2023-03-31-annual-return

/ownership REPORT 2022/23 co- owner ship. org

ownership Vision Purpose Values To enable people to become homeowners. To lead the way on affordable home ownership. Putting customers first. Working together. Doing the right thing. Evolving and improving. co- owner ship. org 2021-2024

CONTENTS

		Page
1.	Chair's Report ..........................................................................	4
2.	Chief Executive's Summary ....................................................	5
3.	About .....................................................................................	6
4.	Year at a Glance .....................................................................	7
5.	Our Impact .............................................................................	8
6.	Performance Highlights .........................................................	10
7.	Operational Highlights ..........................................................	12
8.	Environmental, Social & Governance (ESG) ...........................	14
9.	ARG Committee Chair’s report .............................................	18
10.	FP Committee Chair’s report ................................................	19
11.	HR Committee Chair's report ................................................	20
12.	Board Members .....................................................................	21
13.	Financial Performance ...........................................................	22
14.	Financial Statements ............................................................	24

03

Co-Ownership Annual Report 2022/23

CHAIR'S REPORT

I’m proud that last year Co-Ownership helped 745 new customers take their first step into an affordable and secure home and that 576 people moved into full home ownership.

Our customers' experience of Co-Ownership and the impact it has on their lives is important to the Board. This year we carried out a survey on our social impact that showed that over 80% of those surveyed said that since purchasing their own home with Co-Ownership their health and wellbeing had improved. This confirmed that having a home is the foundation for good health and wellbeing and reinforces the importance of the work of Co-Ownership.

One of the highlights of the year was the launch of our new product. Co-Own for Over 55s allows people, often existing homeowners, to find a property that is more suitable to their needs. Funded by the Department for Communities, the product opened to applications in June 2022. As our population ages it’s vital that people are supported to live independently for as long as possible and it has been great to hear about the very positive impact this new product has had on our customers.

Sam Dickey left the Board during this period, we thank him for keeping us well informed about issues in the residential sector.

On behalf of the Board, our thanks are due to all the people who work in Co-Ownership for their contribution throughout the year. They continue to be our most valuable asset, and we will ensure they have the necessary resources to deliver and enhance excellent service to our customers.

I would also like to thank all the partners we work with to deliver our services, and the Board continue to be grateful to Department for Communities for their support.

David Little, Chairman

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Co-Ownership Annual Report 2022/23

CHIEF EXECUTIVE'S REPORT

It has been a volatile period for the housing market. After the high levels of activity and the rapidly increasing house prices we saw during the pandemic, last year with increasing mortgage costs and high inflation the market has been much more subdued. Inevitably in this difficult and uncertain environment we saw our application numbers fall from the high levels of the previous two years.

In Co-Ownership we have a passion to deliver a great customer experience. The data we collect and the benchmarking we carry out show that our customers are very happy with the service we deliver, but delivering great customer service is a never-ending journey and we continue to strive to improve. Highlights this year included the complete overhaul of our property assessment process to provide much better information to our customers and to make the process easier to navigate.

We have been very conscious of the financial pressures our customers are facing with high inflation and the financial shock as their mortgage costs increase. They are clearly feeling the impact but to date I’m happy to report that the vast majority of people are able to pay their rent and their mortgage, and our rent arrears remain very low. The cost-of-living crisis is far from over and we will continue to support our customers over the coming year.

We recognise the need to play our role in achieving net zero emissions goals. Given the number of Co-Ownership homes there are across NI we believe we have a key role to play in the owner-occupied sector. Our focus this year has been to build knowledge and capability in our team so that we can support our applicants make informed decisions about the properties they buy and to ensure that all our customers know how to reduce the energy use in their homes. There is no doubt that to decarbonise our homes and to ensure they provide good thermal comfort will be challenging.

All that we achieved in 2022/23 was only possible due the hard work and commitment of everyone that works in Co-Ownership, and I continue to be proud to lead an organisation that makes such a difference to so many people’s lives.

Mark Graham, Chief Executive

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Co-Ownership Annual Report 2022/23

ABOUT

Co-Ownership is the regional body for shared ownership in Northern Ireland. We are a registered housing association, an industrial & provident society regulated and funded by Department for Communities (DfC).

Co-Ownership is a charity and is registered with the NI Charity Commission.

Our purpose is to enable people to become homeowners and our vision is to lead the way on affordable home ownership. We operate on a not-forprofit basis to help people get onto the property ladder who cannot do so by themselves. Co-Ownership has a strong sense of social purpose and puts people at the heart of what we do, whilst also having a strong commercial focus. Our goal is to extend our reach and impact on society and we treat our customers fairly in all our interactions with them.

There are many reasons why people need help to buy a home – difficulty in raising a deposit, low income or non-permanent employment are some reasons. We have three ways to help people: Co-Own, Co-Own for Over 55s and Rent to Own. Since 1978 we have helped over 32,000 people buy a home in Northern Ireland, and currently have over 10,000 co-owners.

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Co-Ownership Annual Report 2022/23

2022/23 YEAR AT A GLANCE

----- Start of picture text -----
745
£106m People we
10,209
Total value of homes have helped co-owners
become
purchased
homeowners
96
£142,724 21% £190,000
Net Promoter
Average New builds Property Value
Score
purchase price purchased Limit increased
Co-Own Over 55s
customer profile customer profile
739 33 48% 6 66 67%
People Average From rental People Average From rental
helped age market helped age market
94% 33%
100%
First time buyer Retired
£24,577 £86,821
Annual earned income Customer contribution57%
576
Customers bought out
----- End of picture text -----

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Co-Ownership Annual Report 2022/23

OUR IMPACT

We love to hear about the positive impact Co-Ownership has on the lives of our customers. They inspire the team to deliver results and get people into homes. Here’s a snapshot of some of them.

Co-Ownership made my dream come true, as I'm a single mum and had no chance to buy a house on my own. Thanks to Co-Ownership!

Helped our dream come true! Like most people high rents meant we couldn't save for a deposit to purchase our home. Co-Ownership was the best choice for us. Very quick process (bank not so quick). Supportive and keep you well informed.

Alina

As I a first time buyer, CoOwnership was the only way I could get on the property ladder, as it saved trying to gather a 5%-15% deposit on a single income. They were in constant contact with myself and my mortgage advisor and I was always kept informed as to what was going on.

Carrie-Anne

Without Co-Ownership I believe I would never have had the ability to purchase the home I wanted, they made it all possible! The deposits on properties that I wanted where simply too large. If you really want your perfect home, but the only thing standing in your way is large deposit, consider them at the very least. 10/10.

Luke

Nevin

Fantastic from start to finish anyone we spoke to was very polite and helpful definitely recommend.

Karen

Such an amazing group! So much support, ensure all info is available to you, at the end of the phone no matter what the question. Highly professional, extremely friendly patient team who go out of their way to help, no question too silly. I urge anymore starting out to check these guys out. Absolutely outstanding. Customer service is next level.

Very efficient and a quick decision. Excellent.

Kate

Frances

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Co-Ownership Annual Report 2022/23

Our Impact

My experience with Co-Ownership is that the people I dealt with were pleasant, helpful and kind. I didn't have to worry about anything they took care of everything for me no stress.

Clare

I had a great experience with Co-Ownership service. I would have struggled to get my foot on the property ladder but they helped me get my ideal house. All my questions and service experiences were very professional with minimal stress. Highly recommend this to anyone.

James

My experience with Co-Ownership was amazing! They are such an amazing team of people. I have a house now and I can’t believe it it’s so surreal it wouldn’t of been possible without them so thank you all so much if anyone is wanting a house but doesn’t think they can do it! These guys make it possible! They helped me from day one.

Thanks to Co-Ownership we are now sitting in our very first house. We could not have done it without them. Things are hard enough out there with the current financial crisis going on and with the help of CoOwnership our dream has come true. They were very professional and helpful from the off. We had our survey done within a week of sale agreed and it was very thorough which really helped us and most of all they helped with some of the other fee's incurred which was awesome. Cannot thank them enough. They do what they do very well.

Matthew

Co-Ownership was absolutely brilliant and I would recommend it to anyone. First class.

Colin

Steven

I've had a fantastic experience with Co-Ownership so far. I didn't have an easy buy and there were a few difficult moments but they were with me every step of the way. One of the advisors went above and beyond for me and showed me great kindness, unfortunately can't remember her name. Highly recommended.

Kez

Was a little apprehensive about applying for Co-Own for Over 55s but once I made the application everything went well. From my first contact everything was explained in detail and was impressed how quick and efficient the staff was, they kept us informed at every stage of the process. A life changer for both of us and a big thank you to the friendly staff of Co-Ownership.

Denis

Co-Ownership have been nothing but helpful and transparent in helping us buy our first home. We would recommend to any first time buyers struggling with the huge deposits required, it was a simple and stress-free process from the beginning and everyone I spoke to was helpful and knowledgeable.

Victoria

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Co-Ownership Annual Report 2022/23

PERFORMANCE HIGHLIGHTS

Applications

A total of 1,449 applications were received for Co-Own during 2022/23. This is lower than the total of 2,106 applications received during 2021/22.

Property purchasing activity

In the year 745 Co-Ownership customers received keys to their home.

Purchases were recorded across all council areas which demonstrates the continuing demand for affordable home ownership across Northern Ireland.

We ended the year with stock of 10,209 Co-Ownership homes.

House prices

During 2022/23, the average Co-Ownership purchase price was £142,724. The average price for new build properties was £158,664 and £138,434 for existing build properties.

The average purchase price for a property in Northern Ireland was £172,005 as of March 2023 (Source: NISRA NI House Price Index, Jan – Mar 2023).

New build housing

During 2022/23, 158 (21%) of the 745 Co-Ownership properties purchased overall were new builds, down from 31% in 2021/22.

The need for CoOwnership remains strong particularly as this new era of more expensive mortgages means fewer people can achieve their dream of home ownership by themselves. We have been very conscious of the financial pressures our customers are facing with high inflation and the financial shock as their mortgage costs increase.

Armagh, Banbridge and Craigavon council area recorded the highest volume of new build completions during 2022/23.

Mark Graham Chief Executive

Property type

Overall, semi-detached remained the most purchased property type during 2022/23; more than half of Co-Ownership customers purchased this property type (57%). This was followed by terrace/townhouses (33%), apartments (7%) and detached (3%).

Property value limit

To reflect the rise in house prices the property value limit for Co-Ownership increased from £175,000 to £190,000.

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Co-Ownership Annual Report 2022/23

Performance Highlights

Buying out

During 2022/23, 576 Co-Own customers fully bought out the remaining share in their property. There were 57 part buy outs recorded, down from 116 during 2021/22.

First time buyers

During 2022/23, 94% of Co-Own purchasers were first time buyers while 6% were returning homebuyers.

Deposit

During 2022/23, four in every ten Co-Own customers were able to access home ownership without a deposit (40%).

The average deposit amount for a Co-Own customer during 2022/23 was £10,065 whilst the average deposit amount for first time buyers in Northern Ireland was three times higher at around £33,000[1].

----- Start of picture text -----
800
600
550 654 688 526 766 576
400
200
0
2017/18 2018/19 2019/20 2020/21 2021/22 2022/23
----- End of picture text -----

Co-Own customers buying out in full, 2017/18 – 2022/23

Earnings

During 2022/23, the median gross annual earnings for a Co-Own customer was £24,577[2]. This represents an increase of 5% from last year.

Previous tenure

Of those Co-Ownership customers who received keys to their home overall during 2022/23, almost half came from the private rented sector (48%). The remainder comprised of customers who had previously been living with friends/family (50%) whilst a small number had been in social housing (2%)[2].

Age

The average age of a Co-Own customer during 2022/23 was 33[2] which is just slightly higher than last year (32).

The most common age groups of Co-Own customers remain unchanged; those aged 23 to 27 and 28 to 32 were found to be most likely to purchase their home with Co-Ownership.

Rent to Own

During 2022/23, 6 Rent to Own tenants purchased their properties. 4 bought with a full mortgage and 2 bought with Co-Own.

----- Start of picture text -----
30
20
10
5% 26% 26% 17% 13% 13%
0
<=22 23-27 28-32 33-37 38-42 >=43
Age of Co-Own customers, 2017/18 – 2022/23
----- End of picture text -----

[1] Halifax, 2023 [2] Applicant 1

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Co-Ownership Annual Report 2022/23

OPERATIONAL HIGHLIGHTS

Customer Service

We’re committed to delivering outstanding customer service and striving for improvement while keeping our customers at the heart of the organisation. Having become the first organisation in Northern Ireland to achieve the Institute of Customer Services ServiceMark accreditation in 2022, we are now working towards achieving distinction when we are reaccredited.

Customers are at the heart of everything the team at Co-Ownership does & commitment to delivering great service to its customers runs through all areas of the company. Throughout the assessment, I saw a lot of pride in everyone I spoke with, in working for an organisation that is customer centric.

During this financial year we surveyed our stakeholders and achieved a customer satisfaction index of 91.6. Our net promoter score for the year was 96 and we consistently received a TrustPilot rating of 4.9 out of 5.

This year we were shortlisted for two ICS UK wide service awards and we commenced our professional qualifications journey with ICS training 15 coaches who are now supporting 15 members of the team work towards an ICS professional qualification.

Product Development

Institute of Customer Services

In June 2022, we were delighted to start accepting applications for our new affordable housing initiative for people aged 55 and over who want to move to a more suitable home that better meets their needs. There has been a pleasing level of interest in Co-Own for Over 55s and up to March 2023, six customers had been able to access more suitable homes.

As part of the launch of Co-Own for Over 55s we held an event for stakeholders in September 2022. This was well attended by housing, health and age industry stakeholders, MLAs, and the Department for Communities.

Marketing

In July 2022 we carried out consumer research to understand how the increased cost of living is impacting people’s ability to get a home. This identified the barriers and concerns people faced and we were able to incorporate these into our messaging for digital advertising, and later our outdoor advertising as part of the brand campaign.

Industry representations at the launch of Co-Own for Over 55s

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Co-Ownership Annual Report 2022/23

Operational Highlights

Marketing activity

There were 2 bursts of the Think Again brand campaign in 2022/23 which included TV, Digital and Billboard advertising. In addition to this we also launched the 'Always on' marketing activity across YouTube, Facebook and Display advertising. This was layered on top of our organic social media.

In March 2023, our brand tracking research showed that levels of awareness of Co-Ownership were continuing to increase.

Billboard creative used in the advertising campaign

People

We remain focused in developing our people. As we embedded our hybrid way of working we have focused on maintaining collaboration and ensuring that everyone feels part of the team in CoOwnership. We have achieved this through many staff events and regular communications. Our staff recognition scheme, the Extra Milers, continues to demonstrate the commitment of our staff to excellent service with great staff participation. We have also continued to support our people through our Health & Wellbeing strategy, policy and activities. Leadership development remains a priority with a number of training events in the year to support this key agenda.

ICT

We continue to deliver our Digital Program by designing solutions that ensure we can provide the best possible service to our customers and delivery partners. This year we introduced a fully digital property assessment, significantly improving both the time taken to make a property decision, and the quality of information available to both Co-Ownership and our customer.

The increased cyber security threat has been a focus in the year and we continued to take measures to maintain our ISO27001 Information Security accreditation. We have remained vigilant to the cyber threat and taken proactive steps to address this by investing in firewalls and systems and through mandatory cyber security training for our staff.

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Co-Ownership Annual Report 2022/23

Environmental, Social & Governance

ESG REPORT

As a business with a strong sense of social purpose, we have always recognised the wider impact of our work and we seek to make a positive impact on society whilst minimising our environmental footprint. The practical application of our values “putting customers first” and “doing the right thing” is evident through our strong focus on Environmental, Social and Governance, (ESG), in response to climate change, rising energy prices and the increasing cost of living.

a) Environmental

We developed our Climate Change Strategy during the year following a dedicated Board Strategy Event with input from a panel of experts. We aim to be a voice for the owner occupier sector, to encourage customers to improve energy and carbon efficiency in their homes, and to lead by example by reducing the carbon footprint of our operational environment.

The strategy sets out the scale of the challenge and enablers for the housing sector to transition to net zero and we look forward to working with government bodies and other strategic partners to help homeowners to reduce carbon consumption. The full Climate Strategy Response can be found in the Reports section of our website.

Throughout the year we benchmarked the heat source and energy efficiency of our stock and this exercise will inform our future activities. We invested in significant staff training on energy efficiency and carbon literacy. This has enabled us to deliver information on energy saving measures to support customers with the rising cost of living.

Additionally, we continued our environmental efforts under the framework of our Business in the Community CoRe accreditation, the standard for responsible businesses in Northern Ireland.

In partnership with Action Renewables, we undertook an energy use audit of our premises. We will take forward their recommendations in the forthcoming period. The Board fully recognize the challenge ahead and are committed to lead in the owner occupier sector.

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Co-Ownership Annual Report 2022/23

Environmental, Social & Governance

b) Social

Our 2022/23 Social Impact Report shows the impact buying a home through Co-Ownership has had on the lives of our customers. It allows us to look beyond the numbers and communicate the real benefits achieving home ownership has had on people’s lives.

688 526 766 76% 89% 83% 95% 80% agreed or strongly agreed or strongly agreed or strongly agreed or strongly agreed or strongly agreed they felt part agreed they could agreed they felt their agreed they felt part agreed they felt of the community travel to work health and wellbeing more independent financially secure where they lived conveniently had improved

However often it’s the comments from customers that say it best:

“It has really helped with my mental health. Years of trying to save and getting nowhere. I never would have been able to buy my house as a single woman on her own so thank you very much.”

“Our little boy has autism and it has changed his life having our own home. He loves having space and his own garden. He hates his routine being affected so we are so delighted with having our own home.”

“Without Co-Own I would be in a terrible housing position. A mix of homeless and living with friends. Thank goodness for Co-Own!”

The full Social Impact Report can be found under the Reports section of our website.

Community Fund

Our annual Community Fund supported 4 different community groups from across Northern Ireland, with projects including Mainstay, who arranged gardening activities for people with learning disabilities and Sion Swifts who organised a programme of activities to help ensure a girls' football team kept active and socialising over the winter months. Additionally, two food banks were awarded funding to help with the ongoing cost of living crisis. This work demonstrates our commitment to being a responsible business by actively supporting local communities and supports our ongoing work on the CoRe accreditation with Business in the Community.

Mainstay confirmed that “Families reported that their loved ones were sleeping better at night, coming home in brighter form, more enthusiastic about going into their environment, had a sense of achievement and excited to do more programmes like this.”

Sion Swifts Ladies and Girls FC said “Families provided feedback that it was great to have these indoor activities over winter months, keeping their children active and socialising with each other, improving their well being and confidence.”

Community Fund Recipients

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Co-Ownership Annual Report 2022/23

Environmental, Social & Governance

Charity Partner

Staff selected NI Chest, Heart and Stroke as our chosen charity and so far, have raised over £5,000. They have achieved this by taking part in events such as the Belfast half marathon, red dress fun run, the relay race and 8 mile walk. Coffee mornings, themed lunches and raffles have helped raise further funds for the charity along with Co-Ownership's matched funding commitment.

Barnardo's Family Bereavement Service Christmas Appeal

This year again, staff surpassed all expectations with their generous support for Barnardo’s Family Bereavement Service Christmas appeal. This does invaluable work supporting bereaved families through what can be a difficult period following the loss of a loved one.

Volunteering

All staff are supported with 1 day’s volunteering annually and staff have used this opportunity to support local organisations, taking part in beach cleans, dog walking, cleaning out stables at an animal shelter and assisting with school events. We also have a number of staff who support the Age NI Check in and Chat initiative. A number of staff also sit on various Boards, giving up their time to assist local charities with their expertise.

Members of the Co-Ownership team taking part in fundraising activities for NI Chest, Heart and Stroke

“The support staff in Co-Ownership offer our families yearly is so precious. A lot of our families find Christmas time difficult for lots of reasons after the death of a loved one, emotionally and financially but with CoOwnership staff support they have one less thing to worry about. It is hard to put into words the sense of relief felt by parents and carers when offered this support. Thank you all so much.”

Michelle Scullion, Barnardo’s

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Co-Ownership Annual Report 2022/23

Environmental, Social & Governance

c) Governance

Co-Ownership is governed by a Board of Management, made up of non-executive directors elected from our shareholders. The Board complies with a Code of Governance based on the National Housing Federation Model Code of Governance.

Board members are unpaid volunteers, with their time and expertise freely given to the work of CoOwnership.

Board members act collectively; they do not have individual executive authority. As individuals they are responsible for upholding the values and principles of Co-Ownership and for contributing their personal skills, knowledge and experience to our work.

As non-executives, the Board delegates day to day responsibility for the operation of the business to the executive management team via a Delegated Authority policy clearly outlining board and executive responsibilities. The Board met 6 times in the year with an overall attendance rate of 69%.

Individual attendance rates for Board and Committee meetings are:

Board Member	Attendance Rate
David Little ....................................................................................	100%
Alyson Kilpatrick ..........................................................................	70%
Norman McKeown .......................................................................	88%
Phillip Price ...................................................................................	76%
Audrey Fleming .............................................................................	86%
Sam Dickey ....................................................................................	42%
Alastair Coulson ............................................................................	53%
Jordan Buchanan ...........................................................................	78%
Alan Ledlie .....................................................................................	57%
Nicola McCrudden ........................................................................	69%
Gillian Greer ..................................................................................	79%
Derek Wilson .................................................................................	80%

Gender balance on the Board is 33.3% female, 66.7% male.

We noted the departure of Sam Dickey from the Board in March 2023 and we thank him for his insight and professionalism during his tenure. The Board continued its development and succession planning with a recruitment exercise which was supported by a newly formed HR Committee. They also received a report from an independent Board Evaluation exercise noting pleasing results. The resulting actions will be tracked and supported by the HR Committee.

Risk Management

In meeting Co-Ownership’s corporate and strategic plans, the associated risks are properly identified, evaluated and managed to ensure that risk exposure is within an acceptable range, as defined in our Risk Appetite Statement.

In addition, the Board has delegated to its Committees the detailed scrutiny of financial performance, funding, HR matters and operational delivery. The Board has ultimate responsibility for ensuring an effective Risk Management Process. It delegates close scrutiny of risks to the Audit, Risk and Governance Committee, (ARG), which co-ordinates risk management activities and reviews processes. The ARG regularly reviews and evaluates all risks ensuring there are adequate ongoing monitoring arrangements including the effectiveness of early warning triggers/indicators. In turn, the ARG reports to the Board on the adequacy of Internal Control and alerts them to any emerging risk issues.

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Co-Ownership Annual Report 2022/23

Audit, Risk & Governance ARG COMMITTEE CHAIR'S REPORT

The Audit, Risk, and Governance Committee met 5 times in the year to perform their primary role which is to support the Board by reviewing the comprehensiveness and reliability of assurances on governance, risk management, the control environment and the findings and recommendations of any authorised investigations.

As part of the audit process, the ARG reviewed internal audit reports and resulting actions, and the internal audit plan. This year our contract with KPMG came to an end and we undertook a procurement process which resulted in recommending to the Board that we appoint ASM. On the external audit front, the ARG reviewed and agreed the approach to external audit and timelines with BDO.

Operationally, the ARG considered the climate change risk and ensured appropriate levels of insurance were in place. It considered enhancing operational resilience, IT and information security, including the risk implications from increased homeworking.

The committee reviewed and approved regulatory returns, updates to the Data Protection policy and made recommendations to the Board on the updated Code of Governance and Code of Conduct.

The Committee was satisfied that the control environment remains robust, resulting in a satisfactory level of assurance, (the highest possible) from internal audit as well as a clean audit result following external audit by BDO. Overall the Committee are satisfied with adherence to audit, risk and governance requirements.

Philip Price, Chair of the ARG Committee

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Co-Ownership Annual Report 2022/23

Finance & Performance

FP COMMITTEE CHAIR'S REPORT

In the year the Board restructured its committees and the FHR Committee evolved into the Finance & Performance Committee, with a separate dedicated HR Committee formed.

The Committee met 6 times in the year to perform their function which is to report to the Board on matters relating to Finance and Operations. Oversight of Finance includes financial risk management, maximising funding opportunities, compliance with funding terms, treasury management, budgetary control and procurement.

Operations oversight covers a review of the operational performance of the organisation.

Prior to the HR Committee being formed, this committee in it’s original FHR capacity reviewed and had oversight of the People Strategy and Action plan, including Health and Wellbeing and approval of updated HR policies.

The Committee has monitored the Department for Communities and private funding levels along with the covenant performance on behalf of Board.

The Committee has reviewed and approved various business cases presented by the business, regularly reviewed the Legal and Contract Registers and reviewed the audited accounts and the auditors report.

Following the implementation and formalisation of the organisation’s hybrid working policy, the Committee has had oversight and input into it’s successful embedding.

Overall the Committee was very pleased with Co-Ownership’s financial and operational performance for the year.

Norman McKeown, Chair of the FP Committee

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Co-Ownership Annual Report 2022/23

Human Resources

HR COMMITTEE CHAIR'S REPORT

The Board restructured its committees in the year and formed an additional HR Committee, (HRC).

HRC supports the Board in matters relating to organisational structure and resourcing, staff employment terms and conditions, Board and staff learning and development, and grievance and disciplinary matters. It also assists with ensuring the Board retains an appropriate structure, size and balance of skills and supports on Executive level recruitment, performance and remuneration. It liaises on various matters relating to the management and development of human resources strategy, policy and practices within the organisation, both statutory and in terms of good practice/public policy directives.

The Committee met 3 times in the year. As well as focusing on Board recruitment, training and development, members reviewed the People Strategy and Action Plan, and the Health & Wellbeing Strategy.

The Committee also gave consideration to Executive team salary benchmarking, reviewing HR policies, and workforce planning.

The Committee was content with the HR and people focused performance in the year.

Audrey Fleming, Chair of the HR Committee

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Co-Ownership Annual Report 2022/23

BOARD MEMBERS

David Little Chair

Alastair Coulson

Derek Wilson

Nicola McCrudden

Alyson Kilpatrick Vice Chair

Gillian Greer

Jordan Buchanan

Audrey Fleming

Philip Price

Norman McKeown

Alan Ledlie

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Co-Ownership Annual Report 2022/23

FINANCIAL PERFORMANCE

Co-Ownership has produced a group surplus of £15.7m for the year ended 31st March 2023, which compares favourably to a surplus of £13.2m in the previous financial year. This surplus will be used to help more people into home ownership next year.

Improving house prices in the housing market have resulted in improved surpluses on the sale of housing properties which have increased by £1.1m to £6.4m.

£15.7m Group Surplus

Following an impairment review a provision release of £0.8m further added to the surplus.

Income decreased by 14% to £50.2m, primarily reflecting a 20% decrease in turnover from the sale of homes to £35.7m, resulting from decreased customer staircasing activity.

Financial Position

-14%

Income

The balance sheet remains strong, with net assets having increased by £22m to £142m by 31 March 2023.

During 2022/23 Co-Ownership helped new customers by investing £43m into homes, which together with customer contributions of £63m represented a £106m investment in the Northern Ireland property market. After taking account of staircasing, Co-Ownership’s investment in housing properties increased to £490m at the year end.

Cash and deposit balances increased by £18m to £89m, and provide good liquidity for the operations into the future.

£142m

Assets

Funding

The increase in housing property investments has been funded by a combination of loans and grants from the Department for Communities alongside bank borrowings. The Department for Communities continued support for affordable housing through the provision of £36m of Financial Transaction Capital during the year.

During 2022/23 sales proceeds generated £12.9m of grant repayable to the Department for Communities and in addition Co-Ownership also made £3.75m of loan repayments to the Department.

Loan facilities totalling £65m are in place with Bank of Ireland until 2029 with £30m of this facility having a fixed interest rate for the term

£106m

Investment into NI market

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Co-Ownership Annual Report 2022/23

Financial Perforamnce

of the loan. The bank debt was drawn at £30m at the year end.

Conclusion

Overall, the financial performance, financial position and funding arrangements are strong and provide a robust platform to move into the next financial year.

Value for Money Report

In the face of a challenging year for the Northern Ireland housing market, we continued to deliver value for money in our four key areas.

----- Start of picture text -----
Customer Services Use of Resources
Operations Our Community
----- End of picture text -----

Impact on Customer Service: We’re now providing AIPs and final offers to customers within an average of 2 and 11 working days respectively.

Impact on Operations: Further enhancements were made as we digitised our valuations process, launched Co-Own for Over 55s and enhanced the resilience and security of our ICT infrastructure.

Impact on use of Resources: Surpluses generated have been reinvested in new homes and loan repayments have been made to the Department for Communities. Rent collection remains at 100%.

Impact on our Community: In addition to our Performance Highlights on page 10, other key achievements were the launch of Co-Own for Over 55s, the development of our Climate Strategy and our Social Impact Report.

The full Value for Money Report can be found at under the Reports section of our website.

23

Co-Ownership Annual Report 2022/23

FINANCIAL STATEMENTS 2 0 2 2 / 2 3

24

Co-Ownership Annual Report 2022/23

Registered number: 200IP Charity Registration Number: NIC101435

Northern Ireland Co-Ownership Housing Association Limited Annual report and financial statements for the year ended 31 March 2023

Northern Ireland Co-Ownership Housing Association Limited

Annual report and financial statements for the year ended 31 March 2023

31 March 2023
Contents	Pages
Board of management and advisers	1
Strategic report of the Board of Management	2 - 7
Report of the Board of Management	8 - 9
Independent Auditors’ report to the members of Northern Ireland Co-Ownership
Housing Association Limited	10 - 13
Consolidated statement of comprehensive income	14
Consolidated statement of changes in reserves	14
Co-Ownership statement of comprehensive income	15
Co-Ownership statement of changes in reserves	15
Consolidated statement of financial position	16
Co-Ownership statement of financial position	17
Consolidated statement of cash flows	18
Notes to the financial statements	19 - 41

1

Northern Ireland Co-Ownership Housing Association Limited

Board of management and advisers

Board of management

David Little (Chair) Jordan Buchanan Alastair Coulson Samuel Dickey (resigned 3[rd] March 2023) Daniel Egerton (co-opted 29[th] June 2023) Audrey Fleming (appointed 22[nd] September 2022) Gillian Greer Alyson Kilpatrick Alan Ledlie Nicola McCrudden Norman McKeown Philip Price Derek Wilson

Chief executive

Mark Graham

Company secretary

Gillian Hughes

Registered office

Moneda House 25-27 Wellington Place Belfast BT1 6GD

Bankers

Bank of Ireland Limited 1 Donegall Square South Belfast BT1 5LR

Independent auditors

BDO Northern Ireland Chartered Accountants and Statutory Auditors Metro Building, 1st Floor 6-9 Donegall Square South Belfast BT1 5JA

2

Northern Ireland Co-Ownership Housing Association Limited

Strategic report of the Board of Management for the year ended 31 March 2023

The Board of Management presents its strategic report for the year ended 31 March 2023 for Northern Ireland CoOwnership Housing Association Limited (“Co-Ownership”) and its subsidiary (together the “Group”). The wholly owned subsidiary of Co-Ownership is called Ownco Homes Limited (“Ownco”).

Co-Ownership is a registered charity with the Charity Commission for Northern Ireland. The Board of Management of Co-Ownership are the directors of the company and are the trustees of the charity.

Principal activity

The principal activity of Co-Ownership remains unchanged and is the provision of affordable housing on a shared ownership basis for persons in need thereof. Ownco complements the Group by providing a route to home ownership when a full mortgage or Co-Ownership are currently unattainable.

Our Purpose: To enable people to become homeowners.

Our Vision: To lead the way on affordable home ownership.

Our Values: Putting customers first, working together, doing the right thing, and evolving and improving.

Whilst the Group operates on not-for-profit principles, the generation of an annual surplus is vital to ensure the ongoing investment in new homes, to meet the commitments to lenders, and to generally ensure adequate protection against unforeseen circumstances.

Co-Ownership has developed a three year corporate plan which sets out an ambition to deliver on four primary objectives. These objectives are to extend its reach and impact on society, to be the best we can be for our customers, to be strong advocates and trusted partners for home ownership and to be a great place to work with high performing teams delivering our service.

The key strengths of the Group which enable its primary objectives to be met are:

• A customer centric focus;

• A commitment to the highest standards of corporate governance;

• A financial position which secures the confidence of funders, facilitating future investment and strategic growth opportunities; and

• Professional and dedicated staff who are committed to the Group’s objectives.

The team delivering these objectives across the Group, at 31 March 2023, comprised 63 employees, of which 40 are female and 23 are male and the Board of Management which comprised 12 members of which 8 are male and 4 are female.

Review of business and future developments

During the year Co-Ownership helped customers purchase a total of 745 (2022: 1,144) properties and as a result the housing property portfolio increasing from £471m to £486m. Staircasing activity resulted in 576 full property sales transactions (2022: 766) and 57 partial staircases (116 in 2022). The level of repossession sales remained low and totalled 22 for the year (2022: 16). At 31 March 2023 Co-Ownership had interests in 10,209 homes (2022: 10,063).

The Department for Communities (DfC) provided Co-Ownership with Financial Transaction Capital of £36m by way of long term loans during the year, which together with Co-Ownership’s own resources funded the investment in homes. During the year sales proceeds generated £12.9m of grant repayable to DfC and in addition Co-Ownership made £3.7m of loan repayments to DfC.

A loan facility of £65m with Bank of Ireland remains in place for a further six years. Of this facility, £30m was drawn throughout the year.

The Board of Management is of the view that for the foreseeable future Co-Ownership will continue to generate sufficient operating surplus to cover its operating and financing costs. The rental income is anticipated to be £15m in the next financial year. The underlying need for affordable homes in Northern Ireland remains strong, although a lack of supply of homes and economic uncertainty are challenges home buyers will face in the year ahead.

3

Northern Ireland Co-Ownership Housing Association Limited

Strategic report of the Board of Management for the year ended 31 March 2023 (continued)

The Board continues to explore opportunities for enhancement of its services going forward, in response to a changing housing market. A new shared ownership product for people over the age of 55 was launched during the year with the aim of helping provide affordable homeownership for people who are retired or are approaching retirement. Applications since the launch have resulted in 6 homes being purchased by the year end, which has been an encouraging start.

Ownco completed its fifth full year of trading and purchased 2 houses at a total cost of £0.4m, making 76 purchases to date. There were 7 property sales in the year, of which 6 were to tenants. As at 31 March 2023 there were 23 houses held in stock and £10.1m held on deposit for reinvestment.

Results

The surplus for the year amounted to £15.7m (2022: surplus £13.2m). The increase is primarily due to an increase in the surplus on the sale of housing properties to £7.2m (2022: £6.5m) as detailed in note 9, an increase interest receivable to £1.2m (2022: £0.1m) and an increase in rents to £14.5m (2022: £13.9m).

The Board of Management are satisfied with the underlying financial performance of the Group.

Environment, Social and Governance

As an organisation with a strong social purpose that recognises its responsibility to carry out its operations whilst minimising the impact on the environment, it has a Corporate Social Responsibility Strategy in place.

The Board complies with a code of governance based on the National Housing Federation model code of governance.

Health and safety

The Group is committed to achieving the highest practicable standards in health and safety management and strives to make its offices a safe environment for both employees and customers alike. As an organisation we have invested in providing information, training, instruction and supervision to all employees and will continue to invest resources in ensuring the office remains a safe work environment.

Human resources

The Group’s most important resource is its people; their knowledge and experience is crucial to meeting customer requirements. Co-Ownership holds an Investor in People accreditation reflecting the good management of its people.

Group structure

Northern Ireland Co-Ownership Housing Association Limited is the controlling member of the Group. The aim of Ownco Homes Limited is to increase the provision of affordable housing in the province. Note 16 of the financial statements provides details on Northern Ireland Co-Ownership Housing Association Limited’s investments in subsidiary undertakings.

Funding

At the year-end the Group had cash and deposit balances of £89m (2022: £71m), net current assets of £80m (2022: £59m) and total net assets in excess of £142m (2022: £119m). In addition, it has undrawn financing facilities of £35m (£65m minus £30m drawn down). The Board is of the view that the Group will have sufficient finance to fund its ongoing activities for a period of at least 12 months whereby it continues to be appropriate to adopt the going concern basis in the preparation of the annual financial statements.

4

Northern Ireland Co-Ownership Housing Association Limited

Strategic report of the Board of Management for the year ended 31 March 2023 (continued)

Financial risk management

The Group’s operations expose it to a variety of financial risks that include the effects of changes in credit risk, price risk and interest rate risk. The programme of capital investment is financially dependent on the continued availability of government funding. The Group has in place a risk management programme that seeks to limit the adverse effects on the financial performance of the Group by regular review of activity levels against changing market conditions and adjustment to cashflow projections accordingly, with regular financial stress testing performed. The Group liaises with lenders, financial adviser networks and independent financial advisers on an ongoing basis to keep up to date with other products in the market place.

Credit risk

Levels of rent collectibles are set in line with the corporate plan and cashflow forecasts. Strict procedures are in place and levels of arrears are regularly reviewed, monitored and reported to the Board.

Price risk

The Group is exposed to changes in the housing market. In order to ensure the Group is receiving value for money on the properties it purchases and sells, each property is valued by a professional external valuer prior to entering into a contract. The nature of operations undertaken by the Group exposes it to a number of inherent price risk factors. By rigidly adhering to its procurement policy, in line with public sector tendering requirements, the Group is customarily able to determine and agree favourable prices. Therefore, the risk management strategies and operational processes employed by the Group ensure that such exposure is controlled.

Interest rate risk

The Group has both interest bearing assets and interest bearing liabilities. Interest bearing assets include cash balances which are held on deposit. Interest bearing liabilities consist of bank loans that bear interest at normal commercial rates. In order to manage the impact of interest rate fluctuations the Group has implemented a hedging strategy. Cash deposits are spread across various banks to mitigate counterparty risk.

Non- financial risk management

The Group’s operations are exposed to a variety of non-financial risks that include operational, market and environmental risks. The Group has in place a risk management system that seeks to identify, measure, mitigate and monitor these risks.

Operational risk

Good systems, processes and people reduce operational risks. Changes, including digital transformation and development of new products, are rigorously tested before launching. Information security protocols are followed and regularly audited. Conveyancing of properties are managed by legal professionals.

Market risk

Delivery of housing programmes is dependent upon the housing market, consumer demand, government support and mortgage lender appetite for Co-Ownership products. Stakeholder engagement and raising product awareness are key tools in managing market risk.

Environmental risk

Climate change presents an increasing risk to Co-Ownership. The Government has targets under the Climate Change Act 2008 to reach ‘net zero’ carbon emissions by 2050. Meeting this target will require a range of actions across sectors of the economy, including housing, that are responsible for emissions. Co-Ownership continues to develop plans in response to climate change.

Events after the Balance Sheet date

The Association has no post balance sheet date events to disclose.

5

Northern Ireland Co-Ownership Housing Association Limited

Strategic report of the Board of Management for the year ended 31 March 2023 (continued)

Value for Money (VfM)

The focus on VfM and continuous improvement is an important aspect to the delivery of our corporate strategy. It is recognised that the focus is not just about cost savings and financial improvement, but that VfM is integrated into the culture and operations of the organisation. Value is defined from the perspective of our customers and stakeholders in any service or process, where economy, efficiency and effectiveness are considered in everything that we do whilst having regard to quality of service.

Our approach to VfM is to ensure the combined efforts of the organisation and its resources are focused on what makes a difference for our customers and stakeholders. This is done through measuring and assessing our efforts against targets so the impact of our work is understood, and that learnings can be taken and used to shape future plans with an aim to be constantly improving and evolving. The Finance & Performance Committee oversee the delivery of VfM through review and challenge, which includes the review of business cases, contracts registers and performance indicators.

Some of the achievements of using the VfM approach during the year are as follows:

• Helped 745 people take the step towards owning their own home.

• Co-Ownership contributed to a total spend of £106m in the Northern Ireland housing market by purchasing 745 properties, including 158 new build properties.

• Enabled 576 people to fully purchase outright their own home and 57 people to purchase further equity in their home.

• Launched a new shared ownership product for people over the age of 55 with the aim of helping provide affordable homeownership for people who are retired or are approaching retirement.

• Maintaining a high standard of customer service and operational effectiveness being continued to be accredited with the Service Mark from the Institute of Customer Services.

Internal financial control

The Board of Management is responsible for ensuring that the Group has established and maintains an effective system of internal financial control to ensure the reliability of financial information, the maintenance of proper accounting records and the safeguarding of assets against unauthorised use or disposition. The operation of internal financial control is delegated to the Senior Executive Officers on a day to day basis; however the Board of Management reviews the operation of those controls in the following ways.

The Group has a clearly defined organisational structure based upon a system of delegation and authorisation, which includes the Board of Management where appropriate. The levels of authority are set out in internal policies and similar documents which have been adopted by the Board of Management and are subject to periodic review. These are supported by detailed procedures which seek clearly to define operations, controls and authorisation levels and limitations so as to ensure the completeness, accuracy and reliability of transactions and information.

Experienced and suitably qualified staff take responsibility for important business functions. Annual appraisal procedures have been established to maintain standards of performance.

The Group reviews the effectiveness of the system of internal financial control through participation in the Audit, Risk & Governance Committee. That Committee reviews reports from management, from the internal auditors and from the external auditors and seeks to obtain reasonable assurance that control procedures are in place and are being followed. This includes a review of the major risks facing the Group. The Audit, Risk & Governance Committee approves an annual internal audit plan, considers recommendations and agrees appropriate responses and action with the Senior Executive Officers. The Committee generally meets four times during the year. The internal auditors also attend meetings and they have unrestricted access to the Chairman of the Committee. The Senior Executive Officers attend meetings when required. The minutes of the Committee are formally recorded. The Board of Management receives the annual report of the internal auditors.

The Internal Audit Plan reflects the risk management policy and the risk ‘map’ it contains so that internal audit resources are directed towards testing the risks and their control mechanisms which the policy identifies. Control is further reinforced by comprehensive measurement of, analysis of, and reporting and acting upon, performance data. The Audit Risk & Governance Committee regularly reviews the risk register.

6

Northern Ireland Co-Ownership Housing Association Limited

Strategic report of the Board of Management for the year ended 31 March 2023 (continued)

The Group develops and monitors progress against a 3 year strategy, which is reviewed by the Board of Management. A detailed annual budget and cash flow statement are prepared. The Finance & Performance Committee reviews these documents in detail and receives regular performance reports from the Senior Executive Officers, including management accounts and performance indicators, which are prepared promptly. These are compared with the planning and budgeting documents to monitor key business and financial activities and identify any activities or developments which require intervention or modification. The Committee generally meets four times during the year.

All new initiatives, major commitments and investment projects are subject to formal appraisal and authorisation procedures by the Board of Management.

The Board of Management recognises that no system of internal control can provide absolute assurance or eliminate all risk. The system of internal control is designed to manage risk and to provide reasonable assurance that the key business objectives and expected outcomes will be achieved. It also exists to give reasonable assurance about the preparation and reliability of financial and operational information and the safeguard of Co-Ownership’s assets and interests.

Following a restructuring of its committees during the year a Human Resources Committee was established to support the Board of Management in matters relating to organisational structure and resourcing, staff employment terms and conditions, board and staff learning and development, and grievance and disciplinary matters. It also ensures that the Board of Management retains an appropriate structure, size and balance of skills to support the strategic objectives and values of Co-Ownership, and meets its responsibilities regarding executive level recruitment, performance and remuneration. It liaises on various matters relating to the management and development of human resources strategy, policy and practices within the organisation, both statutory and in terms of good practice/public policy directives.

The Group is committed to the highest standards of quality, probity, openness and accountability and has in place a confidential reporting system.

Statement of the Board of Management’s responsibilities

The Board is responsible for preparing the financial statements in accordance with applicable laws and regulations.

The Industrial and Provident Societies Act (Northern Ireland) 1969 and registered housing association legislation require the Board to prepare financial statements for each financial year which give a true and fair view of the state of the CoOwnership’s affairs and of its surplus or deficit for that period. In preparing these statements the Board is required to:

• Select suitable accounting policies and apply them consistently;

• Make judgements and estimates that are reasonable and prudent;

• State 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 it is inappropriate to presume that CoOwnership will continue in business.

The Board is responsible for keeping proper accounting records which disclose with reasonable accuracy at any time the financial position of Co-Ownership and to enable them to ensure that the financial statements comply with the Industrial and Provident Societies Act (Northern Ireland) 1969 and the Registered Housing Associations (Accounting Requirements) Order (Northern Ireland) 1993. It has general responsibility for the taking of reasonable steps to safeguard the assets of the Group and to prevent and detect fraud and other irregularities.

7

Northern Ireland Co-Ownership Housing Association Limited

Strategic report of the Board of Management for the year ended 31 March 2023 (continued)

Statement of disclosure of information to auditors

So far as each of the members of the Board of Management in office at the date of approval of these financial statements are aware:

• there is no relevant audit information of which the Group’s auditors are unaware; and

• it has taken all the steps that it ought to have taken as the Board of Management in order to make themselves aware of any relevant audit information and to establish that the Group’s auditors are aware of that information.

By order of the Board of Management

Gillian Hughes Company Secretary 21 September 2023

8

Northern Ireland Co-Ownership Housing Association Limited

Report of the Board of Management for the year ended 31 March 2023

The Board of Management presents its report for the year ended 31 March 2023 for Northern Ireland Co-Ownership Housing Association Limited (the “Co-Ownership”) and its subsidiary (together the “Group”). The wholly owned subsidiary of Co-Ownership is called Ownco Homes Limited.

The Board of Management and executive directors

The Board of Management and executive directors of Co-Ownership are listed on page 1.

Each past and present member of the Board of Management holds one non-equity share of £1 in Co-Ownership. The Chief Executive of Co-Ownership holds no interest in Co-Ownership’s share capital and although not having the legal status of director he acts as executive within the authority delegated by the Board.

The Board of Management is a voluntary Committee who have responsibility for the strategic direction, general policy and management of the Group. The day-to-day management of operations is delegated to the Chief Executive and the Senior Leadership Team.

Performance in the year ended 31 March 2023 and expected performance in the year ended 31 March 2024

The sections on performance in the year ended 31 March 2023 and expected performance in the year ended 31 March 2024 are included in the strategic report.

Regulation

Co-Ownership’s principal regulator is the Department for Communities (DfC). The latest published regulatory judgement related to the year 2021/22 with the following ratings being received.

Area of operations:

Rating:

Financial Standard Meets the requirements Governance Standard Meets the requirements Overall Meets the requirements

Charitable donations made

Donations totalling £22,143 (2022: £22,000) were made by Co-Ownership during the year.

No donations for political purposes were made during the year (2022: £Nil).

Energy and carbon reporting

In line with the ‘Companies (Directors’ Report) and Limited Liability Partnerships (Energy and Carbon Report) Regulations 2018’ and related accompanying government guidance ‘Environmental Reporting Guidelines: Including Streamlined Energy and Carbon Reporting requirements: March 2019’, the Company presents details of its carbon and energy as:

UK Greenhouse gas emissions and energy use data	22/23	21/22
Energy consumption used to calculate emissions (kWh)	97,874	113,548
Scope 2emissions in metric tonnes CO2e
Purchased electricity	31	27
Totalgross emissions in metric tonnes CO2e	31	27
Intensityratio tonnes CO2e / £m revenue	0.62	0.47

9

Northern Ireland Co-Ownership Housing Association Limited

Report of the Board of Management for the year ended 31 March 2023 (continued)

The Group utilises a “Green Tariff” which provides 100% renewable energy. Energy consumption decreased during the year due to a milder winter.

To determine emissions for the year ended 31 March 2023, the company used a methodology compliant with the Greenhouse Gas (‘GHG’) Protocol and incorporated the 2020 UK Government GHG conversion factors for green-house gas reporting.

Electricity consumption was based on actual data, obtained from supplier invoices, meter readings and online supplier portal data. The collected consumption data is then converted into greenhouse gas emissions associated with each activity using annually updated emission factors from the UK Government.

Climate change response and energy efficiency measures

The Group recognises that as a charity with a vision to lead the way on affordable home ownership, it has an important role to play in the journey to Northern Ireland delivering Net Zero. Co-Ownership has developed a strategic response to climate change. Some of the actions taken during the year by the Group are:

• Setting three strategic objectives, namely, to be a voice for the owner occupier sector, to encourage customer to improve the energy and carbon efficiency within their home, and to reduce Co-Ownership’s carbon footprint.

• • Agreeing an action plan to progress the strategic objectives.

• Educating staff on how to save energy in homes, with the assistance of National Energy Action.

• Providing energy saving ideas to homeowners and homebuyers, through customer communications, social media and the Steps to Buy NI website.

• Gathering information on the energy efficiency and energy sources of the homes the Group has interests, in order to better understand the impact on the environment of household energy usage.

• Developing new management information to understand the carbon efficiency of the Group’s operations.

Independent auditors

BDO Northern Ireland were the auditors throughout the year. BDO Northern Ireland have indicated their willingness to continue in office, and a resolution proposing their reappointment will be proposed at the Annual General Meeting.

By order of the Board of Management

Gillian Hughes Company Secretary 21 September 2023

10

Northern Ireland Co-Ownership Housing Association Limited

Independent auditors’ report to the members of Northern Ireland Co-Ownership Housing Association Limited

Opinion on the financial statements

We have audited the financial statements, included within the Annual Report and financial statements (the “Annual Report”), which comprise: the consolidated and Co-Ownership statements of comprehensive income, the consolidated and Co-Ownership statements of changes in reserves, the consolidated and Co-Ownership statements of financial position as at 31 March 2023 and the consolidated statement of cash flows for the year then ended; and the notes to the financial statements, which include a description of the significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).

In our opinion, Northern Ireland Co-Ownership Housing Association Limited’s group financial statements and the ‘CoOwnership’s’ financial statements (the “financial statements”):

• give a true and fair view of the state of the group’s and of the Co-Ownership’s affairs as at 31 March 2023 and of the group’s and Co-Ownership’s surplus and of the group’s cash flows for the year then ended;

• have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards, comprising FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland”, and applicable law); and

• have been prepared in accordance with The Co-operative and Community Benefit Societies Act (Northern Ireland) 1969, The Charities Act (Northern Ireland) 2008, The Housing (Northern Ireland) Order 1992, The Charities (Accounts and Reports) Regulations (Northern Ireland) 2015 and The Registered Housing Associations (Accounting Requirements) Order (Northern Ireland) 1993.

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (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 believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Independence

We remained independent of the group in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, which includes the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements.

Conclusions relating to going concern

In auditing the financial statements, we have concluded that the Board of management’s use of the going concern basis 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 relating to events or conditions that, individually or collectively, may cast significant doubt on the group's and the Co-Ownership’s ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.

Our responsibilities and the responsibilities of the Board of management with respect to going concern are described in the relevant sections of this report.

11

Northern Ireland Co-Ownership Housing Association Limited

Independent auditors’ report to the members of Northern Ireland Co-Ownership Housing Association Limited (continued)

Other information

Responsibilities for the financial statements and the audit

The Board of Management are responsible for the other information. The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. 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. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of 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 this gives rise to a material misstatement in the financial statements themselves. 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.

Responsibilities of the Board of management for the financial statements

As explained more fully in the Statement of the Board of Management’s responsibilities, the Board of management is responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view and for such internal control as the Board of 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, the Board of management is responsible for assessing the group’s and the CoOwnership’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 Board of management either intends to liquidate the group or the CoOwnership’s or to cease operations, or has no realistic alternative but to do so.

Auditors’ responsibilities for the audit of the financial statements

Our 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 auditors’ 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. 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 these financial statements.

Extent to which the audit was capable of detecting irregularities, including fraud

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures 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.

We gained an understanding of the legal and the regulatory framework applicable to the group and the Co-Ownership and the industry in which it operates and considered the risk of acts by the group and the Co-Ownership which were contrary to applicable laws and regulations, including fraud. These included but were not limited to compliance with The Co-operative and Community Benefit Societies Act (Northern Ireland) 1969, The Charities Act (Northern Ireland) 2008, the Housing (Northern Ireland) Order 1992, The Charities (Accounts and Reports) Regulations (Northern Ireland) 2015 and The Registered Housing Associations (Accounting Requirements) Order (Northern Ireland) 1993, FRS 102, "The Financial Reporting Standard applicable in the UK and Republic of Ireland".

12

Northern Ireland Co-Ownership Housing Association Limited

Independent auditors’ report to the members of Northern Ireland Co-Ownership Housing Association Limited (continued)

We focused on laws and regulations that could give rise to material misstatement in the financial statements. Our tests included but were not limited to:

• agreement of the financial statement disclosures to underlying supporting documentation;

• enquiries of management; and

• considering the effectiveness of the control environment and monitoring compliance with laws and regulations.

There are inherent limitations in the audit procedures described above and the further removed non-compliance with laws and regulations is from events and transactions reflected in the financial statements, the less likely we would become aware of it. As in all of our audits we addressed the risk of management override of internal controls, including testing journals and evaluating whether there was evidence of bias by the directors that represented a risk of material misstatement due to fraud.

A further description of our responsibilities for the audit of the financial statements is located on the FRC’s website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditors’ report.

Other required reporting

Co-operative and Community Benefit Societies Act (Northern Ireland) 1969 exception reporting

Under the Co-operative and Community Benefit Societies Act (Northern Ireland) 1969 we are required to report to you if, in our opinion:

• a satisfactory system of control over transactions has not been maintained; or

• we have not received all the information and explanations we require for our audit; or

• proper accounting records have not been kept by the Co-Ownership; or

• the Co-Ownership’s financial statements are not in agreement with the accounting records.

We have no exceptions to report arising from this responsibility.

Charities (Accounts and Reports) Regulations (Northern Ireland) 2015 exception reporting

Under the Charities (Accounts and Reports) Regulations (Northern Ireland) 2015 we are required to report to you if, in our opinion:

• sufficient accounting records have not been kept in respect of the Co-Ownership;

• the Co-Ownership’s financial statements are not in agreement with the accounting records;

• we have not received all the information and explanations we require for our audit; or

• information contained in the financial statements is inconsistent in any material respect with the report of the Board of Management for the year ended 31 March 2023.

We have no exceptions to report arising from this responsibility.

13

Northern Ireland Co-Ownership Housing Association Limited

Independent auditors’ report to the members of Northern Ireland Co-Ownership Housing Association Limited (continued)

Use of this report

This report is made solely to the Co-Ownership as a body in accordance with section 43 of The Co-operative and Community Benefit Societies Act (Northern Ireland) 1969, section 65 of The Charities Act (Northern Ireland) 2008, regulations made under 66 of that Act (Part 4 of the Charities (Accounts and Reports) Regulations (Northern Ireland) 2015), and article 19 of The Housing (Northern Ireland) Order 1992 and for no other purpose. Our audit work has been undertaken so that we might state to the group’s and the Co-Ownership’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 group and the Co-Ownership and the group’s and the Co-Ownership’s members as a body, for our audit work, for this report, or for the opinions we have formed.

Nigel V W Harra, senior statutory auditor For and on behalf of BDO Northern Ireland Metro Building, 1st Floor 6-9 Donegall Square South Belfast BT1 5JA

Date: 21 September 2023

14

Northern Ireland Co-Ownership Housing Association Limited

Consolidated statement of comprehensive income for the year ended 31 March 2023

		2023	2022
	Note	£	£
Turnover	5	50,220,282	58,677,924
Cost of sales	5	(29,304,681)	(39,397,635)
Operating costs	5	(5,864,354)	(5,642,077)
Release of impairment of housing properties	14	800,000	1,200,000
Operating surplus	6	15,851,247	14,838,212
(Loss)/gain on disposal of housing properties	9	(122,457)	(142,242)
Interest receivable and similar income	10	1,231,574	50,292
Interest payable and similar charges	11	(1,065,226)	(1,362,583)
Other finance expenses	12	(152,000)	(172,000)
Surplus before tax		15,743,138	13,211,679
Taxation	13	(58,965)	(38,759)
Surplus for the financial year		15,684,173	13,172,920
Actuarial surplus/ (deficit) recognised in pension scheme	24	6,716,000	3,353,000
Total comprehensive income for the financial year		22,400,173	16,525,920

All amounts above relate to the continuing operations of the Group.

Consolidated statement of changes in reserves for the year ended 31 March 2023

	2023	2022
	£	£
Surplus for the financial year	15,684,173	13,172,920
Actuarial surplus/ (deficit) recognised in pension scheme (note 24)	6,716,000	3,353,000
Share capital (cancelled)/ issued	-	(24)
Net movement in capital and reserves	22,400,173	16,525,896
Opening total capital and reserves	119,338,351	102,812,455
Closing total capital and reserves	141,738,524	119,338,351

15

Northern Ireland Co-Ownership Housing Association Limited

Co-Ownership statement of comprehensive income for the year ended 31 March 2023

	Note	2023	2022
		£	£
Turnover	5	48,905,837	56,852,592
Cost of sales	5	(28,258,331)	(37,874,036)
Operating costs	5	(5,799,041)	(5,572,777)
Release of impairment of housing properties	14	800,000	1,200,000
Operating surplus	6	15,648,465	14,605,779
Gain/(loss) on disposal of housing properties	9	(122,457)	(142,242)
Interest receivable and similar income	10	1,115,135	49,372
Interest payable and similar charges	11	(1,065,226)	(1,362,583)
Other finance expenses	12	(152,000)	(172,000)
Surplus for the financial year		15,423,917	12,978,326
Actuarial gain/ (deficit) recognised in pension scheme	24	6,716,000	3,353,000
Total comprehensive income for the financial year		22,139,917	16,331,326

All amounts above relate to the continuing operations of Co-Ownership.

Co-Ownership statement of changes in reserves for the year ended 31 March 2023

2023
	2023	2022
	£	£
Surplus for the financial year	15,423,917	12,978,326
Actuarial gain/ (deficit) recognised in pension scheme (note 24)	6,716,000	3,353,000
Share capital (cancelled)/ issued	-	(24)
Net movement in capital and reserves	22,139,917	16,331,302
Opening total capital and reserves	118,831,668	102,500,366
Closing total capital and reserves	140,971,585	118,831,668

16

Northern Ireland Co-Ownership Housing Association Limited

Consolidated statement of financial position as at 31 March 2023

		2023	2022
	Note	£	£
Fixed assets
Housing properties	14	489,479,679	475,617,937
Other tangible assets	17	202,878	211,438
		489,682,557	475,829,375
Current assets
Stock	18	2,093,579	3,315,313
Debtors	19	379,830	285,441
Investments	20	78,687,610	26,657,589
Cash at bank and in hand		10,219,420	44,330,095
		91,380,439	74,588,438
Creditors: amounts falling due within one year	21	(11,254,164)	(15,483,632)
Net current assets		80,126,275	59,104,806
Total assets less current liabilities		569,808,832	534,934,181
Creditors: amounts falling due after more than one year	22	(428,070,308)	(409,683,830)
Net assets excluding pension deficit		141,738,524	125,250,351
Pension deficit	24	-	(5,912,000)
Net assets including pension deficit		141,738,524	119,338,351
Capital and reserves
Called up share capital	25	34	34
Revenue reserves	26	3,531,006	3,028,089
Designated reserves	27	138,207,484	116,310,228
Total capital and reserves		141,738,524	119,338,351

The financial statements on pages 14 to 41 were approved by the Board of Management on 21 September 2023 and were signed on its behalf by:

David Little – Board Member

Mark Graham – Chief Executive

Philip Price – Board Member

Registered number: 200IP Charity Registration Number: NIC101435

17

Northern Ireland Co-Ownership Housing Association Limited

Co-Ownership statement of financial position as at 31 March 2023

		2023	2022
	Note	£	£
Fixed assets
Housing properties	14	485,834,904	471,323,493
Other tangible assets	17	202,878	211,438
Investments	16	300,001	300,001
		486,337,783	471,834,932
Current assets
Stock	18	2,093,579	3,315,313
Debtors	19	357,429	260,986
Investments	20	70,582,528	20,058,915
Cash at bank and in hand		8,220,644	41,732,194
		81,254,180	65,367,408
Creditors: amounts falling due within one year	21	(11,050,070)	(15,274,842)
Net current assets		70,204,110	50,092,566
Total assets less current liabilities		556,541,893	521,927,498
Creditors: amounts falling due after more than one year	22	(415,570,308)	(397,183,830)
Net assets excluding pension deficit		140,971,585	124,743,668
Pension deficit	24	0	(5,912,000)
Net assets including pension deficit		140,971,585	118,831,668
Capital and reserves
Called up share capital	25	34	34
Revenue reserves	26	2,764,067	2,716,000
Designated reserves	27	138,207,484	116,115,634
Total capital and reserves		140,971,585	118,831,668

The financial statements on pages 14 to 41 were approved by the Board of Management on 21 September 2023 and were signed on its behalf by:

David Little – Board Member

Mark Graham – Chief Executive

Philip Price – Board Member

Registered number: 200IP Charity Registration Number: NIC101435

18

Northern Ireland Co-Ownership Housing Association Limited

Consolidated statement of cash flows for the year ended 31 March 2023

	Notes	2023	2022
		£	£
Net cash inflow from operating activities	29	8,688,621	8,929,914
Tax paid		(42,776)	(23,302)
		8,645,845	8,906,612
Investing activities
Purchase of properties		(43,425,150)	(62,147,542)
Housing Association Grant received for purchase of properties		6,300	113,466
Sale of properties		38,008,660	48,032,191
Housing Association Grant repaid on sale of properties		(17,802,919)	(19,361,003)
Purchase of other tangible fixed assets		(81,930)	(40,493)
Interest received		1,133,766	50,292
Net cash used in investing activities		(22,161,273)	(33,353,089)
Cash flows used in financing activities
New term loans		36,250,000	44,250,000
Repayment of loans		(3,750,000)	(15,500,000)
Interest paid		(1,065,226)	(1,362,584)
Net cash used in financing activities		31,434,774	27,387,416
Net increase in cash and cash equivalents		17,919,346	2,940,939
Cash and cash equivalents at the beginning of the year		70,987,684	68,046,745
Cash and cash equivalents at the end of the year	30	88,907,030	70,987,684

19

Northern Ireland Co-Ownership Housing Association Limited

Notes to the financial statements for the year ended 31 March 2023

1 General information

Co-Ownership's principal activity is the provision of affordable housing on a shared ownership basis. Co-Ownership is registered under the Co-operative and Community Benefit Societies Act (Northern Ireland) 1969 and domiciled in the UK. The address of the registered office is Moneda House, 25-27 Wellington Place, Belfast, BT1 6GD.

2 Statement of compliance

These financial statements of Northern Ireland Co-Ownership Association Limited have been prepared on the going concern basis in compliance with United Kingdom Accounting Standards, including Financial Reporting Standard 102, ‘‘The Financial Reporting Standard applicable in the United Kingdom and the Republic of Ireland’’ (‘‘FRS 102’’) in accordance with applicable accounting standards in the United Kingdom and Statement of Recommended Practice for Accounting by Registered Social Landlords (updated 2018). The principal accounting policies, which have been applied consistently throughout the year, are set out below. The presentation of the financial statements complies with the Registered Housing Associations (Accounting Requirements) Order (Northern Ireland) 1993.

Disclosure exemptions

In preparing the separate financial statements of the Association, advantage has been taken of the following disclosure exemptions available in FRS 102:

• no cash flow statement or net debt reconciliation has been presented for the Association;

• disclosures in respect of the Association’s financial instruments have not been presented as equivalent disclosures have been provided in respect of the Group as a whole;

3 Summary of significant accounting policies

The principal accounting policies applied in the preparation of these financial statements are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated. The Group has adopted FRS 102 in these financial statements.

The significant accounting policies adopted by the company are as follows:

Basis of preparation of financial statements

These consolidated and separate financial statements are prepared on a going concern basis, under the historical cost convention. The preparation of financial statements requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the Group and Co-Ownership accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the financial statements, are disclosed in note 4.

Basis of consolidation

The consolidated statement of comprehensive income and consolidated statement of financial position are made up to 31 March 2023. Intra group transactions, any unrealised profits/losses arising and intercompany balances are eliminated fully on consolidation.

Going concern

After making enquiries and reviewing the financial plan, the Board has a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future. For this reason it continues to adopt the going concern basis in the financial statements.

20

Northern Ireland Co-Ownership Housing Association Limited

Notes to the financial statements for the year ended 31 March 2023 (continued)

3 Summary of significant accounting policies (continued)

Revenue recognition

Revenue is measured at the fair value of the consideration received or receivable and represents the amount receivable for goods supplied or services rendered, net of returns, discounts and rebates allowed by the Group and Co-Ownership and value added taxes. The Group and Co-Ownership bases its estimate of returns on historical results, taking into consideration the type of customer, the type of transaction and the specifics of each arrangement.

Where the consideration receivable in cash and cash equivalents is deferred and the arrangement constitutes a financing transaction, the fair value of the consideration is measured at the present value of all future receipts using the imputed rate of interest. The Group and Co-Ownership recognises revenue when (a) the significant risks and rewards of ownership have been transferred to the buyer; (b) the Group and Co-Ownership retains no continuing involvement or control over the goods; (c) the amount of revenue can be measured reliably; (d) it is probable that future economic benefits will flow through the Group and Co-Ownership and (e) when the specific criteria relating to each of the Group and Co-Ownership’s sales channels have been met, as described below and in note 5.

i) Rental income

Income represents rental income receivable. Rental income is recognised from the point that the properties are formally let and spread over the rental term.

ii) First tranche equity sales

Proceeds from the first tranche disposals are accounted for as turnover in the Statement of comprehensive income in the period in which the disposal occurs which is the legal completion date.

iii) Other income

Other income is recognised in the Statement of comprehensive income when the terms of revenue recognition have been met.

Value added tax

The financial statements include VAT to the extent that it is suffered by the Group and not recoverable from HM Revenue and Customs.

Employee benefits

The Group provides a range of benefits to employees, including paid holiday arrangements and defined benefit pension plans.

i) Short term benefits

Short term benefits, including holiday pay and other similar non-monetary benefits, are recognised as an expense in the period in which the service is received.

ii) Pension funding

Retirement benefits to employees of Co-Ownership are provided by the Northern Ireland Local Government Officers Superannuation Committee (NILGOSC) defined benefit scheme which is externally funded and contracted out of the State Earnings Related Pension Scheme.

In respect of this scheme, Co-Ownership’s staff constitutes only a small percentage of the overall membership. CoOwnership has no influence over the level of contributions.

21

Northern Ireland Co-Ownership Housing Association Limited

Notes to the financial statements for the year ended 31 March 2023 (continued)

3 Summary of significant accounting policies (continued)

The assets of the NILGOSC scheme are held separately from those of Co-Ownership. Co-Ownership has adopted FRS 102 section 28 ‘Employee benefits’ in these financial statements. Pension scheme assets are measured using market value. Pension scheme liabilities are measured using the projected unit method and discounted at the current rate of return on a high quality corporate bond of equivalent term to the liability. The movement in the present value of the liabilities of Co-Ownership’s defined benefit pension scheme arising from employee service in the year is charged to the statement of comprehensive income. Under FRS 102, a net interest expense, based on the net defined benefit liability, is recognised in the statement of comprehensive income. A net defined benefit asset is only recognised to the extent that the surplus is able to be recovered either through reduced contributions in the future or through refunds from the scheme.

The contributions are determined by qualified actuaries on the basis of triennial valuations, using a projected unit method.

Tangible fixed assets

i) Housing properties

Housing properties are stated at cost which is purchase price together with any incidental costs of acquisition. These properties are effectively purchased concurrently by Co-Ownership and participants and so are disclosed in fixed assets at the cost to Co-Ownership with the participants’ net investment also disclosed in the housing properties note to the financial statements.

Housing properties are not depreciated as the Group estimates that the residual value is higher than the historical cost before charging any depreciation.

ii) Impairment

Any impairment in the value of the housing properties is charged to the statement of comprehensive income in the year in which it is first recognised. A reversal of impairment is recognised in the statement of comprehensive income.

iii) Other fixed assets

Other fixed assets are stated at cost.

iv) Other tangible fixed assets

Tangible fixed assets are stated at historic purchase cost less accumulated depreciation. The cost of tangible fixed assets is their historic purchase cost, together with any incidental costs of acquisition. Depreciation is calculated after allowing for grants received, so as to write off the cost of tangible fixed assets on a straight line basis over the expected useful economic lives of the assets concerned. The principal annual rates used are as follows:

	%
Office equipment	25
Fixtures and fittings	10

v) Derecognition

Tangible assets are derecognised on disposal or when no future economic benefits are expected. On disposal the difference between the net disposal proceeds and the carrying amount is recognised in the Statement of comprehensive income.

22

Northern Ireland Co-Ownership Housing Association Limited

Notes to the financial statements for the year ended 31 March 2023 (continued)

3 Summary of significant accounting policies (continued)

Stock

The costs relating to expected future property sales are transferred from housing properties in fixed assets to inventories for sales occurring one month following the year end.

Housing Association Grant and other grants

Housing Association Grant and other grants received are included within ‘Creditors: amounts falling due after more than one year’ and ‘Creditors: amounts falling due within one year’. Housing Association Grant received against revenue expenditure is credited to revenue in the period in which the related expenditure is charged.

Such grants, although treated as a grant for accounting purposes, may be repayable under certain circumstances, primarily following the sale of housing property, but any amount repayable would be restricted to the original grant amount.

Housing Association Grants received are capital grants and as they relate to house purchases are not recognised in the statement of comprehensive income, rather they are held as a liability on the balance sheet until the housing investment is sold at which point the grant is repaid.

Other grants relating to revenue are recognised in income and expenditure over the same period as the expenditure to which they relate once performance related conditions have been met.

Current taxation

The tax expense for the period comprises current and deferred tax. Tax is recognised in the statement of comprehensive income.

The current income tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the reporting date in the countries where the company’s subsidiaries operate and generate taxable income.

Cash and cash equivalents

Cash consists of cash at bank and in hand. Cash equivalents consist of short-term, highly liquid deposits held at call or at notice with banks with original maturities of twelve months or less.

Current asset investments

Current asset investments are short-term, liquid deposits with an original maturity between one and twelve months. All current asset investments are classified as cash equivalents within the financial statements.

Debtors

Debtors are stated after all known bad debts have been written off and specific provision has been made against all debts considered doubtful for collection.

Housing loans

All borrowings are initially stated at the fair value of the consideration received. Finance costs are charged to the income and expenditure account over the term of the borrowings. Interest payable but not yet paid at the year-end is shown as accrued interest within creditors due within one year.

23

Northern Ireland Co-Ownership Housing Association Limited

Notes to the financial statements for the year ended 31 March 2023 (continued)

3 Summary of significant accounting policies (continued)

Impairment of non-financial assets

At each statement of financial position date non-financial assets not carried at fair value are assessed to determine whether there is an indication that the asset may be impaired. If there is such an indication the recoverable amount of the asset (or asset’s cash generating unit) is compared to the carrying amount of the asset (or asset’s cash generating unit).

The recoverable amount of the asset (or asset’s cash generating unit) is the higher of the fair value less costs to sell and value in use. Value in use is defined as the present value of the future cash flows before interest and tax obtainable as a result of the asset’s (or asset’s cash generating unit) continued use. These cash flows discounted using a pre-tax discount rate that represents the current market risk-free rate and the risks inherent in the assets.

If the recoverable amount of the asset (or asset’s cash generating unit) is estimated to be lower than the carrying amount, the carrying amount is reduced to its recoverable amount. An impairment loss is recognised in the Statement of income and retained earnings, unless the asset has been revalued when the amount is recognised in other comprehensive income to the extent of any previously recognised revaluation. Thereafter any excess is recognised in the Statement of income and retained earnings.

If an impairment loss is subsequently reversed, the carrying amount of the asset (or asset’s cash generating unit) is increased to the revised estimate of its recoverable amount, but only to the extent that the revised carrying amount does not exceed the carrying amount that would have been determined (net of depreciation or amortisation) had no impairment loss been recognised in prior periods. A reversal of an impairment loss is recognised in the statement of income and retained earnings.

Provisions

Provisions are recognised when the company has a present legal or constructive obligation as a result of past events; it is probable that an outflow of resources will be required to settle the obligation; and the amount of the obligations can be estimated reliably.

Where there are a number of similar obligations, the likelihood that an outflow will be required in settlement is determined by considering the class of obligations as a whole. A provision is recognised even if the likelihood of an outflow with respect to any one item included in the same class of obligations may be small.

Provisions are measured at the present value of the expenditures expected to be required to settle the obligation using a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the obligation. The increase in the provision due to passage of time is recognised as a finance cost.

Contingencies

Contingent liabilities, arising as a result of past events, are not recognised when (i) it is not probable that there will be an outflow of resources or that the amount cannot be reliably measured at the reporting date or (ii) when the existence will be confirmed by the occurrence or non-occurrence of uncertain future events not wholly within the company’s control. Contingent liabilities are disclosed in the financial statements unless the probability of an outflow of resources is remote.

Operating leases

Annual rentals on operating leases are charged to profit or loss on a straight-line basis over the term of the lease.

24

Northern Ireland Co-Ownership Housing Association Limited

Notes to the financial statements for the year ended 31 March 2023 (continued)

3 Summary of significant accounting policies (continued)

Financial instruments

The company has chosen to adopt Sections 11 and 12 of FRS 102 in respect of financial instruments.

i) Financial assets

Basic financial assets, including trade and other receivables and cash and bank balances are initially recognised at transaction price.

At the end of each reporting period financial assets measured at amortised cost are assessed for objective evidence of impairment. If an asset is impaired the impairment loss is the difference between the carrying amount and the expected realisable value of the asset. The impairment loss is recognised in Statement of income and retained earnings.

If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been had the impairment not previously been recognised. The impairment reversal is recognised in Statement of income and retained earnings.

Financial assets are derecognised when (a) the contractual rights to the cash flows from the asset expire or are settled, (b) substantially all the risks and rewards of the ownership of the asset are transferred to another party or, (c) despite having retained some significant risks and rewards of ownership, control of the asset has been transferred to another party who has the practical ability to unilaterally sell the asset to an unrelated third party without imposing additional restrictions.

ii) Financial liabilities

Basic financial liabilities, including trade and other payables, bank loans and other borrowings, are initially recognised at transaction price, unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future receipts discounted at a market rate of interest. Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.

Fees paid on the establishment of loan facilities are recognised as transaction costs of the loan to the extent that it is probable that some or all of the facility will be drawn down. In this case, the fee is deferred until the draw-down occurs. To the extent there is no evidence that it is probable that some or all of the facility will be drawn down, the fee is capitalised as a pre-payment for liquidity services and amortised over the period of the facility to which it relates.

Trade payables are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Accounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade payables are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.

Revenue reserves

Co-Ownership’s policy is to retain a level of free reserves, which matches its needs at the current time and in the foreseeable future. The reserves required are sufficient to meeting committed running costs for a period equivalent to six months budgeted future expenditure.

Designated reserve - property purchase

All other reserves are treated as designated reserves as they are used to fund Co-Ownership’s investment in housing properties and thus are not available for future general use. Transfers between reserves are made to retain committed running costs for a period equivalent to six months of budgeted future expenditure within the Revenue reserve.

25

Northern Ireland Co-Ownership Housing Association Limited

Notes to the financial statements for the year ended 31 March 2023 (continued)

4 Critical accounting judgements and estimation uncertainty

Estimates and judgements made in the process of preparing the Group financial statements are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.

Critical judgement in applying the entity’s accounting policies

The following judgement, apart from those involving estimates, made by the directors has had significant effect on the amounts recognised in the financial statements;

Co-Ownership provides housing on a shared ownership basis. Under the arrangement Co-Ownership has with a lender on an individual property, the lender ranks in priority to Co-Ownership and therefore if the borrower fails to pay the lender, the property could be repossessed by that lender. Co-Ownership has incurred losses on repossessed properties over recent years. As a result it is necessary to recognise an impairment provision for future losses expected on the repossession of such properties. When calculating the provision management consider the historical losses incurred, and current property values based on recent transactions and apply an expected loss ratio to the book value of properties.

Estimation uncertainty in applying the entity’s accounting policies

In preparing the financial statements the recoverability of debtors and the level of impairment on housing properties has been considered.

A provision for bad debts has been made for the estimated amount of debtors that are considered to be unrecoverable. The level of provision held at the year end is set out in note 19.

A provision for the impairment on housing assets has been made for the estimated amount of investment that is considered to be unrealisable. Management take into account factors including the broader Northern Ireland property market, the yield level of the properties and other known factors as part of this consideration. There has been a release of £0.8m this year due to the improvement in the housing market since the prior year end. The level of impairment provision at the year end is set out in note 14.

The underlying assumptions relating to the valuation of the Group’s defined benefit pension scheme position include estimates of inflation, mortality, discount rate and anticipated salary increases. The Group uses the Group’s actuaries to value the scheme’s assets and liabilities. The assumptions used are also provided by the Group’s actuaries and have not been adjusted. Variations in these assumptions, along with movements in asset valuations, can be expected to significantly alter the net pension position from year to year. The directors have adopted a policy of not recognising a net pension scheme asset as they do not believe it to be recoverable.

26

Northern Ireland Co-Ownership Housing Association Limited

Notes to the financial statements for the year ended 31 March 2023 (continued)

5 Lettings and other related information

	Group	Group	Co-Ownership	Co-Ownership
	2023	2022	2023	2022
Turnover	£	£	£	£
Rents (see below)	14,481,396	13,901,161	14,319,451	13,715,829
First Tranche Sales (note 9)	35,738,886	44,776,763	34,556,386	43,136,763
Donations received	-	-	30,000	-
	50,220,282	58,677,924	48,905,837	56,852,592
Cost of sales
Rents	(101,281)	(100,787)	(101,281)	(100,787)
First Tranche Sales (note 9)	(29,203,400)	(39,296,848)	(28,157,050)	(37,773,249)
	(29,304,681)	(39,397,635)	(28,258,331)	(37,874,036)
Operating costs
Management expenses (exc. Non cash pension)	(4,927,007)	(4,740,702)	(4,862,582)	(4,671,402)
Non cash pension costs	(652,000)	(726,000)	(652,000)	(726,000)
Valuation fees	(302,955)	(265,780)	(302,067)	(265,780)
Bad debt released/(written off)	17,608	90,405	17,608	90,405
	(5,864,354)	(5,642,077)	(5,799,041)	(5,572,777)
Release of impairment of housing properties	800,000	1,200,000	800,000	1,200,000
(note 14)
Operating surplus	15,851,247	14,838,212	15,648,465	14,605,779
(Loss)/gain on disposal of housing properties	(122,457)	(142,242)	(122,457)	(142,242)
(note 9)
Interest receivable and similar income (note 10)	1,231,574	50,292	1,115,135	49,372
Interest payable and similar charges (note 11)	(1,065,226)	(1,362,583)	(1,065,226)	(1,362,583)
Other finance expenses (note 12)	(152,000)	(172,000)	(152,000)	(172,000)
Surplus before taxation for the year	15,743,138	13,211,679	15,423,917	12,978,326
		Group	Co-Ownership
Turnover from lettings	2023	2022	2023	2022
	£	£	£	£
Rents	14,284,214	13,728,423	14,122,269	13,543,091
Processing fees	197,182	172,738	197,182	172,738
	14,481,396	13,901,161	14,319,451	13,715,829

27

Northern Ireland Co-Ownership Housing Association Limited

Notes to the financial statements for the year ended 31 March 2023 (continued)

5 Lettings and other related information (continued)

		Group		Co-Ownership	Co-Ownership
Analysis of Operating costs	2023		2022	2023	2022
	£		£	£	£
Personnel
Salaries (excluding pensions)	2,888,550		2,748,343	2,873,298	2,731,038
Pension contributions	476,131		440,108	476,131	440,108
Other staff costs	104,856		111,899	104,856	111,899
	3,469,537		3,300,350	3,454,285	3,283,045
Non cash pension costs	652,000		726,000	652,000	726,000
	4,121,537		4,026,350	4,106,285	4,009,045
Establishment
Property costs	430,589		407,360	390,448	364,883
Telephone	27,317		24,491	27,317	24,491
Depreciation	90,490		87,956	90,490	87,956
	548,396		519,807	508,255	477,330
Administration
Administration overheads	126,270		106,839	126,270	106,839
Computer costs	198,585		221,536	198,585	221,536
Professional fees	120,556		148,476	113,191	141,061
Project costs	49,888		28,368	49,888	28,368
General expenses	119,882		119,286	118,215	117,183
Repairs	12,532		-	12,532	-
Marketing	254,858		247,201	254,858	247,201
Credit Agency	26,503		48,839	26,503	48,839
	909,074		920,545	900,042	911,027
Total Management expenses	5,579,007		5,466,702	5,514,582	5,397,402
Valuation fees	302,955		265,780	302,067	265,780
Bad debt (released)/written off	(17,608)		(90,405)	(17,608)	(90,405)
Total Operating costs	5,864,354		5,642,077	5,799,041	5,572,777

28

Northern Ireland Co-Ownership Housing Association Limited

Notes to the financial statements for the year ended 31 March 2023 (continued)

6 Operating surplus

6 Operating surplus
		Group	Co-Ownership
	2023	2022	2023	2022
	£	£	£	£
Operating surplus is stated after charging:
Staff costs, excluding pension (note 7)	2,888,550	2,748,343	2,873,298	2,731,038
Pension (note 7) – contributions	476,131	440,108	476,131	440,108
– other pension costs	652,000	726,000	652,000	726,000
Depreciation of tangible fixed assets
– owned assets (note 17)	90,490	87,955	90,490	87,955
Operating lease rentals	245,651	231,631	245,651	231,631
Fees payable to the Group’s auditor for the audit of	39,000	39,000	36,000	36,000
the financial statements
Fees payable to the Group’s auditor for non-audit	2,950	2,950	-	-
services

7 Employee information

7 Employee information
	Group		Co-Ownership Housing
	2023	2022	2023	2022
	£	£	£	£
Staff costs
Wages and salaries	2,594,830	2,497,624	2,579,578	2,480,319
Social security costs	293,720	250,719	293,720	250,719
	2,888,550	2,748,343	2,873,298	2,731,038
Pension contributions	476,131	440,108	476,131	440,108
	3,364,681	3,188,451	3,349,429	3,171,146
Other pension costs	652,000	726,000	652,000	726,000
	4,016,681	3,914,451	4,001,429	3,897,146
			2023	2022
			Number	Number
Average monthly number of persons employed by the Group and Co-Ownership
(including the Chief Executive and excluding the board members) during		the year
by activity:
- Permanent			62	61
- Temporary			1	2
Administration and finance			63	63

29

Northern Ireland Co-Ownership Housing Association Limited

Notes to the financial statements for the year ended 31 March 2023 (continued)

8 Key management emoluments

The remuneration of the key management (compromising the Chief Executive and senior personnel) of the Group and Co-Ownership during the year was:

and Co-Ownership during the year was:
	Group		Co-Ownership
	2023	2022	2023	2022
	£	£	£	£
Aggregate emoluments	360,468	348,564	360,468	348,564
Pension contributions to money purchase	63,803	62,370	63,803	62,370
schemes
	424,271	410,934	424,271	410,934

Members of the Board of Management serve in a voluntary capacity and none were in receipt of emoluments during the year.

The emoluments to the highest paid Director included within the above table are as follows:

	Group		Co-Ownership	Co-Ownership
	2023	2022	2023	2022
	£	£	£	£
Aggregate emoluments	117,764	114,577	117,764	114,577
Pension contributions	20,966	20,590	20,966	20,590
	138,730	135,167	138,730	135,167

During the period the key management emoluments (excluding pension contributions) fell within the following band distributions:

	2023 Number	2022 Number
More than £70,000 but not more than £75,000	-	1
More than £75,000 but not more than £80,000	1	-
More than £80,000 but not more than £85,000	2	2
More than £110,000 but not more than £115,000	-	1
More than £115,000 but not more than £120,000	1	-

30

Northern Ireland Co-Ownership Housing Association Limited

Notes to the financial statements for the year ended 31 March 2023 (continued)

9 Surplus on sale of housing properties

	Group	Group	Co-Ownership	Co-Ownership
	2023	2022	2023	2022
	£	£	£	£
Sales - first tranche sales	35,738,886	44,776,763	34,556,386	43,136,763
Cost of sales - first tranche sales	(29,203,400)	(39,296,848)	(28,157,050)	(37,773,249)
	6,535,486	5,479,915	6,399,336	5,363,514
(Loss)/gain on disposal of housing properties	(122,457)	(142,242)	(122,457)	(142,242)
– second tranche and after
Release of provision for impairment of	800,000	1,200,000	800,000	1,200,000
housing properties (note 14)
	7,213,029	6,537,673	7,076,879	6,421,272
Comprising:
	£	£	£	£
Repossession of properties	(938,537)	(851,594)	(938,537)	(851,594)
Surplus on Disposal	7,351,566	6,189,267	7,215,416	6,072,866
Release of impairment of housing properties	800,000	1,200,000	800,000	1,200,000
	7,213,029	6,537,673	7,076,879	6,421,272

As at 31 March 2023, there were 8 (2022: 16) properties remaining in repossession status.

10 Interest receivable and similar income

		Group		Co-Ownership	Co-Ownership
	2023		2022	2023	2022
	£		£	£	£
Interest receivable	1,231,574		50,292	1,115,135	49,372

11 Interest payable and similar charges

	Group	Group	Co-Ownership	Co-Ownership
	2023	2022	2023	2022
	£	£	£	£
Interest payable	1,065,226	1,362,583	1,065,226	1,362,583

12 Other finance expenses

12 Other finance expenses
	2023	2022
Group and Co-Ownership	£	£
Interest on pension scheme	152,000	172,000
	152,000	172,000

31

Northern Ireland Co-Ownership Housing Association Limited

Notes to the financial statements for the year ended 31 March 2023 (continued)

13 Taxation on profit on ordinary activities

	Group		Co-Ownership
	2023	2022	2023	2022
	£	£	£	£
UK corporation tax charge on profit for the year	58,965	38,759	-	-
Total current tax	58,965	38,759	-	-

Reconciliation of tax expense

The tax assessed on the profit on ordinary activities for the year is lower than (2022: lower than) the standard rate of corporation tax in the UK of 19% (2022: 19%).

	2023	2022
	£	£
Surplus on ordinary activities before taxation	15,743,138	13,211,679
	==============================================	==============================================
Surplus on ordinary activities by rate of tax	2,991,196	2,510,219
Charitable income not chargeable to tax	(2,930,544)	(2,465,882)
Adjustment to tax in respect of previous periods	(1,687)	(5,578)
	----------------------------------------------	----------------------------------------------
Tax on profit	58,965	38,759
	==============================================	==============================================

As Co-Ownership is a charitable entity it does not pay corporation tax. The tax charge above relates to the subsidiary Ownco Homes Limited.

14 Housing properties

14 Housing properties
Cost Participants’ Net Investment Group £ £	Group Housing Investment £
At 1 April 2022 1,125,994,237 646,251,349 Transfers of completed schemes and additions in the year 107,210,722 63,221,606 Disposals (64,256,908) (35,877,286) Transferred to stock (5,421,705) (3,376,449)	479,742,888 43,989,116 (28,379,622) (2,045,256)
At 31 March 2023 1,163,526,346 670,219,220	493,307,126
Impairment At 1 April 2022 Released in the year	(5,400,000) 800,000
At 31 March 2023	(4,600,000)
Uncompleted schemes and additions Balance at 1 April 2022 Additions Transfers
	1,275,049
	43,486,619 (43,989,115)
At 31 March 2023	772,553
At 31 March 2023	489,479,679
At 31 March 2022	475,617,937

32

Northern Ireland Co-Ownership Housing Association Limited

Notes to the financial statements for the year ended 31 March 2023 (continued)

14 Housing properties (continued)

14 Housing properties (continued)
Cost Participants’ Net Investment Co-Ownership £ £	Co-Ownership Investment £
At 1 April 2022 1,121,699,794 646,251,349 Transfers of completed schemes and additions in the year 106,821,731 63,221,606 Disposals (63,218,249) (35,877,286) Transferred to stock (5,421,705) (3,376,449)	475,448,445 43,600,125 (27,340,963) (2,045,256)
At 31 March 2023 1,159,881,571 670,219,220	489,662,351
Impairment At 1 April 2022 Released in the year	(5,400,000) 800,000
At 31 March 2023	(4,600,000)
Uncompleted schemes and additions Balance at 1 April 2022 Additions Transfers
	1,275,048
	43,097,630 (43,600,125)
At 31 March 2023	772,554
At 31 March 2023	485,834,904
At 31 March 2022	471,323,493

The above properties are held subject to ninety-nine year leases to the occupiers. The leases give Co-Ownership power to repossess the properties in the event of non-compliance with any of the conditions set out in the lease. The occupier, known as the participant, currently contributes a minimum of 50% of the funding of the property.

Capital commitments

The total cost to finalise uncompleted schemes and additions amounts to £8,303,145 (2022: £14,507,945), of which £3,433,911 (2022: £5,605,274) represents Co-Ownership’s investment. In addition, negotiations are in progress for the purchase of existing property at a total cost of £20,747,145 (2022: £19,266,600), of which £8,697,204 (2022: £7,974,445) represents Co-Ownership’s investment.

15 Housing Association Grant

15 Housing Association Grant
	2023	2022
Group and Co-Ownership	£	£
At 1 April	191,183,830	212,190,877
Receivable in the year	6,300	10,150
Repayable - on disposal	(12,869,822)	(21,017,197)
At 31 March (note 22)	178,320,308	191,183,830

Housing Association Grant (HAG) repayable on disposal consists of amounts paid during the year of £8,064,849 (2022: £11,279,127) and amounts falling due within one year of £4,804,973 (2022: £9,738,070) (note 21).

33

Northern Ireland Co-Ownership Housing Association Limited

Notes to the financial statements for the year ended 31 March 2023 (continued)

16 Fixed asset investments

16 Fixed asset investments
	2023	2022
	Subsidiary	Subsidiary
	Undertaking	Undertaking
Co-Ownership	£	£
Cost	300,001	300,001

The investment represents Co-Ownership’s holding in a wholly owned subsidiary company, Ownco Homes Limited.

17 Other tangible fixed assets

Fixtures and fittings Office Equipment Group and Co-Ownership £ £	Total £
Cost At 1 April 2022 157,787 404,942 Additions 3,579 78,351	562,729 81,930
At 31 March 2023 161,366 483,293	644,659
Accumulated depreciation At 1 April 2022 31,438 319,853 Charge for the year 16,137 74,353	351,291 90,490
At 31 March 2023 47,575 394,206	441,781
Net book amount At 31 March 2023 113,791 89,087	202,878
At 31 March 2022 126,349 85,089	211,438
18 Stock 2023 Group and Co-Ownership £	2022 £
Stock 2,093,579	3,315,313

This value represents the cost of housing properties held for sale at the year end. Any property that will be staircased or sold within one month of the year end has that element of the property moved from housing property to stock.

Stock is held at the lower of cost and net realisable value.

34

Northern Ireland Co-Ownership Housing Association Limited

Notes to the financial statements for the year ended 31 March 2023 (continued)

19 Debtors

19 Debtors
Amounts falling due within one year		Group	Co-Ownership
	2023	2022	2023	2022
	£	£	£	£
Rent debtors	325,112	349,739	306,197	329,383
Less: bad debts provision	(171,000)	(196,338)	(171,000)	(196,338)
	154,112	153,401	135,197	133,045
Prepayments and accrued income	225,718	132,040	222,232	127,941
	379,830	285,441	357,429	260,986
20 Current asset investments
	Group		Co-Ownership
	2023	2022	2023	2022
	£	£	£	£
Short term deposits	78,687,610	26,657,589	70,582,528	20,058,915

Current asset investments comprise deposits with an original maturity between one and twelve months. The Group manages risk by utilising a variety of institutions and accounts with the intention of holding these deposits to maturity to generate a return.

21 Creditors: amounts falling due within one year

		Group	Co-Ownership	Co-Ownership
	2023	2022	2023	2022
	£	£	£	£
HAG repayable - on disposal	4,804,973	9,738,070	4,804,973	9,738,070
Participants’ deposits	240,017	156,461	113,724	1,099
Other creditors	463,059	621,927	463,059	621,927
DfC Loans (note 23)	5,000,000	3,750,000	5,000,000	3,750,000
Corporation Tax	58,965	38,759	-	-
Accruals and deferred income	687,150	1,178,415	668,314	1,163,746
	11,254,164	15,483,632	11,050,070	15,274,842

35

Northern Ireland Co-Ownership Housing Association Limited

Notes to the financial statements for the year ended 31 March 2023 (continued)

22 Creditors: amounts falling due after more than one year

		Group	Co-Ownership	Co-Ownership
	2023	2022	2023	2022
	£	£	£	£
Bank loan (note 23)	30,000,000	30,000,000	30,000,000	30,000,000
DfC loans (note 23)	219,750,000	188,500,000	207,250,000	176,000,000
Housing Association Grant (note 15)	178,320,308	191,183,830	178,320,308	191,183,830
	428,070,308	409,683,830	415,570,308	397,183,830

Security

The bank loan and DfC loan are secured by a floating charge over all the assets of Northern Ireland Co-Ownership Association Limited with the bank taking preference.

23 Loans and other borrowings

	Group		Co-Ownership	Co-Ownership
	2023	2022	2023	2022
	£	£	£	£
Bank loans and overdrafts	30,000,000	30,000,000	30,000,000	30,000,000
Maturity of financial liabilities:
Greater than five years	30,000,000	30,000,000	30,000,000	30,000,000
	Group		Co-Ownership
	2023	2022	2023	2022
	£	£	£	£
Department for Communities loans	224,750,000	192,250,000	212,250,000	179,750,000
Maturity of financial liabilities:
Due within one year	5,000,000	3,750,000	5,000,000	3,750,000
In more than one year, but not more	34,156,250	27,171,875	34,156,250	27,171,875
than five years
Greater than five years	185,593,750	161,328,125	173,093,750	148,828,125
	224,750,000	192,250,000	212,250,000	179,750,000

The above loans from DfC relate to Financial Transactions Capital (“FTC”). The DfC loan is interest free and secured against the assets of the Group.

The Bank loan and unused facilities bear interest between 0.5% and 3.0% and are secured against the assets of the Group. At 31 March 2023 the Group had an undrawn revolving loan facility of £35m.

36

Northern Ireland Co-Ownership Housing Association Limited

Notes to the financial statements for the year ended 31 March 2023 (continued)

24 Pension commitments

A net pension deficit shown below under section 28 of FRS 102 deals with accounting for employee benefits and does not represent a shortfall which requires short term cash funding. The amount shown below is calculated to comply with the Financial Reporting Standard, the specific requirements of which differ from the basis on which pension liabilities are actuarially calculated for the purpose of the ongoing funding of the scheme. The Financial Reporting Standard requires:

• (i) actuarial deficiencies to be recognised immediately as a liability in the financial statements rather than being spread forward over employees’ remaining service lives; and

• (ii) the actuary, in valuing the scheme’s liabilities, is required to use a bond yield as the discount rate for valuing future liabilities, rather than a rate that reflects the expected return on the scheme’s particular asset portfolio, with the result of an apparent increase in the present value of future longer term liabilities.

The below is in relation to employees and ex-employees who are members of the NILGOSC pension scheme. NILGOSC pension scheme is considered a related party of Co-Ownership. The most recent valuation was conducted as at 31 March 2023 by a qualified actuary for the purpose of the disclosures below.

The major assumptions used by the actuary were:

Group and Co-Ownership	2023	2022	2021
Rate of increase in salaries	4.20%	4.50%	4.20%
Rate of increase in pensions in payment	2.70%	3.00%	2.70%
Discount rate	4.70%	2.70%	2.10%
Inflation assumption	2.70%	3.00%	2.70%

The mortality assumptions used were as follows:

	2023	2022	2021
Group and Co-Ownership	Years	Years	Years
Longevity at age 65 for current pensioners:
- Men	22.2	21.8	21.9
- Women	25.0	25.0	25.1
Longevity at age 45 for future pensioners:
- Men	23.2	23.2	23.3
- Women	26.0	26.4	26.5

37

Northern Ireland Co-Ownership Housing Association Limited

Notes to the financial statements for the year ended 31 March 2023 (continued)

24 Pension commitments (continued)

The assets and liabilities in the scheme and the reconciliation to the statement of financial position were:

	Value at	Value at
	31 March	31 March
Group and Co-Ownership	2023	2022
	£’000	£’000
Equities	7,541	9,349
Property	2,111	2,179
Bonds	4,449	5,862
Asset Credit	2,507	2,855
Cash	1,225	872
Other	1,018	676
Total market value of assets	18,851	21,793
Present value of scheme liabilities	(18,501)	(27,705)
Net pension surplus/ (deficit)	350	(5,912)
Unrecognised asset	(350)	-
Net pension deficit recognised in statement	-	(5,912)
of financialposition

Reconciliation of fair value of scheme assets

Reconciliation of fair value of scheme assets
	2023	2022
Group and Co-Ownership	£’000	£’000
At 1 April	21,793	20,126
Interest income on assets	592	424
Member contributions	174	158
Employer contributions	551	432
Actuarial (losses)/ gains	(3,767)	1,086
Benefits paid	(492)	(433)
At 31 March	18,851	21,793

The actual return on assets was a loss of £3.2m (2022: gain of £1.5m).

Reconciliation of present value of scheme liabilities

Reconciliation of present value of scheme liabilities
	2023	2022
Group and Co-Ownership	£’000	£’000
At 1 April	27,705	28,493
Current service cost	1,128	1,158
Interest cost	744	596
Member contributions	174	158
Actuarial (gains)/ losses	(10,833)	(2,267)
Past service cost	75	-
Curtailment cost	-	-
Benefits paid	(492)	(433)
At 31 March	18,501	27,705

38

Northern Ireland Co-Ownership Housing Association Limited

Notes to the financial statements for the year ended 31 March 2023 (continued)

24 Pension commitments (continued)

Analysis of amount charged to income or expenditure are as follows:

Analysis of amount charged to income or expenditure are as	follows:
	2023	2022
Group and Co-Ownership	£’000	£’000
Current service cost	1,128	1,158
Past service cost	75	-
Interest on net defined benefit liabilities	152	172
Total cost	1,355	1,330

Amounts for current and previous four years:

Amounts for current and previous four years:
	2023	2022	2021	2020	2019
Group and Co-Ownership	£’000	£’000	£’000	£’000	£’000
Fair value of employer assets	18,851	21,793	20,126	16,361	12,307
Present value of defined benefit obligation	(18,501)	(27,705)	(28,493)	(21,832)	(16,194)
Surplus/ (Deficit)	350	(5,912)	(8,367)	(5,471)	(3,887)

Total amount recognised in the statement of changes in reserves

	2023	2022	2021	2020	2019
Group and Co-Ownership	£’000	£’000	£’000	£’000	£’000
Actuarial surplus/ (deficit)	6,716	3,353	(2,414)	(905)	261

25 Called up share capital

Each past and present member of the Board of Management holds one non-equity share of £1 in Co-Ownership.

	2023	2022
Group and Co-Ownership	£	£
Allotted, issued and fully paid	34	34

There were no changes in share capital during the year (2022: 24 shares were cancelled).

26 Revenue reserves

26 Revenue reserves
	Group		Co-Ownership
	2023	2022	2023	2022
	£	£	£	£
Opening reserves	3,028,089	2,668,848	2,716,000	2,546,000
Net transfer from designated reserves (note	502,917	359,241	48,067	170,000
27)
Closing reserves	3,531,006	3,028,089	2,764,067	2,716,000

The transfer from Designated reserves has been made on the basis that the closing Revenue reserves represent 6 months committed operating costs.

39

Northern Ireland Co-Ownership Housing Association Limited

Notes to the financial statements for the year ended 31 March 2023 (continued)

27 Designated reserves

Property purchase reserve

Property purchase reserve
	2023	2022
Group	£	£
At 1 April	116,310,228	100,143,549
Surplus for the year	22,400,173	16,525,920
Transfer to revenue reserve (note 26)	(502,917)	(359,241)
At 31 March	138,207,484	116,310,228
	2023	2022
Co-Ownership	£	£
At 1 April	116,115,634	99,954,308
Surplus for the year	22,139,917	16,331,326
Transfer to revenue reserve (note 26)	(48,067)	(170,000)
At 31 March	138,207,484	116,115,634

Designated reserves are the balance of reserves required to fund Co-Ownership’s investment in housing properties.

28 Financial Instruments

28 Financial Instruments
	Group		Co-Ownership
	2023	2022	2023	2022
	£	£	£	£
Financial assets that are debt instruments
measured at amortised cost
Rental debtor (note 19)	154,112	153,401	135,197	133,045
Short term deposits (note 20)	78,687,610	26,657,589	70,582,528	20,058,915
Cash at bank and in hand	10,219,420	44,330,095	8,220,644	41,732,194
	89,061,142	71,141,085	78,938,369	61,924,154
Financial liabilities measured at amortised
cost
DfC loans (note 21 and 23)	224,750,000	192,250,000	212,250,000	179,750,000
Bank loans (note 23)	30,000,000	30,000,000	30,000,000	30,000,000
Participants’ deposits (note 21)	240,017	156,461	113,724	1,099
Accruals (note 21)	687,151	1,178,415	668,314	1,163,746
	255,677,168	223,584,876	243,032,038	210,914,845

40

Northern Ireland Co-Ownership Housing Association Limited

Notes to the financial statements for the year ended 31 March 2023 (continued)

29 Reconciliation of consolidated operating surplus to net cash inflow from operating activities

29 Reconciliation of consolidated operating surplus operating activities	to net cash inflow	from
	2023	2022
	£	£
Surplus in the financial year	15,684,173	13,172,920
Taxation	58,965	38,759
Gain/(loss) on disposal of housing properties – second tranche	122,457	142,242
and after
Interest receivable and similar income	(1,231,574)	(50,292)
Interest payable and similar charges	1,065,226	1,362,583
Other finance expenses	152,000	172,000
Operating surplus	15,851,247	14,838,212
Surplus on sale of housing properties	(7,474,024)	(6,331,509)
Repossession of properties	938,537	851,594
Release of impairment of housing properties	(800,000)	(1,200,000)
Depreciation	90,490	87,956
Movement in debtors	3,419	15,217
Movement in creditors	(573,048)	(57,532)
Difference between pension charges and cash contributions	652,000	726,000
Share capital cancelled	-	(24)
Cash inflow from operating activities	8,688,621	8,929,914

30 Analysis of consolidated net funds

			Other
	1 April		non cash	31 March
	2022	Cashflow	movements	2023
	£	£	£	£
Cash at bank and in hand	44,330,095	(34,110,675)	-	10,219,420
Short term deposits (note 20)	26,657,589	52,030,021	-	78,687,610
Debt due within one year (note 21)	(3,750,000)	3,750,000	(5,000,000)	(5,000,000)
Debt due after one year (note 22)	(218,500,000)	(36,250,000)	5,000,000	(249,750,000)
Net funds	(151,262,316)	(14,580,654)	-	(165,842,970)

41

Northern Ireland Co-Ownership Housing Association Limited

Notes to the financial statements for the year ended 31 March 2023 (continued)

31 Operating lease commitments

At 31 March Co-Ownership had the following future minimum lease payments under non-cancellable operating leases for each of the following periods:

			Land and	Land and
	Other	Other	buildings	buildings
	2023	2022	2023	2022
	£	£	£	£
Within one year	-	6,394	223,243	223,243
Within two to five years	-	-	892,973	892,973
After five years	-	-	446,486	669,730
	-	6,394	1,562,702	1,785,946

32 Legislative provisions

Co-Ownership is incorporated under the Co-operative and Community Benefit Societies Act (Northern Ireland) 1969.

33 Related party disclosures

Ownco Homes Limited is regarded as a related party as defined by section 33 of FRS 102 as it is a wholly owned subsidiary of Northern Ireland Co-ownership Housing Association.

The transaction and balances due from/to this related party during the year were as follows:

	2023	2022
	£	£
Amounts owed from related party at 1 April	-	-
Management and administration charge to Ownco Homes	15,252	17,305
Donations received from Ownco Homes	30,000	-
Receipts from Ownco Homes	(45,252)	(17,305)
Amounts owed from related party at 31 March	-	-

Moneda House 25-27 Wellington Place Belfast, BT1 6GD

Call 028 9032 7276 Textphone 18001 028 9032 7276 [e-mail]