile: (679) 331 5135 Level 1, Ratu Sukuna House, Macarthur Street, Suva.
Telephone: (679) 339 2977 P.O.

Box 1263, Suva Telephone: (679) 339 2977 Facsimile: (679) 334 0092 Email: info@housing.com.fj www.housingfiji.com NUMBER OF EMPLOYEES AT THE END OF THE YEAR: Management 16 | Staff 127 | Project/Unestablished Staff/Trainees 68 Decent, Quality & Affordable Housing for all Fijians aNNUAL report “Building a Nation through building homes” Parliamentary Paper No.
80/2019 VISIONTo be the dynamic leader in housingMISSIONThe purpose of Housing Authority is to be the premier producer of aﬀordable and quality housing products and services through:VISIONMISSONCORPORATEVALUES & ETHICSDevelopment of fully serviced lotsand housesCompetitive loan packages to all itscustomersService excellence for all customersand stakeholdersBeing socially aware and responsibleCORPORATE VALUES AND ETHICSWe will encounter all challengesto be the leader in housingWe will provide excellentcustomer services promptly,eﬀectively and courteouslyWe will be innovative in meetingthe needs of our customersWe will understand, appreciateand involve all staﬀWe will do business in atransparent, ethical and honestmannerHousing Authority Annual Report 2017Housing Authority Annual Report 20170102CONTENTS1357924681115211318Vision, Mission & EthicsContentsCorporateGovernanceBoardDirectorsFinancialHighlightsLand & HousingDevelopmentLendingDivisionLetter to theMinisterOrganizationStructureChairman’sReportCEO’sReportFinance & AdministrationCustomersRelations DivisionFinancialStatements VISIONTo be the dynamic leader in housingMISSIONThe purpose of Housing Authority is to be the premier producer of aﬀordable and quality housing products and services through:VISIONMISSONCORPORATEVALUES & ETHICSDevelopment of fully serviced lotsand housesCompetitive loan packages to all itscustomersService excellence for all customersand stakeholdersBeing socially aware and responsibleCORPORATE VALUES AND ETHICSWe will encounter all challengesto be the leader in housingWe will provide excellentcustomer services promptly,eﬀectively and courteouslyWe will be innovative in meetingthe needs of our customersWe will understand, appreciateand involve all staﬀWe will do business in atransparent, ethical and honestmannerHousing Authority Annual Report 2017Housing Authority Annual Report 20170102CONTENTS1357924681115211318Vision, Mission & EthicsContentsCorporateGovernanceBoardDirectorsFinancialHighlightsLand & HousingDevelopmentLendingDivisionLetter
 to theMinisterOrganizationStructureChairman’sReportCEO’sReportFinance & AdministrationCustomersRelations DivisionFinancialStatements LETTER TO THE MINISTER1st August 2018The Honorable MinisterMinistry of Local GovernmentHousing & Environment, Infrastructure & TransportP O Box 2131Government BuildingsSUVADear Sir,Re : Annual Report 2017In accordance with Section 21 of the Housing Act, Cap 267, I am pleased to present the Authority’s Annual Report for 2017 which incorporates a detailed summary of its operations and activities including the Financial Statements for the year ending 31 st December, 2017.For the year 2017, the Housing Authority recorded a surplus of $1.701m in comparison to a surplus of $1.473m in 2016.On behalf of the Board and Management of the Authority, I take this opportunity to thank the Government for its continued and unwavering support.Yours sincerely[Umarji Musa]ACTING BOARD CHAIRMANCORPORATE GOVERNANCEIntroductionBoard MeetingsBoard FunctionsThe Board was appointed on 24th December 2015 and is responsible for the overall governance of the Housing Authority.Mr Umarji Musa continues to chair the Board with three Board directors, Mr Nesbitt Hazelman, Mr Roveen Permal and Mr Craig Strong.Mr Craig Strong tendered his resignation on 29th September 2017 while Mr Permal and Mr Hazelman continued the duties of Board directors until the end of the year.During the year, eleven (11) Board Meetings were convened.
Attendance at these meetings averaged 90%.The Authority continued to provide corporate performance reports to the Government through the Ministry of Housing and the Ministry of Public Enterprises.NO.
ATTENDEDMR UMARJI MUSA11MR NESBITT HAZELMAN11MR ROVEEN PERMAL9MR CRAIG STRONG 4The Board Charter outlines the roles and responsibilities of the Board of Directors including disclosure of conflict of interest of any Director.Major responsibilities of the Board of Directors include:The Board strictly adhered to good corporate governance as it forms a fundamental part of the Authority’s values and success.Corporate Governance of the Authority including the establishment of the subcommitteesOversight of the business and the affairs of the Authority by establishing the strategies and financial objectives with managementApproving major corporate initiatives Establishing appropriate system of risk managementMonitoring the performance of managementCommunicating with shareholders results and developments in the operations of the AuthorityAppointment of the Chief Executive OfficerApproval of the Authority’s major policies and overseeing the development strategies for senior and high performance executives••••••••Housing Authority Annual Report 2017Housing Authority Annual Report 20170304 LETTER TO THE MINISTER1st August 2018The Honorable MinisterMinistry of Local GovernmentHousing & Environment, Infrastructure & TransportP O Box 2131Government BuildingsSUVADear Sir,Re : Annual Report 2017In accordance with Section 21 of the Housing Act, Cap 267, I am pleased to present the Authority’s Annual Report for 2017 which incorporates a detailed summary of its operations and activities including the Financial Statements for the year ending 31 st December, 2017.For the year 2017, the Housing Authority recorded a surplus of $1.701m in comparison to a surplus of $1.473m in 2016.On behalf of the Board and Management of the Authority, I take this opportunity to thank the Government for its continued and unwavering support.Yours sincerely[Umarji Musa]ACTING BOARD CHAIRMANCORPORATE GOVERNANCEIntroductionBoard MeetingsBoard FunctionsThe Board was appointed on 24th December 2015 and is responsible for the overall governance of the Housing
 Authority.Mr Umarji Musa continues to chair the Board with three Board directors, Mr Nesbitt Hazelman, Mr Roveen Permal and Mr Craig Strong.Mr Craig Strong tendered his resignation on 29th September 2017 while Mr Permal and Mr Hazelman continued the duties of Board directors until the end of the year.During the year, eleven (11) Board Meetings were convened.
Attendance at these meetings averaged 90%.The Authority continued to provide corporate performance reports to the Government through the Ministry of Housing and the Ministry of Public Enterprises.NO.
ATTENDEDMR UMARJI MUSA11MR NESBITT HAZELMAN11MR ROVEEN PERMAL9MR CRAIG STRONG 4The Board Charter outlines the roles and responsibilities of the Board of Directors including disclosure of conflict of interest of any Director.Major responsibilities of the Board of Directors include:The Board strictly adhered to good corporate governance as it forms a fundamental part of the Authority’s values and success.Corporate Governance of the Authority including the establishment of the subcommitteesOversight of the business and the affairs of the Authority by establishing the strategies and financial objectives with managementApproving major corporate initiatives Establishing appropriate system of risk managementMonitoring the performance of managementCommunicating with shareholders results and developments in the operations of the AuthorityAppointment of the Chief Executive OfficerApproval of the Authority’s major policies and overseeing the development strategies for senior and high performance executives••••••••Housing Authority Annual Report 2017Housing Authority Annual Report 20170304 ORGANIZATION STRUCTUREMinister of HousingMinister of Public EnterprisesBoard ofDirectorsChief Executive OfficerGeneral Manager Land & Housing DevelopmentThe Housing & LandDevelopment Division isresponsible for theacquisition, subdivision and the production of homes/housing unitsGeneral Manager Finance &AdministrationThe Finance & Administration Division is primarily responsible forensuring prudent financial management including reporting, data integrity and disseminating timely and quality information andproviding efficient and direct administration servicesGeneral ManagerCustomer RelationsThe Customer RelationsDivision’s majorresponsibility is to createnew business through itsvarious activities such asland, house sales, productdevelopment and valuation.General Manager LendingThe Lending Division isresponsible for all lendingfunctions which include the assessment, approval,management and recovery of all loans.
It is also tasked with implementing of more effective and efficient policies and procedures so as to improve theoverall management of the Authority’s loan portfolio in line with other commercial banking practices.BoardSecretaryInternalAuditBOARD DIRECTORSNESBITT HAZELMANBOARD DIRECTORUMARJI MUSAACTING BOARD CHAIRMANROVEEN PERMALBOARD DIRECTORAppointed to the Board on 24th December 2015, Mr Hazelman holds a Post Graduate Certificate in Human Resource Management from the Australian Training & Quality College, a Bachelor of Arts with Double Majors in Management and Sociology and a Diploma in Industrial Relations and Personnel Management from the University of the South Pacific.
He has over 31 years of experience in Human Resources, Industrial Relations and Executive Management.

He is the current CEO of the Fiji Commerce Employers Federation.

Appointed to the Board in September 2010 and re-appointed Acting Chairman on 24th December 2015.

Mr Musa holds a Bachelor of Arts Degree in Economics and other professional credentials.

He joined the Fiji Development Bank in 1974 and retired in 2010 after 36 years of service.
Mr Musa is an independent Business and Finance Consultant and holds Directorship on a number of statutory Bodies and listed Companies.Appointed to the Board on 24th December 2015, Mr Permal holds a Bachelor’s Degree in Civil Engineering from the University of New South Wales in Australia.

Currently Mr Permal runs his own Consultancy firm with an extensive background in structural engineering, construction and project management.
He is a professional member of the Institute of Engineers in both Fiji and Australia.Guests and staff members at the Davuilevu ground breaking ceremony.Housing Authority Annual Report 2017Housing Authority Annual Report 20170506 ORGANIZATION STRUCTUREMinister of HousingMinister of Public EnterprisesBoard ofDirectorsChief Executive OfficerGeneral Manager Land & Housing DevelopmentThe Housing & LandDevelopment Division isresponsible for theacquisition, subdivision and the production of homes/housing unitsGeneral Manager Finance &AdministrationThe Finance & Administration Division is primarily responsible forensuring prudent financial management including reporting, data integrity and disseminating timely and quality information andproviding efficient and direct administration servicesGeneral ManagerCustomer RelationsThe Customer RelationsDivision’s majorresponsibility is to createnew business through itsvarious activities such asland, house sales, productdevelopment and valuation.General Manager LendingThe Lending Division isresponsible for all lendingfunctions which include the assessment, approval,management and recovery of all loans.
It is also tasked with implementing of more effective and efficient policies and procedures so as to improve theoverall management of the Authority’s loan portfolio in line with other commercial banking practices.BoardSecretaryInternalAuditBOARD DIRECTORSNESBITT HAZELMANBOARD DIRECTORUMARJI MUSAACTING BOARD CHAIRMANROVEEN PERMALBOARD DIRECTORAppointed to the Board on 24th December 2015, Mr Hazelman holds a Post Graduate Certificate in Human Resource Management from the Australian Training & Quality College, a Bachelor of Arts with Double Majors in Management and Sociology and a Diploma in Industrial Relations and Personnel Management from the University of the South Pacific.
He has over 31 years of experience in Human Resources, Industrial Relations and Executive Management.

He is the current CEO of the Fiji Commerce Employers Federation.

Appointed to the Board in September 2010 and re-appointed Acting Chairman on 24th December 2015.

Mr Musa holds a Bachelor of Arts Degree in Economics and other professional credentials.

He joined the Fiji Development Bank in 1974 and retired in 2010 after 36 years of service.
Mr Musa is an independent Business and Finance Consultant and holds Directorship on a number of statutory Bodies and listed Companies.Appointed to the Board on 24th December 2015, Mr Permal holds a Bachelor’s Degree in Civil Engineering from the University of New South Wales in Australia.

Currently Mr Permal runs his own Consultancy firm with an extensive background in structural engineering, construction and project management.
He is a professional member of the Institute of Engineers in both Fiji and Australia.Guests and staff members at the Davuilevu ground breaking ceremony.Housing Authority Annual Report 2017Housing Authority Annual Report 20170506 CHAIRMAN’S REPORTFinancial ResultsLand Development ProjectsStrategic PlanAcknowledgementSocial Housing Policy Housing Authority is tasked with the enormous responsibility of ensuring that every Fijian has access to decent and affordable homes.
It has been the social arm of Government in providing land and house to the Fijian citizens over the years.The Authority continued to focus on its core mission and that is, to develop fully serviced lots and houses with competitive loan packages to all its customers.I am pleased to present the 2017 Annual Report ending 31st December 2017.The year 2017 has been another progressive year for the Authority recording a surplus of $1.701m in comparison to $1.473m recorded in 2016.The financial performance drivers are revenue from sale of lots and interest income from mortgage loan portfolio.
Development and sale of lots is often unpredictable which is largely dependent on parcels of land available and release of lots for sale.A total of 107 lots in 2017 compared to 381 lots were sold in 2016.

Another 511lots is projected for 2018.The mortgage loan portfolio increased to $91.28m in 2017 compared to $88.38m in 2016, which resulted from progress disbursements for construction loans approved to customers who purchased lots in 2017 and 2016.
In addition, the RBF facility launched in October was an attraction to customers to take advantage of the lower interest rates provided over the initial five years of their loan.

There was an increase in the interest income accrued by 1.89% from $7.259m in 2016 to $7.396m in 2017.
This is mainly due to increase in performing loans and subsequently, reduction in non-performing loans.The Authority has been doing its utmost best to be consistent with its five-year development plan to develop and deliver 1000 lots per annum.

This is to accommodate the ever increasing demand of customers registered on the HA Customer Database.

There were 135 lots delivered during the year from the 120 lots at Tacirua 1A subdivision and 15 lots from Tacirua 3A.
No new land was acquired in 2017 however, two groundbreaking ceremonies were held during the year for Davuilevu and Tavakubu subdivisions.
Both projects expected to yield 577 and 429 residential lots respectively.MOU signing between Housing Authority’s Acting Board Chairman Mr Umarji Musa and Fairdeal Earthmoving Contractors Ltd to develop the Tavakubu Subdivision in Lautoka.The Authority operates in a very competitive home loan market with other financial institutions offering home loan packages at affordable rates.
However, much emphasis is placed on the Land & Housing Development Division to develop and deliver fully serviced lots, houses and units to meet the increasing demand for housing.

Major challenges facing the Authority is to provide housing that low-income families can afford.

The Authority has strengthened its Land & Housing Development Division and going forward, the Authority intends to pursue Design and Build initiative.
This initiative aims to save customers’ time and effort in constructing their homes after they have purchased lots.

The Authority has also allocated space in its Wainibuku and Nepani subdivisions for construction of approximately 784 mixed strata units with one, two and three bedroom.
Land is available and earmarked for strata units at Matavolivoli subdivision for the Fiji National Provide Fund (FNPF) to develop.Total of 135 lots were released for sale in December from the remaining Tacirua 1A and 3A lots.

An additional 402 residential lots from Matavolivoli subdivision is expected to be released in 2018.The projects on the drawing board are Tavakubu, Davuilevu, Nepani, Veikoba and Tavua.
A further 1220 lots is projected apart from 1328 strata units and 39 duplex units to meet the demand.Housing Authority will continue to explore initiatives and collaboration with Fiji National Provident Fund (FNPF) and develop strategies to make housing more affordable to its customers.On behalf of the Board, I wish to express my sincere gratitude to the Government for its continued and unwavering support during the year.
I must thank the Board Members for their contributions and commitment throughout the year.

I would also like to thank the Management and staff for their assistance and finally, I thank all our customers for their continued support of the Authority..19 customers were assisted under this scheme during the year.

This scheme is directed to assist qualifying customers who are in financial distress and find difficulty in maintaining their repayments over the years.
Total customer debt forgiven in 2017 is $0.565m.This assistance is reviewed periodically by the Authority and the Ministry of Housing to ensure that deserving customers have access to this benefit.UMARJI MUSAUMARJI MUSAACTING BOARD CHAIRMANACTING BOARD CHAIRMANFINANCIAL HIGHLIGHTS20102011201220132014201520162017201020112012201320142015201620172010201120122013201420152016201720102011201220132014201520162017201020112012201320142015201620172010201120122013201420152016201700.511.522.50.950.520.220.982.231.471.70.90.82.013.962.933.11.430.3900.511.522.533.540.3PROFITABILITY TREND 2010 - 2017RETURN ON EQUITY 2010 - 2017Percentage %$0.00M$20.00M$40.00M$60.00M$80.00M$100.00M$120.00M$140.00M$160.00MTOTAL MORTGAGE PORTFOLIO 2010 - 2017$M50525456586056.54858.31796.0698.06105.68113.38112.18112.18109.6753.14253.42754.20156.43550.29654.952CAPTIAL 2010 - 2017BORROWING PORTFOLIO 2010 - 2017$M859095100105110$M115100.96$0.00M$10.00M$20.00M$30.00M$40.00M$50.00M$60.00MTOTAL NON PERFORMING MORTGAGEPORTFOLIO 2010-2017$136.70$129.40$111.70$96.20$81.20$82.50$88.40$91.30$47.40$34.20$24.20$12.10$15.40$7.96$11.50$50.40Housing Authority Annual Report 2017Housing Authority Annual Report 20170708 CHAIRMAN’S REPORTFinancial ResultsLand Development ProjectsStrategic PlanAcknowledgementSocial Housing Policy Housing Authority is tasked with the enormous responsibility of ensuring that every Fijian has access to decent and affordable homes.
It has been the social arm of Government in providing land and house to the Fijian citizens over the years.The Authority continued to focus on its core mission and that is, to develop fully serviced lots and houses with competitive loan packages to all its customers.I am pleased to present the 2017 Annual Report ending 31st December 2017.The year 2017 has been another progressive year for the Authority recording a surplus of $1.701m in comparison to $1.473m recorded in 2016.The financial performance drivers are revenue from sale of lots and interest income from mortgage loan portfolio.
Development and sale of lots is often unpredictable which is largely dependent on parcels of land available and release of lots for sale.A total of 107 lots in 2017 compared to 381 lots were sold in 2016.

Another 511lots is projected for 2018.The mortgage loan portfolio increased to $91.28m in 2017 compared to $88.38m in 2016, which resulted from progress disbursements for construction loans approved to customers who purchased lots in 2017 and 2016.
In addition, the RBF facility launched in October was an attraction to customers to take advantage of the lower interest rates provided over the initial five years of their loan.

There was an increase in the interest income accrued by 1.89% from $7.259m in 2016 to $7.396m in 2017.
This is mainly due to increase in performing loans and subsequently, reduction in non-performing loans.The Authority has been doing its utmost best to be consistent with its five-year development plan to develop and deliver 1000 lots per annum.

This is to accommodate the ever increasing demand of customers registered on the HA Customer Database.

There were 135 lots delivered during the year from the 120 lots at Tacirua 1A subdivision and 15 lots from Tacirua 3A.
No new land was acquired in 2017 however, two groundbreaking ceremonies were held during the year for Davuilevu and Tavakubu subdivisions.
Both projects expected to yield 577 and 429 residential lots respectively.MOU signing between Housing Authority’s Acting Board Chairman Mr Umarji Musa and Fairdeal Earthmoving Contractors Ltd to develop the Tavakubu Subdivision in Lautoka.The Authority operates in a very competitive home loan market with other financial institutions offering home loan packages at affordable rates.
However, much emphasis is placed on the Land & Housing Development Division to develop and deliver fully serviced lots, houses and units to meet the increasing demand for housing.

Major challenges facing the Authority is to provide housing that low-income families can afford.

The Authority has strengthened its Land & Housing Development Division and going forward, the Authority intends to pursue Design and Build initiative.
This initiative aims to save customers’ time and effort in constructing their homes after they have purchased lots.

The Authority has also allocated space in its Wainibuku and Nepani subdivisions for construction of approximately 784 mixed strata units with one, two and three bedroom.
Land is available and earmarked for strata units at Matavolivoli subdivision for the Fiji National Provide Fund (FNPF) to develop.Total of 135 lots were released for sale in December from the remaining Tacirua 1A and 3A lots.

An additional 402 residential lots from Matavolivoli subdivision is expected to be released in 2018.The projects on the drawing board are Tavakubu, Davuilevu, Nepani, Veikoba and Tavua.
A further 1220 lots is projected apart from 1328 strata units and 39 duplex units to meet the demand.Housing Authority will continue to explore initiatives and collaboration with Fiji National Provident Fund (FNPF) and develop strategies to make housing more affordable to its customers.On behalf of the Board, I wish to express my sincere gratitude to the Government for its continued and unwavering support during the year.
I must thank the Board Members for their contributions and commitment throughout the year.

I would also like to thank the Management and staff for their assistance and finally, I thank all our customers for their continued support of the Authority..19 customers were assisted under this scheme during the year.

This scheme is directed to assist qualifying customers who are in financial distress and find difficulty in maintaining their repayments over the years.
Total customer debt forgiven in 2017 is $0.565m.This assistance is reviewed periodically by the Authority and the Ministry of Housing to ensure that deserving customers have access to this benefit.UMARJI MUSAUMARJI MUSAACTING BOARD CHAIRMANACTING BOARD CHAIRMANFINANCIAL HIGHLIGHTS20102011201220132014201520162017201020112012201320142015201620172010201120122013201420152016201720102011201220132014201520162017201020112012201320142015201620172010201120122013201420152016201700.511.522.50.950.520.220.982.231.471.70.90.82.013.962.933.11.430.3900.511.522.533.540.3PROFITABILITY TREND 2010 - 2017RETURN ON EQUITY 2010 - 2017Percentage %$0.00M$20.00M$40.00M$60.00M$80.00M$100.00M$120.00M$140.00M$160.00MTOTAL MORTGAGE PORTFOLIO 2010 - 2017$M50525456586056.54858.31796.0698.06105.68113.38112.18112.18109.6753.14253.42754.20156.43550.29654.952CAPTIAL 2010 - 2017BORROWING PORTFOLIO 2010 - 2017$M859095100105110$M115100.96$0.00M$10.00M$20.00M$30.00M$40.00M$50.00M$60.00MTOTAL NON PERFORMING MORTGAGEPORTFOLIO 2010-2017$136.70$129.40$111.70$96.20$81.20$82.50$88.40$91.30$47.40$34.20$24.20$12.10$15.40$7.96$11.50$50.40Housing Authority Annual Report 2017Housing Authority Annual Report 20170708 CHIEF EXECUTIVE OFFICER’S REPORTSustainable Development GoalsFinancial Performance HighlightsThe year 2017 has been challenging however, the Authority continue to assist customers acquire lots and own a home.Over the past years, an increasing number of customers have expressed interest through the Property Demand Survey to acquire lots and build homes in the various housing subdivisions developed by the Authority.
The Authority has been directing most of its resources to acquire and develop raw land to meet this high demand.The Government has also been forthcoming with various supports through the HAG assistance to assist first home buyers.
Despite the many challenges faced, a profit of $1.701m was recorded for the financial year ending 31 st December 2017.Housing Authority aligns itself to Goal 11 of the Sustainable Development Goals (SDGs) with the global aim “Sustainable Cities & Communities – Make cities and human settlements inclusive, safe, resilient and sustainable”.
By 2030, Fiji along with other countries must ensure access to adequate, safe and affordable housing and basic services; and upgrade slums for all its citizens.20172016Profit$1.701m$1.473mReturn On Equity (ROE)3.10%2.93%Total Operating Expenses$11.02m$19.91mInterest Income$7.40m$7.26mInterest Expenses$4.48m$4.56mTotal Performing Loans$83.32m$76.29mBorrowing Portfolio$100.96m$109.67mGender balance has always been an integral part of the Authorities social fabric and continues to be a key priority for the future.
The strong emphasis on promoting gender equality has been one of the strands of our nation’s remarkable development success story, hence, more women are taking up managerial positions in the workforce.Today, we all enjoy the fruits of our country’s efforts to enhance gender balance in various spheres of life.
As the authority makes steady progress towards meeting the demand of housing in Fiji, one of its goals is ensuring gender balance is achieved therefore developing procedures and adopt concrete action plans to entrench gender balance practices in the workplace.Composition of Management & Staff:CategoryTotalMaleFemale%1.

Executive5502.

Management109110%3.

Team Leaders1810844%4.

Staff115763934%5.


Engineers65117%Total1541054932%• A profit of $1.701m against a budget of $2.040m was achieved for the year.• Return on Equity achieved was 3.10% against target of ` 3.40%.

• Total operating expenses decreased by $8.89m from $19.91m in 2016 to $11.02m in 2017 due to reduction in sales.
• Interest income increased by $0.14m from $7.40m in 2017 to $7.26m in 2016.• Interest expenses reduced by $0.08m from $4.48m in 2017 to $4.56m in 2016.• Total Performing Loans portfolio increased by $6.95m from $83.24m in 2017 to $76.29m in 2016.• Borrowing portfolio decreased by $8.71m from $109.67m in 2016 to $100.96m in 2017.Non-Financial PerformanceHighlightsHuman Resources & TrainingTotal of 578 customers were approved home loans compared to 750 customers in 2016.
The Authority continued to focus on the middle to low income earners as its core target market.This year, the Authority assisted 19 families and had their home loan debt forgiven under the Social Housing policy compared to 20 families in 2016.
The applicants are scrutinized through a strict criterion to ensure genuine customers with financial hardships are assisted with funds from the Government Grant.In 2017, the Authority had a total number of 211 staff consisting of management team, team leaders, tenure/contract staff and temporary staff.

Staff movements for the year included:• Recruitment of 24 new employees;• 12 promotions and;.
• 7 resignations who either join other organizations or pursue greener pastures.Other movements include internal transfers within Divisions and acting appointments.By choosing to act sustainably, the Authority is committed to build communities where citizens live a decent quality of life and form part of the nation’s goals, creating shared prosperity and social stability is paramount.
Thedevelopment and construction of our housing projects provide this opportunity to alleviate shortage of adequate housing and rapid urbanization challenges.CHIEF EXECUTIVE OFFICER’S REPORTInsurance ServicesPublic Relations & CommunicationsLooking ForwardLegal ServicesThe Occupation Health & Safety (OHS) Committee was very active in ensuring that the Authority was compliant with the requirements of OHS under the HASAWA 1996.Training conducted throughout the year is based on the 2017 Training Plan and Training Needs Analysis that was incorporated in the 2016performance appraisal for staff.The Authority facilitated 61 workshops attended by 176 staff.
Out of 61 training programs, 40 workshops were conducted in-house and 13 was carried out externally.

8 training programs specifically targeted management on development programs.
These range from strategic workshops, awareness trainings to more specialized trainings that targeted keypersonnel such as engineers, surveyors, strategists, accountants and human resource specialists.The Authority continued its sponsorship for professional development and the outcome of this initiative reviewed once staff complete their programs.Discussions were also underway between the Authority and Fiji National University for the possibility of an Engineering cadet program that allow students who have graduated or nearing graduation, undertake 3 to 6 months attachmentwith the Authority.As part of its succession planning initiative, the Authority continue to assist staff in terms of professional development and specialized training.
HA continue to provide its customers insurance covers for their mortgaged properties under the Group Scheme.
This arrangement enable 4,000 customers to enjoy competitive premiums with extended benefits and no premium increase.There are three major insurance covers provided for our customers and their properties as follows:Housing Authority continue to proactively engage with the media and provide a positive corporate profile and image.Communication efforts include radio talkback shows in English, Hindi and iTaukei language whereby our staff participate with the public to generate discussion on housing projects and address frequently asked questions on ourproducts and services.As we look toward 2018 and beyond, we will continue to strive to ensure that Fijians have access to decent, affordable and quality housing for their families as provided under Section 35 of the 2013 Fiji Constitution.The Authority has set a new platform and strategic direction that will guide us towards achieving our vision of providing affordable homes for all Fijians.The Legal Counsel Department provides in-house legal advice, guidance and support to all Divisions.
It ensures that the Authority’s operations are legally compliance with the Consumer Credit Act, Land Transfer Act, Housing Act, Public Enterprises Act and Reserve Bank Act including other legal and compliance regulations.Other responsibilities of the department include overseeing litigation (cases for and cases against the Authority), recovery and eviction cases for litigation.
Additionally, the LegalCounsel holds the position of Secretary of the Housing Authority Board under the Housing Act.New India Assurance Co. Ltd approved three property-damaged claims worth $45,763 under the Group House (Fire) Insurance Cover.

The claims resulted from fire and water seepage.The Mortgage Protection & Debtors Medical Insurance cover was placed with FijiCare Insurance Ltd.
The claims arising due to death and total permanent disablement of our customers insured amounted to $880,766 and was accordingly settled by this insurer.HA successfully negotiated the inclusion of $2,500 funeral benefit under MPI death claims for beneficiaries.

This does not incur any additional cost to our customers.

During the year, the Authority was able to assist 23 families and facilitate funeral expenses.
Debtors Medical Insurance Policy covers our insured customers for treatment of cardiac (heart) and 1.

Mortgage Protection & Debtors Medical Insurance (extension)2.

House (Fire) Insurance3.


Contract Works (cover for residential dwelling under construction)Mr Josua Bera receiving offer letter from the Honorable Minister, Mr Praveen Bala, for the sale of lots at Tacirua 1A subdivision.Housing Authority Annual Report 2017Housing Authority Annual Report 20170910cancer conditions in India, only if certified by their respective treating specialist, that such treatment is not available in Fiji.
Further negotiation extended to cover cardiac treatment at the MIOT Pacific Hospital in Suva; and business class air ticket for the bypass patient.

The Authority evacuated one customer for treatment of cardiac condition at the cost of $30,264.
CHIEF EXECUTIVE OFFICER’S REPORTSustainable Development GoalsFinancial Performance HighlightsThe year 2017 has been challenging however, the Authority continue to assist customers acquire lots and own a home.Over the past years, an increasing number of customers have expressed interest through the Property Demand Survey to acquire lots and build homes in the various housing subdivisions developed by the Authority.
The Authority has been directing most of its resources to acquire and develop raw land to meet this high demand.The Government has also been forthcoming with various supports through the HAG assistance to assist first home buyers.
Despite the many challenges faced, a profit of $1.701m was recorded for the financial year ending 31 st December 2017.Housing Authority aligns itself to Goal 11 of the Sustainable Development Goals (SDGs) with the global aim “Sustainable Cities & Communities – Make cities and human settlements inclusive, safe, resilient and sustainable”.
By 2030, Fiji along with other countries must ensure access to adequate, safe and affordable housing and basic services; and upgrade slums for all its citizens.20172016Profit$1.701m$1.473mReturn On Equity (ROE)3.10%2.93%Total Operating Expenses$11.02m$19.91mInterest Income$7.40m$7.26mInterest Expenses$4.48m$4.56mTotal Performing Loans$83.32m$76.29mBorrowing Portfolio$100.96m$109.67mGender balance has always been an integral part of the Authorities social fabric and continues to be a key priority for the future.
The strong emphasis on promoting gender equality has been one of the strands of our nation’s remarkable development success story, hence, more women are taking up managerial positions in the workforce.Today, we all enjoy the fruits of our country’s efforts to enhance gender balance in various spheres of life.
As the authority makes steady progress towards meeting the demand of housing in Fiji, one of its goals is ensuring gender balance is achieved therefore developing procedures and adopt concrete action plans to entrench gender balance practices in the workplace.Composition of Management & Staff:CategoryTotalMaleFemale%1.

Executive5502.

Management109110%3.

Team Leaders1810844%4.

Staff115763934%5.


Engineers65117%Total1541054932%• A profit of $1.701m against a budget of $2.040m was achieved for the year.• Return on Equity achieved was 3.10% against target of ` 3.40%.

• Total operating expenses decreased by $8.89m from $19.91m in 2016 to $11.02m in 2017 due to reduction in sales.
• Interest income increased by $0.14m from $7.40m in 2017 to $7.26m in 2016.• Interest expenses reduced by $0.08m from $4.48m in 2017 to $4.56m in 2016.• Total Performing Loans portfolio increased by $6.95m from $83.24m in 2017 to $76.29m in 2016.• Borrowing portfolio decreased by $8.71m from $109.67m in 2016 to $100.96m in 2017.Non-Financial PerformanceHighlightsHuman Resources & TrainingTotal of 578 customers were approved home loans compared to 750 customers in 2016.
The Authority continued to focus on the middle to low income earners as its core target market.This year, the Authority assisted 19 families and had their home loan debt forgiven under the Social Housing policy compared to 20 families in 2016.
The applicants are scrutinized through a strict criterion to ensure genuine customers with financial hardships are assisted with funds from the Government Grant.In 2017, the Authority had a total number of 211 staff consisting of management team, team leaders, tenure/contract staff and temporary staff.

Staff movements for the year included:• Recruitment of 24 new employees;• 12 promotions and;.
• 7 resignations who either join other organizations or pursue greener pastures.Other movements include internal transfers within Divisions and acting appointments.By choosing to act sustainably, the Authority is committed to build communities where citizens live a decent quality of life and form part of the nation’s goals, creating shared prosperity and social stability is paramount.
Thedevelopment and construction of our housing projects provide this opportunity to alleviate shortage of adequate housing and rapid urbanization challenges.CHIEF EXECUTIVE OFFICER’S REPORTInsurance ServicesPublic Relations & CommunicationsLooking ForwardLegal ServicesThe Occupation Health & Safety (OHS) Committee was very active in ensuring that the Authority was compliant with the requirements of OHS under the HASAWA 1996.Training conducted throughout the year is based on the 2017 Training Plan and Training Needs Analysis that was incorporated in the 2016performance appraisal for staff.The Authority facilitated 61 workshops attended by 176 staff.
Out of 61 training programs, 40 workshops were conducted in-house and 13 was carried out externally.

8 training programs specifically targeted management on development programs.
These range from strategic workshops, awareness trainings to more specialized trainings that targeted keypersonnel such as engineers, surveyors, strategists, accountants and human resource specialists.The Authority continued its sponsorship for professional development and the outcome of this initiative reviewed once staff complete their programs.Discussions were also underway between the Authority and Fiji National University for the possibility of an Engineering cadet program that allow students who have graduated or nearing graduation, undertake 3 to 6 months attachmentwith the Authority.As part of its succession planning initiative, the Authority continue to assist staff in terms of professional development and specialized training.
HA continue to provide its customers insurance covers for their mortgaged properties under the Group Scheme.
This arrangement enable 4,000 customers to enjoy competitive premiums with extended benefits and no premium increase.There are three major insurance covers provided for our customers and their properties as follows:Housing Authority continue to proactively engage with the media and provide a positive corporate profile and image.Communication efforts include radio talkback shows in English, Hindi and iTaukei language whereby our staff participate with the public to generate discussion on housing projects and address frequently asked questions on ourproducts and services.As we look toward 2018 and beyond, we will continue to strive to ensure that Fijians have access to decent, affordable and quality housing for their families as provided under Section 35 of the 2013 Fiji Constitution.The Authority has set a new platform and strategic direction that will guide us towards achieving our vision of providing affordable homes for all Fijians.The Legal Counsel Department provides in-house legal advice, guidance and support to all Divisions.
It ensures that the Authority’s operations are legally compliance with the Consumer Credit Act, Land Transfer Act, Housing Act, Public Enterprises Act and Reserve Bank Act including other legal and compliance regulations.Other responsibilities of the department include overseeing litigation (cases for and cases against the Authority), recovery and eviction cases for litigation.
Additionally, the LegalCounsel holds the position of Secretary of the Housing Authority Board under the Housing Act.New India Assurance Co. Ltd approved three property-damaged claims worth $45,763 under the Group House (Fire) Insurance Cover.

The claims resulted from fire and water seepage.The Mortgage Protection & Debtors Medical Insurance cover was placed with FijiCare Insurance Ltd.
The claims arising due to death and total permanent disablement of our customers insured amounted to $880,766 and was accordingly settled by this insurer.HA successfully negotiated the inclusion of $2,500 funeral benefit under MPI death claims for beneficiaries.

This does not incur any additional cost to our customers.

During the year, the Authority was able to assist 23 families and facilitate funeral expenses.
Debtors Medical Insurance Policy covers our insured customers for treatment of cardiac (heart) and 1.

Mortgage Protection & Debtors Medical Insurance (extension)2.

House (Fire) Insurance3.


Contract Works (cover for residential dwelling under construction)Mr Josua Bera receiving offer letter from the Honorable Minister, Mr Praveen Bala, for the sale of lots at Tacirua 1A subdivision.Housing Authority Annual Report 2017Housing Authority Annual Report 20170910cancer conditions in India, only if certified by their respective treating specialist, that such treatment is not available in Fiji.
Further negotiation extended to cover cardiac treatment at the MIOT Pacific Hospital in Suva; and business class air ticket for the bypass patient.

The Authority evacuated one customer for treatment of cardiac condition at the cost of $30,264.
GENERAL MANAGER LAND & HOUSING DEVELOPMENT REPORTProjectsLand & Property ServicesEngineering & Technical ServicesThe Land & Housing Development Division is tasked with the acquisition of land, design of subdivisions and construction and monitoring of land development projects.
The outcome would see the delivery of fully serviced lots (or units) with particular focus on low to middle income earners for our customers.2017 was a critical year for the Division having set the platform for shaping current and future development projects for the organization.
Notably this includes commissioning of the second project for the Western Division namely, Tavakubu and commencement of the largest residential developments in the Central and Eastern Division namely the Davuilevu project.In addition, Nepani in the Central Division is the only ongoing project scheduled for completion by mid-2018.The new subdivisions feature improved and efficient infrastructures that includes kerb and channel, footpaths, driveways and streetlights.
These sub-divisions are expected to produce more than 1000 lots.The Land & Property Services Department is responsible for the overall maintenance of the Authority’s properties, land acquisition and estate management.As part of its commitment to fulfilling one of the Authority’s corporate objectives, the Department has an annual target of 200 acres for land acquisition.

This is to ensure that the Authority has a constant supply of suitable raw land available for current and future developments.
The team also monitors the Authorities head leases and ensure timely payment of lease rental to the respective land owners.In managing our estate properties, the department attend to complaints and grievances expressed by our tenants.

The Authority maintains the exterior and other common areas of the strata units.

There are plans to develop more strata estates in the future and necessary space allocations made to accommodate these strata estates in our new developments.
The department had undergone reviews of its processes, policies and standard operating procedures to assist streamline work and improve efficiency.The Technical Services Department consist of engineers, surveyors and support technicians.
The unit welcomed 2 additional staff by the way of survey assistants to complement the survey capabilities within the team.The Department was given the approval to upgrade one of its major hardware through the procurement of satellite positioning technology associated ancillaries.
The team found the investment extremely useful in reducing the operational costs of deployment and data capture by 30 percent.As a trial on the “design and build” arrangement, our Tavakubu Stage 2 development was offered to a private contractor with our in-house supervision.
The development was commissioned and project is expected to be completed towards the end of 2019.The groundbreaking ceremony for the new Davuilevu Subdivision in December 2017Tavakubu groundbreaking ceremony in November 2017ISIKELI NAVUDAGENERAL MANAGER LAND & HOUSING DEVELOPMENT2017 was a critical year for the Land and Housing Development Division having set the platform for shaping current and future development project for the organization.Looking AheadOur in-house engineers and support technicians were able to complete the design of two projects towards the end of2017 to enable the construction contracts to be awarded towards the end of the last quarter.
Koronisalusalu in Tavua and Davuilevu Stage 2 around the Nakasi prescient was also commissioned with construction beginning immediately.After a significant number of years, HA was able to enjoy the privilege of having one of its survey technicians, Mosese Vatubuli, registered with the Fiji Surveyors Registration Board in December 2017.
Our comparatively small survey team with the guidance of Mr Paserio Samisoni secured the approval of 17 survey plans yielding over 500 residential lots on development sites around the country.
These sites includeMatavolivoli, Nepani and Tacirua East Phase 1A (balance).The team would invest more on its people in terms of the right training and resources to carry out their respective duties.Design and Build is another initiative that the Division will seriously consider for future development to facilitate home ownership taking into consideration the difficulty customers face in building their own homes after purchasing the land.Collaboration with other Government agencies including Water Authority of Fiji, Fiji Electricity Authority, iTaukei Lands Trust Board and Lands Department will continue to ensure that fully serviced lots are delivered in a timely manner.Finally, we would like to thank our stakeholders for their tremendous support throughout the year and look forward to their continued assistance in the future.ISIKELI NAVUDAGENERAL MANAGER LAND & HOUSING DEVELOPMENTGENERAL MANAGER LAND & HOUSING DEVELOPMENT REPORTHousing Authority Annual Report 2017Housing Authority Annual Report 20171112 GENERAL MANAGER LAND & HOUSING DEVELOPMENT REPORTProjectsLand & Property ServicesEngineering & Technical ServicesThe Land & Housing Development Division is tasked with the acquisition of land, design of subdivisions and construction and monitoring of land development projects.
The outcome would see the delivery of fully serviced lots (or units) with particular focus on low to middle income earners for our customers.2017 was a critical year for the Division having set the platform for shaping current and future development projects for the organization.
Notably this includes commissioning of the second project for the Western Division namely, Tavakubu and commencement of the largest residential developments in the Central and Eastern Division namely the Davuilevu project.In addition, Nepani in the Central Division is the only ongoing project scheduled for completion by mid-2018.The new subdivisions feature improved and efficient infrastructures that includes kerb and channel, footpaths, driveways and streetlights.
These sub-divisions are expected to produce more than 1000 lots.The Land & Property Services Department is responsible for the overall maintenance of the Authority’s properties, land acquisition and estate management.As part of its commitment to fulfilling one of the Authority’s corporate objectives, the Department has an annual target of 200 acres for land acquisition.

This is to ensure that the Authority has a constant supply of suitable raw land available for current and future developments.
The team also monitors the Authorities head leases and ensure timely payment of lease rental to the respective land owners.In managing our estate properties, the department attend to complaints and grievances expressed by our tenants.

The Authority maintains the exterior and other common areas of the strata units.

There are plans to develop more strata estates in the future and necessary space allocations made to accommodate these strata estates in our new developments.
The department had undergone reviews of its processes, policies and standard operating procedures to assist streamline work and improve efficiency.The Technical Services Department consist of engineers, surveyors and support technicians.
The unit welcomed 2 additional staff by the way of survey assistants to complement the survey capabilities within the team.The Department was given the approval to upgrade one of its major hardware through the procurement of satellite positioning technology associated ancillaries.
The team found the investment extremely useful in reducing the operational costs of deployment and data capture by 30 percent.As a trial on the “design and build” arrangement, our Tavakubu Stage 2 development was offered to a private contractor with our in-house supervision.
The development was commissioned and project is expected to be completed towards the end of 2019.The groundbreaking ceremony for the new Davuilevu Subdivision in December 2017Tavakubu groundbreaking ceremony in November 2017ISIKELI NAVUDAGENERAL MANAGER LAND & HOUSING DEVELOPMENT2017 was a critical year for the Land and Housing Development Division having set the platform for shaping current and future development project for the organization.Looking AheadOur in-house engineers and support technicians were able to complete the design of two projects towards the end of2017 to enable the construction contracts to be awarded towards the end of the last quarter.
Koronisalusalu in Tavua and Davuilevu Stage 2 around the Nakasi prescient was also commissioned with construction beginning immediately.After a significant number of years, HA was able to enjoy the privilege of having one of its survey technicians, Mosese Vatubuli, registered with the Fiji Surveyors Registration Board in December 2017.
Our comparatively small survey team with the guidance of Mr Paserio Samisoni secured the approval of 17 survey plans yielding over 500 residential lots on development sites around the country.
These sites includeMatavolivoli, Nepani and Tacirua East Phase 1A (balance).The team would invest more on its people in terms of the right training and resources to carry out their respective duties.Design and Build is another initiative that the Division will seriously consider for future development to facilitate home ownership taking into consideration the difficulty customers face in building their own homes after purchasing the land.Collaboration with other Government agencies including Water Authority of Fiji, Fiji Electricity Authority, iTaukei Lands Trust Board and Lands Department will continue to ensure that fully serviced lots are delivered in a timely manner.Finally, we would like to thank our stakeholders for their tremendous support throughout the year and look forward to their continued assistance in the future.ISIKELI NAVUDAGENERAL MANAGER LAND & HOUSING DEVELOPMENTGENERAL MANAGER LAND & HOUSING DEVELOPMENT REPORTHousing Authority Annual Report 2017Housing Authority Annual Report 20171112 Borrowing PortfolioThe Division comprise of; the Finance Team, Information communication Technology (ICT) Team and Office Administration Team.
The teams combined effort is to support the business and drive performance through transformation program aligned with the overall strategy and expectation from key stakeholders.
The team collectively is focus to improve efficiency and driving the business decision to the next level to achieve corporate objectives in producing affordable fully serviced residential lots and home loan package.The organization’s corporate mission is align towards the Government’s, 5 Year & 20 Year National Development Plan, Page 4, “The Housing Authority and Public Rental Board will ensure that more land is developed for residential lots and more affordable and accessible housing is provided.” The Authority is responding to the affordable housing challenge through our Strategic Plan 2017 – 2020 supporting Governments National Development Plan.The organisation strategy is focus on producing more lots and achieve appropriate margins through efﬁciency and low costs concurrently respond to range of factors, which are economic, social, technological, legal and environmental while managing business risk.
The internal auditors and reviewing stakeholders scrutinise risk areas ensuring timely delivery of lots coping with the demand and maintain sustainable operation to support affordable price points of lots.The financial result reflects the marginal profitable trend in last the ten years achieved through setting strategic direction along our corporate mission and values focusing in providing excellent customer service promptly, effectively and courteously.
Moreover, the business administration cost is supported through income generated from the business activities, which are mainly from interest income, sale of lots and fees/charges.

The manufacturing of lots and mortgage financing or capital projects demands working capital that is funded through borrowings therefore access to capital markets will always be a greater priority.
The Board and management will ensure the best financing mix with longer-term financing at the lowest cost leveraging borrowing cost to achieve out competitive edge.Borrowing Portfolio for the Authority stood at $100.96 million in 2017 compared to $109.67 million in 2016.

Decrease of 9% is due to principal payment for loans and bonds.
The aggregate borrowing portfolio supporting the current capital projects and mortgage financing reports balance of $100.96 million comprising of the categories illustrated in figure 1:POASA VEREVAKABAUGENERAL MANAGER FINANCE & ADMINISTRATIONThe mission is critical with the right funding cost structure to produce high quality and innovative housing solutions, enhancing quality of life and building communities.FNPFLICIBANK OF BARODAHOME FINANCEFHL TRUSTRBFEXIM BANK12.00%8.25%3.00%9.00%4.95%4.00%1.00%0.00%0.05.010.015.020.025.030.035.040.02.00%4.00%6.00%8.00%10.00%12.00%14.00%$M$ ValueInterest MinInterest MaxGENERAL MANAGER FINANCE & ADMINISTRATION REPORTTeam BondingGoing ForwardThe RBF also introduced the Housing facility loan for first home buyers earnin below $50k.
The Desired Home Loan package introduced in late 2017 with as follows rates:• 3.95% Year one• 4.20% Year two to five• 6.99% variable from year 6.The Board and Management will continue to pursue its mission in reaching out to the community and ensure that all citizens earning less than $50k have easy access to affordable housing product including financing.The Division maintain work-life balance for staff wellbeing through team bonding activities.
Division meetings and celebration of staff birthdays held throughout the year with an ongoing climax that later culminated with a weekend get-away at the Shangri-La Resort towards the end of the year.

The annual event was a good mix of fun activities, group dinner and entertainment organised by the Committee.
The team bonding trip included staff from other Divisions and family memebers.For its second successful year, the Division continues to provide upbeat and powerful team experiences with the opportunity to socialize and showcase true team spirit.The next fiscal year will likely be challenging due to the anticipated completion of development projects and commencement of new development projects, however, the Division looks forward to provide support in achieving corporate vision & mission.The changing business climate presents the opportunity to enhance progress.
In line with this, the Division focus to automate processes is in progress including, process simplification and review of the legacy system.Finance Division team building exercise that was held at theFijian Resort in 2017POASA VEREVAKABAUGENERAL MANAGER FINANCE & ADMINISTRATIONGENERAL MANAGER FINANCE & ADMINISTRATION REPORTHousing Authority Annual Report 2017Housing Authority Annual Report 20171314The total borrowing through Bond market amounts to $38.70 million out of which $24 million attracts average interest rate of 11.03% planned to be redeem in 2018.
The average borrowing cost as at December 2017 is registered at $4.62% while forecast for 2018 is expected to slide below 4%.Despite the inherent high interest rates, the investors and agencies play an important role in fulfilling Governments mandate, assisting the low and middle-income residents However the current borrowing rates from 2014 is below 5%.

leveraging business operation cost.


The participation by the investors is critical to support Government mandate in providing affordable housing to the low and middle-income families or those earning $50,000.00 and below.

Graph 2 presents the investors with the borrowing cost.The Housing Authority has maintained a sustainable business model operating without administrative Government support in terms of administration grant despite the challenges faced in delivering affordable housing solutions.
The Government through Ministry of Housing & Local Government provides the following assistance:• housing assistance grant for first home owners•Social rehabilitation funding for customers facing genuine financial distress.The Authority debt structure is closely monitored to produce sustainable expenditure level with ambition to reduce home loan Lending rates to our target customers.
The borrowings from 2006 to 2018 with high interest rates continues to challenge our mission to deliver competitive edge in providing affordable housing solutions.Regardless of the barriers, the Authority periodically carries out stress test on it’s lending rates against borrowings rates to remain a dynamic player in providing affordable loan packages while mitigating risk to remain sustainable in its long term business strategy in housing the people of Fiji.The Board and Management while prudently managing the inherent business risk is optimistic and look forward in providing affordable housing solutions.
The variable interest rate reduced from 7.99% to 6.99% effective from October 2017.MOE/EXIM BANK - China37%RBF Loan 25%Bonds38%We strive to be successful by serving the low to middle-income residents through effective strategic planning of its financial resources and continuously review business model based on best practice in delivering effective customers services.
Borrowing PortfolioThe Division comprise of; the Finance Team, Information communication Technology (ICT) Team and Office Administration Team.

The teams combined effort is to support the business and drive performance through transformation program aligned with the overall strategy and expectation from key stakeholders.
The team collectively is focus to improve efficiency and driving the business decision to the next level to achieve corporate objectives in producing affordable fully serviced residential lots and home loan package.The organization’s corporate mission is align towards the Government’s, 5 Year & 20 Year National Development Plan, Page 4, “The Housing Authority and Public Rental Board will ensure that more land is developed for residential lots and more affordable and accessible housing is provided.” The Authority is responding to the affordable housing challenge through our Strategic Plan 2017 – 2020 supporting Governments National Development Plan.The organisation strategy is focus on producing more lots and achieve appropriate margins through efﬁciency and low costs concurrently respond to range of factors, which are economic, social, technological, legal and environmental while managing business risk.
The internal auditors and reviewing stakeholders scrutinise risk areas ensuring timely delivery of lots coping with the demand and maintain sustainable operation to support affordable price points of lots.The financial result reflects the marginal profitable trend in last the ten years achieved through setting strategic direction along our corporate mission and values focusing in providing excellent customer service promptly, effectively and courteously.
Moreover, the business administration cost is supported through income generated from the business activities, which are mainly from interest income, sale of lots and fees/charges.

The manufacturing of lots and mortgage financing or capital projects demands working capital that is funded through borrowings therefore access to capital markets will always be a greater priority.
The Board and management will ensure the best financing mix with longer-term financing at the lowest cost leveraging borrowing cost to achieve out competitive edge.Borrowing Portfolio for the Authority stood at $100.96 million in 2017 compared to $109.67 million in 2016.

Decrease of 9% is due to principal payment for loans and bonds.
The aggregate borrowing portfolio supporting the current capital projects and mortgage financing reports balance of $100.96 million comprising of the categories illustrated in figure 1:POASA VEREVAKABAUGENERAL MANAGER FINANCE & ADMINISTRATIONThe mission is critical with the right funding cost structure to produce high quality and innovative housing solutions, enhancing quality of life and building communities.FNPFLICIBANK OF BARODAHOME FINANCEFHL TRUSTRBFEXIM BANK12.00%8.25%3.00%9.00%4.95%4.00%1.00%0.00%0.05.010.015.020.025.030.035.040.02.00%4.00%6.00%8.00%10.00%12.00%14.00%$M$ ValueInterest MinInterest MaxGENERAL MANAGER FINANCE & ADMINISTRATION REPORTTeam BondingGoing ForwardThe RBF also introduced the Housing facility loan for first home buyers earnin below $50k.
The Desired Home Loan package introduced in late 2017 with as follows rates:• 3.95% Year one• 4.20% Year two to five• 6.99% variable from year 6.The Board and Management will continue to pursue its mission in reaching out to the community and ensure that all citizens earning less than $50k have easy access to affordable housing product including financing.The Division maintain work-life balance for staff wellbeing through team bonding activities.
Division meetings and celebration of staff birthdays held throughout the year with an ongoing climax that later culminated with a weekend get-away at the Shangri-La Resort towards the end of the year.

The annual event was a good mix of fun activities, group dinner and entertainment organised by the Committee.
The team bonding trip included staff from other Divisions and family memebers.For its second successful year, the Division continues to provide upbeat and powerful team experiences with the opportunity to socialize and showcase true team spirit.The next fiscal year will likely be challenging due to the anticipated completion of development projects and commencement of new development projects, however, the Division looks forward to provide support in achieving corporate vision & mission.The changing business climate presents the opportunity to enhance progress.
In line with this, the Division focus to automate processes is in progress including, process simplification and review of the legacy system.Finance Division team building exercise that was held at theFijian Resort in 2017POASA VEREVAKABAUGENERAL MANAGER FINANCE & ADMINISTRATIONGENERAL MANAGER FINANCE & ADMINISTRATION REPORTHousing Authority Annual Report 2017Housing Authority Annual Report 20171314The total borrowing through Bond market amounts to $38.70 million out of which $24 million attracts average interest rate of 11.03% planned to be redeem in 2018.
The average borrowing cost as at December 2017 is registered at $4.62% while forecast for 2018 is expected to slide below 4%.Despite the inherent high interest rates, the investors and agencies play an important role in fulfilling Governments mandate, assisting the low and middle-income residents However the current borrowing rates from 2014 is below 5%.

leveraging business operation cost.


The participation by the investors is critical to support Government mandate in providing affordable housing to the low and middle-income families or those earning $50,000.00 and below.

Graph 2 presents the investors with the borrowing cost.The Housing Authority has maintained a sustainable business model operating without administrative Government support in terms of administration grant despite the challenges faced in delivering affordable housing solutions.
The Government through Ministry of Housing & Local Government provides the following assistance:• housing assistance grant for first home owners•Social rehabilitation funding for customers facing genuine financial distress.The Authority debt structure is closely monitored to produce sustainable expenditure level with ambition to reduce home loan Lending rates to our target customers.
The borrowings from 2006 to 2018 with high interest rates continues to challenge our mission to deliver competitive edge in providing affordable housing solutions.Regardless of the barriers, the Authority periodically carries out stress test on it’s lending rates against borrowings rates to remain a dynamic player in providing affordable loan packages while mitigating risk to remain sustainable in its long term business strategy in housing the people of Fiji.The Board and Management while prudently managing the inherent business risk is optimistic and look forward in providing affordable housing solutions.
The variable interest rate reduced from 7.99% to 6.99% effective from October 2017.MOE/EXIM BANK - China37%RBF Loan 25%Bonds38%We strive to be successful by serving the low to middle-income residents through effective strategic planning of its financial resources and continuously review business model based on best practice in delivering effective customers services.
Gross Mortgage PortfolioRBF FacilityMortgage PortfolioNew Loans ApprovedThe Lending Division is responsible for the assessment and approval of all loans granted by the Authority, ensures that all due diligence process and security documentation are completed before disbursement of loan funds.It is also responsible for the management of all loan and ground rent accounts including recovery process for accounts in arrears.The performance of the Division is largely dependent on the residential lots or fully serviced units made available for sale during the year.
There were only 135 residential lots from Tacirua phase 1A and 3A (part of) that were available for sale at the end of the year.The Authority has a customer base of 22,805 customers, comprising of 3,112 active loan accounts and 19,693 ground rent accounts as at 31 st December 2017.Total mortgage portfolio at the end of the year stood at $91.28m compared to $88.38m in 2016.
The increase in portfolio attributed to new loans from the sale of land from stock, the completion of new Tacirua East subdivision, walk–incustomers and commencement of house constructions in the Tacirua and Wainibuku subdivisions.Performing mortgage portfolio increased to $83.32m compared to $76.29m in 2016.
The increase in performing portfolio resulted from new land sales, construction loans from stock and migration of non-performing accounts to performing loans.In October 2017, the Authority launched the loan product facility that enabled customers to benefit from low interest rates.

Under the facility, customers enjoy fixed interest rate for 5 years.90 customers were assisted for the purchase of lots and construction of houses.

Total loan value was $7.5m as at 31st December 2017.
The anticipation is to attract maximum customers under the scheme in the next financial year.Total mortgage portfolio at the end of the year is $91.28m compared to $88.38m in 2016.
The Mortgage portfolio increased through sale of land stock, construction of houses and loans to purchase properties.The bar graph shown on the next page illustrates the trend for the total mortgage portfolio, performing portfolio andnon-performing portfolio over the last six years:The Approvals Department is responsible for carrying out due diligence on loan submissions and approve quality loans to ensure lower probability of default.Security coverage, repayment capacity, equity and commitment by customers being the primary focus in loan assessments.Continuous process improvement with ongoing training, coaching and guidance helped identify problem areas and setbacks.
Regular meetings with the Customer Relations Division continue to minimize the number of deferred and declined cases to ensure quality loan assessments.Total of 578 customers were assisted during the year for home packages inclusive of loans to purchase land from our new Tacirua East and house constructions.
This is inclusive ofcustomers who were also granted loans to buy ready-built houses, purchase of vacant land and construction of houses from other financial institutions.The bar graph shown below reflects the loans approved in 2017 and illustrates the trend of loans approved by the Authority over the last seven years.
The decline in 2017 attributed to the late delivery of Tacirua subdivision.RAMESH CHANDGENERAL MANAGER LENDINGThe total mortgage portfolio at the end of the year was $91.28m, compared to $88.38m in 2016.
The mortgage portfolio increased through sale of land stock, construction of houses and loans to purchase properties.20132014201120122015201620170.005.0010.0015.0020.0025.0030.0035.0011.6610.349.7411.5422.4830.5924.73Total Loan Approved 2011 -2017$MGENERAL MANAGER LENDING REPORTRecovery of Loan ArrearsSocial Housing PolicyConveyancing ServicesNon-Performing LoansArrearsThe Authority provides every opportunity and continue to pursue debtors who default their loan repayments with the support of our collection team.
The Credit Management team manage performing accounts and recovered arrears fromcustomers.The Division continued with its strategy on home retention drive’ by encouraging defaulting customers and their families to make suitable repayment arrangements to pay their debts and retain their family homes.Government introduced the Social Housing Policy in 2011.

It was later reviewed to include customers who have paid more than one times the loan amount.
The policy applies to customers who are retired, unemployed and are facing financial difficulties to repay their debts.Under this scheme, the Authority assisted 19 customers in 2017 by writing off their debts totaling $0.565m, of which, $0.160m was provided from Government Grant funds and$0.405m from the Authority.The graph below illustrates the total assistance provided through the Social Housing Policy from 2011 to 2017.The Conveyancing team is responsible for conveyancing functions, Fiji National Provident Fund housing transfers and registration and safe-keeping of legal documents held by theAuthority for security of loans granted to customers.New loans disbursed in 2017 were $21.5m for 535 customers.
346 customers were assisted through the transfer of their Fiji National Provident Fund monies totaling $3.26m.In 2009, the Authority adopted the Reserve Bank of Fiji’s risk grade model of classifying its impaired assets.As at 31 st December 2017, the non-performing portfolio was $7.96m compared to $12.09m in 2016.
Total loan portfolio stood at 91.28% compared to 86.32% in 2016.Mortgage arrears stood at $4.8m or 5.26% of the total mortgage portfolio as at December 2017 compared to $5.9m for the same period in 2016 which is 6.68% of the Authority’s total loan portfolio.The bar graph shown below illustrates the trend over the last six years:20132014201120122015201620170.020.040.060.080.0100.0120.0140.0130.1110.298.781.083.988.491.2Mortgage Portfolio 2011 -2017$MTotal Mortgage PortfolioPerforming Portfolio $mNon Performing Portfolio79.750.476.034.274.524.265.515.470.311.576.383.312.17.920132014201120122015201620170.005.0010.0015.0020.0025.0016.00%14.00%12.00%10.00%8.00%6.00%4.00%2.00%0.00%19.6115.0712.3413.198.617.156.685.2613.6013.025.85.94.86.97Total Mortgage Arrears 2011 -2017$MTotal Mortgage Arrears AmountArrearsArrears %201320142011201220152016201700.20.40.60.8$MNo of customers11.2160140120100806040200Social Housing Policy 2011 -2017Government GrantHA ProvisionNumber0.531.020.890.140.200.150.160.870.930.740.130.270.870.41901437319302019GENERAL MANAGER LENDING REPORTHousing Authority Annual Report 2017Housing Authority Annual Report 20171516 Gross Mortgage PortfolioRBF FacilityMortgage PortfolioNew Loans ApprovedThe Lending Division is responsible for the assessment and approval of all loans granted by the Authority, ensures that all due diligence process and security documentation are completed before disbursement of loan funds.It is also responsible for the management of all loan and ground rent accounts including recovery process for accounts in arrears.The performance of the Division is largely dependent on the residential lots or fully serviced units made available for sale during the year.
There were only 135 residential lots from Tacirua phase 1A and 3A (part of) that were available for sale at the end of the year.The Authority has a customer base of 22,805 customers, comprising of 3,112 active loan accounts and 19,693 ground rent accounts as at 31 st December 2017.Total mortgage portfolio at the end of the year stood at $91.28m compared to $88.38m in 2016.
The increase in portfolio attributed to new loans from the sale of land from stock, the completion of new Tacirua East subdivision, walk–incustomers and commencement of house constructions in the Tacirua and Wainibuku subdivisions.Performing mortgage portfolio increased to $83.32m compared to $76.29m in 2016.
The increase in performing portfolio resulted from new land sales, construction loans from stock and migration of non-performing accounts to performing loans.In October 2017, the Authority launched the loan product facility that enabled customers to benefit from low interest rates.

Under the facility, customers enjoy fixed interest rate for 5 years.90 customers were assisted for the purchase of lots and construction of houses.

Total loan value was $7.5m as at 31st December 2017.
The anticipation is to attract maximum customers under the scheme in the next financial year.Total mortgage portfolio at the end of the year is $91.28m compared to $88.38m in 2016.
The Mortgage portfolio increased through sale of land stock, construction of houses and loans to purchase properties.The bar graph shown on the next page illustrates the trend for the total mortgage portfolio, performing portfolio andnon-performing portfolio over the last six years:The Approvals Department is responsible for carrying out due diligence on loan submissions and approve quality loans to ensure lower probability of default.Security coverage, repayment capacity, equity and commitment by customers being the primary focus in loan assessments.Continuous process improvement with ongoing training, coaching and guidance helped identify problem areas and setbacks.
Regular meetings with the Customer Relations Division continue to minimize the number of deferred and declined cases to ensure quality loan assessments.Total of 578 customers were assisted during the year for home packages inclusive of loans to purchase land from our new Tacirua East and house constructions.
This is inclusive ofcustomers who were also granted loans to buy ready-built houses, purchase of vacant land and construction of houses from other financial institutions.The bar graph shown below reflects the loans approved in 2017 and illustrates the trend of loans approved by the Authority over the last seven years.
The decline in 2017 attributed to the late delivery of Tacirua subdivision.RAMESH CHANDGENERAL MANAGER LENDINGThe total mortgage portfolio at the end of the year was $91.28m, compared to $88.38m in 2016.
The mortgage portfolio increased through sale of land stock, construction of houses and loans to purchase properties.20132014201120122015201620170.005.0010.0015.0020.0025.0030.0035.0011.6610.349.7411.5422.4830.5924.73Total Loan Approved 2011 -2017$MGENERAL MANAGER LENDING REPORTRecovery of Loan ArrearsSocial Housing PolicyConveyancing ServicesNon-Performing LoansArrearsThe Authority provides every opportunity and continue to pursue debtors who default their loan repayments with the support of our collection team.
The Credit Management team manage performing accounts and recovered arrears fromcustomers.The Division continued with its strategy on home retention drive’ by encouraging defaulting customers and their families to make suitable repayment arrangements to pay their debts and retain their family homes.Government introduced the Social Housing Policy in 2011.

It was later reviewed to include customers who have paid more than one times the loan amount.
The policy applies to customers who are retired, unemployed and are facing financial difficulties to repay their debts.Under this scheme, the Authority assisted 19 customers in 2017 by writing off their debts totaling $0.565m, of which, $0.160m was provided from Government Grant funds and$0.405m from the Authority.The graph below illustrates the total assistance provided through the Social Housing Policy from 2011 to 2017.The Conveyancing team is responsible for conveyancing functions, Fiji National Provident Fund housing transfers and registration and safe-keeping of legal documents held by theAuthority for security of loans granted to customers.New loans disbursed in 2017 were $21.5m for 535 customers.
346 customers were assisted through the transfer of their Fiji National Provident Fund monies totaling $3.26m.In 2009, the Authority adopted the Reserve Bank of Fiji’s risk grade model of classifying its impaired assets.As at 31 st December 2017, the non-performing portfolio was $7.96m compared to $12.09m in 2016.
Total loan portfolio stood at 91.28% compared to 86.32% in 2016.Mortgage arrears stood at $4.8m or 5.26% of the total mortgage portfolio as at December 2017 compared to $5.9m for the same period in 2016 which is 6.68% of the Authority’s total loan portfolio.The bar graph shown below illustrates the trend over the last six years:20132014201120122015201620170.020.040.060.080.0100.0120.0140.0130.1110.298.781.083.988.491.2Mortgage Portfolio 2011 -2017$MTotal Mortgage PortfolioPerforming Portfolio $mNon Performing Portfolio79.750.476.034.274.524.265.515.470.311.576.383.312.17.920132014201120122015201620170.005.0010.0015.0020.0025.0016.00%14.00%12.00%10.00%8.00%6.00%4.00%2.00%0.00%19.6115.0712.3413.198.617.156.685.2613.6013.025.85.94.86.97Total Mortgage Arrears 2011 -2017$MTotal Mortgage Arrears AmountArrearsArrears %201320142011201220152016201700.20.40.60.8$MNo of customers11.2160140120100806040200Social Housing Policy 2011 -2017Government GrantHA ProvisionNumber0.531.020.890.140.200.150.160.870.930.740.130.270.870.41901437319302019GENERAL MANAGER LENDING REPORTHousing Authority Annual Report 2017Housing Authority Annual Report 20171516 Ground Rent PortfolioVillage Housing SchemeStakeholdersThe Ground Rent portfolio as at 31 st December 2017 was $2.20m compared to $2.17m in 2016.
Our collection teams are assigned to review each account and take arrears recovery actions to collect these dues.Financing of home constructions in village and rural areas is one of the products the Authority had been providing over the years to fulfill its obligation for rural housing.

This was a Government initiative to improve the standard of living in the rural Fijian villages.
It contributes to their security, happy communities and an ideal choice for better utilization of their lease income.Total Village Loan Portfolio stood at $2.9m as at 31st December 2017 compared to $3.4m in 2016.

The Performing and Non Performing portfolios stood at $2.61m and $0.284m respectively.
Village scheme recorded arrears of $124,674 forthe year.The Division will continue collaboration with government stakeholders and meetings with the Fiji National Provident Fund including iTaukei Land Trust Board, Methodist Church of Fiji and Lands Department and contribute favorably in making housing affordable to the lower income bracket.It will also continue to refine work processes and reduce turnaround times to ultimately improve service delivery to all our valued customers.Mr Ajay Singh (former Manager Credit Recovery) receiving a token of appreciation from the Executive Management team after serving the Authority for over 35 years.RAMESH CHANDGENERAL MANAGER LENDINGGENERAL MANAGER LENDING REPORTMarketingBuilding Communities &Construction of Residential HomesHousing Assistant Grant (HAG)In support of the Authority’s ongoing commitment to its vision of “Helping Fijians Own Affordable Homes”, the Marketing department continued to promote the products and services offered by the Authority through direct marketing presentation, participation in road shows, radio talk-back shows, display booths in festivals, advertising in newspapers, HA webpage and social media.The department also manages logistics pertaining to the allocation and sale of residential stock properties and; maintaining database records pertaining to the demand forhousing and customer preferences.
It also contribute to the Authority’s website updates and addressing social media enquiries including customer complaints.The Authority is proud to be a major player in building communities through the development and sale of fully serviced residential lots within housing subdivisions around the country.

A further 135 new lots from Tacirua Phase 1A & 3A were made available for sale in November 2017.
Residential lots are sold by the Authority as ‘land & house package’ where the buyers are required to purchase land and construct a residential dwelling at the same time.To facilitate the construction process, the Authority has a dedicated Work Assessment team whose primary role is to assist customers in estimating building construction costs anddisbursement of construction funds.The number of customers assisted through Government’s Housing Assistant Grant (HAG) initiative continue to increase.
It has been an attractive incentive in encouraging first time homeowners to purchase land and build.
196 customers received HAG from Government totaling $1,780,000 to either construct or buy their first home.Maintaining customer satisfaction and improving customer relationship continue to be the primary focus for the Customer Relations Division in 2017.The existence of customer relation centers in Lautoka, Labasa, Suva with its head office in Valelevu, Nasinu ensures the spread of the Authority’s services across the country and allows for greater accessibility to our products and services.The core functions of the Division include land & house sales, marketing & corporate branding, loan assessment and processing, valuation services, construction management services, research and development and; creation of new products and business.
The Division ensure these activities are delivered in a timely manner for its customers.LEONARD KWANSINGGENERAL MANAGER CUSTOMER RELATIONSIn 2017, a total of 4,262 expression of interest was received from prospective customers expressing their interest to purchase lots in upcoming housing subdivisionsYearNo of Customers AssisterHAG Approved201471655,000201597785,00020161371,325,00020171961,780,000GENERAL MANAGER CUSTOMER RELATIONS REPORTHousing Authority Annual Report 2017Housing Authority Annual Report 20171718 Ground Rent PortfolioVillage Housing SchemeStakeholdersThe Ground Rent portfolio as at 31 st December 2017 was $2.20m compared to $2.17m in 2016.
Our collection teams are assigned to review each account and take arrears recovery actions to collect these dues.Financing of home constructions in village and rural areas is one of the products the Authority had been providing over the years to fulfill its obligation for rural housing.

This was a Government initiative to improve the standard of living in the rural Fijian villages.
It contributes to their security, happy communities and an ideal choice for better utilization of their lease income.Total Village Loan Portfolio stood at $2.9m as at 31st December 2017 compared to $3.4m in 2016.

The Performing and Non Performing portfolios stood at $2.61m and $0.284m respectively.
Village scheme recorded arrears of $124,674 forthe year.The Division will continue collaboration with government stakeholders and meetings with the Fiji National Provident Fund including iTaukei Land Trust Board, Methodist Church of Fiji and Lands Department and contribute favorably in making housing affordable to the lower income bracket.It will also continue to refine work processes and reduce turnaround times to ultimately improve service delivery to all our valued customers.Mr Ajay Singh (former Manager Credit Recovery) receiving a token of appreciation from the Executive Management team after serving the Authority for over 35 years.RAMESH CHANDGENERAL MANAGER LENDINGGENERAL MANAGER LENDING REPORTMarketingBuilding Communities &Construction of Residential HomesHousing Assistant Grant (HAG)In support of the Authority’s ongoing commitment to its vision of “Helping Fijians Own Affordable Homes”, the Marketing department continued to promote the products and services offered by the Authority through direct marketing presentation, participation in road shows, radio talk-back shows, display booths in festivals, advertising in newspapers, HA webpage and social media.The department also manages logistics pertaining to the allocation and sale of residential stock properties and; maintaining database records pertaining to the demand forhousing and customer preferences.
It also contribute to the Authority’s website updates and addressing social media enquiries including customer complaints.The Authority is proud to be a major player in building communities through the development and sale of fully serviced residential lots within housing subdivisions around the country.

A further 135 new lots from Tacirua Phase 1A & 3A were made available for sale in November 2017.
Residential lots are sold by the Authority as ‘land & house package’ where the buyers are required to purchase land and construct a residential dwelling at the same time.To facilitate the construction process, the Authority has a dedicated Work Assessment team whose primary role is to assist customers in estimating building construction costs anddisbursement of construction funds.The number of customers assisted through Government’s Housing Assistant Grant (HAG) initiative continue to increase.
It has been an attractive incentive in encouraging first time homeowners to purchase land and build.
196 customers received HAG from Government totaling $1,780,000 to either construct or buy their first home.Maintaining customer satisfaction and improving customer relationship continue to be the primary focus for the Customer Relations Division in 2017.The existence of customer relation centers in Lautoka, Labasa, Suva with its head office in Valelevu, Nasinu ensures the spread of the Authority’s services across the country and allows for greater accessibility to our products and services.The core functions of the Division include land & house sales, marketing & corporate branding, loan assessment and processing, valuation services, construction management services, research and development and; creation of new products and business.
The Division ensure these activities are delivered in a timely manner for its customers.LEONARD KWANSINGGENERAL MANAGER CUSTOMER RELATIONSIn 2017, a total of 4,262 expression of interest was received from prospective customers expressing their interest to purchase lots in upcoming housing subdivisionsYearNo of Customers AssisterHAG Approved201471655,000201597785,00020161371,325,00020171961,780,000GENERAL MANAGER CUSTOMER RELATIONS REPORTHousing Authority Annual Report 2017Housing Authority Annual Report 20171718 Residential Home LoansLow & Medium Income focusTypes of Loan Approved 20172017 Loan by Income - NumberDespite the challenges in income ceiling, statutory limitations and competitive home loan rates offered by other Lenders, the Authority managed to approve 578 loans with a total net loan of $24,737,285 in 2017.Loan approved to customers for construction was $11,576,087 (47% of the total loan approved), finance loans at $11,522,213 (46%) and new stock sales of $1,638,985 (7%).
In 2017, 4,262 applications were received from prospective customers expressing their interest to purchase lots in upcoming housing subdivisions.

The highest interest was in Central division approximately 75%; Western division 22% and Northern division 3%.
The substantial increase for demand in housing saw the escalation in applications received over theyears to 14,839 as at 31 st December 2017.Of the total 578 customers’ loan approved in 2017, 245 (42%) were approved to customers with annual income below $25,000; 201 (35%) to customers with annual income between$25,000- $40,000 and 132 (23%) to customers with annual income above $40,000.The Authority’s variable home loan rate continued its downward trend in 2017 with a reduction from 7.50% to 6.99%.
This is keeping in line with the Authority’s efforts to make housing more affordable and accessible to its target market.Construction - New Stock Sales47%NEW StockSales - Land Only7%FINANCE46%200020172001-20022003-20132014-20160.00%2.00%4.00%6.00%8.00%10.00%12.00%14.00%11.50%8.35%7.99%7.50%6.99%Variable Interest RateGENERAL MANAGER CUSTOMER RELATIONS REPORTValuationStaff Training & DevelopmentConclusionAs part of its “one stop shop” concept, the Authority also provides valuation services to its customers.
This provides added convenience and avoid the difficulties and time constraints of engaging private valuation companies.

TheAuthority’s valuation is recognized by the Fiji National Provident Fund.The upskilling and development of staff continued with in-house service training, mentoring, on-the- job training and job rotation.This is part of the Authority’s succession planning strategies.
In addition, staff were given the opportunity and ‘hands on’ experience to relieve in various managerial and other key Customer Relations positions.We would like to acknowledge with much appreciation the invaluable support and contribution of all our stakeholders both external and internal for their assistance throughout theyear.
Their support allowed us to effectively and efficiently serve our customers and achieve the results recorded in 2017.LEONARD KWANSINGGENERAL MANAGER CUSTOMER RELATIONSGENERAL MANAGER CUSTOMER RELATIONS REPORTHousing Authority Annual Report 2017Housing Authority Annual Report 20171920Above $40,000 (High), 132 (23%)Above $25,001< $40,000 (Mid), 201 (35%)Below $16,500 (Low), 62 (11%)Above $16,501< $25,000 (Low-Mid), 183 (31%) Residential Home LoansLow & Medium Income focusTypes of Loan Approved 20172017 Loan by Income - NumberDespite the challenges in income ceiling, statutory limitations and competitive home loan rates offered by other Lenders, the Authority managed to approve 578 loans with a total net loan of $24,737,285 in 2017.Loan approved to customers for construction was $11,576,087 (47% of the total loan approved), finance loans at $11,522,213 (46%) and new stock sales of $1,638,985 (7%).
In 2017, 4,262 applications were received from prospective customers expressing their interest to purchase lots in upcoming housing subdivisions.

The highest interest was in Central division approximately 75%; Western division 22% and Northern division 3%.
The substantial increase for demand in housing saw the escalation in applications received over theyears to 14,839 as at 31 st December 2017.Of the total 578 customers’ loan approved in 2017, 245 (42%) were approved to customers with annual income below $25,000; 201 (35%) to customers with annual income between$25,000- $40,000 and 132 (23%) to customers with annual income above $40,000.The Authority’s variable home loan rate continued its downward trend in 2017 with a reduction from 7.50% to 6.99%.
This is keeping in line with the Authority’s efforts to make housing more affordable and accessible to its target market.Construction - New Stock Sales47%NEW StockSales - Land Only7%FINANCE46%200020172001-20022003-20132014-20160.00%2.00%4.00%6.00%8.00%10.00%12.00%14.00%11.50%8.35%7.99%7.50%6.99%Variable Interest RateGENERAL MANAGER CUSTOMER RELATIONS REPORTValuationStaff Training & DevelopmentConclusionAs part of its “one stop shop” concept, the Authority also provides valuation services to its customers.
This provides added convenience and avoid the difficulties and time constraints of engaging private valuation companies.

TheAuthority’s valuation is recognized by the Fiji National Provident Fund.The upskilling and development of staff continued with in-house service training, mentoring, on-the- job training and job rotation.This is part of the Authority’s succession planning strategies.
In addition, staff were given the opportunity and ‘hands on’ experience to relieve in various managerial and other key Customer Relations positions.We would like to acknowledge with much appreciation the invaluable support and contribution of all our stakeholders both external and internal for their assistance throughout theyear.
Their support allowed us to effectively and efficiently serve our customers and achieve the results recorded in 2017.LEONARD KWANSINGGENERAL MANAGER CUSTOMER RELATIONSGENERAL MANAGER CUSTOMER RELATIONS REPORTHousing Authority Annual Report 2017Housing Authority Annual Report 20171920Above $40,000 (High), 132 (23%)Above $25,001< $40,000 (Mid), 201 (35%)Below $16,500 (Low), 62 (11%)Above $16,501< $25,000 (Low-Mid), 183 (31%) financial statementsfor the year ended 31 december 2017ContentsTable of ContentsDirectors’ ReportStatement by DirectorsIndependent Audit ReportStatement of Comprehensive IncomeStatement of Changes in EquityStatement of Financial PositionStatement of Cash FlowsNotes to the Financial Statements2122 - 232425 - 262728293031 - 52Housing Authority Annual Report 2017Housing Authority Annual Report 20172122HOUSING AUTHORITY OF FIJIDIRECTORS’ REPORTFOR THE YEAR ENDED 31 DECEMBER 2017Directors’ ReportIn accordance with a resolution of the Board of Directors, the directors herewith submit the statement of financial position of the Housing Authority of Fiji (“the Authority”) as at 31 December 2017, the related statement of comprehensive income, statement of changes in equity and statement of cash flows for the year then ended on that date and report as follows:State of AffairsIn the opinion of the directors, the accompanying statement of financial position give a true and fair view of the state of affairs of the Authority as at 31 December 2017 and the accompanying statement of comprehensive income, statement of changes in equity and statement of cash flows give a true and fair view of the results of the Authority, its changes in equity and its cash flows for the year then ended.Principal ActivitiesThe principal activities of the Authority during the course of the financial year were to provide affordable housing through the development of land and houses for sale and the financing of these properties.
There was no significant change in the nature of the Authority’s activities during the year.Operating ResultsThe operating results for the Authority for the year ended 31 December was:DividendsThe directors recommend that no dividends be declared or paid during the year (2017: $Nil).ReservesAn independent valuation was carried out by registered valuer, Professional Valuations Limited, in July 2018 for Authority’s properties.
The valuation has been adopted by the Directors which resulted in an increase in the Asset Revaluation Reserve by $2.954 million.
Subsequent eventsNo event has arisen in the interval between the end of the financial year and the date of this report, item, transaction of a material and unusual nature likely, in the opinion of the directors of the Authority, to affect significantly the operations of the Authority, the results of those operations, or the state of affairs of the Authority, in subsequent financial years.Bad and doubtful debtsPrior to the completion of the Authority’s financial statements, the directors took reasonable steps to ascertain that action had been taken to ensure that the net receivable balance as reported is considered to be collectible and adequate provision for doubtful debts has been included.
In the opinion of directors, adequate provision has been made for doubtful debts.As at the date of this report, the directors are not aware of any circumstances, which would require a material adjustment to the net receivable balance as at balance date.DirectorsThe directors of the Authority during the year were:DirectorsAppointedServe UntilMr.

Umarji Musa - Acting Chairman24 December 201523 December 2018Mr.

Nesbitt Hazelman24 December 201523 December 2018Mr.
Craig Strong 24 December 201529 September 2017Mr.
Roveen Permal 24 December 201523 December 20182017 $’0002016 $’000Net Profit before Income Tax1,7011,473Income Tax Expense--Net Profit for the year1,7011,473 financial statementsfor the year ended 31 december 2017ContentsTable of ContentsDirectors’ ReportStatement by DirectorsIndependent Audit ReportStatement of Comprehensive IncomeStatement of Changes in EquityStatement of Financial PositionStatement of Cash FlowsNotes to the Financial Statements2122 - 232425 - 262728293031 - 52Housing Authority Annual Report 2017Housing Authority Annual Report 20172122HOUSING AUTHORITY OF FIJIDIRECTORS’ REPORTFOR THE YEAR ENDED 31 DECEMBER 2017Directors’ ReportIn accordance with a resolution of the Board of Directors, the directors herewith submit the statement of financial position of the Housing Authority of Fiji (“the Authority”) as at 31 December 2017, the related statement of comprehensive income, statement of changes in equity and statement of cash flows for the year then ended on that date and report as follows:State of AffairsIn the opinion of the directors, the accompanying statement of financial position give a true and fair view of the state of affairs of the Authority as at 31 December 2017 and the accompanying statement of comprehensive income, statement of changes in equity and statement of cash flows give a true and fair view of the results of the Authority, its changes in equity and its cash flows for the year then ended.Principal ActivitiesThe principal activities of the Authority during the course of the financial year were to provide affordable housing through the development of land and houses for sale and the financing of these properties.
There was no significant change in the nature of the Authority’s activities during the year.Operating ResultsThe operating results for the Authority for the year ended 31 December was:DividendsThe directors recommend that no dividends be declared or paid during the year (2017: $Nil).ReservesAn independent valuation was carried out by registered valuer, Professional Valuations Limited, in July 2018 for Authority’s properties.
The valuation has been adopted by the Directors which resulted in an increase in the Asset Revaluation Reserve by $2.954 million.
Subsequent eventsNo event has arisen in the interval between the end of the financial year and the date of this report, item, transaction of a material and unusual nature likely, in the opinion of the directors of the Authority, to affect significantly the operations of the Authority, the results of those operations, or the state of affairs of the Authority, in subsequent financial years.Bad and doubtful debtsPrior to the completion of the Authority’s financial statements, the directors took reasonable steps to ascertain that action had been taken to ensure that the net receivable balance as reported is considered to be collectible and adequate provision for doubtful debts has been included.
In the opinion of directors, adequate provision has been made for doubtful debts.As at the date of this report, the directors are not aware of any circumstances, which would require a material adjustment to the net receivable balance as at balance date.DirectorsThe directors of the Authority during the year were:DirectorsAppointedServe UntilMr.

Umarji Musa - Acting Chairman24 December 201523 December 2018Mr.

Nesbitt Hazelman24 December 201523 December 2018Mr.
Craig Strong 24 December 201529 September 2017Mr.
Roveen Permal 24 December 201523 December 20182017 $’0002016 $’000Net Profit before Income Tax1,7011,473Income Tax Expense--Net Profit for the year1,7011,473 Current and non-current assetsPrior to the completion of the financial statements of the Authority, the directors took reasonable steps to ascertain whether any current and non-current assets were unlikely to be realised in the ordinary course of business as compared to their value as shown in the accounting records of the Authority.
Where necessary, these assets have been written down or adequate allowance has been made to bring the values of such assets to an amount that they might be expected to realise.As at the date of the report, the directors are not aware of any circumstances, which would render the values attributed to current and non-current assets in the Authority’s financial statements to be materially misstated.
Signed for and on behalf of the Board and in accordance with a resolution of the board of directors.Signed for and on behalf of the Board and in accordance with a resolution of the board of directors.Dated at Suva this Dated at Suva this ChairmanChairmanMemberMemberday of day of 20182018Unusual TransactionsIn the opinion of the directors, the results of the operations of the Authority during the year were not substantially affected by any item, transaction or event of a material unusual nature, nor has there arisen between the end of the year and the date of this report any item, transaction or event of a material unusual nature likely, in the opinion of the directors, to affect substantially the results of the operations of the Authority in the year ended, other than those reflected in the financial statements.Other CircumstancesAs at the date of this report: a) no charge on the assets of the Authority has been given since the end of the year to secure the liabilities of any other person; b) no contingent liabilities have arisen since the end of the year for which the Authority could become liable; and c) no contingent liabilities or other liabilities of the Authority has become or is likely to become enforceable within the period of twelve months after the end of the year which, in the opinion of the directors, will or may substantially affect the ability of the Authority to meet its obligations as and when they fall due.As at the date of this report, the directors are not aware of any circumstances that have arisen, not otherwise dealt with in this report or the Authority’s financial statements, which would make adherence to the existing method of valuation of assets or liabilities of the Authority misleading or inappropriate.Housing Authority Annual Report 201724HOUSING AUTHORITY OF FIJIHOUSING AUTHORITY OF FIJISTATEMENT BY DIRECTORSFOR THE YEAR ENDED 31 DECEMBER 2017DIRECTORS’ REPORT continuedFOR THE YEAR ENDED 31 DECEMBER 2017In accordance with a resolution of the Board of Directors of the Housing Authority
 of Fiji, we state that in the opinion of the directors: (i) the accompanying statement of comprehensive income of the Authority is drawn up so as to give a true and fair view of the results of the Authority for the year ended 31 December 2017; (ii) the accompanying statement of changes in equity of the Authority is drawn up so as to give a true and fair view of the changes in equity of the Authority for the year ended 31 December 2017; (iii) the accompanying statement of financial position of the Authority is drawn up so as to give a true and fair view of the state of affairs of the Authority as at 31 December 2017; (iv) the accompanying statement of cash flows of the Authority is drawn up so as to give a true and fair view of the cash flows of the Authority for the year ended 31 December 2017; (v) at the date of this statement there are reasonable grounds to believe the Authority will be able to pay its debts as and when they fall due; and (vi) all related party transactions have been adequately recorded in the books of the Authority.Housing Authority Annual Report 201723 Current and non-current assetsPrior to the completion of the financial statements of the Authority, the directors took reasonable steps to ascertain whether any current and non-current assets were unlikely to be realised in the ordinary course of business as compared to their value as shown in the accounting records of the Authority.
Where necessary, these assets have been written down or adequate allowance has been made to bring the values of such assets to an amount that they might be expected to realise.As at the date of the report, the directors are not aware of any circumstances, which would render the values attributed to current and non-current assets in the Authority’s financial statements to be materially misstated.
Signed for and on behalf of the Board and in accordance with a resolution of the board of directors.Signed for and on behalf of the Board and in accordance with a resolution of the board of directors.Dated at Suva this Dated at Suva this ChairmanChairmanMemberMemberday of day of 20182018Unusual TransactionsIn the opinion of the directors, the results of the operations of the Authority during the year were not substantially affected by any item, transaction or event of a material unusual nature, nor has there arisen between the end of the year and the date of this report any item, transaction or event of a material unusual nature likely, in the opinion of the directors, to affect substantially the results of the operations of the Authority in the year ended, other than those reflected in the financial statements.Other CircumstancesAs at the date of this report: a) no charge on the assets of the Authority has been given since the end of the year to secure the liabilities of any other person; b) no contingent liabilities have arisen since the end of the year for which the Authority could become liable; and c) no contingent liabilities or other liabilities of the Authority has become or is likely to become enforceable within the period of twelve months after the end of the year which, in the opinion of the directors, will or may substantially affect the ability of the Authority to meet its obligations as and when they fall due.As at the date of this report, the directors are not aware of any circumstances that have arisen, not otherwise dealt with in this report or the Authority’s financial statements, which would make adherence to the existing method of valuation of assets or liabilities of the Authority misleading or inappropriate.Housing Authority Annual Report 201724HOUSING AUTHORITY OF FIJIHOUSING AUTHORITY OF FIJISTATEMENT BY DIRECTORSFOR THE YEAR ENDED 31 DECEMBER 2017DIRECTORS’ REPORT continuedFOR THE YEAR ENDED 31 DECEMBER 2017In accordance with a resolution of the Board of Directors of the Housing Authority
 of Fiji, we state that in the opinion of the directors: (i) the accompanying statement of comprehensive income of the Authority is drawn up so as to give a true and fair view of the results of the Authority for the year ended 31 December 2017; (ii) the accompanying statement of changes in equity of the Authority is drawn up so as to give a true and fair view of the changes in equity of the Authority for the year ended 31 December 2017; (iii) the accompanying statement of financial position of the Authority is drawn up so as to give a true and fair view of the state of affairs of the Authority as at 31 December 2017; (iv) the accompanying statement of cash flows of the Authority is drawn up so as to give a true and fair view of the cash flows of the Authority for the year ended 31 December 2017; (v) at the date of this statement there are reasonable grounds to believe the Authority will be able to pay its debts as and when they fall due; and (vi) all related party transactions have been adequately recorded in the books of the Authority.Housing Authority Annual Report 201723 OpinionI have audited the financial statements of Housing Authority of Fiji (“the Authority”), which comprise the statement of financial position as at 31 December 2017, the statement of comprehensive income, statement of changes in equity and statement of cash flows for the year then ended, and notes to the financial statements, including a summary of significant accounting policies.In my opinion, the accompanying financial statements give a true and fair view of the financial position of the Authority as at 31 December 2017, and of its financial performance and its cash flows for the year then ended in accordance with International Financial Reporting Standards (IFRS).Responsibilities of the Management and Directors for the Financial StatementsThe management is responsible for the preparation and fair presentation of these financial statements in accordance with IFRS, CAP 267 of the Housing
 Act, 1955 and for the such internal control as a the management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.In preparing the financial statements, management is responsible for assessing the Authority’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the management intend to cease operations, or have no realistic alternative but to do so.The Directors are responsible for overseeing the Authority’s financial reporting process.Basis for OpinionI conducted my audit in accordance with International Standards on Auditing (ISA).
My responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of my report.
I am independent of the Authority in accordance with the International Ethics Standards Board for Accountant’s Code of Ethnics for Professional Accountants (IESBA Code) together with the ethical requirements that are relevant to my audit of the financial statements in Fiji and I have fulfilled other ethical responsibilities in accordance with these requirements and the IESBA Code.
I believe that the audit evidence I have obtained is sufficient and appropriate to provide a basis for my opinion.HOUSING AUTHORITY OF FIJIINDEPENDENT AUDITOR’S REPORTFOR THE YEAR ENDED 31 DECEMBER 2017Housing Authority Annual Report 201725Housing Authority Annual Report 201726The Auditor’s Responsibilities for the Audit of the Financial StatementsMy objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error , and to issue an auditor’s report that includes my opinion.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISA will always detect a material misstatement when it exists.
Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of the financial statement.As part of an audit in accordance with ISA, I exercise professional judgement and maintain professional skepticism throughout the audit.
I also:• Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for my opinion.
The risk of not detecting a material misstatement resulting from fraud is higher thank for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of Authority’s internal control.• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.• Conclude on the appropriateness of the management’s and directors’ use of going concern basis of accounting and, based on the audit-evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Authority’s ability to continue as a going concern.
If I conclude that a material uncertainty exists, I am required to draw attention in my auditor’s report to the related disclosures in the financial statements or, if such disclosures, are inadequate, to modify my opinion.

My conclusions are based on the audit evidence obtained up to the date of my auditor’s report.
However, future events or conditions may cause the Authority to cease to continue as a going concern.• Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represents the underlying transactions and events in a manner that achieves fair presentation.I communicate with the management and directors regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that I identify during my audit.Report on Other Legal and Regulatory RequirementsIn accordance with the requirements of the CAP 267 of the Housing Act 1955, in my opinion:a) proper books of account have been kept by the Authority, so far as it appears from the examination of those books,b) the accompanying financial statements: a. are in agreement with the books of account; and b. to the best of my information and according to the explanations given to me , give the information required by the CAP 267 of the Housing Act in the manner so required.Ajay NandSuva, Fiji21 August, 2019Auditor-GenralOFFICE OF THE AUDITOR GENERALExcellence in Public Sector Auditing6-8th Floor, Ratu Sukuna House2-10 McArthur StP.O Box 2214, Governement BuildingsSuva, FijiTelephone: (679) 330 9032Fax: (679) 330 3812E-mail: info@auditorgeneral.gov.fjWebsite:http://www.oag.gov.fjHOUSING AUTHORITY OF FIJIINDEPENDENT AUDITOR’S REPORT (continue)FOR THE YEAR ENDED 31 DECEMBER 2017 OpinionI have audited the financial statements of Housing Authority of Fiji (“the Authority”), which comprise the statement of financial position as at 31 December 2017, the statement of comprehensive income, statement of changes in equity and statement of cash flows for the year then ended, and notes to the financial statements, including a summary of significant accounting policies.In my opinion, the accompanying financial statements give a true and fair view of the financial position of the Authority as at 31
 December 2017, and of its financial performance and its cash flows for the year then ended in accordance with International Financial Reporting Standards (IFRS).Responsibilities of the Management and Directors for the Financial StatementsThe management is responsible for the preparation and fair presentation of these financial statements in accordance with IFRS, CAP 267 of the Housing Act, 1955 and for the such internal control as a the management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.In preparing the financial statements, management is responsible for assessing the Authority’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the management intend to cease operations, or have no realistic alternative but to do so.The Directors are responsible for overseeing the Authority’s financial reporting process.Basis for OpinionI conducted my audit in accordance with International Standards on Auditing (ISA).
My responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of my report.
I am independent of the Authority in accordance with the International Ethics Standards Board for Accountant’s Code of Ethnics for Professional Accountants (IESBA Code) together with the ethical requirements that are relevant to my audit of the financial statements in Fiji and I have fulfilled other ethical responsibilities in accordance with these requirements and the IESBA Code.
I believe that the audit evidence I have obtained is sufficient and appropriate to provide a basis for my opinion.HOUSING AUTHORITY OF FIJIINDEPENDENT AUDITOR’S REPORTFOR THE YEAR ENDED 31 DECEMBER 2017Housing Authority Annual Report 201725Housing Authority Annual Report 201726The Auditor’s Responsibilities for the Audit of the Financial StatementsMy objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error , and to issue an auditor’s report that includes my opinion.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISA will always detect a material misstatement when it exists.
Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of the financial statement.As part of an audit in accordance with ISA, I exercise professional judgement and maintain professional skepticism throughout the audit.
I also:• Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for my opinion.
The risk of not detecting a material misstatement resulting from fraud is higher thank for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of Authority’s internal control.• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.• Conclude on the appropriateness of the management’s and directors’ use of going concern basis of accounting and, based on the audit-evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Authority’s ability to continue as a going concern.
If I conclude that a material uncertainty exists, I am required to draw attention in my auditor’s report to the related disclosures in the financial statements or, if such disclosures, are inadequate, to modify my opinion.

My conclusions are based on the audit evidence obtained up to the date of my auditor’s report.
However, future events or conditions may cause the Authority to cease to continue as a going concern.• Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represents the underlying transactions and events in a manner that achieves fair presentation.I communicate with the management and directors regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that I identify during my audit.Report on Other Legal and Regulatory RequirementsIn accordance with the requirements of the CAP 267 of the Housing Act 1955, in my opinion:a) proper books of account have been kept by the Authority, so far as it appears from the examination of those books,b) the accompanying financial statements: a. are in agreement with the books of account; and b. to the best of my information and according to the explanations given to me , give the information required by the CAP 267 of the Housing Act in the manner so required.Ajay NandSuva, Fiji21 August, 2019Auditor-GenralOFFICE OF THE AUDITOR GENERALExcellence in Public Sector Auditing6-8th Floor, Ratu Sukuna House2-10 McArthur StP.O Box 2214, Governement BuildingsSuva, FijiTelephone: (679) 330 9032Fax: (679) 330 3812E-mail: info@auditorgeneral.gov.fjWebsite:http://www.oag.gov.fjHOUSING AUTHORITY OF FIJIINDEPENDENT AUDITOR’S REPORT (continue)FOR THE YEAR ENDED 31 DECEMBER 2017 Housing Authority Annual Report 201727Housing Authority Annual Report 201728The accompanying notes form an integral part of this Statement of Changes in Equity.
HOUSING AUTHORITY OF FIJISTATEMENT OF CHANGES IN EQUITYFOR THE YEAR ENDED 31 DECEMBER 20172017$’0002016$’000Accumulated lossesBalance at the beginning of the year(9,683)(3,544)"Adjustment relating to restatment of foreign currency loan as at closing exchange rate (Note 13)"-(7,612)Balance at the beginning of the year - restated (9,683)(11,156)Profit for the year1,7011,473Balance at the end of the year(7,982)(9,683)Asset Revaluation ReserveBalance at the beginning of the year 2,249 2,249 Movement during the year 2,954 - Balance at the end of the year 5,203 2,249 Government contributionBalance at the beginning of the year 15,958 15,958 Movement during the year - - Balance at the end of the year 15,958 15,958 CapitalBalance at the beginning of the year 41,772 41,772 Movement during the year - - Balance at the end of the year 41,772 41,772 Total equity 54,952 50,296 HOUSING AUTHORITY OF FIJISTATEMENT OF COMPREHENSIVE INCOMEFOR THE YEAR ENDED 31 DECEMBER 2017The accompanying notes form an integral part of this Statement of Comprehensive Income.
Notes2017$’0002016$’000Interest income2.17,3967,259Interest expense3.1(4,479)(4,562)Net interest income2,9172,697Other operating income2.29,80718,685Net operating income12,72421,382Amortisation of intangible assets260259Bad and doubtful debts 245790Cost of sales - land and houses2,97811,263Depreciation of property, plant and equipment511520Other expenses3.32,2972,201Personnel expenses3.24,7324,876Total operating expense11,02319,909Net profit before income tax1,7011,473Income tax expense1.4 (p)--Net profit after tax1,7011,473Other comprehensive incomeRevaluation surplus on land and buildings2,954-Total comprehensive income for the year, net of tax4,6551,473 Housing Authority Annual Report 201727Housing Authority Annual Report 201728The accompanying notes form an integral part of this Statement of Changes in Equity.
HOUSING AUTHORITY OF FIJISTATEMENT OF CHANGES IN EQUITYFOR THE YEAR ENDED 31 DECEMBER 20172017$’0002016$’000Accumulated lossesBalance at the beginning of the year(9,683)(3,544)"Adjustment relating to restatment of foreign currency loan as at closing exchange rate (Note 13)"-(7,612)Balance at the beginning of the year - restated (9,683)(11,156)Profit for the year1,7011,473Balance at the end of the year(7,982)(9,683)Asset Revaluation ReserveBalance at the beginning of the year 2,249 2,249 Movement during the year 2,954 - Balance at the end of the year 5,203 2,249 Government contributionBalance at the beginning of the year 15,958 15,958 Movement during the year - - Balance at the end of the year 15,958 15,958 CapitalBalance at the beginning of the year 41,772 41,772 Movement during the year - - Balance at the end of the year 41,772 41,772 Total equity 54,952 50,296 HOUSING AUTHORITY OF FIJISTATEMENT OF COMPREHENSIVE INCOMEFOR THE YEAR ENDED 31 DECEMBER 2017The accompanying notes form an integral part of this Statement of Comprehensive Income.
Notes2017$’0002016$’000Interest income2.17,3967,259Interest expense3.1(4,479)(4,562)Net interest income2,9172,697Other operating income2.29,80718,685Net operating income12,72421,382Amortisation of intangible assets260259Bad and doubtful debts 245790Cost of sales - land and houses2,97811,263Depreciation of property, plant and equipment511520Other expenses3.32,2972,201Personnel expenses3.24,7324,876Total operating expense11,02319,909Net profit before income tax1,7011,473Income tax expense1.4 (p)--Net profit after tax1,7011,473Other comprehensive incomeRevaluation surplus on land and buildings2,954-Total comprehensive income for the year, net of tax4,6551,473 Housing Authority Annual Report 201729Housing Authority Annual Report 201730The accompanying notes form an integral part of this Statement of Cash Flows.HOUSING AUTHORITY OF FIJISTATEMENT OF CASH FLOWSFOR THE YEAR ENDED 31 DECEMBER 2017Notes2017Inflows/ (Outflows)$’0002016Inflows/ (Outflows)$’000Operating activitiesInterest received 7,608 7,025 Fees, charges and other income received 3,575 5,992 Proceeds from sale of land and houses 5,078 13,829 Interest and other finance costs paid (5,253) (4,558)Net customer loans issued and repayments received (3,147) (7,394)Payments to suppliers for land and houses (9,843) (6,186)Net receipt of government grants 3,942 3,192 Other operating expenses paid (6,896) (10,244)Cash flows from / (used in) operating activities (4,936)1,656Investing activitiesPayments for property plant and equipment (410) 132 Proceed from short term investments 13,550 7,500 Cash flows from investing activities13,1407,632 Financing activitiesNet repayment of borrowings (8,704) (10,135)Cash flows used in financing activities (8,704) (10,135)Net decrease in cash held (500) (847)Cash at the beginning of the financial year 2,323 3,170Cash at the end of the financial year4 1,8232,323HOUSING AUTHORITY OF FIJISTATEMENT OF FINANCIAL POSITIONFOR THE YEAR ENDED 31 DECEMBER 2017The accompanying notes form an integral part of this Statement of Financial
 Position.Notes2017 $’0002016 $’000(Restated)Current AssetsCash and cash equivalents4 1,823 2,323 Held-to-maturity investments5 28,400 41,950 Loans and advances6 (a) 11,373 10,959Inventories7 38,404 31,019 Other assets12 4,986 4,286 Total Current Assets 84,986 90,537 Non-Current Assets Loans and advances6 (b) 78,660 75,918Land held for future development8 3,262 3,755 Intangible assets11 161 406 Property, plant and equipment9 10,446 7,515 Total Non-Current Assets 92,529 87,594Total Assets177,515178,131Current Liabilities Trade and other payables14 21,044 17,632Employee benefit liability16 532 511 Provisions15 25 25 Debt issued and borrowed funds13 (a) 27,845 8,045 Total Current Liabilities 49,446 26,213 Non-Current Liabilities Debt issued and borrowed funds13 (b) 73,117 101,622 Total Non-Current Liabilities 73,117 101,622 TOTAL LIABILITIES122,563127,835EQUITYCapital17 41,772 41,772 Accumulated losses (7,982) (9,683)Government grant 15,958 15,958 Asset revaluation reserve17 5,203 2,249 TOTAL EQUITY 54,952 50,296 TOTAL EQUITY AND LIABILITIES 177,515 178,131Signed for and on behalf of the Board and in accordance with a resolution of the Directors.ChairmanMember Housing Authority Annual Report 201729Housing Authority Annual Report 201730The accompanying notes form an integral part of this Statement of Cash Flows.HOUSING AUTHORITY OF FIJISTATEMENT OF CASH FLOWSFOR THE YEAR ENDED 31 DECEMBER 2017Notes2017Inflows/ (Outflows)$’0002016Inflows/ (Outflows)$’000Operating activitiesInterest received 7,608 7,025 Fees, charges and other income received 3,575 5,992 Proceeds from sale of land and houses 5,078 13,829 Interest and other finance costs paid (5,253) (4,558)Net customer loans issued and repayments received (3,147) (7,394)Payments to suppliers for land and houses (9,843) (6,186)Net receipt of government grants 3,942 3,192 Other operating expenses paid (6,896) (10,244)Cash flows from / (used in) operating activities (4,936)1,656Investing activitiesPayments for property plant
 and equipment (410) 132 Proceed from short term investments 13,550 7,500 Cash flows from investing activities13,1407,632 Financing activitiesNet repayment of borrowings (8,704) (10,135)Cash flows used in financing activities (8,704) (10,135)Net decrease in cash held (500) (847)Cash at the beginning of the financial year 2,323 3,170Cash at the end of the financial year4 1,8232,323HOUSING AUTHORITY OF FIJISTATEMENT OF FINANCIAL POSITIONFOR THE YEAR ENDED 31 DECEMBER 2017The accompanying notes form an integral part of this Statement of Financial Position.Notes2017 $’0002016 $’000(Restated)Current AssetsCash and cash equivalents4 1,823 2,323 Held-to-maturity investments5 28,400 41,950 Loans and advances6 (a) 11,373 10,959Inventories7 38,404 31,019 Other assets12 4,986 4,286 Total Current Assets 84,986 90,537 Non-Current Assets Loans and advances6 (b) 78,660 75,918Land held for future development8 3,262 3,755 Intangible assets11 161 406 Property, plant and equipment9 10,446 7,515 Total Non-Current Assets 92,529 87,594Total Assets177,515178,131Current Liabilities Trade and other payables14 21,044 17,632Employee benefit liability16 532 511 Provisions15 25 25 Debt issued and borrowed funds13 (a) 27,845 8,045 Total Current Liabilities 49,446 26,213 Non-Current Liabilities Debt issued and borrowed funds13 (b) 73,117 101,622 Total Non-Current Liabilities 73,117 101,622 TOTAL LIABILITIES122,563127,835EQUITYCapital17 41,772 41,772 Accumulated losses (7,982) (9,683)Government grant 15,958 15,958 Asset revaluation reserve17 5,203 2,249 TOTAL EQUITY 54,952 50,296 TOTAL EQUITY AND LIABILITIES 177,515 178,131Signed for and on behalf of the Board and in accordance with a resolution of the Directors.ChairmanMember Housing Authority Annual Report 201731Housing Authority Annual Report 201732HOUSING AUTHORITY OF FIJINOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 20171.4Summary of significant accounting policiesThe principal accounting policies applied in the preparation of these
 financial statements are set out below.a)The financial statements are presented in Fiji dollars, which is the Authority’s functional and presentation currency.
Transactions in foreign currencies are initially recorded at the functional currency rate ruling at the date of the transaction.

Monetary assets and liabilities denominated in foreign currencies are retranslated at the functional currency rate of exchange ruling at balance date.

All differences are taken to ‘Other operating income’ or ‘Other operating expenses’ in the statement of comprehensive income.
b)Date of recognitionPurchases or sales of financial assets that require delivery of assets within the time frame established by convention in the marketplace are recognised on the trade date, i.e.

the date that the Authority commits to purchase or sell the asset.Initial recognition of financial instrumentsThe classification of financial instruments at initial recognition depends on the purpose for which the financial instruments were required and their characteristics.
All financial instruments are measured initially at their fair value plus, in the case of financial assets and liabilities not at fair value through profit and loss, any directly attributable incremental cost of acquisition or issue.Held to maturity financial investmentsHeld to maturity financial investments are those which carry fixed payments and have fixed maturities and which the Authority has the intention and ability to hold to maturity.
After initial measurement, held to maturity financial investments are subsequently measured at amortised cost using the effective interest rate method, less allowance for impairment.

Amortised cost is calculated taking into account any discount or premium on acquisition and fees that are an integral part of the effective interest rate.
Debt issued and other borrowed fundsIssued financial instruments or their components which are not designated at fair value through profit or loss, are classified as liabilities under ‘Debt issued and other borrowed funds’, where the substance of the contractual arrangement results in the Authority having an obligation either to deliver cash or another financial asset to the holder.Loans and advances Held to maturity financial investments are those which carry fixed payments and have fixed maturities and which the Authority has the intention and ability to hold to maturity.
After initial measurement, held to maturity financial investments are subsequently measured at amortised cost using the effective interest rate method, less allowance for impairment.

Amortised cost is calculated taking into account any discount or premium on acquisition and fees that are an integral part of the effective interest rate.

Non performing loansLoans are classified as non-performing if arrears relating to these loans are greater than three months.
Non-performing loans are treated as non-accrual assets as reasonable doubt exists as to the collectability of principal and interest.After initial measurement, loans and advances are subsequently measured at amortised cost using the effective interest rate method, less allowance for impairment.

Amortised cost is calculated by taking into account any discount or premium on acquisition and fees and costs that are an integral part of the effective interest rate.
The amortisation is included in ‘Interest and similar income’ in the statement of comprehensive income.

The loss arising from impairment are recognised in the statement of comprehensive income in bad and doubtful debts expense.i)ii)iii)v)iv)Foreign currenciesFinancial instruments - initial recognition and subsequent measurement Non monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rates as at the dates of the initial transaction.
Non monetary items measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value was determined.HOUSING AUTHORITY OF FIJINOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 20171.1.11.21.3CORPORATE INFORMATIONThe financial statements of Housing Authority of Fiji (“the Authority”) for the year ended 31 December 2017 were authorised for issue in accordance with a resolution of the directors on 19th September 2018.
Housing Authority of Fiji is a statutory body established under the Housing Act and domiciled in the Republic of Fiji.Basis of Preparation of the Financial StatementThe financial statements have been prepared on a historical cost basis except for land and buildings included under property, plant and equipment which are recorded at fair value.

The financial statements are presented in Fijian dollars and all values are rounded to the nearest thousand dollar except when otherwise indicated.
Statement of ComplianceThe financial statements of Housing Authority of Fiji have been prepared in accordance with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board.Significant accounting judgments, estimates and assumptionThe preparation of the Authority’s financial statements requires management to make judgments, estimates and assumptions that affect the reported amounts of revenue, expenses, assets and liabilities, and the disclosure of contingent liabilities at the reporting date.
However, uncertainty about these assumptions and estimates could result in outcomes that could require a material adjustment to the carrying amount of the asset or liability affected in the future.Principal ActivitiesThe principal activities of the Authority during the course of the financial year were to provide affordable housing through the development of land and houses for sale and the financing of these properties.
There was no significant change in the nature of the activities of the Authority during the year.RestatementThe foreign currency loan obtained by the Authority through Ministry of Economy from Exim Bank of China had not been converted at the closing exchange rate hostrorically.

In current year, the Authority has converted the foreign currency loan at the closing exchnage rate historically and restated the froeign curreny loan balance as at 31 December 2016.
As a result, reatined earnings as at 31 December 2016 has decreased by $7.6million and borrowing has increased by $7.6million.JudgmentsIn the process of applying the Authority’s accounting policies, management has made the following judgments, apart from those involving estimations, which has the most significant effect on the amounts recognised in the financial statements:Operating Lease CommitmentsThe Authority has entered into commercial property leases.
The Authority has determined based on an evaluation of the terms and conditions of the arrangements, that it does not retain all the significant risks and rewards of ownership of rented properties and so accounts for the contracts as operating leases.Estimations and assumptionsThe key assumptions concerning the future and other key sources of estimation uncertainty at the balance date, that have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities within the next financial year are discussed below:Impairment losses on loans and advancesThe Authority reviews its problem loans and advances at each reporting date to assess whether an allowance for impairment should be recorded.
In particular, judgment by management is required in the estimation of the amount and timing of future cash flows when determining the level of allowance required.
Such estimates are based on assumptions about a number of factors and actual results may differ, resulting in future changes of the allowance.In addition to specific allowances against individually significant loans and advances, the Authority also makes a collective impairment allowance against the exposures which although not specifically identified as requiring a specific allowance, have a greater risk of default than when originally granted.
This takes into consideration factors such as any deterioration in country risk, industry and technological obsolescence, economic and social factors as well as identified structural weaknesses or deterioration in cash flows.
Housing Authority Annual Report 201731Housing Authority Annual Report 201732HOUSING AUTHORITY OF FIJINOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 20171.4Summary of significant accounting policiesThe principal accounting policies applied in the preparation of these financial statements are set out below.a)The financial statements are presented in Fiji dollars, which is the Authority’s functional and presentation currency.
Transactions in foreign currencies are initially recorded at the functional currency rate ruling at the date of the transaction.

Monetary assets and liabilities denominated in foreign currencies are retranslated at the functional currency rate of exchange ruling at balance date.

All differences are taken to ‘Other operating income’ or ‘Other operating expenses’ in the statement of comprehensive income.
b)Date of recognitionPurchases or sales of financial assets that require delivery of assets within the time frame established by convention in the marketplace are recognised on the trade date, i.e.

the date that the Authority commits to purchase or sell the asset.Initial recognition of financial instrumentsThe classification of financial instruments at initial recognition depends on the purpose for which the financial instruments were required and their characteristics.
All financial instruments are measured initially at their fair value plus, in the case of financial assets and liabilities not at fair value through profit and loss, any directly attributable incremental cost of acquisition or issue.Held to maturity financial investmentsHeld to maturity financial investments are those which carry fixed payments and have fixed maturities and which the Authority has the intention and ability to hold to maturity.
After initial measurement, held to maturity financial investments are subsequently measured at amortised cost using the effective interest rate method, less allowance for impairment.

Amortised cost is calculated taking into account any discount or premium on acquisition and fees that are an integral part of the effective interest rate.
Debt issued and other borrowed fundsIssued financial instruments or their components which are not designated at fair value through profit or loss, are classified as liabilities under ‘Debt issued and other borrowed funds’, where the substance of the contractual arrangement results in the Authority having an obligation either to deliver cash or another financial asset to the holder.Loans and advances Held to maturity financial investments are those which carry fixed payments and have fixed maturities and which the Authority has the intention and ability to hold to maturity.
After initial measurement, held to maturity financial investments are subsequently measured at amortised cost using the effective interest rate method, less allowance for impairment.

Amortised cost is calculated taking into account any discount or premium on acquisition and fees that are an integral part of the effective interest rate.

Non performing loansLoans are classified as non-performing if arrears relating to these loans are greater than three months.
Non-performing loans are treated as non-accrual assets as reasonable doubt exists as to the collectability of principal and interest.After initial measurement, loans and advances are subsequently measured at amortised cost using the effective interest rate method, less allowance for impairment.

Amortised cost is calculated by taking into account any discount or premium on acquisition and fees and costs that are an integral part of the effective interest rate.
The amortisation is included in ‘Interest and similar income’ in the statement of comprehensive income.

The loss arising from impairment are recognised in the statement of comprehensive income in bad and doubtful debts expense.i)ii)iii)v)iv)Foreign currenciesFinancial instruments - initial recognition and subsequent measurement Non monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rates as at the dates of the initial transaction.
Non monetary items measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value was determined.HOUSING AUTHORITY OF FIJINOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 20171.1.11.21.3CORPORATE INFORMATIONThe financial statements of Housing Authority of Fiji (“the Authority”) for the year ended 31 December 2017 were authorised for issue in accordance with a resolution of the directors on 19th September 2018.
Housing Authority of Fiji is a statutory body established under the Housing Act and domiciled in the Republic of Fiji.Basis of Preparation of the Financial StatementThe financial statements have been prepared on a historical cost basis except for land and buildings included under property, plant and equipment which are recorded at fair value.

The financial statements are presented in Fijian dollars and all values are rounded to the nearest thousand dollar except when otherwise indicated.
Statement of ComplianceThe financial statements of Housing Authority of Fiji have been prepared in accordance with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board.Significant accounting judgments, estimates and assumptionThe preparation of the Authority’s financial statements requires management to make judgments, estimates and assumptions that affect the reported amounts of revenue, expenses, assets and liabilities, and the disclosure of contingent liabilities at the reporting date.
However, uncertainty about these assumptions and estimates could result in outcomes that could require a material adjustment to the carrying amount of the asset or liability affected in the future.Principal ActivitiesThe principal activities of the Authority during the course of the financial year were to provide affordable housing through the development of land and houses for sale and the financing of these properties.
There was no significant change in the nature of the activities of the Authority during the year.RestatementThe foreign currency loan obtained by the Authority through Ministry of Economy from Exim Bank of China had not been converted at the closing exchange rate hostrorically.

In current year, the Authority has converted the foreign currency loan at the closing exchnage rate historically and restated the froeign curreny loan balance as at 31 December 2016.
As a result, reatined earnings as at 31 December 2016 has decreased by $7.6million and borrowing has increased by $7.6million.JudgmentsIn the process of applying the Authority’s accounting policies, management has made the following judgments, apart from those involving estimations, which has the most significant effect on the amounts recognised in the financial statements:Operating Lease CommitmentsThe Authority has entered into commercial property leases.
The Authority has determined based on an evaluation of the terms and conditions of the arrangements, that it does not retain all the significant risks and rewards of ownership of rented properties and so accounts for the contracts as operating leases.Estimations and assumptionsThe key assumptions concerning the future and other key sources of estimation uncertainty at the balance date, that have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities within the next financial year are discussed below:Impairment losses on loans and advancesThe Authority reviews its problem loans and advances at each reporting date to assess whether an allowance for impairment should be recorded.
In particular, judgment by management is required in the estimation of the amount and timing of future cash flows when determining the level of allowance required.
Such estimates are based on assumptions about a number of factors and actual results may differ, resulting in future changes of the allowance.In addition to specific allowances against individually significant loans and advances, the Authority also makes a collective impairment allowance against the exposures which although not specifically identified as requiring a specific allowance, have a greater risk of default than when originally granted.
This takes into consideration factors such as any deterioration in country risk, industry and technological obsolescence, economic and social factors as well as identified structural weaknesses or deterioration in cash flows.
Housing Authority Annual Report 201733Housing Authority Annual Report 201734HOUSING AUTHORITY OF FIJINOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2017d)Leased assets continuedInterest income and expenseFor all financial instruments measured at amortised cost, interest income or expense is recorded at the effective interest rate, which is the rate that exactly discounts the future cash payments or receipts through the expected life of the financial instrument or shorter period, where appropriate to the net carrying amount of the financial asset or financial liability.
The calculation takes into account all contractual terms of the financial instrument and includes any fees or incremental costs that are directly attributable to the instrument and are an integral part of the effective interest rate, but not future credit losses.
The carrying amount of the financial asset or financial liability is adjusted if the Authority revises its estimates of payments or receipts.Once the recorded value of a financial asset or a group of similar financial assets has been reduced due to impairment loss, interest income continues to be recognised using the original effective interest rate applied to the new carrying amount.i)Fee income and chargesThe Authority earns fees and charges from a diverse range of services to its customers.
The fee income is brought to account on an accrual basis.ii)Income from sale of land and housesRevenue relating to the sale of land and houses is brought to account at the time of the sale.iii)Rental IncomeRental income is accounted for on a straight line basis over the lease terms on ongoing leases and is recorded in the statement of comprehensive income.iv)Bad and doubtful debtsThe annual charge against profit for bad and doubtful doubts reflects new individual impairment, reversals of individual impairment no longer required and movements in the collective impairment.vi)Gain or loss on sale of property, plant and equipmentGain or loss on sale of property, plant and equipment is treated as operating income or expense.v)e)Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Authority and the revenue can be reliably measured.
The following specific recognition criteria must also be met before revenue is recognised.Recognition of income and expensesf)Cash and cash equivalents comprise cash at bank and in hand and short term deposits with an original maturity less than three months.
For the purposes of the Statement of Cash Flows cash and cash equivalents consist of cash and cash equivalents as defined above.Cash and cash equivalentsg)Property, plant and equipment is stated at cost or valuation less accumulated depreciation and accumulated impairment losses.

Such costs include the cost of replacing part of the plant and equipment when that cost is incurred, if the recognition criteria is met .
All other repair and maintenance costs are recognized in profit or loss as incurred.Property, plant and equipmentAuthority as a lesseeFinance leases, which transfer to the Authority substantially all the risks and benefits incidental to ownership of the leased item, are capitalised at the inception of the lease at the fair value of the leased property or, if lower, at the present value of the minimum lease payments.
Lease payments are apportioned between the finance charges and reduction of the lease liability so as to achieve a constant rate of interest on the remaining balance of the liability.
Finance charges are reflected in profit or loss.Capitalised leased assets are depreciated over the shorter of the estimated useful life of the asset and the lease term, if there is no reasonable certainty that the Authority will obtain ownership by the end of the lease term.Operating lease payments are recognised as an expense in profit or loss on a straight line basis over the lease term.Authority as a lessorLease where the Authority does not transfer substantially all the risk and benefits of ownership of the asset are classified as operating leases.
The Authority leases out its properties as operating leases, thus generating rental income.

Initial direct costs incurred in negotiating operating lease are added to the carrying amount of the leased asset and recognised over the lease term on the same basis as rental income.
HOUSING AUTHORITY OF FIJINOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2017Loans and advances to customersLoans and advances to customers are carried at amortised cost, the Authority first assesses individually whether objective evidence of impairment exist individually for financial assets that are individually significant, or collectively for financial assets that are not individually significant.
If the Authority determines no objective evidence of impairment exists for an individually assessed financial asset, whether significant or not, it includes the asset in a group of financial assets with similar credit risk characteristics and collectively assess them for impairment.
Assets that are individually assessed for impairment and for which an impairment loss is, or continues to be, recognised are not included in a collective assessment of impairment.If there is objective evidence that an impairment loss has been incurred, the amount of the loss is measured as the difference between the asset’s carrying amount and the present value of estimated future cash flows (excluding future expected credit losses that have not yet been incurred).
The carrying amount of the asset is reduced through the allowance for impairment losses account and the amount of the loss is recognised in the statement of comprehensive income.

Interest income continues to be accrued on the reduced carrying amount based on the original effective interest rate of the asset.

Loans together with the associated allowance are written off when there is no realistic prospect of future recovery and all collateral has been realised or has been transferred to the Authority.
If, in a subsequent year the amount of the estimated impairment loss increases or decreases because of an event occurring after the impairment is recognised, the impairment loss is increased or reduced by adjusting the allowance for impairment losses account.

If in future, write-off is later recovered, the recovery is credited to the allowance for impairment losses.The present value of the estimated future cash flows is discounted at the financial asset’s original effective interest rate.
If a loan has a variable interest rate, the discount rate for measuring any impairment loss is the current effective interest rate.For the purpose of a collective evaluation of impairment, financial assets are grouped on the basis of the Authority’s internal credit grading system that considers credit risk characteristics such as asset type, industry, geographical location, collateral type, past due status and other relevant factors.Future cash flows on a group of financial assets that are collectively evaluated for impairment are estimated on the basis of historical loss experience for assets with credit risk characteristic similar to those in the group.
Historical loss experience is adjusted on the basis of current observance data to reflect the effects of current conditions that did not affect the years on which the historical loss experience is based and to remove the effects of condition in the historical period that do not exist currently.Held to maturity financial investmentsFor held to maturity investments the Authority assess individually whether there is objective evidence of impairment.
If there is objective evidence that an impairment loss has been incurred the amount of the loss is measured as the difference between the asset’s carrying amount and the present value of estimated future cash flows.

The carrying amount of the asset is reduced and the amount of the loss is recognised in the statement of comprehensive income.i)ii)c)The Authority assesses at each balance date whether there is any objective evidence that a financial asset or a group of financial assets is impaired.
A financial asset or a group of financial assets is deemed to be impaired, if, and only if, there is objective evidence of impairment as a result of one or more events that has occurred after the initial recognition of the asset (an incurred ‘loss event’) and that loss event has an impact on the estimated future cash flows of the financial asset or the group of financial assets that can be reliably estimated.
Evidence of impairment may include indications that the borrower or a group of borrowers are experiencing significant financial difficulties with default or delinquency in interest or in principal payments, the probability that they will enter bankruptcy or other financial reorganization and where observable data indicate that there is a measurable decrease in the estimated future cash flows, such as changes in arrears or economic conditions that correlate with defaults.Impairment of financial assetsd)The determination of whether an arrangement is, or contains a lease is based on the substance of the arrangement at inception date of whether the fulfilment of the arrangement is dependent on the use of a specific asset or assets or the arrangement conveys a right to use the asset.Leased assets1.4Summary of significant accounting policies continued Housing Authority Annual Report 201733Housing Authority Annual Report 201734HOUSING AUTHORITY OF FIJINOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2017d)Leased assets continuedInterest income and expenseFor all financial instruments measured at amortised cost, interest income or expense is recorded at the effective interest rate, which is the rate that exactly discounts the future cash payments or receipts through the expected life of the financial instrument or shorter period, where appropriate to the net carrying amount of the financial asset or financial liability.
The calculation takes into account all contractual terms of the financial instrument and includes any fees or incremental costs that are directly attributable to the instrument and are an integral part of the effective interest rate, but not future credit losses.
The carrying amount of the financial asset or financial liability is adjusted if the Authority revises its estimates of payments or receipts.Once the recorded value of a financial asset or a group of similar financial assets has been reduced due to impairment loss, interest income continues to be recognised using the original effective interest rate applied to the new carrying amount.i)Fee income and chargesThe Authority earns fees and charges from a diverse range of services to its customers.
The fee income is brought to account on an accrual basis.ii)Income from sale of land and housesRevenue relating to the sale of land and houses is brought to account at the time of the sale.iii)Rental IncomeRental income is accounted for on a straight line basis over the lease terms on ongoing leases and is recorded in the statement of comprehensive income.iv)Bad and doubtful debtsThe annual charge against profit for bad and doubtful doubts reflects new individual impairment, reversals of individual impairment no longer required and movements in the collective impairment.vi)Gain or loss on sale of property, plant and equipmentGain or loss on sale of property, plant and equipment is treated as operating income or expense.v)e)Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Authority and the revenue can be reliably measured.
The following specific recognition criteria must also be met before revenue is recognised.Recognition of income and expensesf)Cash and cash equivalents comprise cash at bank and in hand and short term deposits with an original maturity less than three months.
For the purposes of the Statement of Cash Flows cash and cash equivalents consist of cash and cash equivalents as defined above.Cash and cash equivalentsg)Property, plant and equipment is stated at cost or valuation less accumulated depreciation and accumulated impairment losses.

Such costs include the cost of replacing part of the plant and equipment when that cost is incurred, if the recognition criteria is met .
All other repair and maintenance costs are recognized in profit or loss as incurred.Property, plant and equipmentAuthority as a lesseeFinance leases, which transfer to the Authority substantially all the risks and benefits incidental to ownership of the leased item, are capitalised at the inception of the lease at the fair value of the leased property or, if lower, at the present value of the minimum lease payments.
Lease payments are apportioned between the finance charges and reduction of the lease liability so as to achieve a constant rate of interest on the remaining balance of the liability.
Finance charges are reflected in profit or loss.Capitalised leased assets are depreciated over the shorter of the estimated useful life of the asset and the lease term, if there is no reasonable certainty that the Authority will obtain ownership by the end of the lease term.Operating lease payments are recognised as an expense in profit or loss on a straight line basis over the lease term.Authority as a lessorLease where the Authority does not transfer substantially all the risk and benefits of ownership of the asset are classified as operating leases.
The Authority leases out its properties as operating leases, thus generating rental income.

Initial direct costs incurred in negotiating operating lease are added to the carrying amount of the leased asset and recognised over the lease term on the same basis as rental income.
HOUSING AUTHORITY OF FIJINOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2017Loans and advances to customersLoans and advances to customers are carried at amortised cost, the Authority first assesses individually whether objective evidence of impairment exist individually for financial assets that are individually significant, or collectively for financial assets that are not individually significant.
If the Authority determines no objective evidence of impairment exists for an individually assessed financial asset, whether significant or not, it includes the asset in a group of financial assets with similar credit risk characteristics and collectively assess them for impairment.
Assets that are individually assessed for impairment and for which an impairment loss is, or continues to be, recognised are not included in a collective assessment of impairment.If there is objective evidence that an impairment loss has been incurred, the amount of the loss is measured as the difference between the asset’s carrying amount and the present value of estimated future cash flows (excluding future expected credit losses that have not yet been incurred).
The carrying amount of the asset is reduced through the allowance for impairment losses account and the amount of the loss is recognised in the statement of comprehensive income.

Interest income continues to be accrued on the reduced carrying amount based on the original effective interest rate of the asset.

Loans together with the associated allowance are written off when there is no realistic prospect of future recovery and all collateral has been realised or has been transferred to the Authority.
If, in a subsequent year the amount of the estimated impairment loss increases or decreases because of an event occurring after the impairment is recognised, the impairment loss is increased or reduced by adjusting the allowance for impairment losses account.

If in future, write-off is later recovered, the recovery is credited to the allowance for impairment losses.The present value of the estimated future cash flows is discounted at the financial asset’s original effective interest rate.
If a loan has a variable interest rate, the discount rate for measuring any impairment loss is the current effective interest rate.For the purpose of a collective evaluation of impairment, financial assets are grouped on the basis of the Authority’s internal credit grading system that considers credit risk characteristics such as asset type, industry, geographical location, collateral type, past due status and other relevant factors.Future cash flows on a group of financial assets that are collectively evaluated for impairment are estimated on the basis of historical loss experience for assets with credit risk characteristic similar to those in the group.
Historical loss experience is adjusted on the basis of current observance data to reflect the effects of current conditions that did not affect the years on which the historical loss experience is based and to remove the effects of condition in the historical period that do not exist currently.Held to maturity financial investmentsFor held to maturity investments the Authority assess individually whether there is objective evidence of impairment.
If there is objective evidence that an impairment loss has been incurred the amount of the loss is measured as the difference between the asset’s carrying amount and the present value of estimated future cash flows.

The carrying amount of the asset is reduced and the amount of the loss is recognised in the statement of comprehensive income.i)ii)c)The Authority assesses at each balance date whether there is any objective evidence that a financial asset or a group of financial assets is impaired.
A financial asset or a group of financial assets is deemed to be impaired, if, and only if, there is objective evidence of impairment as a result of one or more events that has occurred after the initial recognition of the asset (an incurred ‘loss event’) and that loss event has an impact on the estimated future cash flows of the financial asset or the group of financial assets that can be reliably estimated.
Evidence of impairment may include indications that the borrower or a group of borrowers are experiencing significant financial difficulties with default or delinquency in interest or in principal payments, the probability that they will enter bankruptcy or other financial reorganization and where observable data indicate that there is a measurable decrease in the estimated future cash flows, such as changes in arrears or economic conditions that correlate with defaults.Impairment of financial assetsd)The determination of whether an arrangement is, or contains a lease is based on the substance of the arrangement at inception date of whether the fulfilment of the arrangement is dependent on the use of a specific asset or assets or the arrangement conveys a right to use the asset.Leased assets1.4Summary of significant accounting policies continued Housing Authority Annual Report 201735Housing Authority Annual Report 201736HOUSING AUTHORITY OF FIJINOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2017Computer Software20%Land and housesStock, comprising land and houses is carried at the lower of cost and net realisable value.
At year end, the carrying value of unsold lots and developed properties are assessed and a provision for write-down is created where the net realisable value is determined to be less than carrying value.Developed and sub-divided lots include the cost of the land and capitalised expenses directly associated with bringing the stock to its existing condition and location.Work in progressWork-in-progress is valued at the lower of cost and net realisable value.
Cost includes capitalised administrative costs which are incurred as a result of land development and house construction and development interest costs on the funds used to finance the development up to the time of completion.Intangible assetsIntangible assets include computer software that does not form an integral part of the hardware.

Intangible assets acquired separately are measured on initial recognition at cost.
Following initial recognition, intangible assets are carried at cost less any accumulated amortisation and any accumulated impairment losses.The useful lives of intangible assets are assessed to be finite.

Intangible assets with finite lives are amortised over the useful economic life.

The amortisation period and the amortisation method for an intangible asset with a finite useful life are reviewed at least at each financial year end.
The amortisation expense on intangible assets with finite lives is recognised in the statement of comprehensive income in the expense category consistent with the function of the intangible asset.Impairment of non financial assetsThe Authority assesses at each reporting date or more frequently if events or changes in circumstances indicate that the carrying value may be impaired, whether there is an indication that a non financial asset may be impaired.
If any such indication exists, or when annual impairment testing for an asset is required, the Authority makes an estimate of the asset’s recoverable amount.
When the carrying amount of an asset exceeds its recoverable amount, the asst is considered impaired and is written down to its recoverable amount.An asset’s recoverable amount is the higher of an asset’s or crash generating unit’s fair value less costs to sell and its value in use and is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or group of assets.
In assessing value in use, the estimated future cash flows are discounted to their present value.

In determining fair value less costs to sell, an appropriate value model is used.For impaired assets an assessment is made at each reporting date as to whether there is any indication that previously recognised impairment losses may no longer exist or may have decreased.

If such indication exists, the Authority makes an estimate of the recoverable amount.
A previously recognised impairment loss is reversed only if there has been a change in the estimates used to determine the asset’s recoverable amount since the last impairment loss was recognised.

If that is the case, the carrying amount of the asset is increased to its recoverable amount.

The increased amount cannot exceed the carrying amount that would have been determined, net of depreciation, had no impairment loss been recognised for the asset in prior years.
Such reversal is recognised in profit or loss.Amortisation is calculated using the straight line method to write down the cost of intangible assets to their residual values over their estimated useful lives as follows:j)k)1.4Summary of significant accounting policies continuedl)Provisions are recognised when the Authority has a present obligation as a result of a past event, and it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation.Provisionsm)The employee benefit liability relates to amounts expected to be paid to employees for annual leave, sick leave and long service leave.
Current employee remuneration rates are used to calculate these payments estimated to be payable to employees at balance date on the basis of statutory and contractual requirements.Employee benefit liabilityn)Debt issued and borrowed funds relates to loan from EXIM Bank of China for various projects and bonds with various financial institutions and banks.
Details of these are provided in note 13.Debt issued and borrowed fundso)InventoriesHOUSING AUTHORITY OF FIJINOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2017g)Depreciation is calculated on a straight line basis over the useful life of the asset as follows:Property, plant and equipment continuedh)Land held for future development represents freehold and leasehold land lots situated at various locations and are maintained for future developments.
These are subsequently transferred to work in progress as development work commences on these properties.
The land held for future development are recorded at cost.The corporate target and strategic direction for the Authority is to produce 1,000 lots per annum therefore four different land parcel purchased during year in the following areas: Davuilevu - Nasinu, Covata – Labasa, Tulalevu – Sigatoka and Veikoba – Nasinu.Land held for future development1.4Summary of significant accounting policies continuedBuildings1.5% - 3.5%Plant and equipment20% - 33.33 %Motor vehicles20%Computer equipment20%Furniture and fittings10%An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are expected from its use or disposal.
Any gain or loss arising on derecognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in profit or loss in the year the asset is disposed.The asset’s residual values, useful lives and methods of depreciation are reviewed, and adjusted if appropriate, at each financial year end.Revaluation of property, plant and equipmentThe Authority revalues the buildings, staff houses and shops recorded under property, plant and equipment at least every three years or with sufficient regularity to ensure that the carrying amount of each asset in the class does not differ materially from its fair value at reporting date.
Revaluations are performed by independent professionally qualified and registered valuers.Non-specialized assets with short useful lives are measured at depreciated historical cost, as a surrogate for fair value.
This is because any difference between fair value and depreciated historical cost is unlikely to be material.When revaluing non-current assets by reference to current prices for assets newer than those being revalued (adjusted to reflect the present condition of the assets), the gross amount and the related accumulated depreciation are separately restated.For other assets, any balances of accumulated depreciation at the revaluation date in respect of those assets are credited to the asset accounts to which they relate.
The net asset accounts are then increased or decreased by the revaluation increments or decrements.Revaluation increments are credited directly to the asset revaluation reserve, except that, to the extent that an increment reverses a revaluation decrement in respect of that class of asset previously recognized as an expense in the net result, the increment is recognized immediately as revenue in the net result.Revaluation decrements are recognized immediately as expenses in the net result, except that, to the extent that a credit balance exists in the asset revaluation reserve in respect of the same class of assets, they are debited directly to the asset revaluation reserve.Investment propertiesInvestment properties are measured initially at cost, including transaction costs.
Subsequent to initial recognition, investment properties are stated at fair value, which reflects market conditions at the reporting date.

Gains or losses arising from changes in the fair values of investment properties are included in the income statement in the period in which they arise.
Fair values are evaluated every three years by an accredited internal valuer, applying a valuation model recommended by the International Valuation Standards Committee.i) Housing Authority Annual Report 201735Housing Authority Annual Report 201736HOUSING AUTHORITY OF FIJINOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2017Computer Software20%Land and housesStock, comprising land and houses is carried at the lower of cost and net realisable value.
At year end, the carrying value of unsold lots and developed properties are assessed and a provision for write-down is created where the net realisable value is determined to be less than carrying value.Developed and sub-divided lots include the cost of the land and capitalised expenses directly associated with bringing the stock to its existing condition and location.Work in progressWork-in-progress is valued at the lower of cost and net realisable value.
Cost includes capitalised administrative costs which are incurred as a result of land development and house construction and development interest costs on the funds used to finance the development up to the time of completion.Intangible assetsIntangible assets include computer software that does not form an integral part of the hardware.

Intangible assets acquired separately are measured on initial recognition at cost.
Following initial recognition, intangible assets are carried at cost less any accumulated amortisation and any accumulated impairment losses.The useful lives of intangible assets are assessed to be finite.

Intangible assets with finite lives are amortised over the useful economic life.

The amortisation period and the amortisation method for an intangible asset with a finite useful life are reviewed at least at each financial year end.
The amortisation expense on intangible assets with finite lives is recognised in the statement of comprehensive income in the expense category consistent with the function of the intangible asset.Impairment of non financial assetsThe Authority assesses at each reporting date or more frequently if events or changes in circumstances indicate that the carrying value may be impaired, whether there is an indication that a non financial asset may be impaired.
If any such indication exists, or when annual impairment testing for an asset is required, the Authority makes an estimate of the asset’s recoverable amount.
When the carrying amount of an asset exceeds its recoverable amount, the asst is considered impaired and is written down to its recoverable amount.An asset’s recoverable amount is the higher of an asset’s or crash generating unit’s fair value less costs to sell and its value in use and is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or group of assets.
In assessing value in use, the estimated future cash flows are discounted to their present value.

In determining fair value less costs to sell, an appropriate value model is used.For impaired assets an assessment is made at each reporting date as to whether there is any indication that previously recognised impairment losses may no longer exist or may have decreased.

If such indication exists, the Authority makes an estimate of the recoverable amount.
A previously recognised impairment loss is reversed only if there has been a change in the estimates used to determine the asset’s recoverable amount since the last impairment loss was recognised.

If that is the case, the carrying amount of the asset is increased to its recoverable amount.

The increased amount cannot exceed the carrying amount that would have been determined, net of depreciation, had no impairment loss been recognised for the asset in prior years.
Such reversal is recognised in profit or loss.Amortisation is calculated using the straight line method to write down the cost of intangible assets to their residual values over their estimated useful lives as follows:j)k)1.4Summary of significant accounting policies continuedl)Provisions are recognised when the Authority has a present obligation as a result of a past event, and it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation.Provisionsm)The employee benefit liability relates to amounts expected to be paid to employees for annual leave, sick leave and long service leave.
Current employee remuneration rates are used to calculate these payments estimated to be payable to employees at balance date on the basis of statutory and contractual requirements.Employee benefit liabilityn)Debt issued and borrowed funds relates to loan from EXIM Bank of China for various projects and bonds with various financial institutions and banks.
Details of these are provided in note 13.Debt issued and borrowed fundso)InventoriesHOUSING AUTHORITY OF FIJINOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2017g)Depreciation is calculated on a straight line basis over the useful life of the asset as follows:Property, plant and equipment continuedh)Land held for future development represents freehold and leasehold land lots situated at various locations and are maintained for future developments.
These are subsequently transferred to work in progress as development work commences on these properties.
The land held for future development are recorded at cost.The corporate target and strategic direction for the Authority is to produce 1,000 lots per annum therefore four different land parcel purchased during year in the following areas: Davuilevu - Nasinu, Covata – Labasa, Tulalevu – Sigatoka and Veikoba – Nasinu.Land held for future development1.4Summary of significant accounting policies continuedBuildings1.5% - 3.5%Plant and equipment20% - 33.33 %Motor vehicles20%Computer equipment20%Furniture and fittings10%An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are expected from its use or disposal.
Any gain or loss arising on derecognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in profit or loss in the year the asset is disposed.The asset’s residual values, useful lives and methods of depreciation are reviewed, and adjusted if appropriate, at each financial year end.Revaluation of property, plant and equipmentThe Authority revalues the buildings, staff houses and shops recorded under property, plant and equipment at least every three years or with sufficient regularity to ensure that the carrying amount of each asset in the class does not differ materially from its fair value at reporting date.
Revaluations are performed by independent professionally qualified and registered valuers.Non-specialized assets with short useful lives are measured at depreciated historical cost, as a surrogate for fair value.
This is because any difference between fair value and depreciated historical cost is unlikely to be material.When revaluing non-current assets by reference to current prices for assets newer than those being revalued (adjusted to reflect the present condition of the assets), the gross amount and the related accumulated depreciation are separately restated.For other assets, any balances of accumulated depreciation at the revaluation date in respect of those assets are credited to the asset accounts to which they relate.
The net asset accounts are then increased or decreased by the revaluation increments or decrements.Revaluation increments are credited directly to the asset revaluation reserve, except that, to the extent that an increment reverses a revaluation decrement in respect of that class of asset previously recognized as an expense in the net result, the increment is recognized immediately as revenue in the net result.Revaluation decrements are recognized immediately as expenses in the net result, except that, to the extent that a credit balance exists in the asset revaluation reserve in respect of the same class of assets, they are debited directly to the asset revaluation reserve.Investment propertiesInvestment properties are measured initially at cost, including transaction costs.
Subsequent to initial recognition, investment properties are stated at fair value, which reflects market conditions at the reporting date.

Gains or losses arising from changes in the fair values of investment properties are included in the income statement in the period in which they arise.
Fair values are evaluated every three years by an accredited internal valuer, applying a valuation model recommended by the International Valuation Standards Committee.i) Housing Authority Annual Report 201737Housing Authority Annual Report 201738HOUSING AUTHORITY OF FIJINOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 20172.
INCOME2017$’0002016$’0002.1 Interest IncomeInvestment Securities 1,521 1,809 Loans and Advances 5,875 5,450 7,396 7,259 2.2 Other operating incomeFees and charges 3,935 4,483 Rent 29 63 Other income 765 310 Sale of land and houses 5,078 13,829 9,807 18,685 3.
EXPENSES2017$’0002016$’0003.1 Interest ExpenseBonds 3,420 3,566 Long Term Loans 1,059 996 4,479 4,562 3.2 Personnel ExpenseSalaries and wages 3,724 3,688 Employee entitlements 219 345 FNPF contribution 488 504 Other 301 339 4,732 4,876 3.3 Other ExpenseAuditor's remuneration - audit fees 20 20 Accounting services 10 10 Amortisation - leasehold land 16 16 Repairs and maintenance 69 72 Stock write-down 44 - Other expenses 2,138 2,083 2,297 2,201 4.
CASH AND CASH EQUIVALENTS2017$’0002016$’000Cash on hand 1 1 Cash at bank1,822 2,322 1,823 2,323 q)The Government provides an annual grant to the Authority to assist qualifying customers in meeting their mortgage repayments.

This grant is in the form of a one off rebate to a customer’s loan balance.

Any grant that is not utilised at year end is shown as a liability until such time it is applied.
There are certain criteria for customers to comply with to be eligible for financial assistance under the plan.Government grant liabilityr)Liabilities are recognised for amounts to be paid in the future for goods and services rendered.

Creditors and accruals are stated at cost.Trade and other payablesp)The Authority is exempt from income tax under Section 26 of the Housing Act, Cap.
267.Income taxHOUSING AUTHORITY OF FIJINOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2017s)This relates to contributions received from the Government in prior years to assist in the operations of the Authority.Government grantt)Where necessary, amounts relating to prior years have been re-classified/adjusted to facilitate comparison and achieve consistency in disclosure with current financial year amounts.
Explanations are provided for significant restatements where applicable.Comparativesu)Where necessary, amounts relating to prior years have been re-classified/adjusted to facilitate comparison and achieve consistency in disclosure with current financial year amounts.
Explanations are provided for significant restatements where applicable.Segment information1.4Summary of significant accounting policies continuedIndustry segmentThe Authority operates predominantly in the housing industry to provide affordable housing through development of land and houses for sale and the financing of these properties.Geographical segmentThe Authority operates predominantly in Fiji and is therefore one geographical area for reporting purposes.a)b)1.5Amendments to standards and annual improvements effective from 1 January 2017A number of amendments to standards and annual improvements are effective for the first time for periods beginning on (or after) 1 January 2017.
None of the amendments have a material effect on the Authority’s annual financial statements.

1.6Standard issued but not yet effectiveA number of standards and interpretations have been issued by the IASB, but are not yet effective, up to the date of issuance of the Authority’s financial statements.

The Authority intends to adopt these standards, if applicable, when they become effective.
Amendments which are relevant to the entity are summarised below: These amendments are effective from 1 January 2017 and aim to improve information about an entity’s debt, including movements in that debt.
Disclosures are required to enable users of financial statements to evaluate changes in liabilities arising from financing activities, including both changes arising from cash flows and non-cash changes.IAS 7: Amendment – Disclosure InitiativeReferenceSummaryApplication date of standard and the AuthorityIFRS 9 Financial InstrumentsNew requirements on recognition of expected credit losses.
1 January 2018IFRS 15 Revenue from Contracts with CustomersRequires revenue to be recognised on satisfaction of the performance obligations specified under contracts.

1 January 2018IFRS 16 LeasesRequires operating leases to berecognised on balance sheet.1 January 2019IFRIC Interpretation 22: Foreign Currency Transactions and Advance ConsiderationAddress how to determine the date of transaction for the purpose of determinig the spot exchange rate.
1 January 2018 Housing Authority Annual Report 201737Housing Authority Annual Report 201738HOUSING AUTHORITY OF FIJINOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 20172.

INCOME2017$’0002016$’0002.1 Interest IncomeInvestment Securities 1,521 1,809 Loans and Advances 5,875 5,450 7,396 7,259 2.2 Other operating incomeFees and charges 3,935 4,483 Rent 29 63 Other income 765 310 Sale of land and houses 5,078 13,829 9,807 18,685 3.
EXPENSES2017$’0002016$’0003.1 Interest ExpenseBonds 3,420 3,566 Long Term Loans 1,059 996 4,479 4,562 3.2 Personnel ExpenseSalaries and wages 3,724 3,688 Employee entitlements 219 345 FNPF contribution 488 504 Other 301 339 4,732 4,876 3.3 Other ExpenseAuditor's remuneration - audit fees 20 20 Accounting services 10 10 Amortisation - leasehold land 16 16 Repairs and maintenance 69 72 Stock write-down 44 - Other expenses 2,138 2,083 2,297 2,201 4.
CASH AND CASH EQUIVALENTS2017$’0002016$’000Cash on hand 1 1 Cash at bank1,822 2,322 1,823 2,323 q)The Government provides an annual grant to the Authority to assist qualifying customers in meeting their mortgage repayments.

This grant is in the form of a one off rebate to a customer’s loan balance.

Any grant that is not utilised at year end is shown as a liability until such time it is applied.
There are certain criteria for customers to comply with to be eligible for financial assistance under the plan.Government grant liabilityr)Liabilities are recognised for amounts to be paid in the future for goods and services rendered.

Creditors and accruals are stated at cost.Trade and other payablesp)The Authority is exempt from income tax under Section 26 of the Housing Act, Cap.
267.Income taxHOUSING AUTHORITY OF FIJINOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2017s)This relates to contributions received from the Government in prior years to assist in the operations of the Authority.Government grantt)Where necessary, amounts relating to prior years have been re-classified/adjusted to facilitate comparison and achieve consistency in disclosure with current financial year amounts.
Explanations are provided for significant restatements where applicable.Comparativesu)Where necessary, amounts relating to prior years have been re-classified/adjusted to facilitate comparison and achieve consistency in disclosure with current financial year amounts.
Explanations are provided for significant restatements where applicable.Segment information1.4Summary of significant accounting policies continuedIndustry segmentThe Authority operates predominantly in the housing industry to provide affordable housing through development of land and houses for sale and the financing of these properties.Geographical segmentThe Authority operates predominantly in Fiji and is therefore one geographical area for reporting purposes.a)b)1.5Amendments to standards and annual improvements effective from 1 January 2017A number of amendments to standards and annual improvements are effective for the first time for periods beginning on (or after) 1 January 2017.
None of the amendments have a material effect on the Authority’s annual financial statements.

1.6Standard issued but not yet effectiveA number of standards and interpretations have been issued by the IASB, but are not yet effective, up to the date of issuance of the Authority’s financial statements.

The Authority intends to adopt these standards, if applicable, when they become effective.
Amendments which are relevant to the entity are summarised below: These amendments are effective from 1 January 2017 and aim to improve information about an entity’s debt, including movements in that debt.
Disclosures are required to enable users of financial statements to evaluate changes in liabilities arising from financing activities, including both changes arising from cash flows and non-cash changes.IAS 7: Amendment – Disclosure InitiativeReferenceSummaryApplication date of standard and the AuthorityIFRS 9 Financial InstrumentsNew requirements on recognition of expected credit losses.
1 January 2018IFRS 15 Revenue from Contracts with CustomersRequires revenue to be recognised on satisfaction of the performance obligations specified under contracts.

1 January 2018IFRS 16 LeasesRequires operating leases to berecognised on balance sheet.1 January 2019IFRIC Interpretation 22: Foreign Currency Transactions and Advance ConsiderationAddress how to determine the date of transaction for the purpose of determinig the spot exchange rate.
1 January 2018 Housing Authority Annual Report 201739Housing Authority Annual Report 201740HOUSING AUTHORITY OF FIJINOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 20177.

INVENTORIES2017$’0002016$’000Developed lots 7,782 5,297 Less: provision for developed lots write-down (202) (254) 7,580 5,043 Unsold properties 392 367 Less: provision for unsold properties write-down (178) (154) 214 213 Development work-in-progress 30,610 25,763 Total inventories 38,404 31,019 6.
LOANS AND ADVANCES TO CUSTOMERS continuedMortgage$’000Village$’000Total$’000At 1 January 20161,5083131,821Charge for the year103(305)(202)Amounts written off(923)-(923)At 31 December 20166888696Individual Impairment6888696Collective Impairment---6888696Gross amount of loans, individually determined to be impaired, before deducting any individual or collective assessed impairment allowance.11,63064912,279The following is a reconciliation of the individual and collective allowances for impairment losses on loans.2017Individual Impairment$’000Collective Impairment$’000Total$’000At 1 January 2017 696- 696Charge for the year 371- 371 Amounts written off (350)- (350)At 31 December 2017717-7172016Individual Impairment$’000Collective Impairment$’000Total$’000At 1 January 2016 1,817 4 1,821 Charge for the year (198) (4) (202)Amounts written off (923) - (923)At 31 December 2016696 -696HOUSING AUTHORITY OF FIJINOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 20175.
HELD - TO - MATURITY INVESTMENTS2017$’0002016$’000Term deposits28,400 41,950Term deposits are placed with financial institutions in Fiji at terms of 6 months to 12 months.

The interest rate of these deposits range from 3.60% to 4.60%.6.
LOANS AND ADVANCES2017$’0002016$’000a) Current AssetMortgage Loans 12,516 12,252 Village Scheme Loan 542 242 13,058 12,494 Less: Interest and fees suspended 1,350 1,363 Less: Allowance for impairment losses 335 172 1,685 1,535 11,373 10,959b) Non-Current AssetMortgage Loans 78,001 74,792 Village Scheme Loan 2,432 3,278 80,433 78,070 Less: Interest and fees suspended 1,391 1,628 Less: Allowance for impairment losses 382 524 1,773 2,152 78,660 75,918 Total Loans and Advances 90,033 86,877Impairment allowances for loans by class is as follows:The Authority holds securities for these impaired loans.
The difference between the assessed security values and the loan balance of identified impaired accounts have been included in the allowance for impairment.Mortgage$’000Village$’000Total$’000At 1 January 2017688 8 696Charge/(utlisation) for the year270 101 371 Amounts written off(350) - (350)At 31 December 2017608109717Individual Impairment608109717Collective Impairment---608109717Gross amount of loans, individually determined to be impaired, before deducting any individual or collective assessed impairment allowance.7,9194358,353 Housing Authority Annual Report 201739Housing Authority Annual Report 201740HOUSING AUTHORITY OF FIJINOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 20177.
INVENTORIES2017$’0002016$’000Developed lots 7,782 5,297 Less: provision for developed lots write-down (202) (254) 7,580 5,043 Unsold properties 392 367 Less: provision for unsold properties write-down (178) (154) 214 213 Development work-in-progress 30,610 25,763 Total inventories 38,404 31,019 6.
LOANS AND ADVANCES TO CUSTOMERS continuedMortgage$’000Village$’000Total$’000At 1 January 20161,5083131,821Charge for the year103(305)(202)Amounts written off(923)-(923)At 31 December 20166888696Individual Impairment6888696Collective Impairment---6888696Gross amount of loans, individually determined to be impaired, before deducting any individual or collective assessed impairment allowance.11,63064912,279The following is a reconciliation of the individual and collective allowances for impairment losses on loans.2017Individual Impairment$’000Collective Impairment$’000Total$’000At 1 January 2017 696- 696Charge for the year 371- 371 Amounts written off (350)- (350)At 31 December 2017717-7172016Individual Impairment$’000Collective Impairment$’000Total$’000At 1 January 2016 1,817 4 1,821 Charge for the year (198) (4) (202)Amounts written off (923) - (923)At 31 December 2016696 -696HOUSING AUTHORITY OF FIJINOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 20175.
HELD - TO - MATURITY INVESTMENTS2017$’0002016$’000Term deposits28,400 41,950Term deposits are placed with financial institutions in Fiji at terms of 6 months to 12 months.

The interest rate of these deposits range from 3.60% to 4.60%.6.
LOANS AND ADVANCES2017$’0002016$’000a) Current AssetMortgage Loans 12,516 12,252 Village Scheme Loan 542 242 13,058 12,494 Less: Interest and fees suspended 1,350 1,363 Less: Allowance for impairment losses 335 172 1,685 1,535 11,373 10,959b) Non-Current AssetMortgage Loans 78,001 74,792 Village Scheme Loan 2,432 3,278 80,433 78,070 Less: Interest and fees suspended 1,391 1,628 Less: Allowance for impairment losses 382 524 1,773 2,152 78,660 75,918 Total Loans and Advances 90,033 86,877Impairment allowances for loans by class is as follows:The Authority holds securities for these impaired loans.
The difference between the assessed security values and the loan balance of identified impaired accounts have been included in the allowance for impairment.Mortgage$’000Village$’000Total$’000At 1 January 2017688 8 696Charge/(utlisation) for the year270 101 371 Amounts written off(350) - (350)At 31 December 2017608109717Individual Impairment608109717Collective Impairment---608109717Gross amount of loans, individually determined to be impaired, before deducting any individual or collective assessed impairment allowance.7,9194358,353 Housing Authority Annual Report 201741Housing Authority Annual Report 201742HOUSING AUTHORITY OF FIJINOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 20179.
PROPERTY, PLANT AND EQUIPMENT continued2017$’0002016$’000Staff houses and shopsValuation:At 1 January 406 406 Ajustment on revaluation`(64)Revaluation 154 - At 31 December 496406 Depreciation and impairment:At 1 January 76 65 Depreciation charge for the year 11 11 Reversal of depreciation on revaluation (64)At 31 December 23 76 Net written down value - staff houses and shops473330Motor VehiclesCost:At 1 January 1,094 1,016 Additions 215 106 Disposals (315) (28)At 31 December 994 1,094 Depreciation and impairment:At 1 January 896 821 Depreciation charge for the year 100 103 Disposals (315) (28)At 31 December 681 896 Net written down value - motor vehicles313198Computer EquipmentCost:At 1 January 1,326 2,606 Additions 60 1 Disposals (55) (1,281)At 31 December 1,331 1,326 Depreciation and impairment:At 1 January 1,240 2,396 Depreciation charge for the year 57 122 Disposals (55) (1,278)At 31 December 1,242 1,240 Net written down value - motor vehicles8986HOUSING AUTHORITY OF FIJINOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 20178.
LAND HELD FOR FUTURE DEVELOPMENT2017$’0002016$’000Freehold land- at deemed cost 202 202 Leasehold land – at cost 3,830 4,336 Less: provision for amortisation of leasehold land (770) (783)Total land held for future development 3,262 3,755 9.
PROPERTY, PLANT AND EQUIPMENT2017$’0002016$’000PropertyValuation:At 1 January 7,462 7,464 Additions 47 - Disposals (5) (2)Ajustment on revaluation(959)-Revaluation2,800 - At 31 December 9,345 7,462 Depreciation and impairment:At 1 January 814 642 Depreciation charge for the year 239 173 Disposals (5) (1)Reversal of depreciation on revaluation (959)At 31 December 89 814 Net written down value - properties 9,256 6,648 Furniture and fittingsCost:At 1 January 2,278 2,349 Additions 165 23 Disposals (62) (94)At 31 December 2,381 2,278 Depreciation and impairment:At 1 January 2,117 2,101 Depreciation charge for the year 102 110 Disposals (62) (94)At 31 December 2,157 2,117 Net written down value - furniture and fittings224161 Housing Authority Annual Report 201741Housing Authority Annual Report 201742HOUSING AUTHORITY OF FIJINOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 20179.
PROPERTY, PLANT AND EQUIPMENT continued2017$’0002016$’000Staff houses and shopsValuation:At 1 January 406 406 Ajustment on revaluation`(64)Revaluation 154 - At 31 December 496406 Depreciation and impairment:At 1 January 76 65 Depreciation charge for the year 11 11 Reversal of depreciation on revaluation (64)At 31 December 23 76 Net written down value - staff houses and shops473330Motor VehiclesCost:At 1 January 1,094 1,016 Additions 215 106 Disposals (315) (28)At 31 December 994 1,094 Depreciation and impairment:At 1 January 896 821 Depreciation charge for the year 100 103 Disposals (315) (28)At 31 December 681 896 Net written down value - motor vehicles313198Computer EquipmentCost:At 1 January 1,326 2,606 Additions 60 1 Disposals (55) (1,281)At 31 December 1,331 1,326 Depreciation and impairment:At 1 January 1,240 2,396 Depreciation charge for the year 57 122 Disposals (55) (1,278)At 31 December 1,242 1,240 Net written down value - motor vehicles8986HOUSING AUTHORITY OF FIJINOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 20178.
LAND HELD FOR FUTURE DEVELOPMENT2017$’0002016$’000Freehold land- at deemed cost 202 202 Leasehold land – at cost 3,830 4,336 Less: provision for amortisation of leasehold land (770) (783)Total land held for future development 3,262 3,755 9.
PROPERTY, PLANT AND EQUIPMENT2017$’0002016$’000PropertyValuation:At 1 January 7,462 7,464 Additions 47 - Disposals (5) (2)Ajustment on revaluation(959)-Revaluation2,800 - At 31 December 9,345 7,462 Depreciation and impairment:At 1 January 814 642 Depreciation charge for the year 239 173 Disposals (5) (1)Reversal of depreciation on revaluation (959)At 31 December 89 814 Net written down value - properties 9,256 6,648 Furniture and fittingsCost:At 1 January 2,278 2,349 Additions 165 23 Disposals (62) (94)At 31 December 2,381 2,278 Depreciation and impairment:At 1 January 2,117 2,101 Depreciation charge for the year 102 110 Disposals (62) (94)At 31 December 2,157 2,117 Net written down value - furniture and fittings224161 Housing Authority Annual Report 201743Housing Authority Annual Report 201744HOUSING AUTHORITY OF FIJINOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 201710.
INVESTMENT PROPERTY2017$’0002016$’000Depreciation and impairment:At 1 January -994 Disposals- (994)At 31 December -- Rental income derived from investment properties -63Direct operating expenses (including repairs and maintenance)-(5)Finance costs--Net profit arising from investment properties-58The Authority has no restrictions on the realisability of its investment property and contractual obligations to either purchase, construct or develop investment property or for repairs, maintenance and enhancements.
The investment property was sold in year 2016.11.

INTANGIBLE ASSETS2017$’0002016$’000CostAt 1 January3,034 3,032 Additions152At 31 December 3,0493,034Depreciation and impairment:At 1 January2,6282,369Amortisation charge for the year260259At 31 December 2,8882,628Net written down value - Intangible assets161406In July 2018, an independent valuation was carried out by registered valuer, Professional Valuations Limited.
Based on a confirmation received from the valuer that had the valuation was performed in December 2017, the values would have been similar to the values determined in July 2018 valuation, Authority has taken up the entries in the books as at 31 December 2017 based on July 2018 valuation performed.

Revaluations are performed by external independent valuer to assess the carrying value of the properties.
The Directors work closely with the external valuer to establish the appropriate valuation techniques and inputs to the valuation model.
The valuation methodology adopted by the valuer was Summation Method and Sale Comparison Methods.The excess market value over the book value of $2,954,000 has been recorded as revaluation surplus to land and buildings in the financial statements for the year ended 31 December 2017 based on management and directors assessment of fair values and taking into consideration the recent valuations by the independent registered valuer.Furthermore, revaluation surplus amounting to $2,954,000 has been recorded in other comphensive income for the year.HOUSING AUTHORITY OF FIJINOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 20179.
PROPERTY, PLANT AND EQUIPMENT continued2017$’0002016$’000OthersCost:At 1 January 7070At 31 December7070Depreciation and impairment:At 1 January 2625Depreciation charge for the year11At 31 December 2726Net written down value - Others4344Work in progressCostAt 1 January 4848At 31 December 4848Net written down value - work in progress4848Net written down value - total10,4467,515TotalCost/Valuation:At 1 January 12,686 13,961 Additions 487 130 Disposals/adjustments (1,460) (1,405)Revaluation 2,954 - At 31 December 14,667 12,686 Depreciation and impairment:At 1 January 5,171 6,052 Depreciation charge for the year 511 520 Disposals (437) (1,401)Reversal of depreciation on revaluation (1,023) - At 31 December 4,222 5,171 Net written down value - total 10,446 7,515 Housing Authority Annual Report 201743Housing Authority Annual Report 201744HOUSING AUTHORITY OF FIJINOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 201710.
INVESTMENT PROPERTY2017$’0002016$’000Depreciation and impairment:At 1 January -994 Disposals- (994)At 31 December -- Rental income derived from investment properties -63Direct operating expenses (including repairs and maintenance)-(5)Finance costs--Net profit arising from investment properties-58The Authority has no restrictions on the realisability of its investment property and contractual obligations to either purchase, construct or develop investment property or for repairs, maintenance and enhancements.
The investment property was sold in year 2016.11.

INTANGIBLE ASSETS2017$’0002016$’000CostAt 1 January3,034 3,032 Additions152At 31 December 3,0493,034Depreciation and impairment:At 1 January2,6282,369Amortisation charge for the year260259At 31 December 2,8882,628Net written down value - Intangible assets161406In July 2018, an independent valuation was carried out by registered valuer, Professional Valuations Limited.
Based on a confirmation received from the valuer that had the valuation was performed in December 2017, the values would have been similar to the values determined in July 2018 valuation, Authority has taken up the entries in the books as at 31 December 2017 based on July 2018 valuation performed.

Revaluations are performed by external independent valuer to assess the carrying value of the properties.
The Directors work closely with the external valuer to establish the appropriate valuation techniques and inputs to the valuation model.
The valuation methodology adopted by the valuer was Summation Method and Sale Comparison Methods.The excess market value over the book value of $2,954,000 has been recorded as revaluation surplus to land and buildings in the financial statements for the year ended 31 December 2017 based on management and directors assessment of fair values and taking into consideration the recent valuations by the independent registered valuer.Furthermore, revaluation surplus amounting to $2,954,000 has been recorded in other comphensive income for the year.HOUSING AUTHORITY OF FIJINOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 20179.
PROPERTY, PLANT AND EQUIPMENT continued2017$’0002016$’000OthersCost:At 1 January 7070At 31 December7070Depreciation and impairment:At 1 January 2625Depreciation charge for the year11At 31 December 2726Net written down value - Others4344Work in progressCostAt 1 January 4848At 31 December 4848Net written down value - work in progress4848Net written down value - total10,4467,515TotalCost/Valuation:At 1 January 12,686 13,961 Additions 487 130 Disposals/adjustments (1,460) (1,405)Revaluation 2,954 - At 31 December 14,667 12,686 Depreciation and impairment:At 1 January 5,171 6,052 Depreciation charge for the year 511 520 Disposals (437) (1,401)Reversal of depreciation on revaluation (1,023) - At 31 December 4,222 5,171 Net written down value - total 10,446 7,515 Housing Authority Annual Report 201745Housing Authority Annual Report 201746HOUSING AUTHORITY OF FIJINOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2017The following reflect the above corrections.Balance as at 31 December 2016 as perviously reportedEffect of conversion of foreign currency loanRestated balance as at 31 December 2016Borrowings32,6557,61240,267Reatined Earnings(2,071)(7,612)(9,683)14.
TRADE AND OTHER PAYABLES2017$’0002016$’000Interest payable 1,096 1,734 Insurance payable 528 370 Government grant received in advance 14,761 10,819 Customer Accounts with Credit Balance757704Trade payables and accruals 3,902 4,005 21,044 17,632Terms and conditions of the above financial liabilities:- Trade payables are non-interest bearing and are normally settled on 60-day terms;- Other payables are non-interest bearing and have an average term of six months;- Interest payable is normally settled monthly throughout the financial year; and- Government Grant received is recognised as a liability until the authority utilises the amounts in accordance with Government policy and the conditions attached to the grant.15.
PROVISIONS2017$’0002016$’000The movement in provision during the year is as follows:At 1 January25179Utilised-(154)As 31 December2525Represented by:Current252516.

EMPLOYEE BENEFIT LIABILITY2017$’0002016$’000The movement in employee benefit liability during the year is as follows:At 1 January 511 546 Arising during the year 237 191 Utilised (216) (226)At 31 December 532 511Represented by:Current532511HOUSING AUTHORITY OF FIJINOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 201712.
OTHER ASSETS2017$’0002016$’000Advance - FNPF settlement 37 20 Sundry debtors and prepayments 4,462 3,480 Stationery stock 23 28 Interest receivable 365 753 Stamp duty/deposit 3 4 VAT receivable 96 - Staff advances - 1 4,9864,28613.
DEBT ISSUED AND BORROWED FUNDS2017$’0002016$’000(Restated) Effective Interest Rate%(a) CurrentBonds 1% to 12%25,0005,200Loans 2.00%2,8452,84527,8458,045(b) Non-CurrentBonds 1% to 12% 38,700 64,200 Loans 2.00% 34,417 37,422 73,117 101,622 Total debt issued and borrowed funds 100,962 109,667 MaturityBonds 2017 to 2025Loans 2017 to 2031Repayment of principal is guaranteed by the Government of Fiji.
The funds raised by the Authority will be used to acquire new land and to carry out its land development projects for fully serviced lots and to provide cash loans to its customer for new house constructions and purchase of new houses.In 2010, the Government of Fiji entered into a financing agreement with the EXIM Bank of China for the Fiji Low Cost Housing project.

The project was contracted to China Railway First Group (Fiji) Limited for Yuan 200,000,000.
The Authority, as the eventual owner of the project on behalf of Government entered into an on-lending agreement with the Government.
As at 31 December 2017, the balance from the EXIM Bank to the contractor accumulated to FJD 37,262,729 inclusive of FJD 9,991,936 advance for mobilisation which is equal to 20% of the total contract price.The foreign currency loan obtained by the Authority through Ministry of Economy from Exim Bank of China had not been converted at the closing exchange rate as required by IFRS.
In current year, the Authority has converted the foreign currency loan at the closing exchange rate retro respectively and restated the foreign currency loan balance as at 1 December 2016.

As a result, retained earnings as at 1 January 2016 has decreased by $7.6million and borrowing has increased by $7.6million.
Housing Authority Annual Report 201745Housing Authority Annual Report 201746HOUSING AUTHORITY OF FIJINOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2017The following reflect the above corrections.Balance as at 31 December 2016 as perviously reportedEffect of conversion of foreign currency loanRestated balance as at 31 December 2016Borrowings32,6557,61240,267Reatined Earnings(2,071)(7,612)(9,683)14.
TRADE AND OTHER PAYABLES2017$’0002016$’000Interest payable 1,096 1,734 Insurance payable 528 370 Government grant received in advance 14,761 10,819 Customer Accounts with Credit Balance757704Trade payables and accruals 3,902 4,005 21,044 17,632Terms and conditions of the above financial liabilities:- Trade payables are non-interest bearing and are normally settled on 60-day terms;- Other payables are non-interest bearing and have an average term of six months;- Interest payable is normally settled monthly throughout the financial year; and- Government Grant received is recognised as a liability until the authority utilises the amounts in accordance with Government policy and the conditions attached to the grant.15.
PROVISIONS2017$’0002016$’000The movement in provision during the year is as follows:At 1 January25179Utilised-(154)As 31 December2525Represented by:Current252516.

EMPLOYEE BENEFIT LIABILITY2017$’0002016$’000The movement in employee benefit liability during the year is as follows:At 1 January 511 546 Arising during the year 237 191 Utilised (216) (226)At 31 December 532 511Represented by:Current532511HOUSING AUTHORITY OF FIJINOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 201712.
OTHER ASSETS2017$’0002016$’000Advance - FNPF settlement 37 20 Sundry debtors and prepayments 4,462 3,480 Stationery stock 23 28 Interest receivable 365 753 Stamp duty/deposit 3 4 VAT receivable 96 - Staff advances - 1 4,9864,28613.
DEBT ISSUED AND BORROWED FUNDS2017$’0002016$’000(Restated) Effective Interest Rate%(a) CurrentBonds 1% to 12%25,0005,200Loans 2.00%2,8452,84527,8458,045(b) Non-CurrentBonds 1% to 12% 38,700 64,200 Loans 2.00% 34,417 37,422 73,117 101,622 Total debt issued and borrowed funds 100,962 109,667 MaturityBonds 2017 to 2025Loans 2017 to 2031Repayment of principal is guaranteed by the Government of Fiji.
The funds raised by the Authority will be used to acquire new land and to carry out its land development projects for fully serviced lots and to provide cash loans to its customer for new house constructions and purchase of new houses.In 2010, the Government of Fiji entered into a financing agreement with the EXIM Bank of China for the Fiji Low Cost Housing project.

The project was contracted to China Railway First Group (Fiji) Limited for Yuan 200,000,000.
The Authority, as the eventual owner of the project on behalf of Government entered into an on-lending agreement with the Government.
As at 31 December 2017, the balance from the EXIM Bank to the contractor accumulated to FJD 37,262,729 inclusive of FJD 9,991,936 advance for mobilisation which is equal to 20% of the total contract price.The foreign currency loan obtained by the Authority through Ministry of Economy from Exim Bank of China had not been converted at the closing exchange rate as required by IFRS.
In current year, the Authority has converted the foreign currency loan at the closing exchange rate retro respectively and restated the foreign currency loan balance as at 1 December 2016.

As a result, retained earnings as at 1 January 2016 has decreased by $7.6million and borrowing has increased by $7.6million.

Housing Authority Annual Report 201747Housing Authority Annual Report 201748HOUSING AUTHORITY OF FIJINOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 201718.
CONTINGENT LIABILITIES AND COMMITMENTS continuedCommitments continueda) Operating lease commitments continuedThe Authority has various lease commitments for leasehold land.

The leases typically run for a period of between three and ten years.

It is not certain whether the land leases will offer an option of renewal after maturity.
The annual capital lease rentals paid during the year amount to $109,155 (2016: $86,025).b) Capital commitments for 2017 comprise of purchase of microsoft license, motor vehicles, computer and accessories, acquisition of land in Veikoba,Saweni foreshore and development of land in Davuilevu Nausori, Covata Labasa, Koroinisalsalu Tavua, Tavakubu Lautokaand Natadola Sigatoka and construction of strata units in Wainibuku.Litigation Claimsb) The Authority is also subject to various additional unquantified claims and legal actions, which arose in the ordinary course of business.
On the basis of legal opinion obtained and in the opinion of the directors, no significant liability is expected to eventuate.19.

RELATED PARTY DISCLOSURESa) Identity of related partiesThe Board has a related party relationship with its directors.

The directors of the Board in office during the year were:AppointedServe UntilMr.

Umarji Musa - Acting Chairman24-Dec-1523-Dec-18Mr.

Nesbitt Hazelman24-Dec-1523-Dec-18Mr.

Craig Strong24-Dec-1529-Sep-17Mr.
Roveen Permal24-Dec-1523-Dec-18b) Transactions with related partiesTransactions with related parties during the year ended 31 December 2017 with approximate transaction value are summarised as follows:2017$’0002016$’000Board expenses and allowances5151c) Compensation of key management personnelShort term employee benefits321202Key management personnel include the Chief Executive Officer and the four General Managers (2017: Three General Managers) of the Authority.20.EVENTS AFTER THE BALANCE DATEThere has not arisen in the interval between the end of the financial year and the date of this report any item, transaction or event of a material and unusual nature likely, in the opinion of the directors of the Authority, to affect significantly the operations of the Authority, the results of those operations, or the state of affairs of the Authority, in future financial years.HOUSING AUTHORITY OF FIJINOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 201717.
CAPITAL AND RESERVES2017$’0002016$’000Capital 41,772 41,772 Asset Revaluation ReserveAt 1 January 2,249 2,249 Movement during the year 2,954 - At 31 December 5,203 2,249 18.

CONTINGENT LIABILITIES AND COMMITMENTS2017$’0002016$’000(Restated)To meet the financial needs of customers, the Authority enters into various commitments and contingent liabilities.
Even though these obligations may not be recognised on the statement of financial position, they do contain credit risk and are therefore part of the overall risk of the Authority.The total commitments and contingent liabilities at balance date are as follows:Contingent liabilitiesGuarantees5555CommitmentsOperating lease commitments 687 952 Capital commitments 88,675 92,656 89,362 93,608 Total 89,367 93,613 Contingent liabilitiesThe details and estimated maximum amounts of contingent liabilities that may become payable by the Authority are set out below.
The directors are not aware of any circumstances or information that would lead them to believe that these contingent liabilities will crystallize and consequently no provisions are included in the financial statements in respect of these matters: GuaranteeFiji Electricity Authority bond55Commitmentsa) Operating lease commitmentsFuture operating lease rentals not provided for in the financial statements and payable as follows:Not later than one year 366 337 Later than one year but not later than two years 249 322 Later than two years but not later than five years 71 292 Later than five years 1 1 687952 Housing Authority Annual Report 201747Housing Authority Annual Report 201748HOUSING AUTHORITY OF FIJINOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 201718.
CONTINGENT LIABILITIES AND COMMITMENTS continuedCommitments continueda) Operating lease commitments continuedThe Authority has various lease commitments for leasehold land.

The leases typically run for a period of between three and ten years.

It is not certain whether the land leases will offer an option of renewal after maturity.
The annual capital lease rentals paid during the year amount to $109,155 (2016: $86,025).b) Capital commitments for 2017 comprise of purchase of microsoft license, motor vehicles, computer and accessories, acquisition of land in Veikoba,Saweni foreshore and development of land in Davuilevu Nausori, Covata Labasa, Koroinisalsalu Tavua, Tavakubu Lautokaand Natadola Sigatoka and construction of strata units in Wainibuku.Litigation Claimsb) The Authority is also subject to various additional unquantified claims and legal actions, which arose in the ordinary course of business.
On the basis of legal opinion obtained and in the opinion of the directors, no significant liability is expected to eventuate.19.

RELATED PARTY DISCLOSURESa) Identity of related partiesThe Board has a related party relationship with its directors.

The directors of the Board in office during the year were:AppointedServe UntilMr.

Umarji Musa - Acting Chairman24-Dec-1523-Dec-18Mr.

Nesbitt Hazelman24-Dec-1523-Dec-18Mr.

Craig Strong24-Dec-1529-Sep-17Mr.
Roveen Permal24-Dec-1523-Dec-18b) Transactions with related partiesTransactions with related parties during the year ended 31 December 2017 with approximate transaction value are summarised as follows:2017$’0002016$’000Board expenses and allowances5151c) Compensation of key management personnelShort term employee benefits321202Key management personnel include the Chief Executive Officer and the four General Managers (2017: Three General Managers) of the Authority.20.EVENTS AFTER THE BALANCE DATEThere has not arisen in the interval between the end of the financial year and the date of this report any item, transaction or event of a material and unusual nature likely, in the opinion of the directors of the Authority, to affect significantly the operations of the Authority, the results of those operations, or the state of affairs of the Authority, in future financial years.HOUSING AUTHORITY OF FIJINOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 201717.
CAPITAL AND RESERVES2017$’0002016$’000Capital 41,772 41,772 Asset Revaluation ReserveAt 1 January 2,249 2,249 Movement during the year 2,954 - At 31 December 5,203 2,249 18.

CONTINGENT LIABILITIES AND COMMITMENTS2017$’0002016$’000(Restated)To meet the financial needs of customers, the Authority enters into various commitments and contingent liabilities.
Even though these obligations may not be recognised on the statement of financial position, they do contain credit risk and are therefore part of the overall risk of the Authority.The total commitments and contingent liabilities at balance date are as follows:Contingent liabilitiesGuarantees5555CommitmentsOperating lease commitments 687 952 Capital commitments 88,675 92,656 89,362 93,608 Total 89,367 93,613 Contingent liabilitiesThe details and estimated maximum amounts of contingent liabilities that may become payable by the Authority are set out below.
The directors are not aware of any circumstances or information that would lead them to believe that these contingent liabilities will crystallize and consequently no provisions are included in the financial statements in respect of these matters: GuaranteeFiji Electricity Authority bond55Commitmentsa) Operating lease commitmentsFuture operating lease rentals not provided for in the financial statements and payable as follows:Not later than one year 366 337 Later than one year but not later than two years 249 322 Later than two years but not later than five years 71 292 Later than five years 1 1 687952 Housing Authority Annual Report 201749Housing Authority Annual Report 201750HOUSING AUTHORITY OF FIJINOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 201721.121.2Introduction continuedCredit RiskInternal auditInternal audit is a corporate function and independent of any other function or unit of the Authority.
The internal audit function provides assurance to the board and executive management on the quality and effectiveness of internal control processes and systems, of management of all risks and of governance.Risk management processes throughout the Authority are audited by sections within divisions and reports are submitted quarterly to the Board audit sub-committee.
To effectively manage risk with independence, the internal audit function is currently undertaken by KPMG with effective from October 2016. Credit risk is the risk that the Authority will incur a loss because its customers, clients or counterparties failed to discharge their contractual obligations.
The Authority manages and controls credit risk by setting limits on the amount of risk it is willing to accept for individual counterparties and for industry concentrations and by monitoring exposures in relation to such limits.The Authority has established a credit quality review process to provide early identification of possible changes and the credit worthiness for counterparties including regular collateral revisions.
The credit quality review process allows the Authority to assess the potential loss as a result of the risks to which it is exposed and take corrective action.The table below shows the maximum exposure to credit risk for the components of the statement of financial position; the maximum exposure is shown gross, before the effect of mitigation.Excessive risk concentrationConcentrations arise when a number of counterparties are engaged in similar business activities in the same geographic region, or have similar economic features that would cause their ability to meet the contractual obligations to be similarly affected by changes in economic, political or other conditions.
Concentrations indicate the relative sensitivity of the Authority’s performance to developments affecting a particular industry or geographical locations.In order to avoid excessive concentrations of risks, the Authority’s policies and procedures include specific guidelines to focus on maintaining a diversified portfolio.
Identified concentrations of credit risks are controlled and managed accordingly.Risk Management and reporting systemsThe Authority’s risks are measured using a method which reflects both the expected loss likely to arise in normal circumstances and unexpected losses, which are an estimate of the ultimate actual loss based on statistical models.

The models make use of probabilities derived from historical expense adjusted to reflect the economic environment.
The Authority also runs worst case scenarios that would arise in the event that extreme events which are unlikely to occur do, in fact, occur.Monitoring and controlling risks is primarily based on limits established by the Authority.
These limits reflect the business strategy and market environment of the Authority as well as the level of risk that the Authority is willing to accept, with additional emphasis on selected industries.Information compiled from all the business units is examined and processed in order to analyse, control and identify early risks.

This information is presented and explained to the Board of Directors and the head of each business section.
The process ensures management deal effectively with future events that create uncertainty, events that pose a significant risk or opportunity, and to respond in a prompt, efficient and effective manner to support the growth drivers of creating value through innovation and executing with excellence and leading with purpose.Information and communication channels are in place to make business leaders, as well as individuals, aware of risks that fall into their area of responsibility and the expected behaviour to mitigate negative outcomes.Net Maximum ExposureNet Maximum Exposure2017$’0002016$’000Loans and advances (Note 6) 90,033 86,173Total credit exposure 90,03386,173HOUSING AUTHORITY OF FIJINOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 201721.21.1FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIESIntroductionRisk is inherent in the Authority’s activities but it is managed through a process of ongoing identification, measurement and monitoring subject to risk limits and other controls.
Risk management is a fundamental element of the Authority’s business practice on all levels and encompasses different types of risks.

Risk management is an integral part of the business planning and controlling process.

Material risks are monitored and regularly discussed with Management Board and the Audit Committee.

The risk management process is critical to the Authority’s business continuity while focusing on delivering its product and services at affordable cost.
Business division leaders are accountable for managing risk exposure affecting their division.Risk can be interpreted as the combination of the probability of an event and the impact of its consequences.

Business activities resulting in a negative impact represent risks that can prevent value creation or erode existing value.

In order to deliver value while maintaining competitive edge, the Authority understands the types of risks it faces and addresses them appropriately.
The Authority is exposed to credit risk, liquidity risk and market risks.The independent risk control process does not include business risks such as changes in business environment, technology and industry.

Business risks are identified through the Authority’s strategic planning process and monitored throughout the year.Risk management structureThe Board of Directors is ultimately responsible for identifying and controlling risks.
The Directors have set-up sub-committees to be responsible for managing and monitoring specific risks such as audit, finance, human resource and credit.The Authority’s strategic plan is focused on addressing housing needs for low income to middle income residents.

Therefore, the executive management sets overarching strategic objectives as well as financial targets based on demands and Government mandate.
These objectives are cascaded to respective divisions to ensure alignment of the business operation.The executive management is accountable for meeting the overall objectives of the Authority, while being consistent with its overall mission.
Risk management is considered fundamental to the Authority’s ability to deliver core services.As part of the strategic planning process and day-to-day management of the business, the divisional leaders identify internal and external events that may affect the achievement of the Authority’s objectives.
Divisional leaders concurrently identify and assess these risks through their expertise, formal assessments and analysis of business intelligence and trends.Risks affecting the Authority to achieve its corporate objectives are identified at various points in the business cycle.
Management encourages a risk culture, encouraging employees to be open, candid and fact-based in discussing risk issues, and making all relevant facts and information available so that the Authority can consider all possible options in making decisions.

The points in the business cycle are during strategic and business planning process and monthly business review meetings.
However, throughout the year, the executive management assess the Authority’s performance which incorporates the risk management functions to identify internal and external events that might affect achievement of the Authority’s objectives.
In addition, the various meetings incorporate risk management scanning of the external environment for risk indicators through analysis of applicable business intelligence, including trends in the housing/lending market, legislative changes, consumer models, as well as relationships with external factors.
Finally, risk management functions review the output from internal monitoring and assurance activities to identify gaps and emerging risk areas.Governance ensures that identified risks and associated response strategies are communicated to the respective divisional head and subsequently escalated to the Executive Committee member or directly to the Audit Committee.
The Board of Directors is responsible for the overall risk management approach and for approving the risk strategies and principles.Governance and oversight The Board of Directors provides oversight of the various anticipated risks faced by the Authority to executive management.

The Directors have set-up sub-committees to be responsible for managing and monitoring specific risk areas such as audit, finance, human resource, project management and lending portfolio.
In addition, the Board of Directors receives regular reports from executive management and the independent internal auditor.

The external audit report is also presented to the Board of Directors.The Board of Directors is responsible for the overall risk management approach and review of the risk incorporated in the Authority’s corporate plan.

The Board is dedicated and fully committed to its role in ensuring quality, compliance and effective risk management.
Housing Authority Annual Report 201749Housing Authority Annual Report 201750HOUSING AUTHORITY OF FIJINOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 201721.121.2Introduction continuedCredit RiskInternal auditInternal audit is a corporate function and independent of any other function or unit of the Authority.
The internal audit function provides assurance to the board and executive management on the quality and effectiveness of internal control processes and systems, of management of all risks and of governance.Risk management processes throughout the Authority are audited by sections within divisions and reports are submitted quarterly to the Board audit sub-committee.
To effectively manage risk with independence, the internal audit function is currently undertaken by KPMG with effective from October 2016. Credit risk is the risk that the Authority will incur a loss because its customers, clients or counterparties failed to discharge their contractual obligations.
The Authority manages and controls credit risk by setting limits on the amount of risk it is willing to accept for individual counterparties and for industry concentrations and by monitoring exposures in relation to such limits.The Authority has established a credit quality review process to provide early identification of possible changes and the credit worthiness for counterparties including regular collateral revisions.
The credit quality review process allows the Authority to assess the potential loss as a result of the risks to which it is exposed and take corrective action.The table below shows the maximum exposure to credit risk for the components of the statement of financial position; the maximum exposure is shown gross, before the effect of mitigation.Excessive risk concentrationConcentrations arise when a number of counterparties are engaged in similar business activities in the same geographic region, or have similar economic features that would cause their ability to meet the contractual obligations to be similarly affected by changes in economic, political or other conditions.
Concentrations indicate the relative sensitivity of the Authority’s performance to developments affecting a particular industry or geographical locations.In order to avoid excessive concentrations of risks, the Authority’s policies and procedures include specific guidelines to focus on maintaining a diversified portfolio.
Identified concentrations of credit risks are controlled and managed accordingly.Risk Management and reporting systemsThe Authority’s risks are measured using a method which reflects both the expected loss likely to arise in normal circumstances and unexpected losses, which are an estimate of the ultimate actual loss based on statistical models.

The models make use of probabilities derived from historical expense adjusted to reflect the economic environment.
The Authority also runs worst case scenarios that would arise in the event that extreme events which are unlikely to occur do, in fact, occur.Monitoring and controlling risks is primarily based on limits established by the Authority.
These limits reflect the business strategy and market environment of the Authority as well as the level of risk that the Authority is willing to accept, with additional emphasis on selected industries.Information compiled from all the business units is examined and processed in order to analyse, control and identify early risks.

This information is presented and explained to the Board of Directors and the head of each business section.
The process ensures management deal effectively with future events that create uncertainty, events that pose a significant risk or opportunity, and to respond in a prompt, efficient and effective manner to support the growth drivers of creating value through innovation and executing with excellence and leading with purpose.Information and communication channels are in place to make business leaders, as well as individuals, aware of risks that fall into their area of responsibility and the expected behaviour to mitigate negative outcomes.Net Maximum ExposureNet Maximum Exposure2017$’0002016$’000Loans and advances (Note 6) 90,033 86,173Total credit exposure 90,03386,173HOUSING AUTHORITY OF FIJINOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 201721.21.1FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIESIntroductionRisk is inherent in the Authority’s activities but it is managed through a process of ongoing identification, measurement and monitoring subject to risk limits and other controls.
Risk management is a fundamental element of the Authority’s business practice on all levels and encompasses different types of risks.

Risk management is an integral part of the business planning and controlling process.

Material risks are monitored and regularly discussed with Management Board and the Audit Committee.

The risk management process is critical to the Authority’s business continuity while focusing on delivering its product and services at affordable cost.
Business division leaders are accountable for managing risk exposure affecting their division.Risk can be interpreted as the combination of the probability of an event and the impact of its consequences.

Business activities resulting in a negative impact represent risks that can prevent value creation or erode existing value.

In order to deliver value while maintaining competitive edge, the Authority understands the types of risks it faces and addresses them appropriately.
The Authority is exposed to credit risk, liquidity risk and market risks.The independent risk control process does not include business risks such as changes in business environment, technology and industry.

Business risks are identified through the Authority’s strategic planning process and monitored throughout the year.Risk management structureThe Board of Directors is ultimately responsible for identifying and controlling risks.
The Directors have set-up sub-committees to be responsible for managing and monitoring specific risks such as audit, finance, human resource and credit.The Authority’s strategic plan is focused on addressing housing needs for low income to middle income residents.

Therefore, the executive management sets overarching strategic objectives as well as financial targets based on demands and Government mandate.
These objectives are cascaded to respective divisions to ensure alignment of the business operation.The executive management is accountable for meeting the overall objectives of the Authority, while being consistent with its overall mission.
Risk management is considered fundamental to the Authority’s ability to deliver core services.As part of the strategic planning process and day-to-day management of the business, the divisional leaders identify internal and external events that may affect the achievement of the Authority’s objectives.
Divisional leaders concurrently identify and assess these risks through their expertise, formal assessments and analysis of business intelligence and trends.Risks affecting the Authority to achieve its corporate objectives are identified at various points in the business cycle.
Management encourages a risk culture, encouraging employees to be open, candid and fact-based in discussing risk issues, and making all relevant facts and information available so that the Authority can consider all possible options in making decisions.

The points in the business cycle are during strategic and business planning process and monthly business review meetings.
However, throughout the year, the executive management assess the Authority’s performance which incorporates the risk management functions to identify internal and external events that might affect achievement of the Authority’s objectives.
In addition, the various meetings incorporate risk management scanning of the external environment for risk indicators through analysis of applicable business intelligence, including trends in the housing/lending market, legislative changes, consumer models, as well as relationships with external factors.
Finally, risk management functions review the output from internal monitoring and assurance activities to identify gaps and emerging risk areas.Governance ensures that identified risks and associated response strategies are communicated to the respective divisional head and subsequently escalated to the Executive Committee member or directly to the Audit Committee.
The Board of Directors is responsible for the overall risk management approach and for approving the risk strategies and principles.Governance and oversight The Board of Directors provides oversight of the various anticipated risks faced by the Authority to executive management.

The Directors have set-up sub-committees to be responsible for managing and monitoring specific risk areas such as audit, finance, human resource, project management and lending portfolio.
In addition, the Board of Directors receives regular reports from executive management and the independent internal auditor.

The external audit report is also presented to the Board of Directors.The Board of Directors is responsible for the overall risk management approach and review of the risk incorporated in the Authority’s corporate plan.

The Board is dedicated and fully committed to its role in ensuring quality, compliance and effective risk management.
Housing Authority Annual Report 201751HOUSING AUTHORITY OF FIJINOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 201721.21.321.4FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES continuedInterest Rate RiskCapital ManagementInterest rates on financial assets and liabilities are fixed over the terms of the relevant contracts, thereby minimising the risk of mis-matches in interest rates.
At the reporting date, the interest rate profile of the Authority’s interest bearing financial instruments carrying amounts were:The primary objective of the Authority’s capital management is to ensure that it maintains a strong credit rating and a healthy capital ratio in order to support its operations and maximise shareholder value.The Authority manages its capital structure and makes adjustments to it, in light of changes in economic conditions.
To maintain or adjust the capital structure, the Authority may adjust the dividend payment to shareholders, return capital to shareholders or raise capital.The Authority monitors capital using a gearing ratio, which is net debt divided by total capital plus net debt.

The Authority includes within net debt, trade and other payables less cash and cash equivalents.
Capital includes equity attributable to equity holders less the net unrealised gains reserve.2017$’0002016$’000Fixed Rate InstrumentsFinancial assets 119,499 130,530 Financial liabilities 119,057 126,595 2017$’0002016$’000(Restated)Interest bearing loans and borrowings 100,962 109,667 Less: cash and short term deposits (1,823) (2,323)Net debt 99,139 107,344Equity 54,952 50,296 Total capital 54,952 50,296 Capital and net debt 154,091 157,640Gearing ratio64%68%The following sensitivity analysis is based on the interest risk exposures, if any, in existence at balance date:Increase/ (decrease) in interest rateEffect on profit before tax $’0002017+10 bp105-10 bp (105) 2016+10 bp107-10 bp (107) Housing Authority Annual Report 201752HOUSING AUTHORITY OF FIJINOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 201731 December 2017At CallLess than 3 months4 to 12 months1 to 5 yearsover 5 yearsProvision for doubtful debtsSuspended interest and feesTotal$’000$’000$’000$’000$’000$’000$’000$’000Financial AssetsCash 1,823 - - - - - - 1,823 Loans and advances 3,758 2,608 5,934 26,102 54,331 (717) (2,741) 89,276 Financial investments - held to maturity - 16,900 11,500 - - - 28,400 Total 5,581 19,508 17,434 26,102 54,331 (717) (2,741) 119,499 Financial liabilitiesBorrowings - 28,98415,58853,390 - - 100,962 Accrued interest - (1,096) - - - - (1,096)Accounts payable and accrued liabilities - 19,191 - - - - - 19,191 Total - 19,191 27,88818,58853,390 - - 119,057 31 December 2016At CallLess than 3 months4 to 12 months1 to 5 yearsover 5 yearsProvision for doubtful debtsSuspended interest and feesTotal$’000$’000$’000$’000$’000$’000$’000$’000Financial assetsCash 2,323 - - - - - - 2,323 Loans and advances 4,118 1,981 5,691 25,984 52,086 (612) (2,991) 86,257 Financial investments - held to maturity - 15,000 26,950 - - - 41,950 Total 6,441 16,981 32,641 25,984 52,086 (612) (2,991) 130,530 Financial liabilitiesBorrowings - 8,044 68,914 32,709 - - 109,667 Accrued interest - 1,055 679 - - - - 1,734 Accounts payable and accrued
 liabilities - 15,194 - - - - - 15,194 Total - 16,249 8,723 68,914 32,709 - - 126,595 The table below shows an analysis of financial assets and liabilities analysed according to when they are expected to be recovered or settled.22.MATURITY ANALYSIS OF FINANCIAL ASSETS AND LIABILITIES Housing Authority Annual Report 201751HOUSING AUTHORITY OF FIJINOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 201721.21.321.4FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES continuedInterest Rate RiskCapital ManagementInterest rates on financial assets and liabilities are fixed over the terms of the relevant contracts, thereby minimising the risk of mis-matches in interest rates.
At the reporting date, the interest rate profile of the Authority’s interest bearing financial instruments carrying amounts were:The primary objective of the Authority’s capital management is to ensure that it maintains a strong credit rating and a healthy capital ratio in order to support its operations and maximise shareholder value.The Authority manages its capital structure and makes adjustments to it, in light of changes in economic conditions.
To maintain or adjust the capital structure, the Authority may adjust the dividend payment to shareholders, return capital to shareholders or raise capital.The Authority monitors capital using a gearing ratio, which is net debt divided by total capital plus net debt.

The Authority includes within net debt, trade and other payables less cash and cash equivalents.
Capital includes equity attributable to equity holders less the net unrealised gains reserve.2017$’0002016$’000Fixed Rate InstrumentsFinancial assets 119,499 130,530 Financial liabilities 119,057 126,595 2017$’0002016$’000(Restated)Interest bearing loans and borrowings 100,962 109,667 Less: cash and short term deposits (1,823) (2,323)Net debt 99,139 107,344Equity 54,952 50,296 Total capital 54,952 50,296 Capital and net debt 154,091 157,640Gearing ratio64%68%The following sensitivity analysis is based on the interest risk exposures, if any, in existence at balance date:Increase/ (decrease) in interest rateEffect on profit before tax $’0002017+10 bp105-10 bp (105) 2016+10 bp107-10 bp (107) Housing Authority Annual Report 201752HOUSING AUTHORITY OF FIJINOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 201731 December 2017At CallLess than 3 months4 to 12 months1 to 5 yearsover 5 yearsProvision for doubtful debtsSuspended interest and feesTotal$’000$’000$’000$’000$’000$’000$’000$’000Financial AssetsCash 1,823 - - - - - - 1,823 Loans and advances 3,758 2,608 5,934 26,102 54,331 (717) (2,741) 89,276 Financial investments - held to maturity - 16,900 11,500 - - - 28,400 Total 5,581 19,508 17,434 26,102 54,331 (717) (2,741) 119,499 Financial liabilitiesBorrowings - 28,98415,58853,390 - - 100,962 Accrued interest - (1,096) - - - - (1,096)Accounts payable and accrued liabilities - 19,191 - - - - - 19,191 Total - 19,191 27,88818,58853,390 - - 119,057 31 December 2016At CallLess than 3 months4 to 12 months1 to 5 yearsover 5 yearsProvision for doubtful debtsSuspended interest and feesTotal$’000$’000$’000$’000$’000$’000$’000$’000Financial assetsCash 2,323 - - - - - - 2,323 Loans and advances 4,118 1,981 5,691 25,984 52,086 (612) (2,991) 86,257 Financial investments - held to maturity - 15,000 26,950 - - - 41,950 Total 6,441 16,981 32,641 25,984 52,086 (612) (2,991) 130,530 Financial liabilitiesBorrowings - 8,044 68,914 32,709 - - 109,667 Accrued interest - 1,055 679 - - - - 1,734 Accounts payable and accrued
 liabilities - 15,194 - - - - - 15,194 Total - 16,249 8,723 68,914 32,709 - - 126,595 The table below shows an analysis of financial assets and liabilities analysed according to when they are expected to be recovered or settled.22.MATURITY ANALYSIS OF FINANCIAL ASSETS AND LIABILITIES Affordable loan packages a b l e o i n t s d r e p o f r i c A f p REGISTERED OFFICE LAUTOKA LABASA SUVA Housing Authority Building, Saqa Street, Valelevu, Nasinu.
P.O.

Box 1263, Suva Telephone: (679) 339 2977 Facsimile: (679) 334 0092 Email: info@housing.com.fj www.housingfiji.com Housing Authority Building, 14 Tavewa Avenue, Lautoka.

P.O.

Box 262, Lautoka Telephone: (679) 666 0299 Facsimile: (679) 666 5602 FNPF Building, Rosawa Street, Labasa.

P.O.

Box 78, Labasa.

Telephone: (679) 881 1977 Facsimile: (679) 881 3919 Level 1, Ratu Sukuna House, Macarthur Street, Suva.
Telephone: (679) 339 2977 Facsimile: (679) 331 5135 NUMBER OF EMPLOYEES AT THE END OF THE YEAR: Management 16 | Staff 127 | Project/Unestablished Staff/Trainees 68 Decent, Quality & Affordable Housing for all Fijians aNNUAL report “Building a Nation through building homes” Parliamentary Paper No.

80/2019