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 ststements for the year
ended 31 March 2023 of Connswater Homes Limited (the "Association"). 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
Communities I"DfC") providing housing accommodation for those in need. It has charitable status wilh
HM Revenue and Customs and is a registered charity with the Charity Commission for Northern
Ireland.
Board of Management
The Board of ftAanagement meets regularly throughout the year. There are also various committees
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 company
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 stalemenls, 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
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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 the year the number of homes in ownership increased to 1,205 from 1,175 at the end of Ihe
prior year representing a 2.60A 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 result of new homes
added to the Association's stock during the year. An average annual inflationary rent increase of
2.380/0 on much of our existing stock also helped to boost turnover.
Operating costs of £6,188,080 represent 72ts/0 of turnover {2022= 730A). 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 the 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 safety inspections was also completed including boiler seNicing, smoke
and carbon monoxide alams testing. asbestos monitoring. legionella testing and fire risk
assessments.
The Board has a set number of key perfomiance indicators monitoring the operations of the
Association on regular basis.
Performance Indicator
Actual 22123
Target 22123
>850/0
Emergency repairs carried out within 24 hours
Urgent repairs carried out within 4 days
Routine repairs carried out within 28 days
Operating margin
Net margin
Gearing ratio
Interest cover ratio
890
>800/0
870
>800/0
>30%
>10°/0
380/0
<60'/ts
Net debt per unit
Voids as a 0/0 of Stock
£29.949
0.8.
<£38,000
Board members attendance 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.
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Connswater Homes Limited
Annual report and Financial ststements 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 Mar¢h 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 the year made up of
a number of schemes. We expect there will be approximately 59 properties completed from existing
schemes on sile and added to management during the year with the remainder completing in the
years ending 31 March 2025 and 2028.
A cyclical and planned maintenance programme of approximately £1.1m of investment has been
approved. This includes 5 heating upgrades, 50 window and door replacements, 6 complete property
refurbishments, 15 HRU IEnvirovent replacements. fixed wire testing at 400 properties and all health
and safety inspections.
Corporate Governance
In the opinion of the Board of Management, the Associalion 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 ftve year period 2022 to
2027. Our business goals over this period f￿uS on working logether 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 seNices. We wll 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 services that our tenants actualty 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 to live in warm, safe, affordable homes,. to provide
added value through community initiatives, customer led service provision and reducing our negative
impact on the environment and by being a viable. forward thinking, environmentally aware business.
We want to see houses become homes" safe and well-maintained homes that 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 aGross our core
housing service activities such as routine repairs, investing in planned maintenance, rent collection
and peaceful living.
Whilst striving for continuous improvement and service development we will be inclusive anij mindful
of the needs of our lenants.
Our development priorities will be to not only provide new affordable homes in thoughtfully designed
developments that will stand 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 opportunities through collaborative
partnership with tenants and key stakeholders as we work to innovate in delivery of services.
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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 invoEved 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 lo 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 wanl to empower them to be the best they can.
We want to develop a staff team with skills, knowledge and molivalion to deliver our goals. We want
our team to feel valued and listened to., to provide them with a working environment that is agile and
safe and to ensure they have resources to perfomi at their best.
As an organisation, we will meet, or exceed statutory and legal requirements, apply appropriate risk
controls, develop and comply with inlernal policies and apply innovative thinking to develop service
efficiencies and deliver excellent customer focused services.
Our business activities are underpinned by sustainability, regulation and collaborative working. We will
assess a range of factors to ensure positive 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
critical. We will ensure that the appropriate infrastructure, applicalions and systems are available in
order for staff to deliver services in an efficient, consistent and cost-effective manner whilst ensuring
clear and transparent governance. We will focus on improving cuslomer access to services and data.
This will be driven further by developing our tenant portal and improving access lo equipmenl for
tenants through our tablet 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 this
reason they continue to adopt the going concern basis in preparing the financial statements.
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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 setvices to our tenants, continue building high quality homes
and generate social value whenever we see the opportunity.
VFM Fram8woth - 3 E's
The Association strives to 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 perfomiance 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 obligalions at they fall due.
Financial Risk Management
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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 it 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.
Interesl rate risk
Exposure to fluctuating interest rates is managed by the composition of a balanced portfolio bebNeen
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 a
Ghanged economic environment and that any new loans drawn down in future years are likely to 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
met. The Association runs stress testing scenarios each year to ensure our future plans are viable
and we amend our plans where necessary.
Liquidity risk
The Association maintains a mixture of long-temi and short-term loan finance that is designed to
ensure there is sufficient funds to 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
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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 {DfCI. 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 to regulation by the Charity Commission for Northern Ireland.
Environmental matters
The Association recognises its corporate responsibility to carry out its operations 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 estsblishing and overseeing a risk management
framework in order to safeguard the assets of the Association and for the Association's systems of
internal financial control and along with senior management is responsible for establishing and
operating detailed control and report procedures. The systems of internal financial control can provide
over reasonable. and not absolute, assurance against material misstatement and loss.
The Board of Managemenl 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.
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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.,
stale whether applicable accounting standards have been followed, subject to any malerial
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 lo ensure Ihat the financial statements comply with the Co-operative and Community
Benefit Societies Act (Northern Ireland) 1969 and the Registered Housing Associations {Accounling
Requirements) Order {Northern Ireland) 1963. They have general responsibility for the taking of
reasonable steps to safeguard the assets of the Association and to prevent and detect fraud and olher
irregularities.
Events after the Balance Sheet date
The Association has no post balance sheet date events to disclose.
Charitable donations
Donations tolalling £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 sustainability
The Association has a robust 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 10A.. bad debts increase by 1 %, CPI increases by 10/0
and interest rates increase by 10A. In addition. to reflect the current economic environment, further
stress testing was undertaken to assess the impact of 20/0 increases in CPI and interest rales.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.
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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
statements 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 Auditor3
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 .
73
and signed on its behalf by:
r Alan Hill {Honorary Secretary)
Mr Michael Graham (Honorary Treasurer)
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