**Registered No. IP000306 Charity Registration No. NIC 104547**
**ARK HOUSING ASSOCIATION NORTHERN IRELAND LIMITED ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2023**
**ARK HOUSING ASSOCIATION NORTHERN IRELAND LIMITED ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2023**
|**CONTENTS**|**Page**|
|---|---|
|Board of Management and Advisors|1|
|Report of Board of Management|2 – 4|
|Strategic Report of the Board of Management|5 – 16|
|Independent Auditors Report to the Members of Ark Housing Association NI Limited|17 – 21|
|Statement of Comprehensive Income|22|
|Statement of Changes in Reserves|23|
|Statement of Financial Position|24|
|Statement of Cash Flows|25|
|Notes to the Financial Statements|26 – 42|
## **ARK HOUSING ASSOCIATION NORTHERN IRELAND LIMITED ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2023**
## **BOARD OF MANAGEMENT & ADVISORS**
**Board of Management** Mr Tom Doran (Chair) Mr Ian McAvoy (Vice-Chair) Ms Nicole Mulholland Ms Deborah Reynolds Ms Sara McClintock Mr Kevin McElroy (Ended 23 May 2022) Ms Denise Burns Ms Catherine Blackbourne Mr Ward Erwin Mr Robert Hutchinson (Appointed 5 September 2022) Ms Chi Ting Yip (Appointed 5 September 2022)
**Chief Executive & Company Secretary** Mr James P McShane
**Registered Office** Unit 1, Hawthorn Office Park 43 Stockmans Way Belfast BT9 7ET
Registered under the Co-Operative and Community Benefit Societies Act (Northern Ireland) 1969 No IP00306 Registered with the Department for Communities (NI) R50
Registered with the Charity Commission for Northern Ireland NIC104547
**Solicitors** Edwards & Co 28 Hill Street Belfast BT1 3LR
**Independent Auditors**
GMCG Belfast 19 Alfred Street Belfast BT2 8EQ
**Bankers** Danske Bank Donegall Square West Belfast BT1 6JS
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## **ARK HOUSING ASSOCIATION NORTHERN IRELAND LIMITED ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2023**
## **REPORT OF THE BOARD OF MANAGEMENT**
The Board of Management presents their strategic report and the audited financial statements for the year ended 31 March 2023 for Ark Housing Association Northern Ireland Limited (the “Association”).
## **Principle Activities**
The Association is a non-profit making Housing Association providing a range of social housing and support services across Northern Ireland for those in need. Our principal activities include:
- Developing new build social housing in response to identified need;
- Providing housing management and tenancy support services;
- Undertaking response, cyclical and planned maintenance works;
- Assisting people to stay in their own homes through home adaptation services;
- Providing temporary accommodation and support services to homeless families;
- Providing a Floating Support Service to the wider community
- Partnering others in the delivery of specialist housing & support provision.
## **Vision, Mission and Values**
Our vision is _‘Making a positive difference by empowering people and communities’_ and its mission is _‘In partnership, provide quality homes and support services to meet housing need and contribute to the well-being of communities”_ .
Our core values, which have the acronym **PRIDE** , are:
|Progressive|_– Forward thinking, supporting change and transformational_|
|---|---|
|Respect|_- Treat everyone with dignity & esteem_|
|Integrity|_- Maintain the highest professional and personal standards_|
|Diversity & Equality|_- Value diversity and equality in everything we do_|
|Excellence|_- Strive to deliver the highest standards of quality and customer care_|
We currently own 717 homes across a wide geographical area providing housing and associated services across a diverse spectrum including:
- General needs homes;
- Mobility and wheelchair bungalows;
- Sheltered Housing;
- Temporary Accommodation;
- Specialist homes for those living with mild to moderate dementia, learning difficulties and mental illhealth.
## **Corporate Governance**
In the opinion of the Board, the Association is compliant with the Best Practice issued by the NHF Code of Governance.
## **Board of Management**
The Association is governed by a voluntary Board, which during the year, consisted of 11 persons with a wide range of skills and experience. The gender balance of the Board during 2022-2023 was 55% female, 45% male.
The work of the Board was supported by its committees which include the Audit, Compliance and Risk committee, the Investment committee, the Governance committee and the Remuneration committee.
|**Board/Committees**|**Number of Meetings during 2022-23**|
|---|---|
|Board|6|
|Audit, Compliance & Risk Committee|5|
|Performance & Investment Committee|4|
|Governance Committee|1|
|Remuneration Committee|2|
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## **ARK HOUSING ASSOCIATION NORTHERN IRELAND LIMITED ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2023**
## **REPORT OF THE BOARD OF MANAGEMENT (CONT’D)**
## **Going Concern**
After making enquiries, the Board has a reasonable expectation that the Association has adequate resources to continue in operational existence for the foreseeable future. For this reason, the Board continues to adopt the going concern basis in preparing the financial statements.
## **Internal Financial Control**
The Board is responsible for the Association’s system of financial control and along with Senior Management is responsible for establishing and operating detailed control and reporting procedures. The systems of internal financial control can only provide reasonable, and not absolute, assurance against material misstatement and loss.
The Board has reviewed the effectiveness of the Association’s system of financial control. The review included consideration of the business risks facing the Association and of the existing internal financial control procedures. The key elements of the control system in operation are:
- The Board has adopted a formal schedule of matters reserved for its approval ensuring it maintains responsibility for overall strategy, approval of all property transactions and other major capital expenditure projects.
- There is an organisational structure with clearly defined lines of responsibility and delegation of authority.
- Detailed budgets are prepared covering the Association’s business, which are reviewed and approved by the Board. In the monthly management accounts, the actual results are compared against the budget and appropriate action identified and initiated.
- The Board reviews matters relating to internal control and receives reports on a regular basis from the external and internal auditors and from Senior Management.
- The process for identifying, evaluating and managing the significant risks faced by the Association is ongoing, and is regularly reviewed by the Board.
## **Board Responsibilities**
The Co-operative and Community Benefit Societies Act (Northern Ireland) 1969 and registered housing association legislation require the members of the Board of Management to prepare financial statements for each financial year which give a true and fair view of the state of the Association’s affairs and of its surplus or deficit for that period. In preparing these 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 the Association will continue to operate.
The members of the Board of Management are responsible for keeping proper accounting records which disclose with reasonable accuracy at any time the financial position of the Association and to enable them to ensure that the financial statements comply with the Co-operative and Community Benefit Societies Act (Northern Ireland) 1969 and the Registered Housing Associations (Accounting Requirements) Order (Northern Ireland) 1993. They have general responsibility for the taking of reasonable steps to safeguard the assets of the Association and to prevent and detect fraud and other irregularities.
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## **ARK HOUSING ASSOCIATION NORTHERN IRELAND LIMITED ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2023**
## **REPORT OF THE BOARD OF MANAGEMENT (CONT’D)**
## **Statement of Disclosure of Information to Auditors**
So far as each of the members of the Board is aware:
- There is no relevant information of which the Association’s auditors are unaware.
- They have taken all reasonable steps that they ought to have taken, as members of the Board, to make themselves aware of any relevant audit information and to establish that the Association’s auditors are aware of that information.
## **Auditors**
A resolution to appoint GMcG Group Limited was proposed and agreed at the Annual General Meeting on 27 June 2022. A resolution to reappoint GMcG Group Limited will be proposed at the Annual General Meeting.
By order of the Board
Mr Tom Doran **Chair of the Board of Management**
Belfast 26 June 2023
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## **ARK HOUSING ASSOCIATION NORTHERN IRELAND LIMITED ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2023**
## **STRATEGIC REPORT OF THE BOARD OF MANAGEMENT**
## **Business Overview**
The financial year 2022-23 marked the fourth year of our ambitious five-year plan to achieve 1,000 units of accommodation under management by March 2024. To date we have 717 completed units plus 340 units currently on site, which keeps us on track towards achieving our target.
We achieved 74 new build starts during 2022-23, against a target of 100.
We had a very strong 2022-23 year in development, with 114 completions against a target of 73.
The Board’s revised policy and framework for managing risks has ensured a continuous review of the risks affecting our business and we have been proactive in monitoring and acting in mitigating those risks.
Our risk register not only considers risks that are unique to Ark Housing but also those risks that affect the wider housing sector due to economic policy and political influences. Each risk is continually assessed in respect of the likelihood of something happening and the impact it would have on our business if it did happen, as well as the action taken to mitigate those risks.
The Board are committed to embedding risk management throughout the organisation and its systems and controls are designed to ensure that any exposure to significant risk is properly managed.
Our risk management strategy is digitised with the use of the Decisiontime Risk Management software module. We recognised that risks are an intrinsic part of the organisation and risk management, and an organisation’s approach to it, can be a matter that may make or break many businesses. This tool encourages scrutiny across the spectrum of risks from day-to-day operational risks to readiness for major global events. The system creates reports that improve the quality of information that is presented and communicated to the board.
Risks identified and monitored throughout 2022/2023 include:
- Macro-Economic Climate
- Climate Emergency
- Building Fire Safety
- Tenant Welfare/Data-Led Service Provision
- Quality Data Management & Security
- Supply Chain Disruption
We completed internal audits throughout the year to provide further assurances on our internal systems, processes and controls and these included an assessment of the Association’s Contract Management, Governance and Tenant Participation. All three internal audit reports returned satisfactory outcomes in the business areas examined and we were pleased to receive a satisfactory annual assurance report from our internal auditors in respect to the same.
## **Financial Performance**
Our turnover for the financial year 2022-23 increased to over £5.5m compared to under £4.6m in 2021-22. This represents a 22% increase. This substantial increase clearly reflects the Association’s strong growth strategy.
Further indication of our growth can be evidenced in the continual increase in equity.
Our surplus is used to fund loan capital repayments and to fund our long-term home improvement plans. Our budget has been well managed, and the performance this year was strong, exceeding budget expectations. We achieved a gross margin of 44% and a net margin of 31%, both calculated using the adjusted operating surplus and turnover.
We have a strong Balance Sheet with the cost of property fixed assets increasing by £21m from the 2021/22 financial year to almost £102m at March 2023. This increase is largely due to our investment in new homes and some expenditure in major improvements to our existing homes.
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## **ARK HOUSING ASSOCIATION NORTHERN IRELAND LIMITED ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2023**
## **STRATEGIC REPORT OF THE BOARD OF MANAGEMENT (CONT’D)**
The liquidity position of the Association is closely monitored in line with our Treasury policy, to ensure the availability of cash to meet its short-term liabilities. Although the ratio of current assets to current liabilities (not including short term HAG) is only 0.3:1, the Association has in place a Revolving Credit Facility of £19.5m. The delay of draw down until needed minimises loan interest repayments.
In spite of our £21m increase in Property Fixed Assets during the year, our bank loan balances decreased by £9m due to paying back part of the Revolving Credit Facility with on-site grants received. This allowed the Association to reduce its gearing ratio from 36% at March 2022 to only 19% at March 2023. This extremely low gearing, well below the bank’s maximum 50% range, affords the Association capacity for continued growth.
The Association is also in a very fortunate position to have 72% of its loans fixed at very competitive rates. In today’s market of high inflation and high interest rates this is very advantageous.
Loan interest is one of our largest areas of expenditure and therefore even small increases can have a significant impact on the Association’s overall performance. We manage this risk in line with our Treasury Management Policy by adhering to a mix of fixed and variable rates in order to balance risk whilst benefiting from more favourable variable rates. Our average loan interest rate for the financial year was 3.3%. In the current economic climate, where the Bank of England base rate before accounting for the bank’s margin, is 4.25%, an average of 3.3% interest rate is very positive for the Association.
## **Safeguarding**
The welfare of adults and children is of utmost importance to us, and we are committed to practices that reduce risk and promote safeguarding. Our staff recognise their responsibilities and are committed to adhering to the policies and procedures in place. We recognise that staff training and development is important, particularly in regard to safeguarding and our staff participated in Safeguarding training in May 2023. We continue to ensure that all new staff are provided with an overview during induction. The Association’s Adult Safeguarding Champion continues to investigate and report safeguarding issues to the Association’s Board, Charities Commission and Supporting People. During 2022/2023, the Board fully implemented its Safeguarding reporting obligations.
## **Fraud**
The Board are concerned with ensuring that the assets of the Association are protected from the risk of theft, misappropriation, or other such unauthorised disposal, from wherever the source is, including through fraudulent actions.
The Association’s fraud policy applies to everyone engaged in activities on behalf of the Association, including board members, staff, tenants, members of the public, contractors, agents and others.
This policy sets out the responsibilities of all staff regarding the prevention of fraud and the actions to be taken where a fraud is suspected or detected.
The Association completed the four quarterly DfC Fraud returns for the financial year. We reported 6 tenancy fraud investigations during 2022-23. 5 cases are now closed and 1 remains open.
## **Value for Money**
We define Value for Money (VFM) as ‘obtaining the maximum benefit from our assets’. It is simply not the cheapest way of doing something. It is about finding the best combination between:
- Keeping the cost to a minimum
- Achieving more with our resources to deliver a greater level of service
- Achieving the best outcomes for our tenants
We are committed to providing the best value for money for services for our tenants. Demand for services is continually increasing and resources are limited, therefore we constantly review our services and how we manage resources to ensure that we can continue to re-invest savings into meeting our tenants’ needs, increasing the number of homes we provide and mitigating risks.
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## **ARK HOUSING ASSOCIATION NORTHERN IRELAND LIMITED ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2023**
## **STRATEGIC REPORT OF THE BOARD OF MANAGEMENT (CONT’D)**
Our strategic approach to achieving VFM is driven by our corporate plan and our other strategies which complement the plan. We continually examine our plans and results across the entire organisation, all of which have the common theme in mind of maximising efficiencies and opportunities to achieve the maximum for our tenants.
## **Budgetary Control**
We produce annually a Financial Long-Term Business Plan, which sets out the following 5 years growth strategy and objectives and then extends for an additional 25 years to ensure the strategy’s long-term financial viability, by confirming that future income streams will be sufficient to meet future expenditure. The plan identifies the financing required and demonstrates the Association’s ability to repay the loans and meet banking covenants as well as measuring other important KPI’s. The model is then re-run several times, testing the impact of changes to the key assumptions. The assumptions which will have the greatest impact on the forecasting are selected for testing.
In addition, we set a detailed annual budget which includes efficiency targets and improvements and acts as a control mechanism for both the Associations’ income and expenditure. Performance is measured against budget throughout the financial year through monthly and quarterly Management Accounts.
## **Procurement**
The procurement of goods and services is a large expense area and therefore we have robust procurement policy and procedures in place to ensure when awarding supplier contracts, we achieve VFM in every contract. The whole organisation is encouraged to drive value for money improvements, however big or small.
Our head office administration costs had an overall saving of £6k for the financial year, and it is an area where we are constantly striving to reduce the unit cost over the longer term through our growth plans. It is a difficult time to achieve cost cuts, as we are experiencing price increases in the current economic climate of high inflation. However, we continue to engage in technology to add VFM through our processes. The vast majority of our processes now are on the whole electronic, the reduction in printing and stationary costs is evidence of this.
Homeworking during the pandemic taught us how to achieve business and operational success by adapting to an increased electronic means of working and using digital platforms such as Microsoft Teams and Zoom for general communication and holding meetings. We continue to embrace these platforms, along with traditional methods, which often prove to be a saving on time and resources.
Service charges are reviewed annually. The Association constantly strives for competitive contracts to drive service costs downwards. Again, with high inflation, savings and lower costs are virtually non-existent. However, during 2022-23 the Association was successful in procuring a new Cleaning Contract, with an overall saving of over £21k, which was a big achievement in the current market. It is a saving that we were able to pass on to our tenants as a means of offsetting soaring energy costs.
## **Our People**
Investing in our people is crucial to achieving VFM. One of our five strategic themes is to be a leading employer and that commitment is reflected throughout our personnel policies.
We are committed to recognising, rewarding, and retaining highly motivated staff. Staff feedback is instrumental in striving to continually improve workforce performance leading to service improvement. In our most recent staff survey 92% reported that they were satisfied in their employment with 89% proud to work for us. We also invested over £37k in staff training and development.
We operate a hybrid workplace model, which has been made possible by technological advancements. As a forward-looking organisation, we wish to embrace the benefits of providing staff with a work life balance whilst also ensuring that productivity and creativity are maintained, through our Hybrid Working policy.
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## **ARK HOUSING ASSOCIATION NORTHERN IRELAND LIMITED ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2023**
## **STRATEGIC REPORT OF THE BOARD OF MANAGEMENT (CONT’D)**
We continually ensure that we meet our equality statutory requirements under section 75 of the Northern Ireland Act. During the year we employed an average of 44 people. The gender balance was 81% female, 19% male and the Senior Executive Team comprised of 75% female, 25% male. Staff retention for the year was 86% at year end, sickness absence levels were measured at an average of 3.9% during the year.
## **Growth & Investment - Development**
Setting our challenging and ambitious growth strategy to reach 1,000 units by 2024 drives a very clear and strong VFM message. The enhanced income combined with economies of scale cost savings in administration costs will generate cash to assist with our long-term capacity for growth.
Our growth strategy also underpins our corporate objective to provide quality social housing and to contribute to the Department for Communities (DfC) social housing development targets. We obtain value from our properties, by not just using them as homes, but as assets to provide security to raise further capital for future investment.
The association delivered 114 newly completed homes at March 2023 against a target of 73, the most since the start of our 5 year growth strategy, set in 2019.
In respect to new build starts, we achieved 74, against a target of 100, during the 2022-23 financial year, giving a further boost to our strategic growth plan and demonstrating our determination to making a strong contribution to the Social Housing Development Plan.
We have currently 340 units on site, at March 2023 and we are working towards a further 142 units, which are being progressed at various stages of development, to be on site during the 2023-24 financial year.
We invested £21m in new properties and component replacements during 2022-23, being the same as in 2021-22. This equates to a Property Fixed Asset growth of 26% and a property unit growth of 19%.
To fund our development programme, we have an undrawn Revolving Credit Facility balance of £19.5m. We currently have loan balances of almost £20m, of which £14.4m is fixed, which provides protection against the current high interest rates and further potential interest rate increases.
## **Growth & Investment – Planned Maintenance**
An annual budget is agreed for major upgrades to our stock in accordance with our asset management strategy and stock condition surveys. We recognise that it is more cost effective to invest in maintaining our properties through a comprehensive planned component replacement programme, which will not only give our properties a longer life but will over the long-term produce savings in routine maintenance spend.
This year we invested £684k in planned maintenance and component replacements, against a budgeted spend of £658k. This demonstrates that as well as investing in new homes, we are committed to maintaining our current homes to a high quality for the well-being and comfort of our tenants.
The budget was spread across several schemes, with particularly large spends for boiler and kitchen replacements in one scheme and replacement external doors in another scheme.
We also undertook several home adaptations to enable our residents to live safely and more independently within their homes as their physical needs change. During the year we completed 25 home adaptations at a cost of £106k.
## **Health& Safety**
We demonstrated compliance in Health & Safety through our Cyclical Servicing Compliance Monitor. Performance was presented quarterly to the Investment Committee and Board in relation to gas servicing, fire protection, lift, legionella testing and other areas. 99% of gas servicing was completed on time, with 100% of all other servicing completed in year with the exception of fixed wire testing (99%) and carbon monoxide alarms (99%).
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## **ARK HOUSING ASSOCIATION NORTHERN IRELAND LIMITED ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2023**
## **STRATEGIC REPORT OF THE BOARD OF MANAGEMENT (CONT’D)**
## **Achieving Affordable Rents & Maximising Rental Income**
We aim to set rents that are affordable for our tenants, however it is equally vital that rents are set at an adequate level to cover the costs of maintaining our properties to a high standard and to service debt. During the 2022/23 financial year we applied a rent increase of 4.1%, in line with September CPI plus 1%.
The overall average rent for a self-contained property during 2022/23 was £94.49, compared to the 2021/22 financial year which was £89.86.
We operate in an increasingly challenging financial environment, and so minimising our rental losses through effective arrears management is also vital. Without a reliable income stream, service delivery may be jeopardised, loan commitments may not be met, thus making further funding more difficult and there will be a detrimental effect on the Association’s reputation.
Thus, we have a robust arrears management policy and procedural action plans in place to promote a ‘rent payment culture.’ We aim to address losses from arrears and to recover debt as cost effectively as possible. There is continual reporting and monitoring in the monthly finance report and KPI framework to ensure timely reaction to growing arrears. We provide advice and assistance to tenants, promote money advice services and debt reduction strategies and intervene early to avoid unmanageable debts building up.
The total amount of arrears for the 2022/2023 financial year end was 8.2% which was above our KPI target of 5.5%. Of these, 6.2% were attributed to current tenants and 2% former tenants. Of the current tenants, 5.4% was identified as technical arrears, meaning those arrears would be payable in time by statutory agencies and the net current rent arrears (ie non-technical which are paid directly by tenants) equated to 0.8% at year end.
The Association has been taking measures to ensure that rent arrears are effectively managed, by ensuring early intervention and continual engagement with tenants and statutory agencies.
The turnover of housing stock is an integral part of social housing provision that inevitably results in periods where properties are void. Good void management has a huge economic and social benefit in maximising rental income and meeting housing need. We continually report and review losses from void properties both in our finance reporting and our KPI framework and constantly aim to reduce void periods in our properties.
Our rental loss through voids was 1.9% against a budget of 1%. The number of permanent social housing allocations made during the year was 153 (including new let and re lets) and the net average time to re-let a void property was 19.4 working days which continues to meet our KPI target.
## **Housing Services and Engaged Communities**
We continually monitor the quality of services delivered to our tenants. Our repairs service is paramount to achieving high levels of tenant satisfaction and VFM and during the year we completed a total of 2,894 repairs with 2,460 (85%) of those being completed within our published timescales.
Our year end repair response times are further broken down below categorised by urgency group:
|**Urgency Indicator**|**% Response Time**|
|---|---|
|Emergency|90%|
|Urgent|85%|
|Routine|87%|
Our tenants have a right to feel safe and live in peace in their community, and therefore we adopt a proactive approach to tackling instances of Anti-Social Behaviour. During the year 70% of all Anti-Social Behaviour cases had been closed and successfully resolved and when asked about how satisfied they were that their neighbourhood was a safe place to live, 81% of our tenants who completed the tenant satisfaction survey indicated that they were either very or satisfied.
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**ARK HOUSING ASSOCIATION NORTHERN IRELAND LIMITED ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2023**
## **STRATEGIC REPORT OF THE BOARD OF MANAGEMENT (CONT’D)**
We are committed to meaningful tenant participation and ensuring that our tenants are offered opportunities to have a say in and shape our services. During 2022/2023 we underwent an accreditation process with Supporting Communities and were pleased to be awarded Upper Bronze status. In addition to this we facilitated 76 activities with 671 tenants attending these events. We saw 12% of new tenants participating in one or more of these engagement activities. 27% of tenants participated in consultation events and 21% signed up to the menu of involvement register.
During 2022/2023 the Tenants Forum met 4 times and as part of the work for the year, undertook a review of the Anti-social Behaviour Policy, the Forum Terms of Reference and reviewed the tenant satisfaction survey and agreed how this should be undertaken. The Forum also engaged with Supporting Communities as part of the accreditation process.
Ark Housing are committed to the promotion and provision of shared housing and have been supported by the Department for Communities and the Northern Ireland Housing Executive’s ‘Housing For All Programme’.
During 2022/2023 our Shared Housing Programme has expanded to include two new housing developments. This brings our shared housing programme to a total of six developments, with a total budget of over £1.8m over 5 years, which include:
Ogle Street, Armagh Causeway Rd, Newcastle Malone Mews, Belfast Hillsborough Rd, Lisburn Frances Street, Newtownards Quarry Rd, Newtownards
As part of the Housing For All programme, our Communities team have developed good relations plans across our schemes and In 2022/2023, 62% of tenants in our housing for all schemes participated in good relations activities.
We continually use feedback from our tenants to increase levels of satisfaction. In 2022/2023 we undertook our annual tenant satisfaction survey.
The results from the survey show that:
- 77% of tenants satisfied with the overall service provided by the Association
- 81% satisfied with the standard of their home
- 78% believe rent to be value for money
- 71% believe service charges to be value for money
- 67% are satisfied with repairs and maintenance
## **Complaints**
We welcome complaints as a means of learning and being able to continuously improve. In 2022/2023, 13 formal complaints were received. 97% of these complaints were resolved on time and the overall average days to investigate and respond to our complaints was 17.7 days. All complaints were resolved satisfactorily, with 92% being resolved at stage 1 and those moved to stage 2 were all resolved at that stage, with no complaints progressed to the Ombudsman.
## **Homeless Services**
Our new Floating Support team is now fully staffed, and the team continue to make significant progress in delivering against the key requirements of this service. We continue to see a positive increase in client referrals to our Floating Support service, with 128 clients in receipt of support at the end of March 2023.
Along with the Floating Support services, we continue to deliver on a range of community and tenant participation activities which has had a positive impact on the families we support as well as the wider community. In 2022/2023 our floating support service was nominated for and won the Aisling Award for ‘Connected Health, Community Building’ for our community engagement programme.
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## **ARK HOUSING ASSOCIATION NORTHERN IRELAND LIMITED ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2023**
## **STRATEGIC REPORT OF THE BOARD OF MANAGEMENT (CONT’D)**
We were also very pleased to secure additional funding from Council for the Homeless NI, Lottery Funding and a Cash for Kids grant. The various pots of money have allowed us to provide much needed food vouchers during the cost of living crisis. We were also able to provide help to families setting up home to purchase some household items. And through the Ark Creative Communities project, it allowed families, to engage and participate in various activities through the medium of music, theatre, drama and art.
## **Key Performance Indicators (KPIs)**
We measure key performance throughout all areas of the Association with a range of indicators which are deemed to be the most essential to organisational success and which link directly to our corporate themes.
We use the traffic light system to demonstrate those areas where we are meeting our targets and to alert us to those areas of underperformance that require our attention. Key Performance Indicators are reported quarterly to the Board and Investment Committee so that they can be reviewed and monitored, thus embedding our VFM strategy into our processes. This framework ensures that performance improvement is a priority.
Our KPI’s link directly to our strategic themes and quarter 4 results, ie March 2023, along with comparative from March 2022, are set out below:
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## **ARK HOUSING ASSOCIATION NORTHERN IRELAND LIMITED ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2023**
## **STRATEGIC REPORT OF THE BOARD OF MANAGEMENT (CONT’D)**
**Corporate Theme 1 – Leading Employer**
|**Corporate Theme 1 - LEADING EMPLOYER**|**Corporate Theme 1 - LEADING EMPLOYER**|**Corporate Theme 1 - LEADING EMPLOYER**|**Corporate Theme 1 - LEADING EMPLOYER**|**Corporate Theme 1 - LEADING EMPLOYER**|**Results**|**Results**|
|---|---|---|---|---|---|---|
|**Key Performance Indicators**|||||||
|**Description**|**Reporting**
**Frequency**|**Indicator Range**|||**Mar-23**|**Mar-22**|
|**Employee Investment**|||||||
|Learning & Development Budget
% Spent vs Budget|
6 Monthly|**<75%**|**75% - 84%**|**>85%**|**130%**|**56%**|
|% Employees Receiving Learning & Development
Opportunities|6 Monthly|**<90%**|**90% - 99%**|**100%**|**100%**|**100%**|
|% Staff ReceivingPerformance Coaching|6 Monthly|**<90%**|**90% - 99%**|**100%**|**100%**|**100%**|
|**Performance**|||||||
|% Employee Retention|Quarterly|**<80%**|**80% - 89%**|**>90%**|**86%**|**91%**|
|% Employee Sickness Absence|Quarterly|**>6%**|**5% - 6%**|**<5%**|**3.9%**|**3.8%**|
|**Employee Perceptions**|||||||
|Staff feel satisfied with Ark Housingas aplace to work|Annually|**<70%**|**70% - 75%**|**>75%**|**92%**|**83%**|
|Staff feel motivated,engaged & satisfied|Annually|**<70%**|**70% - 75%**|**>75%**|**78%**|**72%**|
|Staff feel recognised and rewarded|Annually|**<70%**|**70% - 75%**|**>75%**|**70%**|**66%**|
|Staff enjoya healthywork-life balance|Annually|**<70%**|**70% - 75%**|**>75%**|**78%**|**79%**|
|Staff feel empowered and valued|Annually|**<70%**|**70% - 75%**|**>75%**|**78%**|**73%**|
12
## **ARK HOUSING ASSOCIATION NORTHERN IRELAND LIMITED ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2023**
## **STRATEGIC REPORT OF THE BOARD OF MANAGEMENT (CONT’D)**
**Corporate theme 2 – Better Homes, Greater Diversity**
|**Corporate Theme 2 - BETTER HOMES, GREATER DIVERSITY**|**Corporate Theme 2 - BETTER HOMES, GREATER DIVERSITY**|**Corporate Theme 2 - BETTER HOMES, GREATER DIVERSITY**|**Corporate Theme 2 - BETTER HOMES, GREATER DIVERSITY**|**Results**|**Results**|
|---|---|---|---|---|---|
|**Key Performance Indicators**||||||
|**Description**|**Indicator Range**|||**Mar-23**|**Mar-22**|
|**Development & Acquisition**||||||
|Number of Units Started|**<100**|**100 - 150**|**>150**|**74**|**186**|
|Number of Units Completed|**<80**|**80 - 134**|**>135**|**114**|**68**|
|Stock Growth Rate|**<15%**|**15% - 24%**|**>25%**|**19%**|**11%**|
|**Compliance,**|**Health & Safety**|||||
|% schemes with upto date fire alarm servicing|**<90%**|**90% - 99%**|**100%**|**100%**|**100%**|
|% applicableproperties with upto dategas safetycert|**<95%**|**95% - 99%**|**100%**|**98.9%**|**99%**|
|% applicableproperties with carbon monoxide alarms|**<95%**|**95% - 99%**|**100%**|**98.9%**|**98%**|
|% all properties with up to date heating servicing|**<95%**|**95% - 99%**|**100%**|**100%**|**99%**|
|% schemes with upto date Fire Risk Assessment|**<95%**|**95% - 99%**|**100%**|**100%**|**100%**|
|% schemes with upto date legionella compliance|**<95%**|**95% - 99%**|**100%**|**100%**|**100%**|
|% schemes withquarterlyenvironmental inspection|**<95%**|**95% - 99%**|**100%**|**100%**|**100%**|
|% schemes with upto date lift servicinginspection|**<90%**|**90% - 99%**|**100%**|**100%**|**100%**|
|%properties with upto date 5-year fixed wire testing|**<80%**|**80% - 99%**|**100%**|**99.6%**|**95%**|
|**Disability Adaptations & Access**||||||
|% adaptation works orders completed within target|**<70%**|**70% - 79%**|**>80%**|**56%**|**63%**|
|% adaptationsprocessed within DfC target timeframe|**<70%**|**70% - 79%**|**>80%**|**68%**|**88%**|
|% tenants satisfied with disabilityadaptation service|**<70%**|**70% - 79%**|**>80%**|**95%**|**100%**|
|% Adaptation grant Claims|**<100%**|**-**|**100%**|**100%**||
|**Planned & Cyclical Maintenance**||||||
|% ofplanned & cyclical schemes completed on time|**<80%**|**80% - 90%**|**>90%**|**100%**|**50%**|
|% tenants satisfied withplanned maintenance|**<70%**|**70% - 79%**|**>80%**|**94%**|**86%**|
13
## **ARK HOUSING ASSOCIATION NORTHERN IRELAND LIMITED ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2023**
## **STRATEGIC REPORT OF THE BOARD OF MANAGEMENT (CONT’D)**
**Corporate Theme 3 – Engaged Communities, Greater Impact**
|**Corporate Theme 3 - ENGAGED COMMUNITIES, GREATER IMPACT**|**Corporate Theme 3 - ENGAGED COMMUNITIES, GREATER IMPACT**|**Corporate Theme 3 - ENGAGED COMMUNITIES, GREATER IMPACT**|**Corporate Theme 3 - ENGAGED COMMUNITIES, GREATER IMPACT**|||
|---|---|---|---|---|---|
|**Key Performance Indicators**||||**Results**||
|**Description**|**Indicator Range**|||**Mar-23 **|**Mar-22**|
|**Tenant & Community Engagement**||||||
|Tenant Engagement(Digital & Physical Engagements)|**<6%**|**6% - 9%**|**>10%**|**12%**|**27%**|
|Tenant Engagement(Sheltered & Supported)|**<20%**|**20% - 29%**|**>30%**|**16%**|**53%**|
|Tenant Engagement(General Needs)|**<6%**|**6% - 9%**|**>10%**|**11%**|**22%**|
|Tenant Engagement(Homeless)|**<20%**|**20% - 29%**|**>30%**|**30%**|**30%**|
|Tenant Engagement(Service & PolicyConsultations)|**<6%**|**6% - 9%**|**>10%**|**27%**|**7%**|
|Tenant Engagement(Satisfaction Survey)|**<20%**|**20% - 29%**|**>30%**|**30%**|**40%**|
|Tenant Engagement(Menu of Involvement Register)|**<6%**|**6% - 9%**|**>10%**|**21%**|**6%**|
|Tenant Engagement(TBUC Events)|**<25%**|**25% - 39%**|**>40%**|**62%**|**60%**|
14
## **ARK HOUSING ASSOCIATION NORTHERN IRELAND LIMITED ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2023**
## **STRATEGIC REPORT OF THE BOARD OF MANAGEMENT (CONT’D)**
**Corporate Theme 4 – Service Excellence, Satisfied Customers**
|**Description**|**Indicator Range**|**Indicator Range**|**Indicator Range**|**Mar-23**|**Mar-22**|
|---|---|---|---|---|---|
|**Repairs Service**||||||
|% Overall Repairs Performance|**<70%**|**70% - 79%**|**>80%**|**85%**|**93%**|
|% Emergencyrepairs completed within target|**<76%**|**76% - 84%**|**>85%**|**90%**|**97%**|
|% Urgent repairs completed within target|**<70%**|**70% - 79%**|**>80%**|**85%**|**88%**|
|% Routine repairs completed within target|**<70%**|**70% - 79%**|**>80%**|**87%**|**95%**|
|Average Repair Time|**>10 days**|**8 - 10 days**|**<8 days**|**4.0**|**5.25**|
|**Allocations & Lettings Performance**||||||
|%Average OccupancyRate(Total Stock)|**<94%**|**94% - 95%**|**>96%**|**98%**|**98%**|
|%Total Void Units(Snapshot)|**>4%**|**3% - 4%**|**<3%**|**2.9%**|**1.48%**|
|Average Relet Time|**>25 days**|**21 - 25 days**|**<20 days**|**19.7**|**17**|
|%Relet Performance|**<70%**|**70% - 79%**|**>80%**|**55%**|**80%**|
|Average New Let Time|**>5 days**|**1 - 5**|**0 days**|**5.6**|**1.9**|
|%First Time Let Performance|**<70%**|**70% - 79%**|**>80%**|**67%**|**70%**|
|%Allocations(Transfers vs General Applicants)|**>5% +/ -**|**5% +/ -**|**15% - 45%**|**26%**|**27%**|
|%TenancyFraud Prevalence|**>2%**|**1% - 2%**|**<1%**|**0.41%**|**0.49%**|
|**Tenant Satisfaction**||||||
|Anti-social Behaviour Prevalence|**>4%**|**3% - 4%**|**<3%**|**0.83%**|**4%**|
|Anti-social Behaviour Performance|**<55%**|**55% - 69%**|**>70%**|**70%**|**84%**|
|Anti-social Behaviour Satisfaction|**<75%**|**75% - 84%**|**>85%**|**81%**||
|Overall Customer Satisfaction Rate|**<75%**|**75% - 84%**|**>85%**|**77%**|**80%**|
|Overall Repairs Satisfaction|**<75%**|**75% - 84%**|**>85%**|**67%**|**76%**|
|OverallQualityof Home Satisfaction|**<75%**|**75% - 84%**|**>85%**|**81%**|**80%**|
|Rent - Value For MoneySatisfaction|**<75%**|**75% - 84%**|**>85%**|**78%**|**80%**|
|Service Charge - VFM satisfaction|**<75%**|**75% - 84%**|**>85%**|**71%**|**75%**|
|Satisfaction Rate(Homeless Services)|**<75%**|**75% - 84%**|**>85%**|**91%**|**75%**|
|Formal Complaints Prevalence|**>4%**|**3% - 4%**|**<3%**|**1.8%**|**1%**|
|Formal Complaints(1st Stage Resolution)|**<70%**|**70% - 79%**|**>80%**|**92%**|**90%**|
|Formal Complaints(2nd Stage Resolution)|**<70%**|**70% - 79%**|**>80%**|**100%**|**100%**|
|Formal Complaints(Ombudsman)|**>5%**|**4% - 5%**|**<4%**|**0%**|**0%**|
|Homeless Services Capacity|**<70%**|**70% - 79%**|**>80%**|**64%**|**37%**|
|Homeless Services Throughput(FloatingSupport)|**<30%**|**30% - 50%**|**>50%**|**51%**|**33%**|
|Homeless Services Throughput(Accommodation)|**<50%**|**50% - 100%**|**>100%**|**63%**|**54%**|
|SupportingPeople Outcomes|**<70%**|**70% - 80%**|**>80%**|**80%**|**80%**|
15
## **ARK HOUSING ASSOCIATION NORTHERN IRELAND LIMITED ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2023**
## **STRATEGIC REPORT OF THE BOARD OF MANAGEMENT (CONT’D)**
**Corporate Theme 5 – Financial Assurance, Sustainability**
|**Corporate Theme 5 - FINANCIAL ASSURANCE, SUSTAINABILITY**|**Corporate Theme 5 - FINANCIAL ASSURANCE, SUSTAINABILITY**|**Corporate Theme 5 - FINANCIAL ASSURANCE, SUSTAINABILITY**|**Corporate Theme 5 - FINANCIAL ASSURANCE, SUSTAINABILITY**|||
|---|---|---|---|---|---|
|**Key Performance Indicators**||||**Results**||
|**Description**|**Indicator Range for 2022 - 2023**|||**Mar-23 **|**Mar-22**|
|||||||
||**Banking**|||||
|Insolvency- Current Ratio|**<0.8**|**0.8 - 0.99**|**>1**|**0.3**|**5.1**|
|Bank Covenant Interest Cover(Ulsterbank)|**<1.25**|**1.25**|**>1.25**|**2.1**|**3.4**|
|GearingRatio|**>50%**|**50%**|**<50%**|**19%**|**36%**|
|Average Interest Rate|**>3.5%**|**3% - 3.5%**|**<3%**|**3.3%**|**1.7%**|
|**Performance**||||||
|Gross Margin|**<39%**|**39% - 41.9%**|**>42%**|**43%**|**44%**|
|Net Margin|**<24%**|**24% - 26.9%**|**>27%**|**30%**|**24%**|
|Return on Capital Employment|**<1%**|**1% - 1.39%**|**>1.4%**|**2%**|**1.5%**|
|Management costper unit|**>£750**|**£680-£750**|**<£680**|**£646**|**£745**|
|Maintenance costper unit|**>£1,075**|**£974 - £1,075**|**<£974**|**£820**|**£882**|
|Major Repairs costper unit|**<£980**
**£935-£980**
**>£935**|||**£1,130**||
|**Income Management**||||||
|Rent & Other Charges Collected|**<96%**|**96% - 97%**|**>98%**|**99%**|**100%**|
|Total Arrears(% against income debits)|**>5.75%**|**5.5% - 5.75%**|**<5.5%**|**8.2%**|**6.8%**|
|Current Tenant Rent Arrears (% against income debits)|**>4.5%**|**4.0% - 4.5%**|**<4%**|**6.2%**|**4.9%**|
|Former Tenant Rent Arrears (% against income debits)|**>1.75%**|**1.5% - 1.75%**|**<1.5%**|**2.0%**|**1.9%**|
|Current Tenant(Technical Arrear)%|**>2.8%**|**2.5%-2.8%**|**<2.5%**|**5.4%**|**4.5%**|
|Current Tenant(Net Arrear)%|**>1.7%**|**1.5% - 1.7%**|**<1.5%**|**0.8%**|**0.3%**|
|Non Technical Arrears/Non-Technical Income|**>5%**|**5%**|**<5%**|**3%**|**1%**|
|Void Loss(% against income debits)|**>1.7%**|**1.4% - 1.7%**|**<1.4%**|**1.9%**|**1%**|
By order of the Board
Mr James McShane **Company Secretary**
Belfast 26 June 2022
16
## **INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF ARK HOUSING ASSOCIATION NORTHERN IRELAND LIMITED FOR THE YEAR ENDED 31 MARCH 2023**
We have audited the financial statements of Ark Housing Association Northern Ireland Limited (the ‘Association’) for the year ended 31 March 2023 which comprise of the Statement of Comprehensive Income, the Statement of Changes in Reserves, the Statement of Financial Position, the Statement of Cash Flows and notes to the financial statements, including a summary of 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 the financial statements:
- give a true and fair view of the state of the Association’s affairs as at 31 March 2023 and of its income and expenditure for the year then ended;
- have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
- have been prepared in accordance with requirements of the Co-operative and Community Benefit Societies Act (Northern Ireland) 1969 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 are independent of the Association in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the Financial Reporting Council’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
## **Conclusions relating to going concern**
In auditing the financial statements, we have concluded that the Board'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 association'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 with respect to going concern are described in the relevant sections of this report.
17
## **INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF ARK HOUSING ASSOCIATION NORTHERN IRELAND LIMITED FOR THE YEAR ENDED 31 MARCH 2023**
## **Other Information**
The other information comprises the information included in the annual report, other than the financial statements and our auditor’s report thereon. The Board is responsible for the other information contained within the annual report. 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.
## **Matters on which we are required to report by exception**
In the light of our knowledge and understanding of the Association and its environment obtained in the course of the audit, we have not identified material misstatements in the Report of the Board.
We have nothing to report in respect of the following matters where the Co-operative and Community Benefit Societies Act (Northern Ireland) 1969 requires us to report to you, if in our opinion:
- the Association has not kept proper books of account; or
- a satisfactory system of control over transactions has not been maintained; or
- the financial statements are not in agreement with the Association’s books of account; or
- we have not obtained all the information and explanations necessary for the purpose of our audit.
## **Responsibilities of the Board**
As explained more fully in the statement of board members’ responsibilities set out on page 3, the Board 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 determine 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 is responsible for assessing the Association’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 either intends to liquidate the association or to cease operations, or to have no realistic alternative but to do so.
18
## **INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF ARK HOUSING ASSOCIATION NORTHERN IRELAND LIMITED FOR THE YEAR ENDED 31 MARCH 2023**
## **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 auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but it 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.
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.
## **Extent to which the audit was considered capable of detecting irregularities, including fraud**
We identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and then design and perform audit procedures responsive to those risks, including obtaining audit evidence that is sufficient and appropriate to provide a basis for our opinion.
In identifying and assessing potential risks of material misstatement in respect of irregularities, including fraud and non-compliances with laws and regulations, we considered the following:
- The nature of the industry and sector, control environment and business performance, including the Association’s remuneration policies for directors, bonus levels and performance targets, if any;
- Results of our enquiries of management about their own identification and assessment of the risks of irregularities;
- Any matters we identified having obtained and reviewed the Association’s documentation of their policies and procedures relating to;
- Identifying, evaluating and complying with laws and regulations and whether they were aware of any instance of non-compliance;
- Detecting and responding to the risks of fraud and whether they have and knowledge of any actual, suspected or alleged fraud; and
- The internal controls established to mitigate risks of fraud or non-compliance with laws and regulations;
- · The matters discussed among the audit engagement team regarding how and where fraud might occur in the financial statements and potential indicators of fraud.
As a result of these procedures, we considered the opportunities and incentives that may exist within the Association for fraud and identified the greatest potential for fraud in revenue recognition. In common with all audits under ISAs (UK), we also perform specific procedures to respond to the risk of management override.
We also obtained an understanding of the legal and regulatory frameworks that the Association operates in, focusing on provisions of those laws and regulations that had a direct effect on the determination of material amounts and disclosures in the financial statements. The key laws and regulations we considered in this context included the Co-operative and Community Benefit Societies Act (Northern Ireland) 1969, the Registered Housing Associations (Accounting Requirements) Order (Northern Ireland) 1993 and the Statement of Recommended Practice for Social Housing Providers 2018.
19
## **INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF ARK HOUSING ASSOCIATION NORTHERN IRELAND LIMITED FOR THE YEAR ENDED 31 MARCH 2023**
## **Extent to which the audit was considered capable of detecting irregularities, including fraud (cont’d)**
In addition, we considered provisions of other laws and regulations that do not have a direct effect on the financial statements but compliance with which may be fundamental to the Association’s ability to operate or to avoid a material penalty.
## **Audit response to risks identified**
Our procedures to respond to the risks identified included the following:
- Reviewing the financial statement disclosures and testing to supporting documentation to assess compliance with provisions of relevant laws and regulations described as having a direct effect on the financial statements;
- Enquiring of management concerning actual and potential litigation and claims;
- Performing analytical procedures to identify any unusual or unexpected relationships that may indicate risks of material misstatement due to fraud;
- Reading minutes of meetings of those charged with governance and reviewing correspondence with tax authorities; and
- In addressing the risk of fraud through management override of controls, testing the appropriateness of journal entries and other adjustments; assessing whether the judgements made in making accounting estimates are indicative of a potential bias; and evaluating the business rationale of any significant transactions that are unusual or outside the normal course of business.
We also communicated relevant identified laws and regulations and potential fraud risks to all engagement team members and remained alert to any indications of fraud or non-compliance with laws and regulations throughout the audit.
Owing to the inherent limitations of an audit, there is an unavoidable risk that we may not have detected some material misstatements in the financial statements, even though we have properly planned and performed our audit in accordance with auditing standards. In addition, as with any audit, there remains a higher risk of nondetection of irregularities, as they may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal controls. We are not responsible for preventing non-compliance and cannot be expected to detect non-compliance with all laws and regulations.
A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council’s website at www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditors’ report.
20
## **INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF ARK HOUSING ASSOCIATION NORTHERN IRELAND LIMITED FOR THE YEAR ENDED 31 MARCH 2023**
## **Use of our report**
This report is made solely to the Association’s members, as a body, in accordance with Section 43 of the Cooperative and Community Benefit Societies Act (Northern Ireland) 1969 and article 19 of The Housing (Northern Ireland) Order 1992. Our audit work has been undertaken so that we might state to the Association’s members those matters we are required to state to them in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Association and the Association’s members as a body, for our audit work, for this report, or for the opinions we have formed.
________________________
**Mr Nigel Moore FCA** Senior Statutory Auditor
GMcG BELFAST Chartered Accountants & Statutory Auditor Alfred House 19 Alfred Street Belfast BT2 8EQ
Date: 26 June 2022
21
**ARK HOUSING ASSOCIATION NORTHERN IRELAND LIMITED ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2023**
## **STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 31 MARCH 2023**
|**Note**
**Turnover**
2
**Operating costs**
2
Other Income
Gain/(Loss) on disposal of housing properties
**Operating Surplus**
7
Interest receivable and similar income
5
Interest payable and similar charges
6
Other finance costs
15
Additional Pension Service Costs
15
**Surplus on ordinary activities**
Actuarial (loss)/gain on pension scheme
**Total comprehensive income for the year**|**2023**
**£**
5,570,707
(3,933,896)
-
13,908
1,650,719
8,387
(654,018)
(34,000)
(260,000)
711,088
1,755,000
2,466,088|**2022**
**£**
4,564,915
(3,303,923)
119,272
-|
|---|---|---|
|||1,380,264
800
(507,805)
(34,000)
(287,000)|
|||552,259
647,000|
|||1,199,259|
All amounts above relate to continuing operations.
There is no material difference between the surplus for the year end and their historical cost equivalent .
Turnover includes £133,724 house sales income.
Operating costs include a transfer to Disposal Proceeds Fund of £119,816
22
**ARK HOUSING ASSOCIATION NORTHERN IRELAND LIMITED ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2023**
## **STATEMENT OF CHANGES IN RESERVES FOR THE YEAR ENDED 31 MARCH 2023**
|**Note**
Surplus for the financial year
Actuarial gain on pension scheme
15
Issued share capital in year
16
Net changes in capital and reserve
Opening restricted reserve
Opening revenue reserve
Opening Capital
16,17
Closing total capital and reserves|**2023**
**£**
711,088
1,755,000
2
2,466,090
98,100
5,364,060
50
7,928,300|**2022**
**£**
552,259
647,000
-|
|---|---|---|
|||1,199,259
7,768
4,255,133
50|
|||5,462,210|
23
**ARK HOUSING ASSOCIATION NORTHERN IRELAND LIMITED ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2023**
## **STATEMENT OF FINANCIAL POSITION AS AT 31 MARCH 2023**
||**2023**
**£**
93,650,699
897,389||**2022**|
|---|---|---|---|
|**FIXED ASSETS**
**Note**|||**£**|
|Housing properties - depreciated cost
8|||73,756,325|
|Other tangible fixed assets
9|||953,326|
||94,548,088
82,000
1,773,846
1,254,295||74,709,651|
|**NON CURRENT ASSETS**||||
|Pension
15|||-|
|||||
|**CURRENT ASSETS**||||
|Debtors
10|||17,188,760|
|Cash at bank and in hand|||4,791,421|
||3,028,141
(13,142,186)
(10,114,045)||21,980,181|
|||||
|**Creditors: amounts falling due within one year**
11|||(5,163,650)|
|||||
|**Net Current(Liabilities)/Assets**|||16,816,531|
|**Total Assets Less Current Liabilities**|84,516,043||91,526,182|
||(76,587,743)
-|||
|**CREDITORS: amounts falling due after more**||||
|**than one year**||||
|Creditors
12|||(84,684,972)|
|Pension deficit|||(1,379,000)|
||(76,587,743)||(86,063,972)|
||7,928,300|||
|**NET ASSETS**|||5,462,210|
||11
41
142,582
7,785,666|||
|||||
|||||
|**Capital and Reserves**||||
|Called up share capital
16|||9|
|Capital reserve
17|||41|
|Restricted reserves
19|||98,100|
|Revenuereserve
18|||5,364,060|
||7,928,300|||
|**TOTAL FUNDS**|||5,462,210|
An undrawn Revolving Credit Facility balance of £19.5m is in place.
The financial statements on pages 21 to 42 were approved by the Board of Management on 26 June 2023 and were signed on its behalf by
|**Chair of the Board of Management**|**Board Member**|
|---|---|
|Mr Tom Doran|Mr Ian McAvoy|
|**Company Secretary**||
|Mr James McShane||
24
**ARK HOUSING ASSOCIATION NORTHERN IRELAND LIMITED ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2023**
## **STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 31 MARCH 2023**
||**2023**
**£**
5,123,078
(21,382,826)
(30,666)
200,959
22,604,598|**2022**|
|---|---|---|
|Note||**£**|
||||
|Net cash generated from operating activities
23||(494,648)|
||||
|Cash flow from Investing activities|||
|Purchase of housing properties||(19,553,872)|
|Purchase of other fixed assets||(307,942)|
|House Sale||-|
|Capital grants received||9,635,815|
||1,392,065|(10,225,999)|
||(390,673)
(9,000,000)
2
(669,985)
8,387||
|Cash flow from financing activities|||
|Loan principal repayments||(215,293)|
|Loan repayments/advances received||14,500,000|
|Shares||-|
|Interest Paid||(507,805)|
|InterestReceived||800|
|Net cash from financing activities|(10,052,269)|13,777,702|
|**Net (decrease)/increase in cash**|(3,537,126)
4,791,421|3,057,055|
|Cashand cashequivalents at the beginning ofthe year||1,734,366|
|**Cash and cash equivalents at the end of the year**|1,254,295|4,791,421|
25
**ARK HOUSING ASSOCIATION NORTHERN IRELAND LIMITED ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2023**
## **NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2023**
## **1 Accounting Policies**
## **1.1 Basis of Accounting**
The financial statements have been prepared on the historical cost basis and in compliance with FRS 102, The Financial Reporting Standard applicable in the UK and the Housing SORP 2018: Statement of Recommended Practice for Social Housing Providers.
The financial statements are prepared in sterling, which is the functional currency of the entity. Monetary amounts are rounded to the nearest £.
The Association is a company limited by shares incorporated in Northern Ireland. The registered office is situated at Unit 1, Hawthorn Office Park, 43 Stockmans Way, Belfast, BT9 7ET.
## **1.2 Turnover**
Turnover represents rental income, service charges receivable net of voids and the release of capital grants and is recognised in the period to which it relates.
## **1.3 Other Tangible Fixed Assets and Depreciation**
Tangible fixed assets are stated at cost less accumulated depreciation. Depreciation is charged on a straight-line basis over the expected useful economic lives of the assets at the following annual rates: Furniture and equipment 10% - 33.3%.
Depreciation is charged on a straight-line basis for the new office over 30 years.
## **1.4 Housing Properties**
Housing properties are stated at cost less accumulated depreciation. Cost includes the cost of acquiring land and buildings, development costs and expenditure incurred in respect of improvements. All development costs directly attributable to bringing properties into management are identified and capitalised to schemes in construction during the year.
Expenditure on improvements to existing properties, which enhances the economic benefits of the property or extends its useful life, is capitalised as part of the cost of the property. Other maintenance expenditure is written off to the Income and Expenditure Account as it is incurred.
Depreciation is charged on a straight-line basis over varying timescales, depending on the estimated useful life of the individual components. The major components and their estimated useful lives are listed below. Depreciation charged in the accounts is based on properties in management on the 1st April each year.
|Land|Not depreciated|
|---|---|
|Structure (including roof)|100 years|
|Kitchen|20 years|
|Bathroom|25 years|
|Heating boiler|10/15 years|
|Heating system|30 years|
|Windows and doors|35 years|
|Electrics|35 years|
Where there is evidence of impairment, the fixed assets are written down to the recoverable amount and any write down charged to operating surplus.
26
**ARK HOUSING ASSOCIATION NORTHERN IRELAND LIMITED ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2023**
**NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2023 (CONT’D)**
## **1 Accounting Policies (Cont’d)**
## **1.5 Impairment of fixed assets**
At each reporting period end date, the company reviews the carrying amounts of its tangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs. Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.
## **1.6 Housing Association Grant**
Grant received for property has been included under long term liabilities and is amortised over the estimated useful life of the component to which it relates on the same basis as the depreciation charge listed above under the accruals model. Such grants may be repayable under certain circumstances, primarily following the sale of housing property, but any amount repayable would be restricted to the net proceeds of the sale.
## **1.7 Restricted Reserves**
The Association sets aside money raised for a specific purpose into a restricted reserve.
## **1.8 Retirement Benefits**
The Association participates in the NILGOSC defined benefit pension scheme. The underlying assets and liabilities of the scheme attributable to the Association are held separately from those of the Association. Pension scheme liabilities are measured on an actuarial basis using a projected unit method and are discounted to their present value. Assets are measured at market value at the balance sheet date. As a result, the Association either recognises the scheme deficit on the balance sheet at the year end, or in the case of an asset position, does not recognise this on the balance sheet, on the grounds of prudence. Actuarial gains and losses are included in the statement of comprehensive income. Current and past service costs, curtailments and settlements are recognised within operating surplus. Returns on scheme assets and interest on obligations are recognised as other finance costs.
## **1.9 Disposal Proceeds Fund**
Surpluses from disposal of housing properties, including the Voluntary Purchase Grant, are transferred to the Disposal Proceeds Fund. The association is required to apply these surpluses within a specified period to housing projects as Recycled Housing Association Grant.
## **1.10 Tenants' Services Fund**
For certain schemes the Association is required to charge the tenants for additional services provided, over and above those of the normal management and maintenance services. The Association levies an additional charge to the tenants for this. Annual surpluses are transferred to a fund to equalise the financial position over a period of time and deficits are written off in the year in which they occur.
27
**ARK HOUSING ASSOCIATION NORTHERN IRELAND LIMITED ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2023**
## **NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2023 (CONT’D)**
## **1 Accounting Policies** ( **Cont’d)**
## **1.11 Employee Benefits**
The costs of short-term employee benefits are recognised as a liability and an expense unless those costs are required to be recognised as part of the cost of stock or fixed assets. The cost of any unused holiday entitlement is recognised in the period in which the employee's services are received. Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.
## **1.12 Cash and Cash Equivalents**
Cash and cash equivalents include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.
## **1.13 Financial Instruments**
Financial instruments are recognised in the company's statement of financial position when the company becomes party to the contractual provisions of the instrument. Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
## _**Basic financial assets**_
Basic financial assets, which include trade and other receivables and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest.
## _**Impairment of financial assets**_
Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date. Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset's original effective interest rate. The impairment loss is recognised in profit or loss. 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 profit or loss.
## _**Derecognition of financial assets**_
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the company transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.
28
**ARK HOUSING ASSOCIATION NORTHERN IRELAND LIMITED ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2023**
**NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2023 (CONT’D)**
## **1 Accounting Policies** ( **Cont’d)**
## _**Classification of financial liabilities**_
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities. _**Basic financial liabilities**_
Basic financial liabilities, including trade and other payables, bank loans, loans from fellow group companies and preference shares that are classified as debt, 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. 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.
## _**Derecognition of financial liabilities**_
Financial liabilities are derecognised when the company's contractual obligations expire or are discharged or cancelled.
## **1.4 Judgement and Key Sources of Estimation Uncertainty**
In the application of the company's accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates. The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
The association has recognised a defined benefit pension scheme liability in the balance sheet, the value of which has been prepared by an independent qualified actuary. The actuarial valuation involves making assumptions about discount rates, future salary increases, mortality rates and future pension increases. Due to the complexity of the valuation, the underlying assumptions and the long term nature of these plans, such estimates are subject to significant uncertainty.
The annual depreciation charge on fixed assets depends primarily on the estimated lives of each type of asset and estimates of residual values. The asset lives are regularly reviewed and are changed as necessary to reflect current thinking on remaining lives in light of prospective economic utilisation and physical condition of the assets concerned. Changes in asset lives can have a significant impact on depreciation and amortisation charges for the period. Details of the useful lives is included in the accounting policies.
29
**ARK HOUSING ASSOCIATION NORTHERN IRELAND LIMITED ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2023**
**NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2023 (CONT’D)**
## **2 Turnover, operating costs and operating surplus**
|||||**2023**|**2022**|
|---|---|---|---|---|---|
||||**Operating**|**Operating**
**Operating**
|**Operating**
**Turnover**
**Operating**
**Costs**
**Other**
**Operating**
**Income**
**Operating**
**Surplus/**
**(deficit)**|
||||**Turnover**|**Costs**
**Surplus/**
**dfii**||
|||||**(ect)**||
||||**£**|**£**
**£**|**£**
**£**
**£**|
|||||||
|Social Housing
Activities
Non-Social
Housing|||4,852,000|
3,246,092
1,605,908|
3,801,106
2,637,844
119,272
1,282,534|
|||||
|
-
|
||Activities||852,431|
807,620
44,811|
763,809
666,079
97,730|
|**Total**|||5,704,431|
4,053,712
1,650,719|
4,564,915
3,303,923
119,272
1,380,264|
## **Income from Social Housing**
|**Income from Social Housing**|||||||
|---|---|---|---|---|---|---|
||**Property**|||||**2023**
**Total**
**Social**|
||
**Revenue**
**£**
3,040,615
230,282
-
133,724|**Sheltered**
**£**
267,567
117,618
32,807
-||**Supported**
**£**
295,459
167,673
-
-||**Housing**|
|||||||**£**|
|Rent receivable||||||3,603,641|
|Service Charges Receivable||||||515,573|
|Support Charges and other||||||32,807|
|Other OperatingIncome||||||133,724|
|Gross Income|3,404,621
(39,924)|417,992
(9,786)||463,132
(27,037)||4,285,745|
|Voids||||||(76,747)|
|Net Income|3,364,697
517,975|408,206
29,807||436,095
95,220||4,208,998|
|Grant released||||||643,002|
|Total Income|3,882,672
183,058
-
371,057
104,135
295,164|438,013
98,231
28,655
42,333
8,763
53,022||531,315
125,072
-
-
15,693
65,468||4,852,000|
||||||||
|**Operating Costs**|||||||
|Services||||||406,361|
|Support||||||28,655|
|Rates Payable||||||413,390|
|Insurance||||||128,591|
|Management Costs||||||413,654|
|Maintenance Administration Costs|249,430|-||-||249,430|
|Planned and Cyclical Maintenance|61,339
180,669
21,769
18,793
861,785
-
119,816|16,166
25,461
3,549
19,201
68,875
-
-||26,018
43,187
13,803
4,000
121,580
-
-||103,523|
|Reactive Maintenance||||||249,317|
|Gardening||||||39,121|
|Component Disposals||||||41,994|
|Depreciation||||||1,052,240|
|Bad Debts||||||-|
|Other||||||119,816|
|Total OperatingCosts|2,467,015|364,256||414,821||3,246,092|
||||||||
|**Operating Surplus**||||||1,605,908|
30
**ARK HOUSING ASSOCIATION NORTHERN IRELAND LIMITED ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2023**
**NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2023 (CONT’D)**
## **2 Turnover, operating costs and operating surplus (Cont’d)**
|**Income from Social Housing**|**Property**
**Revenue**
**£**
2,383,125
127,253
-
119,272|**Sheltered**
**£**
255,102
108,033
28,795
-|**Supported**
**£**
277,657
158,098
7,194
-||
|---|---|---|---|---|
|||||**2022**
**Total**
**Social**
**Housing**|
|||||**£**|
|Rent receivable||||2,915,884|
|Service Charges Receivable||||393,384|
|Support Charges and other||||35,989|
|Other OperatingIncome||||119,272|
|Gross Income|2,629,650|391,930|442,949|3,464,529|
|Voids|(14,560)|(10,836)|(16,890)|(42,286)|
|Net Income|2,615,090|381,094|426,059|3,422,243|
|Grant released|372,592|32,241|93,302|498,135|
|Total Income|2,987,682|413,335|519,361|3,920,378|
||103,178
-
293,472
75,418
316,813
239,879
62,725
154,088
13,035
16,729
645,882
-|89,079
23,867
40,849
7,380
51,526
-
20,622
34,032
4,823
7,028
64,100
-|127,133
-
-
13,398
63,993
-
11,050
28,161
9,165
2,091
118,328
-||
|**Operating Costs**|||||
|Services||||319,390|
|Support||||23,867|
|Rates Payable||||334,321|
|Insurance||||96,196|
|Management Costs||||432,332|
|Maintenance Administration Costs||||239,879|
|Planned and Cyclical Maintenance||||94,397|
|Reactive Maintenance||||216,281|
|Gardening||||27,023|
|Component Disposals||||25,848|
|Depreciation||||828,310|
|Bad Debts||||-|
|Total OperatingCosts|1,921,219|343,306|373,319|2,637,844|
||||||
|**Operating Surplus**||||1,282,534|
31
**ARK HOUSING ASSOCIATION NORTHERN IRELAND LIMITED ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2023**
**NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2023 (CONT’D)**
## **2 Turnover, operating costs and operating (Cont’d)**
||||||**2023**|
|---|---|---|---|---|---|
|Technical
Non-technical||**Property**
**Revenue**
**£**
2,289,628
981,269|**Sheltered**
**£**
370,166
15,019|**Supported**
**£**
416,819
46,313|**Total**
**Social**
**Housing**|
||||||**£**|
||||||3,076,613|
||||||1,042,601|
|Total||3,270,897|385,185|463,132|4,119,214|
|||||||**2022**|
|---|---|---|---|---|---|---|
||**Property**
**Revenue**|**Sheltered**|**Supported**|||**Total**
**Social**
**Housing**|
|Technical
Non-technical|**£**
1,840,755
788,895|**£**
344,978
18,157||**£**
392,179
43,576||**£**|
|||||||2,577,912|
|||||||850,628|
|Total
**DFC Allowances**
Management Allowances
Management Costs|2,629,650|363,135||435,755
**2023**
**£**
222,552
(268,018)||3,428,540|
||||||||
|||||||**2022**|
|||||||**£**|
|||||||178,200|
|||||||(301,661)|
||||||||
|**Deficit**
Maintenance Allowances
Planned and cyclical maintenance
Reactive Maintenance||||(45,466)
260,768
(61,339)
(180,669)||(123,461)|
||||||||
|||||||208,800|
|||||||(60,838)|
|||||||(154,088)|
||||||||
|**Surplus/Deficit**||||18,760||(6,126)|
32
**ARK HOUSING ASSOCIATION NORTHERN IRELAND LIMITED ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2023**
**NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2023 (CONT’D)**
## **2 Turnover, operating costs and operating surplus (Cont’d)**
## **Turnover, operating and operating surplus from non-social housing activities**
|Income||||**2023**
**£**
852,431|||**2022**|
|---|---|---|---|---|---|---|---|
||||||||**£**|
||||||||763,809|
|Total||||852,431|||763,809|
|Operating Costs
Management Services||||807,620||||
|||||||||
||||||||666,079|
|Total||||807,620|||666,079|
|Operating surplus
**Housing Stock**
**Number of units owned on 31 March**
General needs housing
Supported Housing
Sheltered Housing
Homeless||||44,811
**2023**
**£**
562
57
74
24||||
||||||||97,730|
|||||||||
|||||||||
||||||||**2022**|
||||||||**£**|
|||||||||
||||||||450|
||||||||57|
||||||||74|
||||||||24|
|||||717|||605|
## **3 Board Members’ emoluments**
Board members act in a voluntary capacity and as such, none were in receipt of emoluments during the financial year. Three members were reimbursed expenses totalling £216 during the year. (2022 – nil).
33
**ARK HOUSING ASSOCIATION NORTHERN IRELAND LIMITED ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2023**
## **NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2023 (CONT’D)**
## **4 Employee information**
|Average monthly number of persons
employed during the financial year by
activity:
Office
Support Staff|Average monthly number of persons
employed during the financial year by
activity:
Office
Support Staff||**2023**
23
21|**2023**
23
21||||**2022**
20
24
44
935,154
81,066
165,785
29,008
1,211,013
157,755
30,037
187,792
77,076
14,788
91,864|
|---|---|---|---|---|---|---|---|---|
||||||||||
||||||||||
||||||||||
||||||||||
|**Staff Costs**
Wages and salaries
Social security costs
Other pension costs
Agency costs|||44
1,046,191
93,885
189,116
108,297||||||
||||||||||
||||||||||
||||||||||
||||||||||
||||||||||
||||||||||
|**Directors' Emoluments**
Aggregate Emoluments
Pensioncontributions|||1,437,489
175,759
34,273||||||
||||||||||
||||||||||
||||||||||
||||||||||
|**CEO's Emoluments**
Aggregate Emoluments
Pensioncontributions||||210,032
82,713
16,129|||||
||||||||||
||||||||||
||||||||||
||||||||||
|**Total Directors' Emoluments per Salary**
£95,000 - £100,000
£70,000- £75,000||||98,842|||||
||||||||||
|||||Number||||Number|
|||||1||||1|
|||||3||||3|
|||||4||||4|
**5 Interest receivable and similar income**
|Interest receivable||**2023**
**£**
8,387||**2022**|
|---|---|---|---|---|
|||||**£**|
|||||800|
## **6 Interest payable and similar charges**
|Loan interest repayable||**2023**
**£**
654,018||**2022**|
|---|---|---|---|---|
|||||**£**|
|||||507,805|
34
**ARK HOUSING ASSOCIATION NORTHERN IRELAND LIMITED ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2023**
## **NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2023 (CONT’D)**
|**7**
**Operating Surplus**
**This is stated after**
Depreciation
Amortisation of grant
Amortisation written off
Components written off
Operating Lease Rentals - land and buildings
Auditors' remuneration
- audit services|**2023**
**£**
1,120,862
(628,985)
(14,017)
41,994
-
8,580|**2022**
**£**
945,454
(485,808)
(12,324)
25,848
4,512
8,580|
|---|---|---|
**8 Tangible fixed assets - housing properties (land & buildings)**
||**2023**||**2022**|
|---|---|---|---|
|**Cost**||||
|At 1 April 2022
Additions|80,790,873
21,123,988||60,098,041|
||||20,856,170|
|Disposals|(304,191)||(163,338)|
|**At 31 March 2023**|101,610,670||80,790,873|
|**Accumulated depreciation**
At 1 April 2022
Charge for year|7,034,548
1,052,240|||
|||||
||||6,343,728|
||||828,311|
|Disposals|(126,817)||(137,491)|
|**At 31 March 2023**|7,959,971||7,034,548|
|||||
|||||
|**NBV at 31 March 2023**|93,650,699||73,756,325|
|**Net Book Amount Comprises:**
**Completed Schemes**
**Schemes in Progress**|70,574,184
23,076,515|||
|||||
||||53,155,039|
||||20,601,286|
||93,650,699||73,756,325|
35
**ARK HOUSING ASSOCIATION NORTHERN IRELAND LIMITED ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2023**
## **NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2023 (CONT’D)**
## **9 Other Tangible Fixed Assets**
|Cost
At 1 April 2022
Additions
Disposals
**At 31 March 2023**
**Accumulated depreciation**
At 1 April 2022
Charge for the year
Disposals
**At 31 March 2023**
**Net book value**
**At 31 March 2023**|**House**
**Furniture**
**£**
22,301
-
-
22,301
22,301
-
-
22,301
-|**Office**
**Fixtures**
**&**
**Fittings**
**£**
111,977
12,685
-
124,662
23,264
17,495
-
40,759
83,903|**New**
**Office**
**£**
606,705
-
-
606,705
20,223
20,223
-
40,446
566,259|**Office**
**Refurb**
**£**
309,035
-
-
309,035
30,904
30,904
-
61,808
247,227|**2023**
**Total**
**2022**
**Total**
**£**
£
1,050,018
1,137,326
12,685
149,793
-
(237,101)
1,062,703
1,050,018
96,692
216,649
68,622
117,144
-
(237,101)
165,314
96,692
897,389
953,326|
|---|---|---|---|---|---|
||||**2023**
**£**
221,946
113,875
(53,630)|**2022**
**£**
154,529
76,734
(53,630)|
|---|---|---|---|---|
|**10**
**Debtors**|||||
|Rental Debtors - Gross technical|||||
|Rental Debtors - Gross non-technical|||||
|Provision for BadDebts|||||
|Net Rental (including rates and service charges)|||282,191
124,870
75,919
1,290,866|177,633
119,653
2,648,494
14,242,980|
|Other Debtors|||||
|Prepayments|||||
|HousingAssociationGrantsReceivable|||||
||||1,773,846|17,188,760|
||||||
|**11**
**Creditors - amounts falling due within one year**|**11**
**Creditors - amounts falling due within one year**|**2023**
**£**
361,035
75,907
1,168,436
8,865,627
336,259
352,180
1,812,393
50,533
119,816|**2022**
**£**
355,537
69,680
1,142,644
1,063,035
55,140
241,714
2,043,768
41,280
150,852|
|---|---|---|---|
|Bank loans (note 14)
Rent, rates, service charges received in advance
Deferred Grant (note 13)
HAG in Advance
Contractors
Other Creditors
Accruals and Deferred Income
Payroll cost and Pension fund
Disposals proceedsfund||||
|||13,142,186|5,163,650|
36
**ARK HOUSING ASSOCIATION NORTHERN IRELAND LIMITED ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2023**
## **NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2023 (CONT’D)**
|**12**
**Creditors - amounts falling due after more than one year**
Bank Loans (note 14)
Housing Association Grants (note 13)||**2023**
**£**
19,334,396
57,253,347|**2023**
**£**
19,334,396
57,253,347|||
|---|---|---|---|---|---|
||||||**2022**|
||||||**£**|
||||||28,695,430|
||||||55,989,542|
|||76,587,743||||
||||||84,684,972|
|||||||
|**13**
**Deferred Grant - Housing Association Grant**||||||
|||||||
|||**2023**|||**2022**|
|**Housing Association Grant**||||||
|At 1 April 2022||61,985,670|||43,016,821|
|Additions||2,000,744|||19,091,368|
|Disposals||(171,181)|||(122,519)|
|**At 31 March 2023**||63,815,233|||61,985,670|
|||4,853,484
628,985||||
|**Accumulated Amortisation**||||||
|At 1 April 2022|||||4,477,873|
|Charge for year|||||485,808|
|Disposals||(89,019)|||(110,197)|
|**At 31 March 2023**||5,393,450|||4,853,484|
|||||||
|||||||
|**NBV at 31 March 2023**||58,421,783|||57,132,186|
|||1,168,436||||
|**Released within one year**|||||1,142,644|
|**Released after more than one year **||57,253,347|||55,989,542|
|||58,421,783|||57,132,186|
37
**ARK HOUSING ASSOCIATION NORTHERN IRELAND LIMITED ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2023**
## **NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2023 (CONT’D)**
## **14 Loans**
Loans are secured on individual assets of the Association and are repayable as follows:
|Bank loans - Housing property and other loans
Less than one year
Between one and two years
Between two and five years
After more than five years||**2023**
**£**
361,035
366,835
1,274,875
17,692,685||**2022**|
|---|---|---|---|---|
|||||**£**|
||||||
|||||355,537|
|||||361,035|
|||||1,419,465|
|||||26,914,930|
||||||
|||19,695,430||29,050,967|
Bank debt is secured by way of mortgages upon the deeds of the related properties financed by loans and bear interest at fixed and variable rates.
Unamortised finance costs of £300,359 (2022 - £335,495) associated with the secured loan are held against the outstanding balance measured at amortised cost using the effective interest method in accordance with FRS 102 Section 11.
## **15 Retirement Benefits**
The Association's pension scheme forms part of the total fund administered by NILGOSC. Ark has contributed at a rate of 19.5% of pensionable salaries. Members have paid contributions at varying rates up to 8.50%.
Formal valuations are carried out at regular intervals by independent professionally qualified actuaries. The last formal valuation was carried out as at 31 March 2022.
## **Assumptions**
||**2023**|**2022**|**2021**|
|---|---|---|---|
||**(£000s)**|**(£000s)**|
**(£000s)**|
|Rate of salary increase|4.10%|4.50%|4.20%|
|Pension increases in payment|2.60%|3.00%|2.70%|
|Discount rate|4.60%|2.70%|2.10%|
|Pension accounts revaluation rate|2.60%|3.00%|2.70%|
## **Mortality Rates**
||**2023**|**2022**|
|---|---|---|
||**(Years)**|
**(Years)**|
|Male - current pensioners|
22.2|21.8|
|Male - future pensioners|23.2|23.2|
|Female - current pensioners|25.0|25.0|
|Female - future pensioners|26.0|26.4|
38
**ARK HOUSING ASSOCIATION NORTHERN IRELAND LIMITED ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2023**
## **NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2023 (CONT’D)**
## **15 Retirement Benefits (continued)**
The assets in the scheme and the expected rate of return were: -
||**2023**|**2022**|
|---|---|---|
||**(£000s)**|
**(£000s)**|
|Equities|1,575|1,703|
|Government bonds|782|980|
|Property|400|397|
|Corporate bonds|103|87|
|Multi Asset Credit|500|520|
|Other|229|123|
|Cash|225|159|
## **Reconciliation of funded status to balance sheet**
||**2023**|**2022**|
|---|---|---|
||**(£000s)**|**(£000s)**|
|Fair value of assets|3,814|3,969|
|Present value of scheme liabilities|3,732|5,348|
|Surplus/(deficit) in scheme|82|(1,379)|
|Related deferred tax liability|-|-|
|Net pension surplus/(deficit)|82|(1,379)|
## **Income and expenditure impact**
The following amounts have been recognised in the statements of comprehensive income:
||**2023**|**2022**|
|---|---|---|
||**(£000s)**|**(£000s)**|
|Current service cost|447|453|
|Past service cost|-|-|
|Interest on net liability|34|34|
|Income Statement Total|481|487|
||||
|Asset (losses)/gains arising in the period|(449)|195|
|Liability gains/(losses)arisingin theperiod|2,204|452|
|Other Comprehensive Income Statement Total|1,755|647|
39
**ARK HOUSING ASSOCIATION NORTHERN IRELAND LIMITED ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2023**
## **NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2023 (CONT’D)**
## **15 Retirement Benefits (continued)**
## **Changes to the present value of obligations**
||**31-Mar-23**|**31-Mar-22**|
|---|---|---|
||**(£000s)**|**(£000s)**|
|Opening obligation|5,348|5,260|
|Current service cost|447|453|
|Past service cost|-|-|
|Interest expense on obligations|144|110|
|Contributions by participants|65|57|
|Actuarial (gain)/loss on liabilities|(2,204)|(452)|
|Net benefitspaid out|(68)|(80)|
|Closing obligation|3,732|5,348|
## **Changes to the fair value of assets**
||**31-Mar-23**|**31-Mar-22**|
|---|---|---|
||**(£000s)**|**(£000s)**|
|Opening fair value of assets|3,969|3,555|
|Interest income on assets|110|76|
|Remeasurement (losses)/gains|(449)|195|
|Contributions by employer|187|166|
|Contributions by participants|65|57|
|Net benefitspaid out|(68)|(80)|
|Closing fair value of assets|3,814|3,969|
## **Actual return on assets**
||**31-Mar-23**|**31-Mar-22**|
|---|---|---|
||**(£000s)**|**(£000s)**|
|Interest income on assets|110|76|
|Remeasurement(losses)/gains|(449)|195|
|Actual return on assets|(339)|271|
40
**ARK HOUSING ASSOCIATION NORTHERN IRELAND LIMITED ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2023**
**NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2023 (CONT’D)**
## **16 Called up Share Capital**
||||**2023**||||**2022**|
|---|---|---|---|---|---|---|---|
||||**£**||||**£**|
|Ordinary shares of £1 each, full paid||||||||
|At 1 April 2022|||9||||11|
|Allotted during the year|||2||||-|
|Transferred to capital reserve|||-||||(2)|
|**At 31 March 2023**|||11||||9|
|**17 Capital Reserve**||||||||
||||**2023**|||||
||||**£**|||||
|||||||||
|At 1 April 2022|||41|||||
|Transferredfromshare capital|||-|||||
|**At 31 March 2023**|||41|||||
|**18 Revenue Reserve**||||||||
|||**2023**||||||
|||**£**||||||
|At 1 April 2022||5,364,060||||||
|Surplus for the year||666,606||||||
|Actuarialgain||1,755,000||||||
|**At 31 March 2023**||7,785,666||||||
|**19 Restricted Reserve**||||||||
|||**2023**||||||
|||**£**||||||
|At 1 April 2022||98,100||||||
|Surplusinyear||44,482||||||
|**At 31 March 2023**||142,582||||||
The restricted reserve are funds from NIHE Supporting People for specific purposes relating to sheltered and homeless services.
## **20 Contingent liabilities**
There exists a contingent liability on the Association of the possibility of having to repay grants received on properties if any properties are sold. This also includes any grants written off through the implementation of component accounting.
41
**ARK HOUSING ASSOCIATION NORTHERN IRELAND LIMITED ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2023**
## **NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2023 (CONT’D)**
## **21 Commitments**
_Capital Commitments_
Capital commitments amounting to £33,610,082 (2022 - £38,145,664) have been contracted for as at 31 March 2023. These commitments will be financed through a combination of HAG, loans and the Association's reserves.
## _Operating Lease Commitments_
At the year end the Association had no commitments under operating leases (2022 -Nil).
## **22 Related party disclosures**
No transactions with related parties were undertaken such as are required to be disclosed under UK GAAP.
## **23 Notes to the Cash Flow Statement**
||**2023**
**£**
1,650,719
1,120,862
(628,985)
(14,017)
41,994
2,497,936
454,569|**2022**|
|---|---|---|
|||**£**|
|**Net cash inflow from operating activities**|||
|Operating surplus for the year||1,380,264|
|Depreciation of tangible fixed assets||945,454|
|Amortisation of grant||(485,808)|
|Amortisation written off||(12,327)|
|Components written off||25,848|
|Movement in debtors||(2,308,656)|
|Movementincreditorsless thanone year||(39,423)|
||5,123,078|(494,648)|
## **24 Analysis of Changes to Net Debt**
||**2022**|**Cashflows**|**Other**
**non cash**
**changes**|**2023**|
|---|---|---|---|---|
||**£**|**£**|**£**|**£**|
|Long-term borrowings|(28,695,430)|9,410,055|(49,020)|(19,334,395)|
|Short-termborrowings|(355,537)|(19,382)|13,884|(361,035)|
|Total Liabilities|(29,050,967)|9,390,673|(35,136)|(19,695,430)|
||||||
||||||
|Cashand Cash Equivalents|4,791,421|(3,537,126)|-|1,254,295|
|Total net debt|(24,259,546)|5,853,547|(35,136)|(18,441,135)|
42