Registration number.. IP000166 Connswater Homes Limited Annual Report and Financial Slatements for the Year Ended 31 March 2023
Connswater Homes Limited Annual report and Financial statements for the year ended 31 March 2023 Contents Board of Management and Advisers Report of the Board of Management 2to10 Independent Auditor's Report to the members of Connswater Homes Limited 11 to14 Slatemenl of Comprehensive Income 15 Statement of Financial Position 18to17 statement of Changes in Reserves 18 Slatemenl of Cash Flows 19 Notes to Statement of Cash Flows 20to22 Notes to the Financial Statements 23to47
Connswater Homes Limited Annual report and Financial statements for the year ended 31 March 2023 Board of Management and Advisers Management Board Mr Robbie Davis {Chairman) Professor Paddy Gray Mr Alan Hill (Honorary Secretary) Mr Michael Graham (Honorary Treasurer) Mr John Beattie Dr Sara Templar (Vice Chairman) Mrs Nicola Barber Mr Alex Ward Mr Trevor Hamplon Mrs Kelly Andrews Jacqueline Locke Chief executive Company secretary Mr Alan Hill (Honorary Secretary) Registered office Unit 5 Citylink Business Park Albert Street Belfast BT12 4HQ Solicitors Elliot Duffy Garrett 40 Linenhall Slreet Belfast BT2 8BA Bankers Danske Bank Corporate Banking Donegall Square West Belfast BT16JS Auditors RBCA Limited Linenhall Exchange 26 Linenhall Street Belfast BT2 8BG Company number IP000166 Status Registered under the Co-operative and Community Benefit Societies Act {Northern Ireland) 1969 - No. IP 166 Registered Charity with the Charity Commission for Northern Ireland Charity Registration No.: NIC106095-0 Registered with the Dfc {Nl) - Number 8 Registered with HMRC - Number XN 41599 Page 1
Connswater Homes Limited Annual report and Financial statements for the year ended 31 March 2023 Report of the Board of Management for the Year Ended 31 March 2023 The Board of Management present their report and the audited financial statements for the year ended 31 March 2023 of Connswater Homes Limited (the "Association l. This report is also known as the Trustees, report for Charity law purposes. Principal activities The Association is an Industrial and Provident Society and is registered with the Department for Communilies {"DfC") providing housing accommodalion for those in need. 11 has charitable status with HM Revenue and Customs and is a registered charity with the Charity Commission for Northern Ireland. Board of Management The Board of Management meets regularly throughout the year. There are also various commiltees who meet regularly throughout the year. The Committees have responsibility for development, housing management, maintenance and audit. Financial matters are reported directly to the Board. The Board carries out an annual appraisal of its own performance and an annual appraisal of individual of individual Board Members. The Board of Management are the directors of the Gompany and are the trustees of the charity. The Board of Management, who served the Association during the year, and up to the date of signing the financial statements, were.. Mr Robbie Davis {Chairman) Dr Sara Templar (Vice Chairman) Mr Alan Hill (Honorary Secretary) Mr Michael Graham (Honorary Treasurer) Ms Kelly Andrews Mrs Nicola Barber Mr John Beattie Professor Paddy Gray Mr Trevor Hampton Mr Alex Ward Page 2
Connswater Homes Limited Annual report and Financial statements for the year ended 31 March 2023 Report of the Board of Management for the Year Ended 31 March 2023 Performance for the year ended 31 March 2023 During Ihe year the number of homes in ownership increased to 1,205 from 1,175 at the end of the prior year representing a 2.60/0 increase in stock size for the Association. Turnover increased by 3.8 % from £8,243,854 in 2021122 to £8,555,856 in 2022123. This increase is as a resull of new homes added to the Association's stock during the year. An average annual inflalionary rent increase of 2.380/0 on much of our existing stock also helped to boost turnover. Operating costs of £6,188,080 represent 720/0 of turnover {2022'. 730/0). The Association generated a surplus for the year of £1,212,402 giving a net margin of 14,/0 (2022.. 120/0), which is better than both sector average and the performance of the Association over the past two years. The Association continuously invests in Ihe maintenance of our existing stock of properties, ensuring our homes remain in great condition. To this end £912.010 was spent on planned maintenance (including capital) during the year. These works included 4 heating upgrades, 23 loft insulations, 60 window and door replacements, 3 kitchen replacements and 2 complete property refurbishments as well as internal redecoration to the communal areas of 2 apartment schemes. A programme of health and safely inspections was also completed including boiler seNicing, smoke and carbon monoxide alarms testing, asbestos monitoring, legionella testing and fire risk assessments. The Board has a set number of key performance indicators monitoring the operations of the Association on regular basis. Performance Indicator Actual 22123 Target 22123
85% Emergency repairs carried out within 24 hours Urgenl repairs carried out within 4 days Routine repairs carried out within 28 days Operating margin Net margin Gearing ratio Interest cover ratio 800/0 800/0 28% 30'/0 10'/0 38% <60'/0 Net debt per unit Voids as a 0/0 of Stock £29,949 0.8/0 <£38,000 Board members altendance at Board meetings 93.25 /0 75% Housing management staff assisted tenants struggling on low incomes by offering welfare and general money management advice, including assistance with universal credit applications. Page 3
Connswater Homes Limited Annual report and Financial statements for the year ended 31 March 2023 Report of the Board of Management for the Year Ended 31 March 2023 Expected performance in the year ending 31 March 2024 The Association expects to maintain its level of operations and performance in 2023124. It is planned that 114 homes will be added to the development programme during Ihe year made up of a number of schemes. We expect there will be approximately 59 properties completed from existing schemes on site and added lo management during the year with the remainder completing in the years ending 31 March 2025 and 2026. A cyclical and planned maintenance programme of approximately £1.1 m of investment has been approved. This includes 5 heating upgrades, 50 window and door replacements, 6 complete property refurbishments, 15 HRU JEnvirovent replacements, fixed wire testing at 400 properties and all health and safely inspections. Corporate Governance In the opinion of the Board of Management, the Association is in compliance with the Best Practice issued by the NHF Code of Governance and wrth the Dfc Regulatory Standards. Corporate Strategy The Association launched a new strategic plan in April 2022 covering the five year period 2022 to 2027. Our business goals over this period focus on working together and recognising diversity., striving to be more environmentally aware throughout our business and activities., promoting kindness, resilience and community cohesion,. being open and clear in our actions, rectifying mistakes and doing what we say we will do,. connecting with tenants, engaging with stakeholders and buddying up with others to improve our services. We will be working on these goals in a tough financial environment under the burden of welfare reform, political uncertainty and economic recovery following a global pandemic. It has never been more important to make sure value for money is embedded in our business., to offer seNices that our tenants actually need and to look at the wider picture of challenging poverty, improving health and well-being and promoting inclusivity. Our strategy to achieve this is to help our tenants lo live in warm, safe, affordable homes,. lo provide added value through community initiatives, customer led service provision and reducing our negative impact on the environmenl and by being a viable, foward thinking, environmentally aware business. We want to see houses become homes,. safe and well-maintained homes thal complement their environment. We want to help our tenants to live comfortably in these homes, so making them more energy efficient and affordable is very important. We also aim to deliver excellence across our core housing service activities such as routine repairs, investing in planned maintenance, rent collection and peaceful living. Whilst striving for continuous improvemenl and service development we will be inclusive and mindful of the needs of our tenants. Our developmenl priorities will be to not only provide new affordable homes in thoughtfully designed developments that will sland the test of time, but also lo consider alternative models for their delivery and tenure. We will have an active asset management and investment strategy to maintain our homes. We will continue to enhance our customer engagement opportunitie5 Ihrough collaborative partnership with tenants and key stakeholders as we work lo innovate in delivery of services. Page 4
Connswater Homes Limited Annual report and Financial statements for the year ended 31 March 2023 Report of the Board of Management for the Year Ended 31 March 2023 Through information and practice we want to gel involved in the sustainability agenda as we provide homes, enhance neighbourhoods and operate our business. Our tenants and employees will be encouraged to get involved in our efforts to reduce our carbon footprint. We will signpost our tenants to fuel poverty initiatives and offer welfare benefit advice. We want to be a great employer and an employer of choice. It is our people who make us great, they determine how we perform as an organisation and we want to empower Ihem to be the best they can. We want to develop a staff team with skills, knowledge and motivation to deliver our goals. We want our team to feel valued and lislened to,. to provide them with a working environment that is agile and safe and to ensure they have resources to perform at their best. As an organisalion, we will meet, or exceed slatulory and legal requirements, apply appropriate risk controls, develop and comply with internal policies and apply innovative thinking lo develop service efficiencies and deliver excellenl customer focused services. Our business activities are underpinned by sustainability, regulation and collaborative working. We will assess a range of factors to ensure posilive outcomes for all parts of our business including financial viability, value for money and environmental sustainability. We will raise staff awareness of energy efficiency and how to pass benefits on to tenants. Digital transformation has never been more important and Connswater recognises that it is business crilical. We will ensure that the appropriate infrastructure, applications and systems are available in order for staff to deliver seNices in an efficient, consistent and cost-effective manner whilst ensuring clear and transparent governance. We will focus on improving customer access to services and data. This will be driven further by developing our tenant portal and improving access lo equipment for tenants through our lablel loan scheme. Going Concern After making enquiries, the Board of Management have a reasonable expectation that the Association has adequate resources to continue in operational existence for the foreseeable future. For Ihis reason they continue to adopt the going concern basis in preparing the financial statements. Page 5
Connswater Homes Limited Annual report and Financial statements for the year ended 31 March 2023 Report of the Board of Management for the Year Ended 31 March 2023 Value for Money Our strategy at Connswater Homes Limited is to operate our core activities as efficiently and effectively as possible. We strive to improve the quality of our services to our tenants, continue building high quality homes and generate social value whenever we see Ihe opportunity. VFM Framework - 3 E s The Association strives lo achieve Value {i.e. be as effective as possible) for the money that is invested in the activities that we carry out. We measure our VFM using a framework which examines our performance in terms of Economy, Efficiency and Effectiveness. Treasury Management Policy The Association's aim is to maintain loan balances at a level to support development while keeping loan interest charges to a minimum. This is achieved without comprising the Association's ability to meet its financial obligations at they fall due. Financial Risk Management Page 6
Connswater Homes Limited Annual report and Financial statements for the year ended 31 March 2023 Report of the Board of Management for the Year Ended 31 March 2023 The Association's operations expose il to a variety of financial risks that include the effects of changes in credit risk, price risk and interest rate risk. The Association has in place a risk management programme that seeks to limit the adverse effects on the financial performance of the Association by regular review of activity levels against changing market conditions and adjustment to cashflow projections accordingly. The Association liaises with lenders on an ongoing basis to keep up to date with other products in the marketplace. Interest rale risk Exposure to fluctuating interest rates is managed by Ihe composition of a balanced portfolio between fixed rate and variable rate loans. The Association's effective interest rate in 2022123 was 3.070/0. For the past number of years the Association's effective interest rate has been falling year on year as the Association agreed competitive terms on new loans. We recognise that we now find ourselves in Ghanged economic environment and that any new loans drawn down in future years are likely lo be at considerably higher Interest rates. This will cause our effective interest rate to increase in future years. Higher interest rates will put a squeeze on Net Margins in years to come and our development plans will need to take account of this higher interest rate environment to ensure bank covenants are mel. The Association runs stress testing scenarios each year lo ensure our future plans are viable and we amend our plans where necessary. Liquidily risk The Association maintains a mixture of long-term and short-lerm loan finance that is designed to ensure there is sufficient funds lo achieve business objectives and to facilitate planned growth. Currency risk The Association does not engage in foreign currency transaclions and so is not exposed to exchange risk Page 7
Connswater Homes Limited Annual report and Financial statements for the year ended 31 March 2023 Report of the Board of Management for the Year Ended 31 March 2023 Regulation The Association's principal regulator is the Department for Communities (Dfc). Their regulatory judgement for the year 2020121 gave the Association the highest rating of Level 1 assessing the 3 standards.. Governance, Finance and Consumer. As a registered charity the Association is also subject lo regulation by Ihe Charity Commission for Northern Ireland. Environmental matters The Association recognises its corporate responsibility to carry out its operalions and development programme whilst minimising environmental impacts. The Board's continued aim is to comply with all applicable environmental legislation, prevent pollution and reduce waste wherever possible. Internal Financial Control The Board of Management is responsible for establishing and overseeing a risk management framework in order to safeguard the assets of the Association and for the Associalion's systems of internal financial control and along with senior management is responsible for establishing and operaling detailed control and report procedures. The systems of internal financial control can provide over reasonable, and not absolute, assurance against malerial misstatement and loss. The Board of Management have reviewed the effectiveness of the Association's system of internal 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 reseNed for its approval ensuring it maintains responsibility for overall strategy, approval of all property transactions and other major capital expenditure projects. There is an organisation structure with clearly defined lines of responsibility and delegation of authority. Detailed budgets are prepared covering the Association's businesses which are reviewed and approved by the Board. Actual results are compared against budget and appropriate action identified and initiated. The Audit Committee review matters relating to internal control and receives reports on a regular basis from the external and internal auditors and from senior management. Page 8
Connswater Homes Limited Annual report and Financial statements for the year ended 31 March 2023 Report of the Board of Management for the Year Ended 31 March 2023 Statement of the Board's responsibilities in respect of the financial statements 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 the 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 accounling 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 Benefil Societies Act (Northern Ireland) 1969 and the Registered Housing Associations (Accounting Requirements) Order (Northern Ireland) 1963. They have general responsibility for the taking of reasonable steps lo safeguard the assets of the Association and to prevent and detect fraud and other irregularities. Events after the Balance Sheet date The Association has no post balance sheel dale events lo disclose. Charitable donations Donations totalling £3,555 (2022.. £2,595) were made by the Association during the year. No donations for political purposes were made during the year (2022.. £nil). Financial sustaTnability The Association has a robusl framework of longer term financial planning in place. The Board regularly considers the longer term financial plan which covers a 30 year period. The financial plan is prepared in accordance with FRS102 using Brixx planning software. The Association remains profitable for each of the 30 years in the plan and both gross margin and net margin remain strong. Sensitivity analysis is carried out to see how the Association would cope financially under the following four stress factors.. voids increase by 10/0, bad debts increase by 10/0, CPI increases by 1 % and interesl rates increase by 10/0. In addition, lo reflect the current economic environment, further slress testing was undertaken lo assess the impact of 20/0 increases in CPI and interest rates.This allows the Board to consider whether the Association may need to amend or postpone future development plans should any of the above scenarios materialise. Page 9
Connswater Homes Limited Annual report and Financial statements for the year ended 31 March 2023 Report of the Board of Management for the Year Ended 31 March 2023 Statement of disclosure of information to auditors So far as each of the members of the Board of Management at the date of approval of these financial slatements is aware: there is no relevant audit information of which the Association's auditors are unaware, and that each Board member has taken all the steps that ought to have have been taken as a Board member in order to be aware of any relevant audit information and to establish that the Association's auditors are aware of that information. Independent Auditors The auditors, RBCA Limited, have indicated their willingness to continue in office, and a resolution proposing their reappointment will be proposed at the Annual General Meeting. Approved and authorised by the Board on 75 and signed on its behalf by.. Mr Robbie avis (Chairman) r Alan Hill (Honorary Secretary) Mr Michael Graham (Honorary Treasurer) Page 10
Connswater Homes Limited Annual report and Financial statements for the year ended 31 March 2023 Independent Auditor's Report to the Members of Connswater Homes Limited Opinion We have audited the financial statements of Connswater Homes Limited for the year ended 31 March 2023, which comprise the Statement of Comprehensive Income, Stalement of Financial Position, Statement of Changes in Resources, Statement of Cashflows and Notes to the Financial Stalements including a summary of significanl accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including FRS 102 - 'The Financial Reporting Standard applicable in the UK and Republic of Ireland, (United Kingdom Generally Accepted Accounting Practice) and the Slatement of Recommended Praclice for Social Housing Providers issued by the National Housing Federation. In our opinion the financial statements- give a true and fair view of the state of the company's affairs as at 31 March 2023 and of its surplus for the year then ended., have been properly prepared in accordance wilh United Kingdom Generally Accepted Accounting Practice- and have been prepared in accordance with the requirements of the requirements of the Co-operative and Community Benefits Societies Act (Northern Ireland) 1969 {formerly the Industrial and Provident Societies Act (Northern Ireland) 1969>, the Charities Act (Northern Ireland) 2008, The Charities (Accounts and Reports) Regulations (Northern Ireland) 2015 and the Registered Housing Associations (Accounting Requirements) Order (Northern Ireland) 1993. Basis of 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 company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC'S Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Conclusions relatlng to going concern We have nothing to report in respect of the following matters in relation to which the ISAS (UK) require us to report to you where-. the Board of Management's use of the going concern basis of accounting in the preparation of the financial statements is not appropriate., or the Board of Management have not disclosed in the financial statements any identified material uncertainties that may cast significant doubt about the Association's ability lo continue to adopt the going concern basis of accounting for a period of at least twelve months from the date when the financial statements are authorised for issue. Other information The other information comprises the information included in the annual report, other than the financial statements and our auditor's report thereon. Our opinion on the financial statements does not cover the other information and, except to the extent othetwise explicitly slated in our report, we do not express any form of assurance conclusion thereon. Page 11
Connswater Homes Limited Annual report and Financial statements for the year ended 31 March 2023 Independent Auditor's Report to the Members of Connswater Homes Limited In connection with our audit of the financial statements, 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 audit or otherwise appears to be malerially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in Ihe financial statements or a material misstatement of the other information. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard. Responsibilities of the Board of Management As explained more fully in the Board of Management responsibilities statement the Board of Management are is responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the Board of Management delermines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing Ihe financial statements, the Board of Management 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 of Management either intend to cease operations, or have no realistic alternalive but to do so. Auditor's responsibilities for the audit of the financial statements Our objectives are lo obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and lo issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAS IUKI will always detect a material misstatemenl when il 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. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below.. We identified areas of laws and regulations that could reasonably be expected have a material effect on the financial statements from our sector experiences through discussion the Board of Management and other management (as required by auditing standards). We had regard to laws and regulations in areas that directly affect the financial statements including financial reporting and laxalion legislation. We Considered the extent of compliance with those laws and regulations as apart of our procedures on the related financial statement items. With the exceplion of any known or possible non-compliance, and as required by auditing standards, our work in respect was limited to enquiry of the Board of Management. We communicated applicable laws and regulations throughout our audit team and remained alert to any indications of non-compliance throughout the audit. We addressed the risk of fraud through management override of controls, by 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 thal are unusual or outside Ihe normal course of business. Page 12
Connswater Homes Limited Annual report and Financial statements for the year ended 31 March 2023 Independent Auditor's Report to the Members of Connswater Homes Limited Our audit procedures were designed to respond to risks of material misstatement in the financial statements, recognising that the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecling one resulting from error, as fraud may involve deliberate concealment by, for example, forgery, misrepresentations or through collusion. There are inherent limilations in the audit procedures performed and the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely we are to become aware of it. A further description of our responsibililies is available on the Financial Reporting Council's website at.. www.frc.org.uklauditorsresponsibilities. This description forms part of our auditor's report. Other required reporting Co-operative and Community Benefit Societies Act (Northern Ireland) 1969 ex¢eption reporting Under the Co-operative and Communily Benefit Socielies Act {Northern Ireland) 1969, we are required to report to you if, in our opinion- A satisfactory syslem of control over transactions has not been maintained., or We have not received all the information and explanations we require for our audit., or Proper accounling records have not been kept by the association., or The financial statements are not in agreement with the accounting records. We have no exceptions lo report arising from this responsibility. Charities {A¢counts and Reports) Regulations (Northern Ireland) 2015 ex¢eption reporting Under the Charities (Accounts and Reports) Regulations {Northern Ireland) 2015 we are required to report to you if, in our opinion-. Sufficient accounting records have not been kept., or The financial statements are not in agreement with the accounting records., or We have not received all the information and explanalions we require for our audit. We have no exceptions to report arising from this responsibility. Use of our report This report is made solely to the Board of Management, in accordance with Article 38 of the Co-operative and Community Benefit Societies Act {Northern Ireland) 1969 (formerly the Industrial and Provident Socielies Act (Northern Ireland) 1969). Our audit work has been undertaken so that we might stale to the Board of Management those matters we are required to slate lo 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 Board of Managemenl and Ihe Association as a body, for our audit work, for this report, or for the opinions we have formed. Page 13
Connswater Homes Limited Annual report and Financial statements for the year ended 31 March 2023 Independent Auditor's Report to the Members of Connswater Homes Limited Ross Boyd (Senior Statutory Auditor) For and on behalf of RBCA Limited, Linenhall Exchange 26 Linenhall Street Belfast BT2 8BG Page 14
Connswater Homes Limited Annual report and Financial statements for the year ended 31 March 2023 statement of Comprehensive Income for the Year Ended 31 March 2023 2023 2022 Turnover Operating costs 8,555,856 (6,188,080) 8,243,854 {6,036,095) Operating surplus for the year Surplus arising from disposals of housing property Miscellaneous income Miscellaneous expenses Transfer to disposal proceeds fund Interest received Interest payable and similar expenses other finance costs 2,367,776 110,427 36,595 2,207,759 758,923 23,550 (26,554) (758,9231 12,814 (1,231,660) {27,000) (110,427) 16,279 (1,183,248) (25,000 1,212,402 1,432,000 Surplus for the financial year Remeasurement gain on defined benefit pension schemes Total comprehensive income for the year 958,909 527,000 2,644,402 1,485,909 The notes on pages 23 to 47 form an integral part of these financial statements. Page 15
Connswater Homes Limited Annual report and Financial statements for the year ended 31 March 2023 (Registration number: IP000166) Statement of Financial Position as at 31 March 2023 2023 2022 Note Fixed assets Housing properties other tangible fixed assets Investments 13 16 17 141,660,372 367,189 133,302,582 188,568 142,027,563 133,491,152 Current assets Stocks Debtors Cash at bank and in hand 15 18 183,000 677,520 3,460,345 222,500 727,691 4,578,950 5,529,141 4,320,865 Creditors.. Amounts falling due within one year Net current assets 19 {2,451,361) (5,121.386) 1,869,504 407,755 Total assets less current liabilities 143,897,067 133,898,907 Creditors.. Amounts falling due after more than one year Pension surplusl(liability) Net assets 20 (122,716,797) (114,147,039) 148,000 (1,068,000) 18,683,868 21,328,270 Capital and reserves Called up share capital Capital reserve Revenue reserve 12 80 21,328,178 14 78 18,683,776 Total funds 21,328,270 18,683,868 Approved and authorised by the Board on and signed on its behalf by.. The notes on pages 23 10 47 form an integral part of these financial statements. Page 16
Connswater Homes Limited Annual report and Financial statements for the year ended 31 March 2023 (Registration number: IP000166) Statement of Financial Position as at 31 March 2023 Mr Robbie Da)iis (Chairman) r Alan ill (Honorary Secretary) ichael Graham (Honorary Treasurer) The notes on pages 23 to 47 form an integral part of these financial statements. Page 17
Connswater Homes 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 2023 2022 Note Total comprehensive income for the year 2,644,402 1,485,909 Net addition to revenue reserves 2,644,402 18,683,776 1,485,909 17,197,867 Opening total revenue reserves Closing total revenue reserves 21,328,178 18,683,776 The notes on pages 23 to 47 form an integral part of these financial statements. Page 18
Connswater Homes 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 2022 Note Nel cash inflowloutflow from operating activities Returns on inveslments and servicing of finance Capital expenditure and financial investment 2,491,523 (1,166,969) {3,092,4851 958,564 (1,218,846) (1,967,445) Cash inflowloutflow before use of liquid resources and financing {1,767,931) (2,227,727) Financing 649,326 (1,336,929) Inceasel{decrease) in cash in period {1,118,605) {3,564,666) 2023 2022 Reconciliation of net cash flow Increasel(decrease) in cash in period Net cash at 1 April (1,118,605) 4,578,950 (3,564,656) 8,143,606 Net cash at 31 March 3,460,345 4,578,950 The notes on pages 23 to 47 form an integral part of Ihese financial statements. Page 19
Connswater Homes Limited Annual report and Financial statements for the year ended 31 March 2023 Notes to Statement of Cash Flows for the Year Ended 31 March 2023 2023 2022 Note A Reconciliation of surplus for the year to operating cashflows Surplus for the year Depreciation Amortisation of grant Movemenls.. 1,212,402 2,067,384 (1,560,170) 958,908 2,104,830 (1,553,232) stock 39,500 50,171 2,334,694 (110,427) (2,734,000) 25,000 {16,279) 1,183,248 (222,500) (174,277) (1,414,090) 1758,923) 772,000 27,000 {12,814) 1,231,660 - Debtors Creditors {Surplus}Ideficit arising from disposals of housing property Difference in pension charge and cash contributions Other finance costs Interest received Interest payable 2,491,523 958,564 The notes on pages 23 to 47 form an integral part of these financial statements. Page 20
Connswater Homes Limited Annual report and Financial statements for the year ended 31 March 2023 Notes to Statement of Cash Flows for the Year Ended 31 March 2023 2023 2022 Note B - Analysis of cash flows for headings netted Sn the cash flow statement Returns on investment and servicing of finance Interest received 16,279 (1,183,248) 12,814 {1,231,660) Interest payable Net cash inflowl (outflow) for returns on investment and servicing of finance {1,166,9691 {1,218,846) 2023 2022 Capital expenditure and financial investment other fixed assets {230,999) (10,916,389) 7,224,983 829,920 {78,765) (9,935,915) 7,178,948 868,287 Housing, land and buildings Capital grant received Sales proceeds Net cash inflowl {outflowl for capital expenditure and financial investment (3,092,485) {1,967,445) 2023 2022 Financing Loan principal payments Loan redemptions Draw-downs <1,350,674) {1,337,220) 2,000,000 Net cash inflowl (outflow) for capital expenditure and financial investment 649,326 {1,337,220) The notes on pages 2310 47 form an integral part of these financial statements. Page 21
Connswater Homes Limited Annual report and Financial statements for the year ended 31 March 2023 Notes to Statement of Cash Flows for the Year Ended 31 March 2023 At 1 April 2022 Cashflows Other At 31 March Changes 2023 Note C - Analysis of changes in net funds Cash in hand and at bank Debt due within one year Debl due after more than one year 4,578,950 (1,118,605) {1,355,299) {9,456) {37,394,532) 1639,8691 3,460,345 {1,364,7551 (38,034,401) (34,170,881} (1,767,930) {35,938,811) The notes on pages 23 to 47 form an inlegral part of these financial statements. Page 22
Connswater Homes 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 General information The association's principal activity during the financial year was providing high quality, affordable homes for rent throughout Northern Ireland. The association is registered under the Co-operative and Community Benefit Societies Act (Northern Ireland) 1969 and domiciled in the UK. The address of its registered office is: Unil 5 Citylink Business Park Albert Street Belfast BT12 4HQ 2 Accounting polTcies Summary of significant accounting policies and key accounting estimates The principal accounting policies applied in the preparation of these financial statemenls are set out below. These policies have been consistently applied to all the years presented, unless otheNise stated. Statement of compliance These financial stalements of Connswater Homes Limited have been prepared on the going concern basis in compliance with United Kingdom Accounting Standards, including Financial Reporting standard 102, "The Financial Reporting Standard applicable in the United Kingdom and the Republic of Ireland" {"FRS 102) under the historical cost convention, and in accordance with the applicable accounting slandards in the United Kingdom and Statement of Recommended Practice for Accounting by Registered Social Landlords. The principal accounting policies, which have been applied consistently throughout the year, are set out below. The presentation of the financial stalements complies with the Registered Housing Associations (Accounting Requirements) Order (Northern Ireland) 1993. Basis of preparation These financial statements are prepared on a going concern basis, under the historical cost convention. The preparation of financial statements requires the use of certain crilical accounling estimates. It also requires management to exercise its judgement in the process of applying the associalion accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the financial statements, are disclosed in note 3. Foreign currency transactions and balances Transactions and non-monetary assets, denominated in foreign currencies, are Iranslated al the exchange rate at the date of the transaction. Monetary assets and liabilities are denominated in foreign currencies are retranslated at the rate of exchange ruling at the statement of the financial position date or the exchange rate of a related foreign exchange contract where relevant. The resulting exchange gains or losses are dealt with in the income and expenditure account. Page 23
Connswater Homes 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 Revenue recognition Revenue is measured at the fair value of the consideration received or receivable and represents the amount receivable for goods supplied or services rendered, net of returns, discounts and rebates allowed by the association and value added taxes. The association bases its estimate of returns on hislorical results, taking into consideration the type of customer, the type of transaction and the specifics of each arrangement. Where Ihe consideration receivable in cash and cash equivalents is deferred and the arrangement constitutes a financing transaction, the fair value of the consideration is measured at the the present value of all future receipls using the imputed rate of inlerest. The association recognises revenue when (al the significant risks and rewards of ownership have been transferred to the buyer- {b) the associalion retains no continuing involvement or control over the goods; (cl the amount of revenue can be measured reliably,. (d) it is probable that future economic benefits will flow through the association and (el when the specific criteria relating to each of the associations, sales channels have been met, as described below and in note 4. Net rental Income Income includes rent and service charge income arising from the provision of housing accommodation and the amortisalion of Housing Association Grant. Income is recognised in the period to which it relates. Employee benefits The association provides a range of benefits lo employees, including paid holiday arrangements and defined benefit pension plans. i) Short term benefils Short term benefits, including holiday pay and other similar non-monetary benefits, are recognised as an expense in the period in which the service is received. ii) Multi-employer pension plan Retirement benefits lo employees of the Association are provided by the Northern Ireland Local Government Officers Superannuation Committee (NILGOSCI defined benefit scheme which is externally funded. The assets of the NILGOSC scheme are held separately from those of the Association. The Association has adopted FRS 102 section 28 "Employee benefits" in these financial statements. Pension scheme assets are measured using market value. Pension scheme liabilities are measured using the projected unil method and discounted at the current rate of retLtrn on a high quality corporate bond of equivalent term to the the liability. The increase in the present value of the liabilities of the Association's defined benefit pension scheme arising from employee service in the year is charged to operating surplus. The net interest cost is calculated by applying the discount rale lo the net balance of the defined benefit obligation and the fair value of the plan assets. This cost is recognised in the Statement of Comprehensive Income as "Other finance costs." Stock Housing properties held for sale are measured at the lower of cost and eslimated selling price less costs to complete and sell. Page 24
Connswater Homes 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 Tangible fixed assets Housing properties The association operates a full component accounting policy in relation to the capitalisation and depreciation of its completed housing stock. Housing Association Grant and other grants Housing Association Grant and other grants received as a contribulion towards the capital costs of housing properties of the Association were set against the capital cost of these properties in the prior years. Housing Association Grant is disclosed as "Creditors.. amounts falling due after more than one yearf, rather than set against the capilal cost and are amortised to the Statement of Comprehensive Income as per the turnover policy. Housing Association Grant received against revenue expenditure is credited to revenue in the period in which the related expenditure is charged. Such grants, although treated as a grant for accounting purposes, may be repayable under certain circumstances, primarily following the sale of housing property, but any amount repayable would be restricted to the nel proceeds of the sale. Depreciation and impairment Housing properties Housing properties are split bebNeen land, structure and major components which require periodic replacement. Replacement or refurbishment of such major components is capitalised and depreciated over the estimated useful life which has been set taking into account professional guidance and the association's asset management strategy. In determining the remaining useful lives for the housing stock, the association has taken account of views provided by both internal and external professional sources. Freehold land is not subject to depreciation. Depreciation is charged so as to wrile down the cost or valuation of the freehold housing properties and major Gomponents on a straight-line basis over Iheir expected useful economic lives. Major components are treated as separable assets and depreciated over their expected useful economic lives or the lives of the structure to which they relate, if shorter, over the following periods.. Asset class Depreciation method and rate Land Not depreciated SlruGlure (including roon 100 years Kitchen 20 years Bathroom 25 years Heating system 15 years Windows and doors 35 years Electrics 30 years Page 25
Connswater Homes 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 Housing assets are depreciated in the month of acquisition, or in the case of a larger project, from the month of completion. Where there is evidence of impairment, Ihe fixed assets are written down lo the recoverable amount and any write down would be charged to the operating surplus. Other fixed assets Ground rents are depreciated. Depreciation of other fixed assets is Charged on a straight-line basis over the estimated useful economic lives of the assels at the following annual rates.. Office premises 2 % Office furniture and equipment 250/ Motor vehicles 14 % Subsequent additions and major components Subsequent costs, including major inspections, are included in the assets carrying amount or recognised as a separate asset, as appropriate, only when it is probable that economic benefits associated with the item will flow to the association and the cost can be measured reliably. The carrying amount of any replaced component is de-recognised. Repairs, maintenance and minor inspection cosls are expensed as incurred. Derecognition Tangible assets are de-reGognised on disposal or when no future economic benefits are expected. On disposal the difference between the net disposal proceeds and the carrying amount is recognised in the Statement of Comprehensive Income. Leases Leases in which substantially all the risks and rewards of ownership are retained by the lessor are classified as operating leases. Payments made under operating leases are charged to Statemenl of Comprehensive Income on a straight-line basis over the period of the lease. Page 26
Connswater Homes 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 Cash and cash equivalents Cash and cash equivalents comprise cash on hand, deposits held at call with banks. other short-term highly liquid investments with original maturities of one month or less and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities. Impairment of non-financial assets At each Statement of financial position date non-financial assets are not carried at fair value are assessed to determine whether there is an indication that the asset lor asset's cash generating uniti may be impaired. If there is such an indication the recoverable amount of the asset (or asset's cash generating unil) is compared to Ihe carrying amount of the asset (or asset's cash generating unit). The recoverable amount of the asset (or asset's cash generating unit) is the higher of the fair value less costs lo sell and value in use. Value in use is defined as the present value of the future cash flows before interest and tax obtainable as a result of the asset's (or asset's cash generating unit) conlinued use. These cash flows disconlinued using a pre-tax discount rate that represents the current markel risk-free rate and Ihe risks inherent in Ihe assets. If the recoverable amount of the asset (or asset's cash generating unit) is estimated to be lower than the carrying amount, the carrying amount is reduced to ils recoverable amount. An impairment loss is recognised in the Slatement of Comprehensive Income and Retained Earnings, unless the asset has been revalued when Ihe amount is recognised in other comprehensive income to the extent of any previously recognised revaluation. Thereafter any excess is recognised in the Statement of Comprehensive Income and Retained Earnings. If an impairment loss is subsequently reversed, the carrying amount of the asset (or asset's cash generating unit) is increased to the revised estimate of its recoverable amount, but only to the extent that the revised carrying amount does not exceed the carrying amount that would have been determined (net of depreciation or amortisation) had no impairment loss been recognised in prior periods. A reversal of an impairment loss is recognised in the Statement of Comprehensive Income and Retained Earnings. il Provisions Provisions are recognised when the Association has a present legal or construclibr obligation as a result of past events,. it is probable that an outflow of resources will be required to settle the obligation., and the amount of the obligations can be estimated reliably. Where there are a number of similar obligations, the likelihood that an outflow will be required in settlemenl is determined by considering the class of obligations as a whole. A provision is recognised even if the likelihood of an outflow wilh respect to any one item included in the same class of obligations may be small. Provisions are measured at the present value of the expenditures expected lo be required to settle the obligation using a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the obligation. The increase in the provision due to passage of time is recognised as a finance costs. ii) Contingencies Contingent liabilities, arising as a result of past events, are not recognised when li) it is not probable that there will be an outflow of resources or that the amount cannot be reliably measured at Ihe reporting date or {ii) when the existence will be confirmed by the occurrence of uncertain future events not wholly within the Association's control. Contingent liabilities are disclosed in the financial statements unless the probability of an outflow of resources is remote. Page 27
Connswater Homes 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 Flnancial instruments The association has chosen to adopt Sections 11 and 12 of FRS 102 in respect of financial inslrumenls. i) Financial assets Basic financial assets, including trade and other receivables and cash and bank balances inilially recognised al transaction price, unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted al a market rate of interest. Such assets are subsequently carried at amortised cost using the effective interest method. At the end of each reporting period financial assets at amortised cost are assessed for objective evidence of impairment. If an asset is impaired the impairment loss is the difference belween the carrying amount and the present value of the estimated cash flows discounted at the asset's original effective interest rate. The impaiment loss is recognised in Statement of Comprehensive Income and Retained Earnings. If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does nol exceed what the carrying amount would have been had the impairment not previously been recognised. The impairment reversal is recognised in Statement of Comprehensive Income and Retained Earnings. Financial assets are de-recognised when (al the contractual rights to the cash flows from the asset to expire or are settled, (b} substantially all the risks and rewards of the ownership of the asset are transferred to another party or, (c) despite having retained some significant risks and rewards of ownership, control of the asset has been transferred to another party who has the practical abilily to unilaterally sell the asset to an unrelated third party without imposing additional restrictions. Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in the Statement of Comprehensive Income and Retained Earnings, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment. Page 28
Connswater Homes 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 ill Financial liabilities Basic financial liabilities, including trade and other payables, bank loans and loans from fellow association companies, are initially recognised at transaction price, unless the arrangement constitutes a financing transaction, where the debt instrument is measured al 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 of melhod. Fees paid on the establishment of loan facililies are recognised as transaction costs of the loan to the extent that it is probable that some or all of the facility will be drawn down. In this case, the fee is deferred until the draw-down occur. The extent there is no evidence that it is probable that some or all of the facility will be drawn down, the fee is capitalised as a pre-payment for liquidity setvices and amortised over the period of the facility lo which il relates. Trade payables are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Accounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade payables are recognised initially al transaction price and subsequently measured al amortised cost using the effective interest method. Disposal proceeds fund The net surpluses, after loan repayments, that arise from the sale of property to lenants under the voluntary purchase grant arrangements instituted by the Department for Communities can be used by the Association to fund works on property that would not be eligible for housing association grant or in certain circumstances, attract loan finance. If the surpluses are not used within two years of their receipt they may be payable in part or in full to the Department of Communities. Revenue reserves The Association's policy is to retain a level of revenue reseNes which reflects its needs at the current time and in the foreseeable future. The reserves required are sufficient to meet committed running costs for a period equivalenl to nine months budgeted futLtre expenditure. The Board of Management reviews Ihe adequacy of the revenue reserves level on an annual basis. Share capital Ordinary shares are classified as equity. Equity instruments are measured al the fair value of the cash or other resources received or receivable, net of the direct costs of issuing the equity instruments. If payment is deferred and the time value of money is material, the initial measurement is on a present value basis. Going concern After making appropriate enquires, the Board of Management has a reasonable expectation that the Association has adequate resources to continue in operational existence for the foreseeable future. For this reason, it continues to adopt the going concern basis in the financial statements. Page 29
Connswater Homes 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 3 Critical accounting judgements and estlmation uncertainty Estimates and judgements made in the process of preparing the association financial statements are continually evaluated and are based on historical expenses and other factors, including expectations of future events that believed to be reasonable under the circumstances. (al Critical judgement in applylng the entity's accounting policies There are no critical judgements in applying the entity's accounting policies. (b) Critical accounting estimates and assumptions The Board of Management makes estimates and assumptions concerning the fulure in the process of preparing the association financial statements. The eslimates and assumptions Ihat have a significant risk of caLFsing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are addressed below. (i) Useful economic lives of housing properties The annual depreciation on housing properties is sensitive to Ghanges in the estimated useful economic lives and residual values of the assets. The useful economic lives and residual values are reviewed annually. They are amended when necessary to reflect current estimates, based on future investments, economic ulilisation and the physical condition of the assets. (li) Defined benefil pension scheme The Association has an obligation to pay pension benefits lo certain employees. The cost of these benefits and the present value of the obligalion depend on a number of faclors, including., life expeGlancy, salary increases, asset valuations and the discount rate on corporate bonds. Management estimates these factors in determining the net pension obligalion in the balance sheet. The assumptions reflect historical experience and current trends. There are no other critical accounting estimates and assumptions. Page 30
Connswater Homes 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 4 Analysis of turnover Turnover and results relate to the association's main activities which are carried out in the United Kingdom. Turnover represents rental and service charge income and residential charges for housing with care, net of voids. It also includes amortisalion of grants received from the Northern Ireland Housing Executive. 5 Operating costs 2023 2022 Direct costs 4,283,608 1,904,472 4,303,531 1,732,564 Administrative expenses 6,188,080 6,036,095 6 Operating surplus 2023 2022 This is stated after chargingllcrediting): Staff costs (Note 7) Wages and salaries Depreciation Housing properties Other tangible fixed assels Amortisation of grants Auditors, remuneration 1,747,479 1,635,472 2,014,989 52,395 (1,560,170) 2,067,469 37,361 (1,553,232) Audit services 8,100 8,100 Page 31
Connswater Homes 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 7 Employee information 2023 2022 Staff costs Wages and salaries Social security costs Other pension costs 1,354,206 146,121 247,152 1,279,067 126,405 230,000 1,747,479 1,635,472 2023 2022 Number Number Average monthly number of persons employed during the year by activity: Administration 33 32 8 Directors, emoluments The aggregate remuneration of key management personnel of the Association during the year was.. 2023 2022 Aggregate emoluments (including pension contributions) Emoluments payable to the highest paid director (excluding pension contributions) 356,599 331,289 123,028 114,296 The number of direclors to whom emoluments were paid during the year falls within each of the following bands.. Page 32
Connswater Homes 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 2023 2022 Salary Band £120,000 - £130,000 £110,000 - £120,000 £100,000- £110,000 £90,000 - £100,000 £80,000 - £90,000 £70,000 - £80,000 Members of the Board of Management serve in a voluntary capacity and none (2022.. none) were in receipt of emoluments during the year. The Board and Committee members were reimbursed for expenses totalling £Nil12022'. £Nil) during the year. 9 Transfer of disposal proceeds fund 2023 2022 Proceeds of disposal Asset original costsllegal fees Voluntary grant payable 830,920 {305,773) 164,281 868,287 (336,028) 226,664 Transfer to disposal proceeds fund {note 19) 689,428 758,923 10 Interest receivable and similar income 2023 2022 Interest receivable 16,279 12,814 16,279 12,814 Page 33
Connswater Homes 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 11 Interest payable and similar expenses 2023 2022 Housing property loans Bank interest and charges 1,179,138 4,110 1,227,852 3,807 1,183,248 1,231,660 12 Other finance costs 2023 2022 Defined benefit pension scheme net interest cost 25,000 27,000 25,000 27,000 Page 34
Connswater Homes 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 13 Tangible fixed assets - housing properties and housing association grants 2023 2022 Housing Properties Cost At l April 2022 Additions 149,545,851 11,453,944 (1,322,243) 142,095,855 9,935,915 (2,033,945) {302,153) Disposals Transfers At 31 March 2023 159,677,552 149,695,672 Accumulated depreciation At 1 April 2022 Charge for the year Disposals Transfers 16,362,417 2,014,989 (360,2251 15,066,500 2,067,469 {687,780) {53,0981 At 31 March 2023 18,017,181 16,393,090 Net book value At 31 March 2023 141,660,372 133,302,582 Net book amount comprises: Freehold property 141,660,372 133,302,582 Net book amount comprises.. Completed scheme Properties under construction 127,508,388 14,151,984 126,138,642 7,163,940 At 31 March 2023 141,660,372 133,302,582 Included in the above is a figure of £393,425 for capitalised component replacements 12022.. £589,247). Page 35
Connswater Homes 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 14 Housing Association Grants 2023 2022 Housing Association Grants Cost Al 1 April 2022 Additions 91,492,175 8,542,674 (981,998) 86,809,816 8,087,291 (1,404,932) Disposals At 31 March 2023 99,052,850 91,492,175 Accumulated amortisation At 1 April 2022 Charge for the year Disposals 14,279,783 1,462,428 {547,999) 13,188,704 1,481,199 (390,1201 At 31 March 2023 15,194,212 14,279,743 Net book value At 31 March 2023 83,858,638 77,212,392 Page 36
Connswater Homes 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 15 Stock 2023 2022 Houses held for sale 183,000 222,500 183,000 222,500 16 Other tangible assets Ground Rents Office Building Office Equipment Motor Vehicles Total Cost At 1 April 2022 Additions 839 238,572 160,372 417,949 12,422 657,360 231,000 58,223 At 31 March 2023 839 398,944 430,371 58,223 888,377 Accumulated amortisation At 1 April 2022 Charge for the year 116,224 17,523 352,568 26,555 468,792 52,396 8,318 At 31 March 2023 133,747 379,123 8,318 521,188 Net book value At 31 March 2023 839 265,180 51,248 49,905 367,189 At 31 March 2022 839 122,348 65,381 188,568 Page 37
Connswater Homes 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 17 Investments Investments Cost and net book value At 1 April 2022 and 31 March 2023 Investments Detailed Name EPIC Clean Limited Dormant Company Northern Ireland Principal Activity Country of Incorporation Registered Address Unit 5 Citylink, Business Park, Albert Street, Belfast BT12 4HQ Holding Class of Share Ordinary 18 Debtors 2023 2022 Rental Debtors Gross - Technical Rental Debtors Gross- Non Technical Provision for Bad Debts 200,389 207,307 (140,8081 197,136 200,998 {140,8081 Net renlal (including rates, service charges) debtors 266,888 257,326 Other Debtors 276,018 84,856 49,758 326,678 89,374 54,313 Prepayments and accrued income Housing Association Grant receivable 677,520 727,691 Page 38
Connswater Homes 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 19 Creditors: amounts falling due within one year 2023 2022 Bank loans 1,349,039 15,716 1,339,583 15,716 1,481,199 42,230 331,933 497,391 1,091,657 321,677 THFC premium Housing Association grants Rent, rates and service charges received in advance Disposal proceeds fund Other creditors 30,747 321,322 123,101 278,580 332,856 HAG in advance Accruals and deferred income 2,451,361 5,121,386 20 Creditors: amounts falling due after more than one year 2023 2022 Bank loans 33,785,131 4,249,271 659,059 83,858,638 164,898 33,130,177 4,264,354 758,875 75,731,193 262,440 THFC premium Disposal proceeds fund Housing Association grants Other grants 122,716,797 114,147,039 The surplus on the disposal proceeds fund must be used within two years of Ihe sale of the property. Page 39
Connswater Homes 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 21 Loans 2023 2022 Bank loans - Housing property and other loans Less than one year, or on demand (Note 18) Between one and two years Between two and five years After more than five years 1,364,755 6,543,719 11,475,575 20,015,107 1,355,299 1,372,719 8,124,384 27,897,428 39,399,157 38,749,831 Security Loans are secured by way of mortgages upon the deeds of the relaled housing properties. Page 40
Connswater Homes 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 22 Other grants As at 1 April 2022 Grant received during financial year Grant amortisation 262,440 97,742 As at 31 March 2023 164,698 23 Called up share capital Ordinary shares of £1 each, fully paid As al 1 April 2022 Allotted during the year Transfer lo capital reserve 14 As al 31 March 2023 12 Page 41
Connswater Homes 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 24 Turnover, operating costs and operating surplus 2023 2022 Operating Operating Operating Operating Turnover Costs Surplus Surplus Social Housing Activities Non-social Housing Activities 8,555,856 6,181,906 2,373,950 2,215,744 6,174 {6,1741 (7,985) 8,555,856 6,188,080 2,367,776 2,207,759 25 Housing stock Number of units owned on 31 March 2023 2022 Number Number Self-contained General needs housing 1,205 1,175 1,205 1,175 26 Turnover, operating costs and operating surplus or deficit from social and non-social housing activities - Association 2023 2022 Social Housing Activities Operating income Rent and rates receivable Service charges receivable Income from Housing Association grant Income from other grants Other income 6,948,461 90,425 1,557,079 6,649,226 88,416 1,481,199 72,033 6,000 147,020) Voids <40,108) Total social housing income 8,555,856 8,243,854 Operating costs Services 110,135 1,279,554 105,037 1,211,227 Managemenl costs Page 42
Connswater Homes 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 Rates 813,987 903,403 518,585 528,136 2,014,989 13,117 763,684 819,011 530,370 517,297 2,067,469 14,015 Maintenance and administration costs Planned and cyclical maintenance Reactive maintenance Depreciation of social housing Bad debts (rent and service charges) Total social housing expenditure 6,181,906 6,028,110 Operating surplus on social housing 2,373,950 2,215,474 2023 2022 Dfc Allowances Management allowances Management costs 471,240 (1,097,821) 465,300 (907,553) Deficit (626,581) (442,253) Maintenance Allowances Maintenance Allowances 543,083 (518,585) (528,136) 545,200 {530,370) {517,297) Planned and cyclical maintenance Reactive maintenance Deflclt {503,638) (593,467) Technical and Non - Technical Income Technical 5,254,526 1,784,357 5,029,649 1,707,993 Non-Technical Total 7,038,884 6,737,642 2023 2022 Non-social Housing Activities Operating costs Developmenl costs written off 6,174 7,985 Total non-social housing expenditure 6,174 7,985 Operating loss on non-social housing {6,1741 (7,985) Page 43
Connswater Homes 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 27 Pension commitments The net pension deficit shown below under section 28 of FRS 102 deals with the accounting for employee benefits does not represent a shortfall which requires short term cash funding. The amount shown below is calculated below lo comply with the Financial Reporting Standard, the specific requirements of which differ from the basis on which pension liabilities are actuarially calculated for the purpose of the ongoing funding of the scheme. The Financial Reporting Standard requires.. actuarial deficiencies to be recognised immediately as a liability in the financial statements rather than being spread forward over employee's remaining service lives., and the actuary, in valuing the scheme's liabilities, is required to use a bond yield as the discount rate for valuing future liabilities, rather than a rate that reflects the expected return on the scheme's particular asset portfolio, with the result of an apparent increase in the present value of future longer term liabilities. The below is in relation to employees and ex-employees who are members of the NILGOSC pension scheme. NILGOSC pension scheme is considered a related party of the Association. The most recent valuation was conducted as at 31 March 2023 by a qualified actuary for the purpose of the disclosures below= The major assumptions used by the actuary were.. 2023 2022 2021 2020 Rate of increase in salaries Rate of increase in pensions in payment Pension accounts revaluation dale 3.8% 2.85° 2.60°/0 2.280/0 2.00 2.60'/0 2.280/0 2.0% Discount rate 2.700/0 2.250/0 2.250 Inflation assumption 2.280/0 2.00 The mortalily assumptions used were as follows.. 2023 2022 2021 2020 Years Years Years Years Longevity at age 65 for current pensioners: -men 22.2 21.8 21.9 21.6 - Women 25.0 25.0 25.1 25.0 Longevity at age 65 for future pensioners: -men 23.2 23.2 23.3 23.2 - Women 26.0 26.4 26.5 26.4 Page 44
Connswater Homes 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 Pension Commitments (continued) Value at 31 March 2023 Value at 31 March 2022 The assets in the scheme and the expected rate of return were.. Equilies Property Bonds 42.90 26.90/0 Gilts 25.20 20.2° 100/0 2023 2022 Reconciliation of present value of scheme liabilities At 1 April Current service cost 7,117,000 440,000 193,000 95,000 (2,369,000) {29,0001 6,769,000 475,000 153,000 87,000 (336,000) (31,000) Interest cost Member contributions Actuarial lossesl{gains) Benefits paid At 31 March 5,447,000 7,117,000 Page 45
Connswater Homes 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 2023 2022 Reconciliation of fair value of scheme assets At l April Interest income on assets Remeasurement gains on assets Contributions by the employer Contributions by participants Nel benefils paid out 8,049,000 168,000 193,700) 249,000 95,000 (29,000) 5,446,000 126,000 191,000 230,000 87,000 {31,000) At 31 March 5,595,000 6,049,000 2023 2022 £'ooo £'ooo Analysis of amount charged to income or expenditure are as follows: Current service costs 440,000 Interest on pension scheme liabilities 25,000 Lossl(gain) on plan inlroductions, changes, curtailments and seltlements 475,000 27,000 465,000 502,000 2023 2022 £'ooo £'ooo Amounts recognised in other comprehensive income Return on plan assets excluding interest income Actuarial lossesl(gains) 937,000 (2.369,000) (191,000) (336,000) (1,432,000) {527,000) Amounts for current and previous three years: 2023 2022 2021 2020 Fair value of employer assets Present value of defined benefit obligation 5,595,000 6,049,000 5,446,000 4,108,000 (5,447,000) (7,117,000) (6,769,000) (5,072,000) 148,000 (1,068,000) (1,323,000) {964,000) Surplusl{deficit) Page 46
Connswater Homes 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 28 Capital Commitments 2023 2022 Capltal expenditure Contracted for but not provided for in the financial statements 5,819,704 6,921,882 The Association anticipates that this expenditure will be funded by Housing Association Grant from the Department for Communities, by private finance, both external and internal and the association's resetves. 29 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. 30 Related party disclosures Connswater Homes Limited is an admitted body to the Northern Ireland Local Government Officers. Superannuation Committee (NILGOSC> and make contributions on behalf of those of ils employees whom are in the scheme. 31 Ultimate controlling party The ultimate controlling party is the Board of Management. Page 47