COVENANTER RESIDENTIAL ASSOCIATION LIMITED REPORT AND FINANCIAL STATEMENTS ASM (B) Ltd Chartered Accountants and Registered Auditor 20 Rosemary Street Belfast BT1 1QD
COMMITTEE OF MANAGEMENT Mr J O Neill (Chairperson) Mr J Campbell (Treasurer) Miss Z Carson Mr J Cubitt Mr R Quigg Mr A Smith Mrs D Hazelton Mrs Galway (co-opted) REGISTERED OFFICE Covenanter Flats 8 Eastermeade Park Ballymoney BT53 6HP Registered under the Industrial and Provident Societies Act (Northern Ireland) 1969 No IP 171 Registered as a housing association with the Department for Social Development (Northern Ireland), Registered No R7 AUDITOR SECRETARY ASM (B) Ltd 20 Rosemary Street Belfast BT1 1QD Mrs V McKay BANKERS Danske Bank Ltd Danske Bank Ltd 6 High Street 49-51 University Road Ballymoney Belfast BT53 6AD BT7 1ND SOLICITORS King & Gowdy 298 Upper Newtownards Road Belfast BT4 3EJ - 1 -
CONTENTS Pages Management committee report 3-4 Auditor s report 5-6 Statement of comprehensive income 7 Statement of changes in equity 8 Statement of financial position 9 Statement of cash flows 10 Notes to the statement of cash flows 11 Notes to the financial statements 12-24 Appendix 1: Statement of housing administration costs 25 Appendix 2: Apportionment of administration costs 26 Appendix 3: Property revenue account 27 Appendix 4: General income and expenditure account 28 Appendix 5: Tenants services account 29-2 -
REPORT OF THE COMMITTEE OF MANAGEMENT The Committee present their report together with the financial statements for the year ended 31 March 2016. MANAGEMENT COMMITTEE S RESPONSIBILITIES The Committee 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 as at the end of the financial year and of the surplus or deficit for that period. The Committee confirms that suitable accounting policies have been used and applied consistently and reasonable and prudent judgements and estimates have been made in the preparation of the financial statements for the year ended 31 March 2016. The Committee also confirms that applicable accounting standards have been followed and that the financial statements have been prepared on the going concern basis. The Committee is responsible for keeping proper accounting records, for safeguarding the assets of the Association and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. PRINCIPAL ACTIVITIES The Association is a registered non-profit making housing association providing housing accommodation for those in need. RESULTS The deficit for the year was (33,543) compared with a re-stated surplus of 7,430 for the previous year. COMMITTEE OF MANAGEMENT Mrs D Hazelton and Mr A Smith retire by rotation and being eligible, offer themselves for re-election. Mrs Galway, being a co-optee, resigned and being eligible, offers herself for election. Members attendances at meetings during the course of the year were as follows: Members Members Attendance Mr J O Neill 5/5 Mr J Campbell 2/5 Miss Z Carson 5/5 Mr J Cubitt 4/5 Mr R Quigg 4/5 Mr A Smith 0/5 Mrs D Hazelton 3/5 Mrs Galway 0/5-3 -
REPORT OF THE COMMITTEE OF MANAGEMENT (continued) INTERNAL CONTROLS The Committee 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 2016 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 Committee. The key elements of the control system in operation are: The Committee of Management 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. Detailed budgets are prepared covering the Association s business which are reviewed and approved by the Committee of Management. Actual results are compared against budget and appropriate action identified and initiated. AUDITORS Crawford Sedgwick & Co has merged with ASM Chartered Accountants and this newly merged practice has indicated a willingness to continue in office. A resolution concerning their appointment will be proposed at the Annual General Meeting. By order of the Committee Mrs V McKay Secretary - 4 -
INDEPENDENT AUDITOR S REPORT TO THE MEMBERS We have audited the financial statements of Covenanter Residential Association Limited for the year ended 31 March 2016 which comprises the statement of comprehensive income, the statement of financial position, the statement of cash flows and the related notes. These financial statements have been prepared under the accounting policies set out therein. This report is made solely to the Association s members, as a body, in accordance with Section 43 of the Industrial and Provident Societies (Northern Ireland) Acts 1969 to 2006 and the Registered Housing Associations (Accounting Requirements) Order (Northern Ireland) 1993. Our audit work has been undertaken so that we might state to the Association s members those matters we are required to state to them in an auditor s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Association and the Association s members as a body, for our audit work, for this report, or for the opinions we have formed. RESPECTIVE RESPONSIBILITIES OF THE COMMITTEE OF MANAGEMENT AND THE AUDITORS As described more fully in the report of the Committee of Management, the Association s Committee of Management is responsible for the preparation of the financial statements in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), and for being satisfied they give a true and fair view. It is our responsibility to audit and express an opinion on the financial statements in accordance with relevant legal and regulatory requirements and International Standards on Auditing (UK and Ireland). Those standards require us to comply with the Auditing Practices Board s Ethical Standard for Auditors. We report to you our opinion as to whether the financial statements give a true and fair view and are properly prepared in accordance with applicable law. We also report to you if, in our opinion, the report of the Committee of Management is not consistent with the financial statements, if the Association has not kept proper accounting records, if we have not received all the information and explanations we require for our audit, or if information specified by law regarding board members remuneration and transactions with the Association is not disclosed. We review whether the statement on page 3 reflects the Association s compliance with the Department for Social Development s Code of Practice ( the Code ) and we report whether the Committee of Management has provided the disclosures required by the Code and whether the statement is not consistent with the information of which we are aware from our audit of the financial statements. We are not required to form an opinion on the effectiveness of the Association s system of internal control. SCOPE OF THE AUDIT OF THE FINANCIAL STATEMENTS An audit involves obtaining evidence about the amounts and disclosures in the financial statements sufficient to give reasonable assurance that the financial statements are free from material misstatement, whether caused by fraud or error. This includes an assessment of whether the accounting policies are appropriate to the Association s circumstances and have been consistently applied and adequately disclosed; the reasonableness of significant accounting estimates made by the Committee; and the overall presentation of the financial statements. In addition, we read all the financial and non-financial information in the financial statements to identify material inconsistencies with the audited financial statements and to identify any information that is apparently materially incorrect based on, or materially consistent with, the knowledge acquired by us in the course of performing the audit. If we become aware of any apparent misstatements or inconsistencies we consider the implications for our report. - 5 -
INDEPENDENT AUDITOR S REPORT TO THE MEMBERS (continued) OPINION In our opinion the financial statements: give a true and fair view, in accordance with UK Generally Accepted Accounting Practice, of the state of the Association s affairs at 31 March 2016 and of its deficit and cash flows for the year then ended; have been properly prepared in accordance with the requirements of the Industrial and Provident Societies Acts (Northern Ireland) 1969 to 2006 and the Registered Housing Associations (Accounting Requirements) Order (Northern Ireland) 1993; and the information given in the Report of the Committee of Management is consistent with the financial statements. MATTERS ON WHICH WE ARE REQUIRED TO REPORT BY EXCEPTION We have nothing to report in respect of the following matters where the Industrial Provident Societies Acts 1969 to 2006 require us to report to you if, in our opinion: a satisfactory system of control over transactions has not been maintained; or the Association has not kept proper accounting records; or the financial statements are not in agreement with the books of account; or we have not received all the information and explanations we need for our audit. 20 Rosemary Street B Clerkin (Senior Statutory Auditor) Belfast For and on behalf of BT1 1QD ASM (B) Ltd Chartered Accountants & Statutory Auditor (date) - 6 -
STATEMENT OF COMPREHENSIVE INCOME Re-stated 2016 2015 Notes TURNOVER 3 201,801 208,523 Operating costs 3 (219,310) (172,834) OPERATING (DEFICIT)/SURPLUS 3 (17,509) 35,689 Other income/(expenditure) - - Interest receivable 6-1 Bank interest and charges payable 7 (25) (197) (DEFICIT)/SURPLUS ON ORDINARY ACTIVITIES BEFORE TAXATION 8 (17,534) 35,493 Tax on surplus on ordinary activities 9 - - (DEFICIT)/SURPLUS ON ORDINARY ACTIVITIES AFTER TAXATION (17,534) 35,493 Transfer (to) tenants services fund (16,009) (28,063) (DEFICIT)/SURPLUS FOR THE YEAR (33,543) 7,430 REVENUE RESERVES BROUGHT FORWARD 294,936 287,506 REVENUE RESERVES CARRIED FORWARD 261,393 294,936 ======= ======= The Association has no recognised gains and losses other than the above. All the Association s activities are classified as continuing. - 7 -
STATEMENT OF CHANGES IN EQUITY Share Capital Revenue Designated Capital Reserves Reserves Reserves Total At 1 April 2014 68 40 339,431 33,014 372,553 Prior year adjustment - - (51,925) - (51,925) At 1 April 2014 re-stated 68 40 287,506 33,014 320,628 Surplus for the year - - 7,430-7,430 Transfer to capital reserves (4) 4 - - - Issued during the year 3 - - - 3 Expenditure from designated reserves - - - (299) (299) Total comprehensive income for the year (1) 4 7,430 (299) 7,134 At 31 March 2015 67 44 294,936 32,715 327,762 ======= ====== ====== ======= ======== Surplus/(deficit) for the year - - (33,543) - (33,543) Expenditure from designated reserves - - - (112) (112) Total comprehensive income for the year - - (33,543) (112) (33,655) At 31 March 2016 67 44 261,393 32,603 294,107 ======= ====== ====== ======= ======== - 8 -
STATEMENT OF FINANCIAL POSITION AT 31 MARCH 2016 Re-stated 2016 2015 Notes FIXED ASSETS Housing land and buildings: 10 Cost 2,076,954 2,076,954 Depreciation (812,990) (775,721) 1,263,964 1,301,233 Other fixed assets 11 46,591 51,198 1,310,555 1,352,431 CURRENT ASSETS Debtors 12 5,466 3,314 Cash and bank balances 215,780 225,571 221,246 228,885 CURRENT LIABILITIES Creditors 13 (120,428) (118,958) NET CURRENT ASSETS 100,818 109,927 TOTAL ASSETS LESS CURRENT LIABILITIES 1,411,373 1,462,358 ======= ======= CREDITORS DUE AFTER MORE THAN ONE YEAR 1,117,266 1,134,596 FINANCED BY: SHARE CAPITAL 15 67 67 CAPITAL RESERVES 16 44 44 REVENUE RESERVES 17 261,393 294,936 DESIGNATED RESERVES 20 32,603 32,715 1,411,373 1,462,358 ======= ======= These financial statements were approved by the Committee of Management and authorised for issue on, and are signed on its behalf by: ) COMMITTEE MEMBER ) COMMITTEE MEMBER ) SECRETARY Belfast: - 9 -
STATEMENT OF CASH FLOWS 2016 2015 Notes NET CASH INFLOW FROM OPERATING ACTIVITIES 1 (9,654) 69,839 RETURNS ON INVESTMENTS AND SERVICING OF FINANCE 2 (25) (197) CAPITAL EXPENDITURE AND FINANCIAL INVESTMENT 2 - (1,503) CASH INFLOW BEFORE USE OF LIQUID RESOURCES AND FINANCING (9,679) 68,139 FINANCING 2 - - (9,679) 68,139 ====== ====== RECONCILIATION OF NET CASH FLOW TO MOVEMENTS IN NET DEBTS (Note 3) Increase in cash in period (9,679) Cash outflow from comfort fund (112) Cash inflow from comfort fund - Movement in net funds in the period (9,791) Net funds at 1 April 2015 225,571 Net funds at 31 March 2016 215,780 ======= - 10 -
NOTES TO STATEMENT OF CASH FLOWS 1. RECONCILIATION OF OPERATING SURPLUS/(DEFICIT) TO OPERATING CASHFLOWS Re-stated 2016 2015 Operating surplus (17,509) 35,689 Depreciation 41,876 42,980 Amortisation of grant (17,329) (17,329) Movements in: Trade debtors - - Other debtors (2,151) 1,347 Creditors less than one year 8,444 35,215 TSF transfer (22,985) (28,063) (9,654) 69,839 ====== ====== 2. ANALYSIS OF CASH FLOWS FOR HEADINGS NETTED IN THE CASH FLOW STATEMENT Returns on investment and servicing of financing Interest received - Bank charges (25) Net cash (outflow) for returns on investment and servicing of finance (25) ====== Capital expenditure and financial investment Other fixed assets - Housing, land and buildings - Capital grant received - Proceeds from sale of equipment - Major repairs spend - Net cash inflow/(outflow) for capital expenditure and financial investment - ====== Financing Loan principal repayments - Share capital issued - Net cash inflow/(outflow) from financing - ====== 3. ANALYSIS OF CHANGES IN NET FUNDS Other At 01/04/15 Cashflows changes At 31/03/16 Cash in hand, at bank 225,571 (9,791) - 215,780 Debt due within one year - - - - Debt due after one year - - - - 225,571 (9,791) - 215,780 ====== ====== ====== ====== - 11 -
NOTES TO THE FINANCIAL STATEMENTS 1. Statement of compliance These financial statements have been prepared in compliance with FRS 102, 'The Financial Reporting Standard applicable in the UK and the Republic of Ireland and the Housing SORP 2014: Statement of Recommended Practice for social housing providers issued by the National Housing Federation. 2. Accounting policies Basis of accounting The financial statements have been prepared on the historical cost basis, as modified by the revaluation of certain financial assets and liabilities and investment properties measured at fair value through profit or loss. The financial statements are prepared in sterling, which is the functional currency of the entity. Transition to FRS 102 The entity transitioned from previous UK GAAP to FRS 102 as at 1st April 2014. Details of how FRS 102 has affected the reported financial position and financial performance is given in note 23. Revenue recognition Turnover comprises income receivable from lettings and service charges, fees receivable, grants and other income. Income tax The Association is accepted as a charity by the HMRC. Income and capital gains of the Association are generally exempt from tax if applied for charitable purposes. Value Added Tax The Association is not registered for VAT. All of its income, including rental receipts, is exempt for VAT purposes. Operating leases Rentals applicable to operating leases where substantially all of the benefits and risks of ownership remain with the lessor are charged against profits as incurred. Tangible assets Housing Stock Housing properties are properties held for the provision of social housing or to otherwise provide social benefit. 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, 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. - 12 -
NOTES TO THE FINANCIAL STATEMENTS 2. Accounting policies (continued) 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. The Association depreciates the major components of its housing properties at the following annual rates: Land - Not depreciated Structure/main fabric - Over 100 years Roof - Over 60 years Windows and doors - Over 30 years Primary heating unit - Over 14 years Kitchen - Over 20 years Bathroom - Over 30 years Mechanical systems - Over 30 years Electrics - Over 40 years Lifts - Over 20 years Depreciation of other fixed assets For other tangible fixed assets, depreciation is charged on a straight-line basis over the expected useful lives of the assets to write off the cost, less estimated residual values over the following expected lives: Leasehold building - 2% Office furniture and equipment - 20% Impairment Annually housing properties are assessed 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 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. - 13 -
NOTES TO THE FINANCIAL STATEMENTS 2. Accounting policies (continued) Tenants Services Fund For certain schemes the Association is required to charge to the tenants an additional amount to fund the costs of common facilities. Annual surpluses and deficits are transferred to the tenants services fund to equalise the financial position over the lifetime of the scheme. Government and other grants Social housing grant (SHG) or HAG (Housing association grant) is receivable from the Northern Ireland Housing Executive (NIHE) and is recognised in income over the useful life of the housing property structure under the accruals model. HAG due or received in advance is included as a current asset or liability. 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 a the Disposal Proceeds Fund (DPF) and included in the statement of financial position in creditors. Finance leases and hire purchase contracts Assets held under finance leases and hire purchase contracts are recognised in the statement of financial position as assets and liabilities at the lower of the fair value of the assets and the present value of the minimum lease payments, which is determined at the inception of the lease term. Any initial direct costs of the lease are added to the amount recognised as an asset. Lease payments are apportioned between the finance charges and reduction of the outstanding lease liability using the effective interest method. Finance charges are allocated to each period so as to produce a constant rate of interest on the remaining balance of the liability. Defined benefit plans The Association participates in an industry-wide defined benefit salary pension scheme through the Northern Ireland Local Government Officers Superannuation Committee. The assets of the scheme are held separately from those of the Association. Pension scheme liabilities are measured on an actuarial basis using a projected unit method and are discounted to their present value. Pension scheme assets are valued at market value at the balance sheet date. - 14 -
NOTES TO THE FINANCIAL STATEMENTS 2. Accounting policies (continued) Financial instruments Financial instruments which meet the criteria of a basic financial instrument as defined in Section 11 of FRS 102 are accounted for under an amortised historical cost model. Non-basic financial instruments are recognised at fair value using a valuation technique with any gains or losses being reported in surplus or deficit. The Association classifies certain lease and leaseback leases as basic financial instruments whenever the terms of the lease transfer substantially all the risks and rewards of ownership of the leased asset to the group. Assets held as basic financial instruments are recognised initially at the fair value of the associated asset (or, if lower, the present value of minimum future payments) at the inception of the arrangement. The corresponding liability to the lessor is included in the statement of financial position as a loan obligation. Payments are apportioned between finance charges and reduction of the lease obligation using the effective interest method so as to achieve a constant rate of interest on the remaining balance of the liability. Finance charges are deducted in measuring profit or loss. Assets held under basic financial instruments are included in tangible fixed assets and depreciated and assessed for impairment losses in the same way as owned assets. Direct costs incurred in connection with the issue of a basic financial instrument are deducted from the proceeds of the issue, and amortised over the life of the instrument. - 15 -
NOTES TO THE FINANCIAL STATEMENTS 3. TURNOVER, OPERATING COSTS AND OPERATING SURPLUS Operating Turnover 2016 Operating Costs Operating Surplus/ (deficit) Re-stated 2015 Operating Surplus/ (deficit) Social Housing Activities 201,801 (219,310) (17,509) 35,689 Non-Social Housing Activities - - - - Total income 201,801 (219,310) (17,509) 35,689 ======= ======= ======= ======= - 16 -
NOTES TO THE FINANCIAL STATEMENTS 3. TURNOVER, OPERATING COSTS AND OPERATING SURPLUS OR DEFICIT FROM SOCIAL HOUSING ACTIVITIES General Needs Housing 2016 Sheltered Housing Re-stated 2015 Total Social Housing Income from social housing lettings: Rent receivable net of service charges 12,570 82,552 95,122 94,560 Service charges receivable 23,612 75,502 99,114 99,482 Gross income from rents and service charges 36,182 158,054 194,236 194,042 Less: voids (1,952) (7,812) (9,764) (2,848) Bad debts (rent and service charges) - - - - Government grants amortised 1,637 15,692 17,329 17,329 Net income 35,867 165,934 201,801 208,523 Operating costs: Services 11,236 71,869 83,105 73,823 Management costs 5,510 36,192 41,702 34,818 Maintenance administration costs - 5,532 5,532 3,512 Reactive maintenance 7,991 33,887 41,878 23,412 Planned and cyclical maintenance - 9,824 9,824 - Housing depreciation 5,794 31,475 37,269 37,269 Total operating costs 30,531 188,779 219,310 172,834 ======= ======= ======= ======= Operating surplus/(deficit) 5,336 (22,845) (17,509) 35,689 DSD Allowances: Management allowances 5,544 5,544 Management costs (5,510) (6,274) (Deficit) 34 (730) Maintenance Allowances 6,496 6,496 Planned and cyclical maintenance - - Reactive maintenance (7,991) (7,016) (Deficit) (1,495) (520) Gross income from rents and service charges Technical 12,917 6,657 Non-technical 181,319 187,385 Total (To add to total detailed above) 194,236 194,042 ======= ======= - 17 -
NOTES TO THE FINANCIAL STATEMENTS 4. DIRECTORS EMOLUMENTS There was no remuneration paid to the members of the Committee of Management. The Committee of Management were paid out of pocket expenses of 1,591 (2015: 1,091). 2016 2015 5 EMPLOYEE INFORMATION No No The average weekly number of persons employed during the year was: Warden 1 1 Secretary 1 1 2 2 ====== ====== Staff costs: Salaries 33,997 24,778 Other pension costs 2,213 1,806 36,210 26,584 ====== ====== 6. INTEREST RECEIVABLE Interest receivable - 1 ====== ====== 7. BANK INTEREST AND CHARGES PAYABLE On bank loans, overdrafts and other loans: (25) (197) ====== ====== 8. SURPLUS ON ORDINARY ACTIVITIES BEFORE TAXATION Surplus on ordinary activities before taxation is stated after charging: Depreciation - owned tangible fixed assets 41,876 42,980 Auditors remuneration Internal audit 2,052 - External audit 5,694 5,694 ====== ====== 9. TAXATION No provision for current or deferred taxation is necessary due to the charitable status of the association. - 18 -
NOTES TO THE FINANCIAL STATEMENTS PERIOD ENDED 31 MARCH 2016 10. FIXED ASSETS HOUSING, LAND AND BUILDINGS Re-stated 2016 2015 COST At beginning of year 2,076,954 2,076,954 Additions - - At end of year 2,076,954 2,076,954 DEPRECIATION At beginning of year 775,721 105,516 Prior year adjustment - 632,936 Re-stated at 1 April 775,721 738,452 Charge for year 37,269 37,269 Eliminated on disposals - - At end of year 812,990 775,721 NET BOOK VALUE At beginning of year 1,301,233 1,338,502 ======= ======= At end of year 1,263,964 1,301,233 ======= ======= Long leasehold land and buildings - cost 2,076,954 2,076,954 ======= ======= HOUSING STOCK Number of units owned and managed by the Association on 31 March: General Needs Housing 1 1 Sheltered Housing 27 27 28 28 ======= ======= - 19 -
NOTES TO THE FINANCIAL STATEMENTS 11. FIXED ASSETS - OTHER 2016 2015 COST At beginning of year 152,048 150,544 Additions - 1,504 Disposals - - At end of year 152,048 152,048 DEPRECIATION At beginning of year 100,850 95,139 Charge for year 4,607 5,711 Eliminated on disposals - - At end of year 105,457 100,850 NET BOOK VALUE At beginning of year 51,198 55,405 ======= ======= At end of year 46,591 51,198 ======= ======= 12. DEBTORS 2016 2015 Prepayments and accrued income 5,466 3,314 5,466 3,314 ======= ======= - 20 -
NOTES TO THE FINANCIAL STATEMENTS Re-stated 2016 2015 13. CREDITORS Amounts falling due within one year: Accruals and deferred income 13,828 25,599 Other creditors 617 3,385 Tenants services account 105,983 89,974 120,428 118,958 ====== ====== Amounts falling due after more than one year: Deferred income capital grants (note 14) 1,117,266 1,134,596 1,117,266 1,134,596 ====== ====== 14. DEFERRED CAPITAL GRANT At 1 April 2015 1,134,596 1,151,924 Grant received during the year - - Released to income during the year (17,329) (17,329) 1,117,266 1,134,596 ====== ====== Deferred capital grant is Housing Association Grant (HAG) originally received less accumulated amortisation. This was received to fund the development of the social housing properties of Covenanter. 2016 2015 15. SHARE CAPITAL Ordinary shares of 1 each fully paid: At beginning of year 67 68 Issued during the year - 3 Transfer to capital reserve - (4) 67 67 ====== ====== - 21 -
NOTES TO THE FINANCIAL STATEMENTS 16. CAPITAL RESERVES Balance brought forward 44 Transfer from share capital - Balance carried forward 44 ====== 17. REVENUE RESERVES Re-stated 2016 2015 At 1 April 2015 294,936 339,431 Prior year adjustment - (51,925) At 1 April 2015 as re-stated 294,936 287,506 Surplus for the year (33,543) 7,430 261,393 294,936 ======== ======== 18. PRIOR YEAR ADJUSTMENTS Adjustments following the adoption of FRS 102: (1) Recognition of grant income Previously, capital Housing Association Grant received was netted off against the cost of housing properties and the net cost of the individual components was depreciated. In line with the Housing SORP 2014 and FRS 102, grant received by the Association is now recognised as a deferred capital grant creditor and released to the Statement of Comprehensive Income, as income, over the useful life of the associated assets. The Association has elected to write off the deferred capital grant over the life of the building structure (100 years). The effect of this has been shown below: Income and expenditure account for the year ended 31 March 2015 As previously Effects of FRS 102 stated transition (as restated) Turnover 191,194 17,329 208,523 Operating costs (142,570) (30,264) (172,834) Operating surplus/(deficit) 48,624 (12,935) 35,689 Interest receivable 1-1 Interest payable (197) - (197) Surplus on ordinary activities 48,428 (12,935) 35,493 Transfer (to)/from tenants services account (28,063) - (28,063) Surplus for the year 20,365 (12,935) 7,430 ======= ======= ======== - 22 -
NOTES TO THE FINANCIAL STATEMENTS 18. PRIOR YEAR ADJUSTMENTS (continued) Balance sheet as at 31 March 2015 As previously Effects of FRS 102 stated transition (as restated) Tangible fixed assets Housing land and buildings 2,076,954-2,076,954 Less: depreciation (112,521) (663,200) (775,721) housing association grant (1,732,936) 1,732,936-231,497 1,069,736 1,301,233 Other fixed assets 51,198-51,198 282,695 1,069,736 1,352,431 Current assets Debtors 3,314-3,314 Cash and bank balances 225,571-225,571 228,885-228,885 Creditors: amounts falling due within one year (118,958) - (118,958) Net current assets 109,927-109,927 Total assets less current liabilities 392,622 1,069,736 1,462,358 ======= ======= ======== Creditors: amounts falling due after more than one year - 1,134,596 1,134,596 Capital and reserves Share capital 67-67 Capital reserve 44-44 Revenue reserves 359,796 (64,860) 294,936 Designated reserves 32,715-32,715 392,622 1,069,736 1,462,358 ======= ======= ======== 19. CONTINGENT LIABILITIES The Association receives capital grant from the Department of Communities, which is used to fund the acquisition and development of housing properties and their components. In certain circumstances, upon disposal of grant funded properties, the Association is required to recycle this grant by crediting the Disposal Proceeds Fund. As the timing of any future disposal is uncertain, no provision has been recognised in these financial statements. - 23 -
NOTES TO THE FINANCIAL STATEMENTS 20. DESIGNATED RESERVES Comfort Common Fund fund Total Balance brought forward 498 32,217 32,715 Received in period - - - Spend in period (112) - (112) Balance carried forward 386 32,217 32,603 ==== ====== ====== 21. COMMON FUND A bequest was received from the Executors of Mr Desmond J Shaw (deceased) in 2006. The monies are to be used by the Association as it thinks fit. There are no restrictions placed on its use. 22. CAPITAL COMMITMENTS There are capital commitments amounting to Nil which have been authorised but not contracted for (2015: Nil). 23. FRS 102 DEFINED BENEFIT PENSION The Association has not complied with the accounting requirements of FRS 102 for defined benefit plans. Under FRS 102, the Association is obliged to obtain a report from a qualified actuary which gives a report on the Association s pension commitment. The Association would then be required to incorporate any identified surplus or deficit within its accounts and to disclose the assumptions underpinning the calculation of the surplus or deficit. The scheme includes one part-time current employee and one past employee. Based on the available information the Association believes that any surplus or deficit would be immaterial and that therefore the fact that it has not fully complied with FRS 102 does not impact on the true and fair view of the Association s financial position. A tri-annual valuation has been procured and will be disclosed in the financial statements for the year ended 31 March 2017. 24. APPENDICES Appendices 1 to 6 are not required by the Order but have been provided as additional information for the committee members. - 24 -
APPENDIX 1 STATEMENT OF HOUSING ADMINISTRATION COSTS HOUSING ACCOMMODATION Total Management: Maximum management allowances 5,544 Management costs (5,510) Costs (over) maximum allowances 34 ======= Maintenance: Maximum maintenance allowances 6,496 Maintenance costs (7,991) Costs (over) maximum allowances (1,495) ======= - 25 -
APPENDIX 2 APPORTIONMENT OF ADMINISTRATION EXPENSES 2016 2015 ADMINISTRATION COSTS Salaries 10,739 8,090 Committee/travelling expenses 1,591 1,091 Printing and stationery 573 585 Insurances 925 925 Telephone and postage - 38 Auditors remuneration 7,746 5,694 Miscellaneous 3,648 3,046 Affiliation fee 695 632 Office rent and service charge 3,885 4,354 Depreciation of office fixed assets 4,607 5,711 Staff recruitment 4,752 - Training 347 - Apportioned to:- 39,508 30,166 ====== ====== Property revenue account Management 33,976 26,654 Maintenance 5,532 3,512 39,508 30,166 ====== ====== - 26 -
APPENDIX 3 PROPERTY REVENUE ACCOUNT Re-stated 2016 2015 INCOME Rents and rates receivable 106,045 105,160 Less: Rates (10,923) (10,600) Voids (9,764) (2,848) Net rents receivable 85,358 91,712 Amortised government grants 17,329 17,329 Net income 102,687 109,041 EXPENDITURE Management Administration costs 33,976 26,654 Insurance 5,152 8,164 Other administration costs - 2,404 Rents written off 2,574 - Maintenance Administration 5,532 3,512 Reactive repairs 36,878 18,412 THA sales level agreement 5,000 5,000 Planned/cyclical maintenance 9,824 - Other Loan interest - - Depreciation 37,269 37,269 136,205 101,415 (DEFICIT)/SURPLUS TRANSFERRED TO GENERAL INCOME AND EXPENDITURE ACCOUNT (33,518) 7,626 ====== ====== - 27 -
APPENDIX 4 GENERAL INCOME AND EXPENDITURE ACCOUNT Re-stated 2016 2015 PROPERTY DEVELOPMENT ACCOUNT Development allowances receivable - - Development costs - - - - OTHER INCOME Bank interest - 1 Common Fund interest received - - OTHER EXPENDITURE Bank interest and charges (25) (197) (DEFICIT) ON OTHER INCOME (25) (196) SURPLUS TRANSFERRED FROM/:- Property revenue account (page 27) (33,518) 7,626 Tenants services account (page 29) 16,009 28,063 (17,534) 35,493 Transfer (from) services equalisation reserve (16,009) (28,063) TOTAL (DEFICIT)/SURPLUS FOR THE YEAR (33,543) 7,430 ======= ======= - 28 -
APPENDIX 5 TENANTS SERVICES ACCOUNT Flats, Renwick Ballymoney House Total INCOME Service charge 75,502 23,612 99,114 EXPENDITURE Heat and light 32,635 3,346 35,981 Telephone and internet 2,417 36 2,453 Warden s salary 25,471-25,471 Rent 6,500-6,500 Cleaning - 6,700 6,700 TV Licence - 790 790 Support system 838-838 Grass cutting 357-357 Water rates 3,651 364 4,015 71,869 11,236 83,105 SURPLUS FOR YEAR 3,633 12,376 16,009 BALANCE BROUGHT FORWARD 31,052 58,922 89,974 BALANCE CARRIED FORWARD 34,685 71,298 105,983 ======= ======= ======= - 29 -