rura hous association FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2023 Rural Housing Association 2 Killy¢logher Road. Omagh. County Tyrone, BT79 OAX
Rural Housing Association Ltd 2 Killyclogher Road, Omagh, County Tyrone, B T79 OAX Association Information Board of Management John Waddell {Chairl Carol Follis BA (Hons) (Vice Chair) Rory O'Brien Bsc IHons} (Secretary) ASistair McKane BA, Dip TP, MRTPI {Treasurerl Thomas Gallagher B Ed. Tom Potter Michaela Mccusker Margaret Raffety John Moss Chief Executive Mr Stephen Fisher PGDip, Msc, CIHCM Registered Office 2 Killyclogher Road, Omagh. County Tyrone. BT79 OAX Head Office 2 Killyclogher Road. Omagh. County Tyrone, BT79 OAX Bankers Danske Bank 5-7 Market Street, Omagh, County Tyrone BT78 1 BN AIB 1-4 East Bridge Street, Enniskillen, County Fermanagh, BT74 7BT Solicitors Mccaffrey & Co 8-10 Church Hil Omagh Co Tyrone BT78 1DQ Statutory Auditors McAleer Jackson Ltd Chartered Accountants & Registered Auditors Church House 24 Dublin Road Omagh Co Tyrone BT78 1HE Internal Auditors Wylie and Bissett Chartered Accountants & Registered Auditors 168 Bath Street Glasgow G2 4TP
Rural Housing Association Ltd 2 Killyclogher Road, Omagh, County Tyrone. 8T79 OAX Financial Statements for the Year Ended 31 March 2023 Contents Report of 8oard of Management Page Auditor's Report to the Members of Rural Housing Association Page Statement of Comprehensive Income Page Statement of Financial Position Page 10 Slatament of Changes in Equity Page Statement of Cash Flows Page 12 Notes to the Financial Statements Page 13 Detailed Income and Expenditure Summary for the Financial Year Ended 31 March 2023 Page 24 Incorne and Expenditure from Lettings for the Financial Year Ended 31 March 2023 Page 26 Administrative Expenditure for the Financial Year Ended 31 March 2023 Page 27
Rural Housing Association Ltd 2 Killyclogher Road, Omagh, County Tymne, B T79 OAX Financial Statements for the Year Ended 31 March 2023 Report of the Board of Management The Board present their report together with the audited financial statements for the year ended 31 March 2023. Principal activities Rural Housing Association was registered under the Co-operative and Community Benefit Societies Act (Northern Ireland) 1969 on 2 March 1992. The Association is a registered non-profit rnaking housing association with the Department for Communities providing housing accommodation for those in need and is recognised as a charity vith The Charity Commission for Northern Ireland and has charitable status with HMRC (HM Revenue & Customs). Business Review Much has changed for the Association, its staff and tenants over the last year and our Corporate Strategy, which was agreed in 2021, provides a clear picture for the organisalion going forward. As part of our strategic review in 2021 a full organisationa5 review was carried out during 2022123. That has brought about o new Committees under the Board, Finance and General Purposes Committee and Housing Services Committee. Both Committees will complement the main Board and provide further assurance in all aspects of the operations of the Association. Further to the committee additions. the organisation staffing structure was fully reviewed. Thi5 review was to ensure the Association's operational setup was fit for purpose for the coming years with an expected development programme of over 300 new homes. Four new Departmental Directors have been put in place with Housing and Technical Departments seeing new posts created for middle managers, and Business Development Department getting a new fvll time administrative post. These changes were all complete before March 2023 and provide the Association with the workforce and experience lo develop, manage and mainlain a high volume of new homes over the next few years. One of the main aspecls the Association focussed on over the last year was the welfare of tenants. The Association availed of local and regional grants lo provide outreach to tenants in the form of food parcels alongside providing one to one welfare advice and sign posting. Most tenants, and in particular the more vulnerable, were frequently contacted directly by staff members throughout the year lo provide support_ The Association implemented a hardship fund for ils tenant5, providing much needed financial support lo the most needed cases. The Association also provided support to its staff through its normal channels of welfare provision alongside extra training on home working. wellness training and social functions held through virtual and face to face means to ensure staff stayed connected at an informal level as well. Vvhen setting its budgets for 2023124 the Association. in line with mitigations identified in its Corporate Risk Register added weight to its cashflows for routine rnainlenance and planned maintenance schemes to ensure coverage for anticipated rises in costs of materials and labour due lo Brexit and a post covid economy of high demand. It is anlicipaled that this prudent action should provide the Association with proper cover and ensure that inflationary pressures will not have an extreme impact on the Association as a going concern. At the balance sheet date. the Hybrid working policy had been fully implemented and Covid restrictions eased in accordance with Departmental guidance. During the financial year the Association maintained ils level of properties bringing on 6 new units and selling 6 units through the House Sale Scheme12022'. 21 units)12021'. 7 units). Operating costs increased by £236.25212022.' £97,100) while the operating surplus increased to £1,021,31212022,:£1 ,227.534). Interest payable was £712,562 12022: £629.4991 resulting in an overall surplus for the financial year of £293.743 (2021.. £577,752).
Rural Housing Association Ltd 2 Killyclogher Road, Omagh, County Tyrone, B T79 OAX Financial Statements for the Year Ended 31 March 2023 Report of the Board of Management (continued) Business Review cont'd On the balance sheet housing properties al depreciated cost was £52m12022'. £49ml. Average staff numbers for the year are currently at 23 and are not anticipated to increase significantly during the incoming financial year. Internal Controls Assurance The Board acknowledges its overall responsibility for eslablishing and maintaining the whole system of internal control and for reviewing its effectiveness. The system of internal control is designed to manage, rather than eliminate, the risk of failure to achieve business objectives, and lo provide reasonable, and not absolute, assurance against material misstatemenl or loss. The process for identifying. evaluating and managing the significant risks faced by the Association is on going, has been in place throughout the period commencing 1 April 2022 up lo the dale of approval of the annual report and financial statements. Key elements of the control framework include.. Board approved terms of reference and delegated authorities for Audit Risk and Governance and Technical Sub- committees". clearly defined management responsibilities for the identification. evaluation and control of significant risks.. a Risk Register and Business Continuity Plan exists to help manage and mitigate these risks., robust strategic and business planning processes, with detailed financial budgets and forecasts.. a formal governance framework detailing standing orders, cyclic reporting processes and relationships bemeen the Board. Sub-committees, Senior Management Team and staff; formal recruitment, retention. training and development policies for all staff., established authorisation and apprais21 procedures for all significant new development initiatives and commitments.. regular reporting to the appropriate committee on key business objectives, targets and outcomes., and Board approved whistleblowing and fraud policies. The Board cannot delegate ultirllale responsibility for the system of internal control, bul it can, and has delegated authority to the Audit Risk and Governance Sub-committee lo regularly review the effectiveness of the system of internal control. The Board receives regular reports from the Audit Risk and Governance Sub-committee together with minute5 of meetings. The Audit Risk and Governance Sub-committee has received the annual report of the internal auditor, and has reported its findings to the Board. Statement of Board of Management Responsibilities The Co-operative and Community Benefit Societies Act {Northern Ireland) 1969 and registered housing association legislation require the members of the Board of Management to prepare financial statements for each financial year that give a true and fair view of the state of the Association's affairs and of its surplus or deficit for that period. In preparing these financial statements the Board is required to: select suitable accounling policies and apply them consistently., make judgements and estimates that are reasonable and prudent-, stale whether applicable accounting standards have been followed. subject to any material departures disclosed and explained in the financial statements.. and prepare the financial statements on the going concern basis unless il is inappropriate to presume that the Association will continue to operate. The members of Ihe Board of Management are responsible for keeping proper accounting records which disclose with reasonable accuracy at any time the financial position of the Association and to enable them to ensure that the financial slalements comply with the Co-operative and Community Benefit Societies Act (Northern Ireland) 1969 and the Registered Housing Associations (Accounting Requirements) Order (Northern Ireland) 1993. They have general responsibility for taking reasonable steps to safeguard Ihe assets of the Association and lo prevent and detect fraud and other irregularities.
Rural Housing Association Ltd 2 Killyclogher Road, Omagh, County Tyrone, ET79 OAX Financial Statements for the Year Ended 31 March 2023 Report of the Board of Management (continued) statement of Disclosure to Auditors So far as each of the members of the Board of Management at the date of approval of these financial statements is aware.. there is no relevant information of which the Association's auditor is unaware. they h8ve taken all reasonable steps that they ought lo have taken as members of the Board of Management in order to make themselves aware of all relevant audit information and lo establish that the Association's auditor is aware of that information. On behalf of the Board Secretary
Rural Housing Association Ltd 2 Killyclogher Road. Omagh, County Tyrone, B T79 OAX Financial Statements for the Year Ended 31 March 2023 Auditor's Report to the Members of Rural Housing Association Opinion We have audited the financial statements of Rural Housing Association Limited for the year ended 31 March 2023 which comprise the Statement of Comprehensive Income, the Statement of Financial Position, the Statement of changes in equity, the Statement of Cash Flows and the related notes to the financial statements. including a summary of significant accounting policies set out in note 1. The financial reporting framework that has been applied in their preparation is applicable law and United ngdoM Accounting Standards, including FRS 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland" (United Kingdom Generally Accepted Accounting Practice) and the Housing SORP 2018 ~ Statement of Recommended Practice for social housing providers issued by the National Housing Federation. In our opinion the f nancial statements= give a true and fair view of the state of affairs of the Association at 31 March 2023 and of its surplus for the year ended; have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice.. and have been prepared in accordance with the Co-operative and Community Benefit Societies Act (Northern Ireland) 1969. the Housing (Northern Ireland) Order 1992. the Registered Housing Associations (Accounting Requirements) Order {Northern Ireland) 1993 and Statement of Recommended Practice 2D18 Accounting by Registered Social Landlords. Basis for opinlon We conducted our audit in accordance with International Standards on Auditing (UK) IISAS (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the Association in accordance with ethical requirements that are relevant to our audit of the financial statements in the UK, including Ihe FRC'S Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficienl and appropriate to provide a basis for our opinion. Conclusions relating to going concern In auditing the financial statements. we have concluded that the Board of Managements, use of the going concern basi5 of accounting in the preparation of the financial statements is appropriate. Based on the work we have performed, we have not identified any material uncertainties relaling to events or conditions that, individually or collectively. may cast significant doubl on the Association's ability to continue as a going concern for a period of at least e1ve months from when the financial statements are authorised for issue. Our responsibilities and the responsibilities of the Board of Managemenl with respecl to going concem are described in the relevant sections of this report. other Information The other information comprises the information included in the annual report other than the financial statements and our Auditor's Report thereon. The Board of Management are responsible for the other information. Our opinion on the financial statements does not cover the other information and. except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. In connection with our audit of the financial statements, our responsibility is lo read the other information and. in doing so, consider whether the other information is materially inconsistent with the financial slatements or our knowledge obtained in the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements. we are required to determine whether there is a rnaterial misstatement in the financial statements or a material misstatement of the other information. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.
Rural Housing Association Ltd 2 Killyclogher Road. Omagh, County fyrone, 8T79 OAX Financial Statements for the Year Ended 31 March 2023 Auditor's Report to the Members of Rural Housing Association Gont'd Matters on which we are required to report by exception In the light of the knowledge and understanding of Ihe Association and its environment obtained in the course of the audit, we have not identified any material misstatements in the report of the Board of Management. We have nothing to report in respect of the following matters where the Co-operative and Community Benefit Societies Act (Northern Ireland) 1969 requires us to report to you if, in our opinion.. proper accounting records have not been kept by the association., or the financial statements are not in agreement with the accounting records and returns-, or a satisfactory system of intemal control over transactions has not been maintained.. or we have not received all the information and explanations we require for our audit. Respective responsibilities of the Board of Management and Auditor As described in the Report of the Board of Management on page 4 the Board of Managernent are responsible for the preparation of the financial statements and for being satlsfied Ihat Ihey give a true and fair view. and for such internal control as they determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due lo fraud or error. In preparing the financial statements, the Board of Management are responsible for assessing the Association's ability to continue as a going concern, disclosing. as applicable. matters related to the going concern and using the going concern basis of accounting unless management either intends to liquidate the company or lo cease operations, or has no realistic alternative but to do so. Auditor's responsibilities for the audit of the financial statements Our objectives are to obtain reasonable assurance about whelher the financial statements as a whole are free from material misstatement, whèther due to fraud or error, and to issue an Auditor's Report that includes our opinion. Reasonable assurance is a high level of assurance. but is not a guarantee that an audit conducted in accordance with ISAS (UK) will always detect a material misstatement when it exists. Mi55tatements can arise from fraud or error and are considered material if, individually or in aggregate. they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial staternents. Irregularities. including fraud, are instance5 of non-compliance with laws and regulations. Vve design proceduies in line with our responsibilities, outlined above. to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below. Our approach to identifying and assessing the risks of material mis-statement in respect of irregularities including fraud and non-compliance with laws and regulations. was as follows.. We identified the laws and regulations applicable to the Association through discussions with management and from our commercial knowledge and experience of the sector.. We assessed the extent of compliance with the laws and regulations identified above through making enquiries of management and inspecting legal correspondence. We assessed the susceplibilily of the company's financial statements ta material mis-statement, including obtaining an understanding of how fraud might occur, by Making enquiries of managerllent as to where they considered there was susceptibility to fraud, their knowledge of actual. suspected and alleged fraud- Considering the internal controls in place to mitigate risks of fraud and non<ompliance with laws and regulations and., Performed analytical procedures to identity any unusual or unexpected relationships.. Tested journal entries to identify unusual transactions-. Assessed whether judgements and assumptions made in determining Ihe accounting estimates were indicalive of potential bias., Investigated the rationale behind any significant or unusLJal transactions. In response to the risk of irregularities and non-compliance wth laws and regulations, we designed procedures which included, but were not limited to.. Agreeing financial statements disclosures to underlying supporting documentation., Reading the minutes of meetings to those charged with governance., Enquiring of management as to actual and potential litigatiori and claims., Reviewing correspondence with HMRC. relevant regulators and the Association's legal advisors.
Rural Housing Association Ltd 2 Killyclogher Road, Omagh, County Tyrone, B T79 OAX Financial Statements for the Year Ended 31 March 2023 Auditor's Report to the Members of Rural Housing Association cont'd There are inherent limitations in our audit procedures described above. The more removed that laws and regulatlONs are frorn financial transactions, the less likely il is that we would become aware of non-compliance. Auditing standards also limit the audit procedures required to identify non-compliance with laws and regulations to enquiry of management and the inspection of regulatory and legal correspondence, if any. Further information regarding the scope of our responsibllities as auditor As part of an audit in accordance with ISAS IUKI, we exercise professional judgement and maintain professional scepticism throughout the audit. We 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 our opinion. The risk of not detecting a material misstatement resulting trom fraud is higher than 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 lo design audit procedures that are appropriate in the circumstances. but not for the purpose of expressing an opinion on Ihe effectiveness of the company's internal control. Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the Board members. Conclude on the appropriateness of the directors, use of the going concem basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions thal may cast significant doubt on the company's ability to continue as a going concern. If we conclude that a material uncertainty exists. we are required to draw attention in our Auditor's Report to the related disclosures in the financial statements or. if such disclosures are inadequate. to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our Auditoff s Report. However, future events or conditions may cause the company 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 represent the underlying transactions and events in a manner that achieves fair presentstion. We communicate with those charged with governance regarding. among other matters, the planned scope and timing of the audit and significant audit findings, including any Significant deficiencies in internal control that we identify dLJring our audit. Use of our report Thi5 report is made solely to the Board's rnembers. as a body, in accordance with section 43 of the Co-operative and Community Benefit Societies Act (Northern Ireland) 1969. Our audit work has been undertaken so that we might state to the Board's members those matters we are required to state to them in an Auditor's report and for no other purpose. To the fullest extent permitted by law. we do not accept or assume responsibility to anyone other than the Association and the Association's members as a body. for our audit work, for this report, or for the opinions we have formed. Michael Barnett (Senior Statutory Auditor) for and on behalf of McAleer Jackson Ltd Chartered Accountants and Stalutory Auditors Church House 24 Dublin Road Omagh B T79 OAH 28 June 2023
Rural Housing Association Ltd 2 Killyclogher Road, Onpagh, County Tyrone, B T79 OAX Statement of Comprehensive Income for the Year Ended 31 March 2023 2023 2022 Note Turnover Less operating costs 3.996,974 (2,975,662) 3.966,944 { 2.739,410) Operating surplus Surplus on property disposals Interest receivable Interest payable and other charges Financing {coslllincome Transfer to disposal proceeds fund 1.021,312 493.355 3,993 (712,562 } { 19,000) { 493,3551 1,227,534 73,180 717 { 629,4991 {21,0001 173,1801 16 Surplus on ordinary activitles before taxation 293,743 577,752 Corporation tax on surplus Surplus for the year after taxatlon 293.743 577,752 Other comprehensive incorne Actuarial gainllloss) on pension scheme 16 955,000 488,000 Prior year adjustment Total comprehensive income for the year 1,248.743 1,065,752 Continuing operatlons None of the Association's activities were acquired or discontinued during the above Iwo financial years. Historical cost The difference bebveen the results as disclosed in the Statement of Comprehensive Income before tax. and retained surplus for the year, on an unmodified historical cost basis is not material.
Rural Housing Association Ltd 2 Killyclogher Road. Omagh: County Tyrone. B T79 OAX statement of Financial Position as at 31 March 2023 2023 2022 Note Tangible fixed assets Housing properties Other fixed assets 10a 10b 52.734.290 869.371 49,582,461 896.155 53,603,661 50,478,616 Current assets Debtors and prepayments Cash and cash equivalents 12 13 1,204,277 1.187,649 523,026 696,902 2,391,926 1,219,928 Creditors.. amounts falling due within 1 year 14 { 4,773,790) (4,531,780) Net current assets/(liabilities) 2.381,864 3.311.852 Total assets less current liabilities 51,221,797 47,166,764 Creditors: amounts falling due after more than 1 year 15 144,810.1731 { 41,229,883) Provision for liabilities and charges Pension liabilty 16 { 2,000) 1776.0001 Total net assets 6,409.624 5,160.880 Reserves Share capital Capital reserves Revenue reserves 17 18 12 30 5,160,838 34 6,409.581 Total Reserves 6.409.624 5.160.880 Approved by the Board of Management on 28 June 2023 Chairman Honorary Secretary Honorary Treasurer 10
Rural Housing Association Ltd 2 Killyclogher Road, Omagh. County Tyrone. 8T79 OAX Statement of changes in equity for the Year Ended 31 March 2023 Share Capital Capital Resetves Revenue Reserves Total At 1 April 2021 29 4,095,086 4,095.123 Surplusl{deficitl for the year 577,752 577,752 Actuarial gainllloss) on pension scheme 488,000 488.000 Share issue Share cancellation At 31 March 2022 12 30 5,160,838 5,160,880 Surplusl{deficitl for the year 293,743 293.743 Actuarial gainllloss) on pension scheme 955.000 955.000 Share issue Share cancellation At 31 March 2023 34 6.409.581 6,409,624
Rural Housing Association Ltd 2 Kffllyclogher Road. Om8gh, County Tyrone, B T79 OAX Statement of Cash Flows for the Year Ended 31 March 2023 2023 2022 Note Net cash flow f rom operating activities 19 1.897.386 1,899,121 Cash flow from investing activities Purchase of tangible fixed assets Proceeds from sale of tangible fixed assets Grants received Interest received (4,399,153) 719,845 1,348,194 3,993 { 5.341,957) 69.150 3,746,100 717 12,327,121 1 11.525,990) Cash flow from financing activities Interest paid New secured loans Repayrnents of borrowings Share capital (719,3261 8,139.000 (6,499,193) (628,744) 1,000.000 1740,6151 920,482 { 369,3541 Net change in cash and cash equivalents 490.747 3,777 Cash and cash equivalents at 1 April 696.902 693,125 Cash and cash equivalents at 31 March 1,187.649 696,902 12
Rural Housing Association Ltd 2 Killyclogher Road. Omagh, County Tymne, B T79 OAX Notes to the Financial Statements for the Year Ended 31 March 2023 1 Accounting policies Legal registration The Association is regislered under the Co-operative and Community Benefit Societies Act (Northern Ireland) 1969 and is a registered provider of social housing Basis of accounting The financial statements have been prepared under the historical cost convention. The financi81 statements have been prepared in compliance with UK GA4P. including FRS102 'The Financial Reporting standard applicable in the UK and the Republic of Ireland, and the Statement of Recommended Practice for registered social housing providers ISORP 20181 issued by the National Federation of Housing Associations. The presentation of the financial statements complies with the Registered Housing Associations (Accounting Requirements) Order (Northern Ireland) 1993. Turnover Turnover comprises rental income, grants and other income. The Association's rental income is reflected net of income attributable to property rates. Fixed assets Housing properties are properties held for the provision of social housing or to otherwise provide social benefit. Housing properties are principally properties available for renl and are slated at cost less accumulated depreciation and impairment losses. Cost includes the cost of acquiring land and buildings, development costs. interest charges incurred during the development period. Works to exisling properties which replace a component that has been treated separately for depreciation purposes. along with those works that result in an increase in net rental income over the lives of the properties, thereby enhancing the economic benefits of the assets, are capitalised as improvements. Other fixed assets are stated at cost less accumulated depreciation. Depreciation has been provided on the Association's Fixed Assets consistent with standard accounting practice at the following rates.. Fixed asset5 by class Useful life Method Housing property Main fabric Roof structure & covering - Windows & external doors Kitchen - Bathroomlwcs Heating. ventilation & plumbing Electrics Office building Cornputer equipment Office furniture & equipment 100 Years 70 Years 30 Years 20 Years 30 Years 30 Years 40 Years 60 Years 3 Years 5 Years straight line straight line straighl line straighl line Straight line Straight line Straight line Straight line Straight line straight line The depreciation charge is time apportioned in the month of addition and in the month of disposal. No depreciation is charged on either property under development or land. Impairment Housing properties are assessed annually for impairment indicators. Where indicators are identified an assessment for impairment is undertaken comparing the asset's carrying amount lo its recoverable amount. Where Ihe carrying amount of an asset is deemed lo exceed its recoverable amount, the asset is written down to its recoverable amount. this is likely lo be the fair value in use of the asset based on its service potential. The resulting impairment loss is recognised as expenditure in income and expenditure. Vvhere an asset is currently deemed not to be providing service potential to the Association. its recoverable amount is its fair value sess cost5 to sell. other assets are reviewed for iTnpairment if there is an indication that impairment may have occurred. 13
Rural Housing Association Ltd 2 Killyclogher Road, Omagh, County Tyrone, B T79 OAX Notes to the Financial Statements for the Year Ended 31 March 2023 1 Accounting policies Icontinuedl Housing Association financing C8Pltal development expenditure by the Association is financed partially by Housing Association Grant from the Department for Communities and from Private Sector Loan Finance (Mixed Fundingl- Current Irevenuel expenditure associated with the management of the development programme is also supported by Housing Association Grant allowance, which is attributed to the Income and Expenditure accounl as appropriate. Administration expenditure associated with the management of the Association's propety is charged directly agair)st income from lellings. Acquisition and development allowances The amount of acquisition and development allowances (HAG) allowed by the Department for Communities are attributed to the cost of the property concerned. Credit is taken for allowances for administrative costs (associated with the management of the development programmel in the Statement of Comprehensive Income and a relevant proportion of administrative expenditure is charged against them. Government and other grants Where the cost of properties have been financed by a Housing Association Grant (HAGI paid from the Department for Communities. the grant is recognised in income over the expected useful life of the housing propety structure and ils individual components on a pro rala basis under the accruals model. HAG and other grants received in respect of revenue expenditure is credited lo the income and expenditure account in the same period as the expenditure to which it relates. To the extent that Housing Association Grant is received in advance of the related expenditure, it has been included in Creditors.. falling due within 1 year. to be attributed lo appropriate capital and revenue expenditure in future accounting periods. Disposal proceeds fund The Disposal Proceeds Fund represents the net surplus on property sales together with grant, which has been set aside for the purpose of providing replacement properties in accordance with the Department for Comrllunities regulations. If the surpluses are not used within two years from their receipt they may be payable in part or in full to the Department for Communities. Retirement benefits The Association participates in an industry wide defined benefit final salary pension scheme. The underlying assets and liabilities of the scheme attributable to Rural Housing Association have been identified by actuaries. As a result the Association recognises the scheme deficit on the balance sheet at the year end. Actuarial gains and losses and returns on scheme assets are recognised in the statement of comprehensive income. Current and past service costs are recognised within operating surplus and interest on obligations is recognised as other finance costs. Financial instruments The Association only has financial assets and liabilities of a kind that qualify as basic financial instruments. Basic instruments are initially recognised at transaction value and subsequently measured at their settlement value. 14
Rural Housing Association Ltd 2 Killyclogher Road, Omagh, County Tyrone. B T79 OAX Notes to the Financial Statements for the Year Ended 31 March 2023 1 Accounting policies {continuedl Going concern The Association's business activities, its current financial p051tion. and factors likely to affect its future development are set out wthin the annual report from Ihe board and wthin these financial statements. The Association has in place long-term debt facilities which provide adequate resources to finance committed reinvestment and development programmes, along with the group's day to day operations. The group also has a long-term business plan which shows that it is able to service these debt facilities whilst continuing to comply with lenders, covenants. As at 31 March 2023 the Association had available cash reserves of £1.2m The Board's assessment of going concern involves a number of subjective judgements including, but not limiled to increased renl arrears. delayed rent collections, In¢asIng inflation and interest rates, a reduction in property prices and costs associated with achieving energy efficiency homes. In making their assessment the board have also considered the potential mitigations available lo manage the potential impact on its cashflows and liquidity. Stress lesls have been run on the Associations business plan, which include the impact of sensitivities on the association's cash flow requirements. compliance with debt facilities, as well as covenant compliance. This stress testing found that the business plan is robust and does not affect the Association's ability to meet ils obligations. On this basis. the Board has a reasonable expectalion that the group has adequate resources to continue in operational existence for the foreseeable futLJre, being a period of at least twelve months after the date on which the rèport and financial statements are signed. The board have considered the foreseeable future for their going concern assessment to cover the period to 31 March 2025. On this basis, the Board continues to adopt the going concern basis in the financial statements. Significant judgments and estimates The following are the significant management judgements made in applying the accounting policies of the group that have the most Significant effect on the financial statements. Useful lives of depreciable assets Management reviews its estimate of the useful lives of depreciable assets at each reporting dale based on the expected utility of the assets including any components. Uncertainties in these estimales relate to technological obsolescence that may change the utility of certain sofiware and IT equipment, changes to the Decent Homes Standards and changes to energy efficiency requirements which may require more frequent replacement of key components Defined benefit obligation Management's estimate of the defined benefit obligation is based on a number of critical underlying assumptions such as standard rates of inflation, mortality. discount rate and anticipation of future salary increases. Variation in these assumptions may significantly impact the liability and the annual defined benefit expenses 15
Rural Housing Association Ltd 2 Killyclo9her Road, Omagh, County Tyrone, B T79 OAX Notes to the Financial Statements for the Year Ended 31 March 2023 2 Turnover, operating costs and operating surpluslldeficit} from social housing 2Ctlvities The whole of the association's turnover is attributable in the United Kingdom and is derived from Ihe principal activity of social housing. 2023 2022 General Needs Housing Total Social Housing other Income Total Income Total Income Operating Income Rent receivable Rates receivable Management allowance re adaptations Interest received Surplus on property disposal Other income Community development grants Amortisation of grants Less voids 3,044,033 405,343 (75) 3,044.033 405.343 1751 3.044,033 405,343 175} 3,993 493,355 5.870 24.103 542,954 125.254 } 2,903,923 387,959 3,568 717 73,180 131.142 57,908 510,683 128,237 } 3,993 493,355 5,870 24,103 542,954 125,2541 5,870 24,103 542.954 125,2541 Total Social Housing Income 3.996.974 3,996.974 497,348 4,494,322 4.040.841 Operating Costs Bad debts Housing Management costs Maintenance Administration Planned and cyclical maintenance Development expenses Response maintenance Major repairs Depreciation Rates Total Social Housing Expenditure 14,677) (4,677) { 687,898) 1687,8981 14,6771 (687.8981 (410,411 ) { 241,086) 17,3781 1370.5441 { 7,7661 1680,7381 1384,400) 1160,071 ) (10,4181 (291,9051 { 241,0861 (241,0881 (7,3781 17,3781 1370,5441 { 370,544 } 1888,8591 1888,859) 364,809) 1364,809) 12,975,662) { 2,975,662) (888.859) (364,809 ) 12.975,6621 { 854,949 ) 349,163) 12,739,410) Interest payable Financing cosuincome Transfer to Disposal Proceeds Fund 1712.5621 1712,5621 { 19.000 } { 19.000) { 493.355 } (493.355) (629,499 ) 121,000 ) 173,1801 Surplus on ordinary actlvities 1.021.312 1,021.312 727,569 293.743 577.752 DFC Allowances Management Allowances £396 per unit Management cost5 Surplus l Deficit 217,008 687,898 1470.890) 217,008 680,738 463.7301 Maintenance Allowances £464 per unit Planned and cyclical maintenance Response maintenance Surplus l Deficit 254,272 241,086 370,544 357,3581 254.272 160.071 291.905 197.704 Gross Income from rents Technical Non technical Total 82.00% 18.00/. 2,496,107 547.926 3.044,033 2,381,216 522.707 2,903.923 No of Propertles 548 548 16
Rural Housing Association Ltd 2 Kijlyclogher Road. Omagh, County Tyrone, 8T79 OAX Notes to the Financial Statements for the Year Ended 31 March 2023 2023 2022 3 Operating surplus Operating surplus is stated after char9ingllcreditingl: Depreciation on tangible fixed assets (Profit)Iloss on disposal of other fixed assets Auditors remuneration Amortisalion of Government grants 900.539 (7.1771 24,763 1542,9541 871,750 { 3,3881 24.414 (510.683) 4 Employee informatlon 2023 2022 The average monthly number of persons employed during Ihe year was.. 23 22 2023 2022 5 Staff Costs Salaries Social security costs Pension costs Private Health Care 670,940 68.841 289.231 4.514 1,033.526 602,214 57,755 310,003 969.972 The aggregate remuneration, including benefits in kind and pension contributions, of key management personnel of the Association during the year was- 2023 2022 Aggregate remuneration 324.901 324,901 296,409 296.409 The number of management personnel to whom emolumen15 (including salary, employer pension contributions and benefits in kindl were paid during the year falls within each of the following bands.. 2023 2022 60.000- 70.000 70.000- 80.000 80.000- 90.000 90.000- 100.000 6 Board of Management remuneration The Board mernbers received no remuneration from the Association. Total expenses paid during the year lo Board mernbers amounted to £44312022: £0). Rent received from two tenant Board members during the year amounted to £11.545 (2022= £01. 7 Interest receivable Bank interest 3,993 717 17
Rural Housing AssoGiatior7 Ltd 2 Killyclogher Road, Omagh, County Tyrone, B T79 OAX Notes to the Financial Statements forthe Year Ended 31 March 2023 2023 2022 8 Interest payable and other charges Bank loans 712,562 629,499 9 Corporation tax The Association became a registered charity reference XR23974 with effect from 13 October 2008. The Association is not liable to Corporation Tax from that date. 2023 2022 10 Fixed assets la} Housing land and buildings cost At beginning of year Additions during year Disposals during year At end ofyear 60,097,735 4.487.752 { 600.6051 63,984,882 54.818,540 5.330,369 {51,1741 60,097,735 Depreciation At beginning of year Charge for year On disposals At end of year (10,515,274) (870.2461 134.928 (11.250,5921 { 9,694,372) { 836,3361 15,434 110.515.274 ) Net book value at end of year 52.734,290 49.582,461 (bl Other fixed assets Computer Equipment Office Equipment Office TOTAL Cost At beginning of year Additions during year Disposals during year At end of year 1.116.777 94.597 2.511 53.807 1.000 1,265.181 3.511 1,116.777 97,108 54.807 1.268,692 Depreciation Al beginning of year Charge for year On disposals At end of year { 242,541 1 118.6131 177.4841 (9,4141 { 49.0031 12.266) 1369,0261 { 30,2931 261,154 86,898 51.269 399,319) Net book value at end of year 855,623 10,210 3,538 869,371 Net book value at beginning of year 874,236 17,113 4,804 896,153 11 Housing Stock Number of units owned by the Association on 31 March 2023 General Needs Housing 2023 2022 548 548 18
Rural Housing Association Ltd 2 Killyclogher Road, Omagh, County Tymne, B T79 OAX Notes to the Financial Statements for the Year Ended 31 March 2023 2023 2022 12 Debtors Tenanl debt Rental debtors gross - technical Rental debtors gross - Non-technical 129.892 32,473 129.006 32,251 162,365 161,257 Less.. provision for bad and doubtful debts 14.6771 17,7661 157,688 153,491 HAG receivable Interest receivable Prepayments other debtors 919,583 305.830 50,569 76.437 33,984 29,721 1.204.277 523.026 13 Cash and cash equivalents BaNk dep051t account Current bank accounts Cash on hand 503,082 684,266 301 896,537 365 1.187.649 696,902 14 Creditors (due within 1 yearl Tenant overpayment Accruals other creditors Loan interest HAG paid in advance by DFC (see below) Deferred Housing Association Grant (Note 151 Loan repayments due within 1 year {Note 151 27,657 986,576 226,272 8,979 2,219.389 464,357 840.560 34,767 574,193 108.273 15,743 2,484,382 500.598 813.824 4.773.790 4,531,780 HAG paid in advance by DFC Opening balance HAG receviable Attributed to capital development Transfer to revenue account Balance at year end 2,484,382 2,003,535 { 2,268,528 ) 1.904,073 3,089,852 12,505,977) 13,5661 2,484,382 2,219,389
Rural Housing Association Ltd 2 Killyclogher Road, On7agh, County Tyrone, B T79 OAX Notes to the Financial Statements for the Year Ended 31 March 2023 2023 2022 15 Creditors (falling due after more than 1 yearl Disposal proceeds fund Bank loans Deferred incorne - capital grants la) Ib) Ic) 566,585 15.187,332 29,056,256 114,817 13,574,262 27,540,805 44,810,173 41,229.883 lal Disposal proceeds fund Opening balance Transfers in surplus on disposals repayment ofVPG discount 114,817 422,541 349,355 144.000 49,180 24,000 493.355 73.180 Transfers out- replacement properties 141,587} 1380.9041 Closing balance 566,585 114.817 (bl Bank loans Based on the lenders earliest repayment dale, borrowings are repayable as follows= Within one year or on demand 840.860 One year or more but less than Iwo years 838.469 Two years or more but less than five years 1.767,773 Five years or more 12,581,090 813,824 4,464.950 1,999,069 7,110.243 16,028.192 14,388,086 All bank loans are secured by way of mortgages upon the deeds of properties. All bank loans bear interest rates ranging bebNeen 3.28 /0 and 5.080/0 at fixed rates, except for a Revolving Credit Facility which was secured in December 2022. The Revolving Credit Facility is provided on an interest only basis for 5 years (with an option to extend to 7 years) with the drawn balance to be repaid or converted to a structured term loan al expiry of the 7 years. (cl Deferred income capital grants Housing Association grant At beginning of year Attributed during year From disposal proceeds fund On disposals Al end of year Other public grant 34,961,523 2,226,941 41,587 1324,960) 36.905.091 58.766 36.963.857 32.484,787 2.125.075 380.903 129.242 34,961,523 58,766 35.020,289 Amortisation At beginning of year Amorlised in year On disposals At end of year 16.978,886) (542,9541 78.596 7.443,244 16,478.288 ) (510,683) 10,085 6.978.886 Net book value at start of year 28,041.403 26,065,265 Deferred Housing Association Grant falling due within 1 year Deferred Housing Association Grant falling due after 1 year Net book value at end of year 464.357 29,056.256 29,520,614 500,598 27,540,805 28,041,403 20
Rural Housing Association Ltd 2 Killyclogher Road, Omagh, County Tyrone, B T79 OAX Notes to the Financial Statements for the Year Ended 31 March 2023 16 Provision for liabilities and charges 2023 2022 Pension liability Opening balance Current & past service cost Employers contributions Interest on net defined benefit liabilityllassetl Remeasurement (gains) I losses 776,000 287,000 1125,0001 19.000 1955.0001 1,046,000 308.000 {111.0001 21,000 1488,000 } Closing balance 2,000 776.000 17 Share capital 12 The Association's Rules require each member to hold only one share of nominal value of one pound each in the Association. There were 9 members of the Association at 31 March 2023 (2022'.12 members), 1 member joined and 4 retired from the Board of Management during the year. 18 Capital reserves 34 30 The Capital reserve reflects the cumu5ative nominal value of shares cancelled by the Association. 19 Cash flow from operating activities Surplus for the year 1,021,312 1.227,534 Adjustments for non-cash items.. Depreciation of tangible assets Amortisation of social housing granl Ilncrease)Idecrease in debtors Increaselldecreasel in creditors Pension costs less contributions payable 900,539 1542.9541 (67.498) 431.164 162.000 871.750 1510,6831 21.002 95.906 197,000 883,251 674,975 Adjustmenls for inve5trnents or financing activities.. (Profitllloss on sale of tangible fixed assets (7,177 } { 3,388) 17,177) (3.3881 Net cash inflow from operating activities 1,897,386 1.899,121 20 Capital Commitments At the balance sheet date the Association was contractually committed lo capital development expenditure of £24.5m 12022 £19.7m). 21
Rural Housing Association Ltd 2 Killyclogher Road, Omagh, County Tyrone, B T79 OAX Notes to the Financial Statements for the Year Ended 31 March 2023 21 Contingent liabilities There exists a contingent liability On the Association of the possibility of having to repay Housing Association Grant received on properties if any properties are sold. This also includes any grant written off through the implementation of component accounting. The possibility of reimbursement to the Department for Communities of the HAG released on build components replaced is considered to be unlikely as the housing properties are expected lo continue lo be made aVailabe for social housing. 22 Retirement benefits The Association operates a defined benefit pension scheme for its employees wlh the assets held separately from those of the company. The scheme provides retirement benefits on the basis of members, average earnings but any member who joined before 31 March 2015 will be based on final salary. The fund is administered by the Northern Ireland Local Government Officers, Superannualion Committee. The funded nature of the Local Government Pension Scheme require the Employer and its employees to pay contributions into the fund, calculated at a level intended lo balance the pension liabilities with investment assets. A full actuarial valuation of the ernployevs Local Government Pension Scheme funded benefits was carried out as at 31 March 2022 by a qualified independent actuary. Adjustments to the valuation at that date have been made based on the followng assumptions.. 2023 2022 2.9°/. 2.90/0 2.9'/0 Pension increases Salary increases CPI Inflation Discount rate Pension accounts revaluation rate 2.90/0 The mortality assumptions at the accounting date are based on actual mortality experience of members within the Fund based on analysis carried out as part of the 2022 Acturial Valuation, and allow for expected future motality improvements. Sample life expeclancies at age 65 in normal health resulting from these mortality assumptions are shown below. 2023 2022 ears ears Males Member aged 65 at accounting date Member aged 45 at accounting date Females Member aged 65 at accounting date Member aged 45 at accounting date 22.2 23.2 21.8 23.2 25.0 26.0 25.0 26.4 22
Rural Housing Association Ltd 2 Killyclogher Road, Omagh, County Tyrone, 8T79 OAX Notes to the Financial Statements for the Year Ended 31 March 2023 22 Retirement benefits {continuedl Reconciliation of scheme assets and liabilities Assets Liabilities 2,433,000 13,209,000) 121,000) 21,000 125.000 42,000 Total 1776,0001 At 1 April 2022 Benefits paid Employer contributions Employee contributions Current service cost Past service cost Interest income l {expensel Remeasurement gains l (losses) Actuarial gainslllosses) Return on plan assets excludin At 31 March 2023 125,000 142,0001 1287,0001 { 287,0001 68,000 { 87,0001 119,000) 1,048,000 1,048,000 93,0001 2,0001 interest income 193.000 ) 2,554,000 2.556,000 Total recognised a$ an expense: 2023 287,000 2022 308.000 Current service cost Past servi¢e cost Interest cost 19.000 306.000 21.000 329,000 No amounts12022.' nil) were included in the cost of assets. The fair value of the plan assets was: 2023 1,021,000 286,000 526,000 77,000 340,000 166,000 138,000 2,554,000 2022 1,044,000 243.000 601.000 54.000 319,000 97,000 75,000 2.433.000 Equities Property Bonds- government Bonds - corporate Multi Asset Credit Cash other The return on the plan assets was.. 2023 68,000 (93,0001 { 25.0001 2022 47.000 73,000 120,000 Interest income Return on plan assets less interest income Total return on lan assets 23 Events after end of reporting period No events after the year end need to be reported. 23
Rural Housing Association Ltd 2 Killyclogher Road. Omagh. County Tymne, B T79 OAX Detailed Income and Expenditure Summary forthe Financial Year Ended 31 March 2023 2023 2022 INCOME Rent receivable Rates receivable 3,018,779 405,343 3.424.122 5.795 24,103 542,954 3,996,974 2,875,686 387,959 3,263.645 134,708 57,908 510,683 3.966,944 Other income Community development grants Amortisation of grants TOTAL INCOME EXPENDITURE (Before Admln Apportionment) Letting costs Rates 1,572,573 364,809 1.937,382 1.236.360 1.375.196 349.163 1,724,35Q 1,198,063 Administration costs TOTAL EXPENDITURE 3,173,742 2.922,422 TRADING SURPLUSI{DEFICIT) 823.232 1,044,522 TRADING SURPLUSIIDEFICITI (After Admin Apportionmentsl Letting Rates 950,880 40,534 996.122 38.796 991,414 1168,1821 1.034,918 9,604 Adminislralion 823.232 1,044.522 FIXED ASSETS AND INTEREST Administration costs capitalised Interest receivable Interest payable 198,080 3,993 712,5621 183,012 717 1629.499 SURPLUSIIDEFICITI 312,743 598,752 Disposal of property Sale proceeds Voluntary purchase grant 588,500 144,000 732,500 71,000 24.000 95.000 Less Cost of propety HAG eliminated Allowable costs Voluntary purchase grant allowance 564,449 1337,958) 6,168 6.486 239.145 49,150 129,180) 959 891 21,820 Net Surplus Transferred lo DFP 493,355 73,180 806,098 671,932 24
Rural Housing Association Ltd 2 Killyclogher Road, Omagh, County Tyrone, 8T79 OAX Detailed Income and Expenditure Summary for the Financial Year Ended 31 March 2023 2023 2022 Note Balance brought fotward 806.098 671,932 Financing (costll income Net interest on net scheme asselslliabilities 119,0001 121,0001 Net return { 19,0001 (21,000) 787,098 650,932 Corporalion tax on tax adjusted surplus Surpluslldeficitl after taxation 787,098 650.932 Transfer to disposal proceeds fund (493.3551 {73,180) 293,743 577,752 25
Rural Housing Association Ltd 2 Killyclogher Road, Omagh, County Tymne. B T79 OA¥ Income and Expenditure from Lettings for Financial Year Ended 31 March 2023 2023 2022 Income Rental income receivable Less loss of income from voids 3.044.033 25,254 3,018,779 405,343 3,424,122 542.954 3.967.076 2,903,923 128.237 ) 2,875,686 387,959 3.263,645 510,683 3,774,328 Rates Amorlisalion of Grants Total Income Less operating (property management) expenditure Bad debt Insurance Development expenses Housing (response) tnaintenance External cyclical and planned maintenance Property depreciation Rates 4,677 60,029 7.378 370.544 241.086 888.859 364,809 7.766 50.087 10.418 291.905 160,071 854,949 349,163 Total operating costs Rent surplus (before admin & interest payable) 1,937,382) 2,029,694 1,724,359 2.049,969 Administration apportionment (1,038,280) (1.015,051 1 Rent surplus (before interest payable) 991,414 1,034,918 26
Rural Housing Association Ltd 2 Killyclogher Road, Omagh, County Tyrone, B T79 OAX Administrative Expenditure for the Financial Year Ended 31 March 2023 2023 2022 Administrative expenditure Salaries and wages Pension service cost Recruitment costs Travel and subsistence Slationery and publications Affiliation and membership Publicity and advertising Courses and conferences Office accommodation and services Equipment and fittings depreciation Accountancy and audit Consultancy Legal & professional fees Insurance (Non Propety) VPG administration allowance IProfit)Iloss on disposal of fixed assets Vehicle lease charges General expenses Community development expenditure Tenant participalion 703.098 287,000 4,986 15,774 4,420 18,699 10,183 7,671 70,594 11,680 24,763 25.526 17.683 16.232 112.6541 17.1771 6,615 656,571 308,000 4.040 14.349 7.215 14,204 7,466 12,246 69,366 16.801 24.414 8,200 14.793 14,316 11,8501 13,388 } 4,800 28,639 2,628 25.310 1.210 Total Administrative expenditure 1,236,360 1.198.063 Apportionments Housing Management Property Maintenance 627,869 410,411 1,038,280 198,080 630.651 384,400 1.015,051 183,012 100.00010 Development and adaptations 1.236.360 1,198,063 27