DocuSign Envelope ID: 93D6A938-DF5C-4319-81CE-119A4D9014B1
Covenanter Residential Association Limited Year Ended 31 March 2023
Registered No: IP000171
Covenanter Residential Association Limited
Report and Financial Statements
For the Year Ended 31 March 2023
DocuSign Envelope ID: 93D6A938-DF5C-4319-81CE-119A4D9014B1
Covenanter Residential Association Limited Year Ended 31 March 2023
Contents page
| Page | |
|---|---|
| Board of Management and Advisers | 1 |
| Report of the Board of Management | 2 |
| Independent Auditor’s Report | 6 |
| Statement of Comprehensive Income | 10 |
| Statement of Changes in Equity | 11 |
| Statement of Financial Position | 12 |
| Statement of Cashflows | 13 |
| Notes to the Financial Statements | 14-25 |
DocuSign Envelope ID: 93D6A938-DF5C-4319-81CE-119A4D9014B1
Covenanter Residential Association Limited Year Ended 31 March 2023
Board of Management and Advisers
Board of Management
Nathan Hawthorne (Chair) Sarah Galway (Secretary) Diane Wright Resigned 30[th] June 2022 / Co-opted 12[th] September 2022 Joel Loughridge Ian McCaughan Resigned 30[th] June 2022 Roger Sloan (Treasurer) Matthew Sampson Appointed 30[th] June 2022 Gareth Hughes Appointed 30[th] June 2022 Irwin McNeill Appointed 30[th] June 2022
Secretary Sarah Galway
Registered office
8 Eastermeade Park Ballymoney BT53 6HP
Registered number
Registered with the Financial Conduct Authority, IP000171
Registered as a housing association with the Department for Communities (Northern Ireland), Registered No R7
Registered as a charity with the Charity Commission for Northern Ireland, NIC107019.
Statutory Auditors
ASM (B) Ltd Glendinning House 6 Murray Street Belfast, BT1 6DN
Bankers
Danske Bank Limited 6 High Street Ballymoney, BT53 6AD
Danske Bank Ltd 49-51 University Road Belfast, BT7 1ND
Solicitors
King & Gowdy 298 Upper Newtownards Road Belfast, BT4 3EJ
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DocuSign Envelope ID: 93D6A938-DF5C-4319-81CE-119A4D9014B1
Covenanter Residential Association Limited Year Ended 31 March 2023
Report of the Board of Management for the year ended 31 March 2023
The Board present their report together with the financial statements for the year ended 31 March 2023.
Principal activities
Covenanter Residential Association Limited (‘the Association’) was formed by Dr Hugh Blair and several members of the Reformed Presbyterian Church of Ireland. The Association is registered under the Co-operative and Community Benefit Societies Act (Northern Ireland) 2016, (formerly the Industrial and Provident Societies Act (Northern Ireland) 1969) (Registered Number IP000171) and is also a registered charity with the Charity Commission (NIC107019).
The objectives of the Association are set out in its rules, namely:
-
a. to carry on for the benefit of the community, the business of providing housing and any associated amenities for persons in necessitous circumstances upon terms appropriate to their means;
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b. to provide for aged persons, in need thereof, housing and any associated amenities specially designed or adapted to meet the disabilities and requirements of such persons.
The Association is committed to putting residents and tenants first and the Board actively seeks their views and engages with them to ensure governance with real transparency, accountability, and integrity.
The Association registered with the Department of the Environment as a Housing Association and was provided grant funding to purchase land adjacent to Ballymoney Reformed Presbyterian Church and build a flats complex on the site. The flats complex (‘Covenanter Flats’) opened in 1979.
In the 1980s a further facility was purchased by the Association in Elmwood Avenue, Belfast (‘Renwick House’) to provide accommodation for young adults.
Covenanter Flats is designated as social housing and provides 27 units of accommodation for the elderly.
Renwick House is not designated as social housing and provides hostel accommodation for 14 young adults. Renwick House is a four-storey terraced house in the University area and is specifically aimed at students and young persons aged 18 to 25 coming to Belfast for the first time for work or study who need safe, short term, serviced accommodation at economic rents. The accommodation comprises fully furnished, single or shared study bedrooms, with ensuite shower rooms.
The Board has full responsibility for the Association’s finance and corporate governance. It oversees the daily operation of the Association and ensures it is compliant with and operates within all applicable laws, regulations, and policies. The Board has given due consideration to the Charity Commission’s guidance on public benefit and considers the Association’s aims and objectives to be in accordance with the regulations on public benefit. The Association complies with DfC Regulatory Standards.
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Covenanter Residential Association Limited Year Ended 31 March 2023
Value for Money
The Association is committed to delivering Value for Money (VfM) by continuous performance improvement. This is a key principle of the Association’s business plan which aims to deliver VfM under its business objectives: Finance standard, Governance standard and Customer focused. Achieving a balance of progress against the specific targets within these themes will ensure we remain true to our core values, and we believe, ensure success.
We continue to benchmark our services against our peers and other relevant measures, mainly from the NI Federation of Housing Associations (NIFHA) and Department for Communities (DfC), to prioritise areas for focus.
The Board consider VfM in terms of the maximum outcomes for the minimum cost of service provision. The Association therefore strives to provide quality homes at reasonable cost. There was an annual rent increase of 2.9% in 2022/2023.
The Association has always benefitted from volunteerism, with many of our committee members and shareholders undertaking tasks on behalf of the Association such as actively participating in the provision of weekly lunches. This type of practical contribution enables the Association to keep costs to a minimum.
The Association activities that contribute to VfM include:
-
Key performance indicators which encourage efficient and effective services and behaviours
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Continual review of services and suppliers
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Delivering maximum value to the customer while minimising costs
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Working effectively and efficiently while maintaining and improving the service to our customers by making the best use of resources
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Effective procurement of services including use of joint procurement with another Housing Association to combine purchasing power
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A system of quality assurance checks on work carried out by service providers
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Tenant satisfaction surveys and engagement to assess quality of services provided from an end user perspective, thereby understanding their definition of value, and focusing on the right things and doing the right things
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Ongoing investment in our properties, ensuring high standard accommodation.
Understanding value for money is as essential as managing and demonstrating it.
The Association’s Board leads the approach to value for money by setting the strategic vision and purpose. The Association is also focused and determined to secure VfM into the future.
We will continue to review opportunities for VfM in 2023/2024, with the assistance of Connon Associates Limited, Chartered Accountants, coupled with ongoing benchmarking within the sector.
Going Concern
The Board has assessed its 24-month Forecasts under various scenarios, including a significant increase in inflation and energy costs, on its operating results and financial position and 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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Covenanter Residential Association Limited Year Ended 31 March 2023
Financial results
The surplus for the year was £49,014 compared to a surplus of £86,878 for the previous year.
Regulation
The Association’s principal regulator is the Department for Communities (DfC). The Association complies with DfC’s Regulatory Standards.
Under the Regulatory Framework for Registered Housing Association in Northern Ireland (RHAs), RHAs are assessed annually against 3 standards namely: Governance, Finance and Consumer.
In the Association’s most recent Regulatory Judgement Report 2020/2021, Housing Regulation Branch determined a judgement rating of 2; meets the requirements but needs to improve in some areas in order to ensure continued compliance. The Governance, Consumer and Finance standards were all met. The Housing Regulation Branch has acknowledged that progress has been made to address the weaknesses identified in the 2019/20 Regulatory Judgement Report and the associated action plan. The anticipated Level of Engagement for 2021/22 is Level 1.
Internal controls
The Board of Management is responsible for the Association’s system of internal controls and for reviewing its effectiveness. Such a system is designed to manage and reduce, rather than to eliminate, the risk of failure to achieve business objectives. It can provide only reasonable, and not absolute, assurance against material misstatement or loss.
We operate ongoing processes for identifying, evaluating, and managing the significant risks faced by the Association. They have been in place for the year to 31 March 2023 and up to the date of the approval of the Annual Report and the Financial Statements. The processes are reviewed at least annually by the Board.
The key elements of the control system in operation are:
-
The Board has adopted a formal schedule of matters reserved for its approval ensuring it maintains responsibility for overall strategy, approval of all property transactions and other major capital expenditure projects;
-
There is an organisation structure with clearly defined lines of responsibility and delegation of authority; and
-
Detailed budgets are prepared covering the Association’s business which are reviewed and approved by the Board of Management. Actual results are compared against budget and appropriate action identified and initiated.
Statement of the responsibilities of the Board of Management
The Board of Management is responsible for preparing the Board of Management's Report and the financial statements in accordance with applicable laws and regulations.
The Board of Management is required by law to prepare financial statements for each financial year which give a true and fair view of the state of affairs of the Association and of its surplus or deficit for that period. In preparing these financial statements, the Board of Management are required to:
-
select suitable accounting policies and then apply them consistently;
-
make judgments and accounting estimates that are reasonable and prudent;
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Covenanter Residential Association Limited Year Ended 31 March 2023
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state whether applicable accounting standards have been followed, subject to any material departures disclosed and explained in the financial statements;
-
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Association will continue in operation.
The Board of Management are responsible for keeping adequate accounting records that disclose with reasonable accuracy at any time the financial position of the Association and enable them to ensure that the financial statements comply with the Co-operative and Community Benefit Societies Act (Northern Ireland) 2016, (formerly the Industrial and Provident Societies Act (Northern Ireland) 1969). They are also responsible for safeguarding the assets of the Association and for taking reasonable steps for the prevention and detection of fraud and other irregularities.
Statement of disclosure to auditors
So far as each of the members of the Board of Management are aware at the date of approval of these financial statements:
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there is no relevant audit information of which the Association’s auditors are unaware; and
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they have taken all the steps that they ought to have taken in order to make themselves aware of any relevant audit information and to establish that the Association’s auditors are aware of that information.
Auditors
A resolution to reappoint ASM (B) Ltd will be proposed at the Annual General Meeting.
On behalf of the Board of Management
Nathan Hawthorne Chair
Sarah Galway Secretary
Date: 11[th] September 2023
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Covenanter Residential Association Limited Year Ended 31 March 2023
Independent Auditor’s Report
Opinion
We have audited the financial statements of Covenanter Residential Association Limited (“the Association”) for the year ended 31 March 2023 which comprises the statement of comprehensive income, the statement of changes in equity, the statement of financial position and the related notes to the financial statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 – The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice) and the Housing SORP: Statement of Recommended Practice 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 Association’s affairs as at 31 March 2023 and of its surplus for the year then ended;
-
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and have been properly prepared in accordance with the requirements of the Co-operative and Community Benefit Societies Act (Northern Ireland) 2016 (formerly the Industrial and Provident Societies Act (Northern Ireland) 1969).
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 Association 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 those requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to going concern
We have nothing to report in respect of the following matters in relation to which the ISAs (UK) require us to report to you were:
-
the Board of Management’s use of the going concern basis of accounting in the preparation of the financial statements is not appropriate; or
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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 to 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.
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Covenanter Residential Association Limited Year Ended 31 March 2023
Independent Auditor’s Report (cont’d)
Other information
The other information comprises the information included in the Report of the Board of Management other than the financial statements and our auditor’s report thereon. The Board of Management is responsible for the other information. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information and, in so doing, consider whether the other information is materially inconsistent with the financial statements, or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
Opinion on other matters prescribed by the Companies Act
In our opinion, based on the work undertaken in the course of the audit;
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the information given in the Report of the Board of Management for the financial year for which the financial statements are prepared is consistent with the financial statements; and
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the Report of the Board of Management has been prepared in accordance with applicable legal requirements.
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the Association and its environment obtained in the course of the audit, we have not identified material misstatements in the Report of the Board of Management.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion;
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adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
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the financial statements are not in agreement with the accounting records and returns; or
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we have not received all the information and explanations we require for our audit.
Responsibilities of the board of management
As explained more fully in the Board of Management responsibilities statement, the Board of Management is responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the Board of Management determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.
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Covenanter Residential Association Limited Year Ended 31 March 2023
Independent Auditor’s Report (cont’d)
In preparing the 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 alternative but to do so.
Auditor’s responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists.
Misstatements can arise from fraud or error and are considered material if, individually or in aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:
- We considered the opportunities and incentives that may exist within the organisation for fraud and identified the greatest potential for fraud in the following area: posting of unusual journals along with complex transactions. We discussed these risks with client management, tested a sample of journals to confirm they were appropriate and reviewed areas of judgement for indicators of management bias to address these risks.
A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council’s website at www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditors’ report.
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) 2016 (formerly the Industrial and Provident Societies Act (Northern Ireland) 1969). Our audit work has been undertaken so that we might state to the Board of Management those matters that we are required to state to them in an auditors’ 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 Society and the Board of Management, for our audit work, for this report, or for the opinion we have formed.
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Covenanter Residential Association Limited Year Ended 31 March 2023
B Clerkin (Senior Statutory Auditor) for and on behalf of ASM (B) Ltd Statutory Auditor Glendinning House 6 Murray Street Belfast BT1 6DN
11[th] September 2023
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Covenanter Residential Association Limited Year Ended 31 March 2023
Statement of Comprehensive Income
For the year ended 31 March 2023
| Notes Turnover 3 Operating costs 3 Operating surplus 3 Interest and financing income Surplus for the year |
2023 £ 273,870 **(224,857) ** |
2022 £ 256,468 (169,592) |
|---|---|---|
| 49,013 1 49,014 |
86,876 2 |
|
| 86,878 |
The results relate wholly to continuing activities.
There was no other comprehensive income for the year (2022: £nil).
The notes on pages 14 to 25 form part of these financial statements.
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Covenanter Residential Association Limited Year Ended 31 March 2023
Statement of Changes in Equity
For the year ended 31 March 2023
| Balance at 1 April 2022 Surplus Movement in share capital Balance at 31 March 2023 |
2023 Share Capital Capital reserve Revenue reserve Total £ £ £ £ 35 87 318,657 318,779 - - 49,014 49,014 (15) 15 -- 20 102 367,671 367,793 |
2022 Total £ 231,898 86,878 3 |
|---|---|---|
| 318,779 |
The notes on pages 14 to 25 form part of these financial statements.
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DocuSign Envelope ID: 93D6A938-DF5C-4319-81CE-119A4D9014B1
Covenanter Residential Association Limited
Year Ended 31 March 2023
Statement of Financial Position
As at 31 March 2023
| Notes Fixed assets Housing properties 8 Other tangible fixed assets 10 Current assets Trade and other debtors 11 Cash and cash equivalents Less: Creditors: amounts falling due within one year 12 Net current assets / liabilities Total assets less current liabilities Creditors: amounts falling due after more than one year 12 Total net assets Reserves Share capital 16 Revenue reserve 17 Capital reserve 18 Total reserves |
2023 £ 1,027,090 28,177 1,055,267 23,913 308,325 332,238 105,871 226,367 1,281,634 913,841 367,793 20 367,671 102 367,793 |
2022 £ 1,067,146 31,563 |
|---|---|---|
| 1,098,709 | ||
| 17,356 246,644 |
||
| 264,000 | ||
| 102,230 | ||
| 161,770 | ||
| 1,260,479 | ||
| 941,700 | ||
| 318,779 | ||
| 35 318,657 87 |
||
| 318,779 |
These financial statements were approved by the Board of Management and authorised for issue on 11[th] September 2023 and are signed on its behalf by:
Nathan Hawthorne Director (Chair)
Roger Sloan Director (Treasurer)
Sarah Galway Director (Secretary)
The notes on pages 14 to 25 form part of these financial statements.
Registered No: IP000171
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Covenanter Residential Association Limited Year Ended 31 March 2023
Statement of Cashflows
For the year ended 31 March 2023
| Notes Cash flow from operating activities Surplus for the year Adjustments for non-cash items: Depreciation of tangible fixed assets 8, 10 Amortisation of housing association grant 13 Decrease / (increase) in trade and other debtors 11 Increase / (decrease) in trade and other creditors 12 Adjustments for investing or financing activities: Interest received Net cash used in operating activities Cash flow from investing activities Interest received Net cash generated from investing activities Cash flow from financing activities Share capital issued 16 Net cash used in financing activities Net change in cash and cash equivalents Cash and cash equivalents at beginning of the year Cash and cash equivalents at end of the year |
2023 £ 49,014 43,442 (44,461) (6,557) 20,243 (1) 61,680 1 1 - - 61,681 246,644 308,325 |
2022 £ 86,878 43,444 (44,461) (4,608) (32,106) (2) |
|---|---|---|
| 49,145 | ||
| 2 | ||
| 2 | ||
3 |
||
| 3 | ||
| 49,150 197,494 |
||
| 246,644 |
The notes on pages 14 to 25 form part of these financial statements.
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Covenanter Residential Association Limited Year Ended 31 March 2023
Notes to the financial statements
1. Legal status
Covenanter Residential Association Limited is a housing association registered in Northern Ireland in the United Kingdom under the Credit Unions and Co-operative and Community Benefit Societies (Northern Ireland) Act 2016 (formerly known as the Industrial and Provident Societies Act (Northern Ireland) 1969). The registered office of the Association is 8 Eastermeade Park, Ballymoney, BT53 6HP.
2. Accounting Policies
2.1 Basis of accounting
These financial statements have been prepared in accordance with Financial Reporting Standard 102 ‘The Financial Reporting Standard Applicable in the UK and Republic of Ireland’ and the Statement of Recommended Practice for Registered Social Housing Providers.
The financial statements are presented in Sterling (£), which is the functional currency of the Association.
2.2 Revenue recognition
Revenue is recognised when the Association has entitlement to the funds and it is probable that the income will be received and the amount is reliably measured.
Turnover includes income receivable from lettings, service charge receivable and income from Housing Association Grant (HAG).
2.3 Taxation
The Association is accepted as a charity by HMRC. Income and capital gains of the Association are generally exempt from tax if applied for charitable purposes.
The Association is not registered for VAT. All its income, including rental receipts, is exempt for VAT purposes.
2.4 Government and other grants
HAG is receivable from the Northern Ireland Housing Executive (NIHE) and is recognised in income over the useful life of the housing property assets under the accruals model.
HAG received in respect of revenue expenditure is credited to the income and expenditure account in the same period as the expenditure to which it relates.
HAG released on sale of a property may be repayable but is normally available to be recycled and is credited to the Disposal Proceeds Fund and included in the Statement of Financial Position within Creditors.
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Covenanter Residential Association Limited Year Ended 31 March 2023
2.5 Tangible fixed assets
Housing properties
Housing stock are properties held for the provision of social housing or to otherwise provide social benefit and are accounted for within tangible fixed assets. Housing properties are principally available for rent and are stated at cost less accumulated depreciation and any accumulated impairment losses. Cost includes the cost of acquiring land and buildings, development costs and interest charges incurred during the development period.
Works to existing properties which replace a component that has been treated separately for depreciation purposes, along with those works that result in an increase in net rental income over the lives of the properties, thereby enhancing the economic benefits of the assets, are capitalised as improvements.
Depreciation of Housing properties
The Association separately identifies the major components which comprise its housing properties, and charges depreciation, so as to write-down the cost of each component to its estimated residual value, on a straight line basis, over its estimated useful life. Land is not depreciated.
The Association depreciates the major components of its housing properties over the following lives:
| Structure / main fabric | - 100 years |
|---|---|
| Roof | - 60 years |
| Windows and doors | - 30 years |
| Primary heating unit | - 14 years |
| Kitchen | - 20 years |
| Bathroom | - 30 years |
| Mechanical systems | - 30 years |
| Electrics | - 40 years |
| Lifts | - 20 years |
Depreciation of other tangible fixed assets
For other tangible fixed assets, depreciation is charged on a straight-line basis over the expected useful lives as follows:
| Buildings | - 50 years |
|---|---|
| Fixtures and fittings | - 5 years |
2.6 Impairment
Housing properties are assessed annually for impairment indicators. Where indicators are identified an assessment for impairment is undertaken comparing the asset’s carrying amount to its recoverable amount. Where the carrying amount of an asset is deemed to exceed its recoverable amount, the asset is written down to its recoverable amount, this is likely to be the fair value in use of the asset based on its service potential. The resulting impairment loss is recognised as expenditure in income and expenditure. Where an asset
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Covenanter Residential Association Limited
Year Ended 31 March 2023
is currently deemed not to be providing service potential to the association, its recoverable amount is its fair value less costs to sell.
Other assets are reviewed for impairment if there is an indication that impairment may have occurred.
2.7 Employee benefits
Defined Contribution Pension
The Association operates a defined contribution scheme for certain employees through True Potential. A defined contribution plan is a pension plan under which the Association pays fixed contributions into a separate entity. Once the contributions have been paid the Association has no further payment obligations.
The contributions are recognised as an expense when they are due. Amounts not paid are included as accruals in the Statement of Financial Position. The assets of the plan are held separately from the Association in independently administered funds.
2.8 Tenants’ Services Fund
For certain schemes the Association is required to charge to the tenants an additional amount to fund the cost of common facilities. Annual surpluses or deficits are transferred to the Tenants’ Services Fund to equalise the financial position over the lifetime of the scheme.
2.9 Financial instruments
The Association only has financial assets and financial liabilities of a kind that qualify as basic financial instruments. Basic financial instruments are initially recognised at transaction value and subsequently measured at their settlement value.
2.10 Judgements in applying accounting policies and key sources of estimation uncertainty
No judgements have been made in the process of applying the above accounting policies (apart from those involving estimates). The following estimate has been made:
- (i) Useful economic lives of components of housing properties – this estimate has been derived using industry standards.
2.11 Going concern
The Board has assessed its 24-month Forecasts under various scenarios, including a significant increase in inflation and energy costs, on its operating results and financial position and 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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Covenanter Residential Association Limited Year Ended 31 March 2023
3. Turnover, Operating costs and operating surplus
| Social Housing Activities (Note 4) Non-Social Housing Activities (Note 4) |
Operating Turnover £ 217,062 56,808 273,870 |
2023 Operating Costs £ 194,766 30,091 224,857 |
Operating Surplus £ 22,296 26,717 49,013 |
2022 Operating Surplus £ 51,463 35,413 |
|---|---|---|---|---|
| 86,876 |
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Covenanter Residential Association Limited Year Ended 31 March 2023
4. Turnover, operating costs and operating surplus from housing activities
| Operating Income Rent Receivable Service Charges Receivable Rates Receivable Income from SHG/HAG Less: Voids Total Social Housing Income Operating Costs Service Costs Management costs Rates Payable Planned & Cyclical Maintenance Reactive Maintenance Depreciation of Housing Properties Other Depreciation Other Operating Costs Transfer (to) Tenants’ Services Fund (note 14) Total Social Housing Expenditure Operating surplus/(deficit) |
2023 Sheltered Housing Non-Social Housing Total £ £ £ 137,014 53,752 190,766 42,179 - 42,179 9,164 - 9,164 41,405 3,056 44,461 (12,700) - (12,700) 217,062 56,808 273,870 56,997 12,996 69,993 6,921 2,026 8,947 8,819 - 8,819 16,245 1,978 18,223 11,409 1,288 12,697 33,867 6,189 40,056 2,581 805 3,386 75,762 4,809 80,572 (17,835) - (17,835) 194,766 30,091 224,857 22,296 26,717 49,013* |
2022 Total £ 170,015 42,179 9,030 44,461 (9,217) |
|---|---|---|
| 256,468 | ||
| 57,025 9,923 (7,930) 17,434 4,439 40,056 3,388 55,058 (9,801) |
||
| 169,592 | ||
| 86,876 |
*Non-Social Housing Operating Income is classed as Rent receivable from occupied units and has not been split into Rent, Rates, Service Charge and Voids.
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Covenanter Residential Association Limited
Year Ended 31 March 2023
4. Turnover, operating costs and operating surplus from housing activities (cont’d)
| DfC Allowances Management allowances Management costs Surplus Maintenance allowances Planned and cyclical maintenance Reactive maintenance Deficit Technical & Non-technical income Technical Non-Technical Total |
2023 £ 10,692 6,921 3,771 12,528 (16,245) (11,409) (15,126) 2023 £ 14,839 227,270 242,109 |
2022 £ 10,692 (8,333) |
|---|---|---|
| 2,359 | ||
| 12,528 (16,033) (4,188) |
||
| (7,693) | ||
| 2022 £ 6,478 214,746 |
||
| 221,224 |
5. Surplus on ordinary activities
Surplus on ordinary activities is stated after charging / (crediting):
| 2023 | 2022 | |
|---|---|---|
| £ | £ | |
| Depreciation – owned tangible fixed assets | 43,442 | 43,444 |
| Amortisation of HAG | (44,461) | (44,461) |
| Auditor’s remuneration | ||
| - External audit of these financial statements |
9,000 | 6,000 |
| - Internal audit services |
2,295 | 1,020 |
19
DocuSign Envelope ID: 93D6A938-DF5C-4319-81CE-119A4D9014B1
Covenanter Residential Association Limited Year Ended 31 March 2023
6. Employee information
Average weekly number of employees during the financial year expressed as full-time equivalents is as follows:
| Housing, support and care Staff costs Wages and salaries Social security costs** Pension costs |
2023 No. 1.58 1.58 2023 £ 31,873 - 359 32,232 |
2022 No. 1.67 |
|---|---|---|
| 1.67 | ||
| 2022 £ 30,011 - 355 |
||
| 30,366 |
**Social security costs 2023 and 2022 are £nil as they were lower than the annual Employment Allowance.
7. Board of Management remuneration
The function of the key management personnel of the Association is carried out by the Board of Management. There was no remuneration paid to the board members of the Association (2022: £nil). Board members were paid out of pocket expenses totalling £186 (2022: £344).
20
DocuSign Envelope ID: 93D6A938-DF5C-4319-81CE-119A4D9014B1
Covenanter Residential Association Limited Year Ended 31 March 2023
8. Tangible fixed assets – Housing properties
| Cost or valuation At 1 April 2022 Additions Disposals At 31 March 2023 Depreciation and impairment At 1 April 2022 Charge for the year Eliminated on disposal At 31 March 2023 Net book value At 31 March 2023 At 31 March 2022 |
Housing properties held for letting £ 2,047,225 - - |
|---|---|
| 2,047,225 | |
| 980,079 40,056 - |
|
| 1,020,135 | |
| 1,027,090 | |
| 1,067,146 |
9. Housing Stock
Number of units owned and managed at year end
| Self-Contained Sheltered Housing Total Self-Contained Units at year end Not Self-Contained General Needs Housing (non-social housing) Total Not Self-Contained at year end Total Units Owned and Managed at year end |
2023 Units 27 27 2023 Units 14 14 41 |
2022 Units 27 |
|---|---|---|
| 27 | ||
| 2022 Units 14 |
||
| 14 | ||
| 41 |
21
DocuSign Envelope ID: 93D6A938-DF5C-4319-81CE-119A4D9014B1
Covenanter Residential Association Limited Year Ended 31 March 2023
10. Other tangible fixed assets
| Buildings Fixtures and Fittings Total £ £ £ Cost or valuation At 1 April 2022 123,123 3,853 126,976 Additions - - - Disposals - - - At 31 March 2023 123,123 3,853 126,976 Depreciation At 1 April 2022 92,496 2,917 95,413 Charge for the year 2,450 936 3,386 Eliminated on disposal - - - At 31 March 2023 94,946 3,853 98,799 Net book value At 31 March 2023 28,177 - 28,177 At 31 March 2022 30,627 936 31,563 11. Debtors 2023 £ Gross rental debtors – technical 246 Gross rental debtors – non-technical 2,708 Net rental debtors 2,954 Prepayments and accrued income 5,643 Tenant Services Fund (undercharged and recoverable) (note 14) 14,261 Other taxes and social security 54 Other debtors 1,001 23,913 |
2022 £ 2 9,411 |
|---|---|
| 9,413 4,710 - 2,145 1,088 |
|
| 17,356 |
22
DocuSign Envelope ID: 93D6A938-DF5C-4319-81CE-119A4D9014B1
Covenanter Residential Association Limited Year Ended 31 March 2023
12. Creditors
Amounts falling due within 1 year
| Deferred Housing Association Grant (note 13) Accruals and deferred income Rent and service charges received in advance Tenants’ Services Fund (note 14) Trade payables Tenants' deposits Other creditors mounts falling due after more than 1 year Deferred Housing Association Grant (note 13) Deferred grant At 1 April 2022 Released to income in the year At 31 March 2023 |
2023 £ 27,859 25,920 3,090 - 42,793 1,400 4,809 105,871 2023 £ 913,841 913,841 2023 £ 986,161 (44,461) 941,700 |
2022 £ 44,461 19,759 3,346 3,574 25,655 1,300 4,135 |
|
|---|---|---|---|
| 102,230 | |||
| 2022 £ 941,700 941,700 2022 £ 1,030,622 (44,461) |
|||
| 986,161 |
Amounts falling due after more than 1 year
13. Deferred grant
Deferred grant consists of Housing Association Grant (HAG) originally received less accumulated amortisation. HAG is amortised over the life of the associated assets in line with the Housing SORP. Although the unamortised HAG liability reported is £941,700 the liability to repay this HAG to the Department for Communities expired in May 2019.
23
DocuSign Envelope ID: 93D6A938-DF5C-4319-81CE-119A4D9014B1
Covenanter Residential Association Limited Year Ended 31 March 2023
14. Tenants’ Services Fund
| Income Service Charge Income Service Charge Voids Total Income Operating Costs Cleaning Electricity Gas Heating Ground Maintenance Maintenance of Communal Areas Support/emergency response system Salaries Pensions Costs Administration cost Total Operating Costs Deficit for the year At 1 April 2022 Deficit for the year At 31 March 2023 |
Sheltered Housing £ 42,179 (3,017) |
|---|---|
| 39,162 | |
| 817 8,483 13,118 3,304 6,077 937 18,705 374 5,182 |
|
| 56,997 | |
| (17,835) | |
| 3,574 (17,835) |
|
| (14,261) |
15. Contingent Liabilities
HAG Liability
The liability to reimburse the Department for Communities expired in May 2019.
16. Share capital
Ordinary shares of [£1] each fully paid:
At 1 April 2022 Issued in the year Transferred to capital reserve At 31 March 2023 |
2023 £ 35 - (15) 20 |
2022 £ 38 3 (6) |
|---|---|---|
| 35 |
24
DocuSign Envelope ID: 93D6A938-DF5C-4319-81CE-119A4D9014B1
Covenanter Residential Association Limited Year Ended 31 March 2023
17. Revenue reserves
| At 1 April 2022 Surplus for the year At 31 March 2023 |
2023 £ 318,657 49,014 367,671 |
2022 £ 231,779 86,878 |
|---|---|---|
| 318,657 |
18. Capital reserves
| At 1 April 2022 Transferred from share capital At 31 March 2023 |
2023 £ 87 15 102 |
2022 £ 81 6 |
|---|---|---|
| 87 |
19. Related party transactions
Board members were paid out of pocket expenses totalling £186 (2022: £344). All expenditure relates to the reimbursement of expenses to enable members to perform their duties and all such expenditure occurs under normal operating terms. There were no other related party transactions.
25