Company no.
01109141
Industrial Common Ownership Finance Limited
trading as Co-operative and Community Finance
Report and Audited Consolidated Financial Statements
31 December 2023
Industrial Common Ownership Finance Limited
Reference and administrative details
For the year ended 31 December 2023
Status The organisation is a company limited by guarantee, incorporated on 17 April 1973.
Company number 01109141
Registered office and 1-3 Gloucester Road
operational address Bishopston
Bristol
BS7 8AA
Chair M Rodriguez-Piza
Directors R Buchanan appointed 5 October 2023
D Cole
S Connor resigned 3 May 2023
O Dowsett
J Forbes resigned 4 October 2023
D Holden
N Katangaza
J Martin
P Mather appointed 1 January 2023
J Nott
M Rodriguez-Piza
Company secretary A Demontoux
Bankers Unity Trust Bank Plc
Four Brindleyplace
Birmingham
B1 2JB
Auditors Godfrey Wilson Limited
Chartered accountants and statutory auditors
5th Floor Mariner House
62 Prince Street
Bristol
BS1 4QD
Industrial Common Ownership Finance Limited
Report of the directors
For the year ended 31 December 2023
Registered company number: 01109141
The directors present their report and the audited financial statements for the year ended 31 December 2023.
Principal activity
The group's principal activity during the year continued to be the provision of loans to common ownership companies and co-operatives and also to be a vehicle for channelling loans from public funds to such enterprises.
Portfolio risk, credit risk, liquidity risk and cash flow risk
The business’s principal activity is the provision of loan finance. As such its principal financial instruments consist of trade debtors in the form of the lending portfolio and cash balances held with counterparties.
With regard to portfolio risk, all clients in the portfolio are subject to stringent due diligence before a formal loan application is approved. The existing portfolio is monitored on a timely basis through the review of statutory accounts and trading data. If necessary corrective action may be taken, in particular with regard to delinquency management. Any debtor that is felt to have substantially increased in risk over a period of time may fall in to the category of doubtful debtors and as such be provided for in the accounts as bad or doubtful debt. The quality of the portfolio is good.
Credit risk relates primarily to a counterparty’s potential inability to meet its obligations towards the business and the losses the organisation might incur as a result. Cash balances are held with Unity Trust and whilst deposit accounts are utilised with the banks in order to maximise interest bearing returns on the cash balances, there is no element of speculation involved.
The directors and their interests
The directors who served during the year were as follows:
R Buchanan appointed 5 October 2023
D Cole
S Connor resigned 3 May 2023
O Dowsett
J Forbes resigned 4 October 2023
D Holden
N Katangaza
J Martin
P Mather appointed 1 January 2023
J Nott
M Rodriguez-Piza
Statement of directors' responsibilities
The directors are responsible for preparing the Directors' Report and the financial statements in accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of the affairs of the company and the group and of the profit or loss of the company and the group for that period. In preparing these financial statements, the directors are required to:
§ select suitable accounting policies and then apply them consistently;
§ make judgments and accounting estimates that are reasonable and prudent; and
§ prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.
The directors are responsible for keeping adequate accounting records that disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and the group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
The directors are responsible for the maintenance and integrity of the corporate and financial information included on the company's website. Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.
Statement of disclosure of information to auditors
The directors of the company who held office at the date of approval of this directors report confirm that:
§ so far as they are aware, there is no relevant audit information, information needed by the company’s auditors in connection with preparing their report, of which the company’s auditors are unaware; and
§ they have taken all the steps that they ought to have taken as a director in order to make themselves aware of any relevant audit information and to establish that the company’s auditors are aware of that information.
Auditors
The auditors, Godfrey Wilson Limited, are deemed to be re-appointed under section 487(2) of the Companies Act 2006. The company plans to retender to prospective auditors in 2024.
Approved by the directors on 28 March 2024 and signed on their behalf by
P Mather
Director
Industrial Common Ownership Finance Limited
Strategic report
For the year ended 31 December 2023
Registered company number: 01109141
Review of the business
Co-operative and Community Finance (CCF) has existed as a revolving loan fund since 1973 and is the trading name for Industrial Common Ownership Finance Limited (ICOF). The Group consists of ICOF Limited and ICO Fund plc.
Our primary purpose is to help more people take control of their economic lives. This is achieved
mainly through the provision of loan finance and business advice to enable people to own and control the businesses in which they work or operate in their own communities.
CCF provides loans to co-operatives and community owned businesses throughout the UK. The money available to lend is derived from invested, gifted and managed funds. We are authorised by the FCA which enables us to manage other funds.
During the year we continued to meet our stated constitutional objectives of supporting co-operatives and employee-owned and community businesses; thereby enabling people to take more control of their economic lives.
After the bounce in lending that followed the end of the pandemic, 2023 continued to see strong demand, as evidenced by over £800k lent across all our funds enabling co-operative and community businesses continuing to rebuild post pandemic. We continue to support our portfolios particularly through the unique economic challenges arising from the current cost-of-living crisis and high interest rate environment of the past eighteen months. We are proactive, making contact and offering help where required.
Notable loans made by the Group
Stokes Croft Community Land Trust (SCLT). In addition to a loan, we brought several initiatives together allowing us to offer greater levels of financial support by supporting their share offer through our management of Community Shares that provided a £50,000 investment, a loan of £50,000 from ICOF and a £25,000 investment from Coops UK Booster Fund.
SCLT was created as a grassroots institution registered in Sept 2014 to acquire sites and buildings within the neighbourhood of Stokes Croft with the purpose of being:
§ A grass roots institution governed and run by local people capable of acquiring and stewarding community assets for the long-term.
§ A fund-raising mechanism that allows local property assets to be acquired on behalf of local people and made available for uses that are locally determined.
With our help they bought their site which is home to all their activity including Stokes Croft China and Print Shop, a retail unit for the sale of books, art and china, their community space, and a range of rented out artist studios and office space.
We were also able to provide further support for the Chequers Inn, a 16th century pub in Canterbury that was originally acquired through community shares in 2019. We lent £121,000 to help the group refinance and repay private investors.
New Initiatives
We began several new initiatives this year including:
§ Access Foundation Flexible Finance for Recovery Booster ‘Flex’ – Fund Management Partner programme between CCF, CSI and Co-ops UK (CUK). A blended finance programme to provide patient and flexible social investment for organisations post-Covid.
§ Social Investment Business – Enterprise Growth for Communities/ Thrive Together Fund. The Thrive Together Fund (TTF) provides a funding package of loan (75%) and grant (25%) to eligible charities and social enterprises in England. The Fund is delivered by a partnership made up of Social Investment Business, Co-operative and Community Finance, Fredericks Foundation, Groundwork, Homeless Link and The Architectural Heritage Fund.
§ Energy Resilience Fund (ERF). This is blended loan and grant product to help charities, social enterprises and community businesses become more energy resilient, supporting the retrofitting of insulation, installing more energy efficient boilers, heat source pumps, hybrid systems, LED’s, and solar PV.
Continuing Initiatives
We continued to manage both the Co-operative Loan Fund and Community Shares ICOF, with both organisations having busy years in terms of lending and investment.
We also remained an Access Point for the £4m Reach Fund which provides grants to organisations that need specific support to be able to take on a loan. Through this we levered in extra financial support, even into organisations that we were unable to help with our own funds.
We continued to work closely with Coops UK on the Community Shares Booster Fund Investment Panel helping to support and grow the sector through grant awards and equity investment.
We continued to provide back-office services for the Coop Foundation, Radical Roots and Solidfund and the Worker Coops Federal Fund.
Financial Performance
ICOF Ltd had an excellent year, generating a net profit of £19,486 against a budgeted profit of £1,244. Income of £347,702 was higher than budget by £8,979 (3%) with variations across the categories. Expenses were £349,841.
Notable items on the balance sheet include Ltd loan balances of £1,321,231. The net worth of the balance sheet increased by £159,486 (7%) to £2,328,943 reflecting the new Flex Fund capital of £140k in the reserves.
There were no lending losses in 2023.
Equality, Diversity, and Inclusion (EDI)
CCF are members of the Diversity Forum and the Diversity Forum Champions Network. We have added EDI questions to our new application form, and this will allow us to better understand the profile of our borrowers, improve our reporting and identify any gaps in our outreach to address.
In 2023 we continued our EDI journey, and shared Action Plan for 2023-2024 on our website. Produced by our board and team, this Plan includes specific commitments and objectives to help us move with purpose towards real, measurable, change.
OUR PLEDGE: To continue working together to ensure that the sector reflects the communities it serves and that we use our tools, networks and experience to tackle inequality and bring about transformational change.
Work to improve our own internal practices and policies, as well as supporting our borrowers and potential borrowers to improve their equality impact, is ongoing.
Cost of Living Crisis
The directors have considered the impact that the cost-of-living crisis will have on the company’s
current and future financial position. The company is taking the following steps to mitigate the risks that the current economic client may pose to the organisation:
§ We have been in close contact with our borrowers from the beginning, doing all we can to help with their cashflow at this difficult time.
Going concern and future prospects
The directors consider that the company holds sufficient cash and general reserves as set out in the GC policy (in Note 1); and therefore, will continue as a going concern for a period of at least 12 months from the date on which these financial statements. Furthermore, the directors believe that the prospects of the business are positive given:
§ The pipeline for lending remains strong following a successful 2023;
§ We continue to work with our partners delivering the Pub programme, and back office and consultancy work continues at high levels. We also continue to lend our own funds;
§ We have a unique relationship with our clients which enables a high level of communication so that they are working with us to mitigate the effects on the portfolio; and
§ Along with other social lenders and the co-operative movement we are making clients aware of the help that is available from government, including loans, guarantees, tax relief, cash grants and deferred VAT payments.
The directors therefore consider it appropriate to adopt the going concern basis of preparation of the accounts, as detailed in note 1 to the financial statements.
Financial risk
Financial risk management objectives and policies
During its daily business, the business is subject to operational risks. These risks relate to losses the organisation could incur because of inadequate or failing internal processes, systems, human behaviour or external events. The business tries to limit these risks as much as possible by making sure there are clear policies, reports, and procedures in place for its staff.
Approved by the directors on 28 March 2024 and signed on their behalf by
P Mather
Director
Independent auditors' report
To the members of
Industrial Common Ownership Finance Limited
Opinion
We have audited the financial statements of Industrial Common Ownership Finance Limited (the 'parent company') and its subsidiary (the 'group') for the year ended 31 December 2023 which comprise the consolidated and parent statement of comprehensive income, consolidated and parent balance sheet, consolidated and parent statement of changes in equity, consolidated statement of cash flows, 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).
In our opinion, the financial statements:
give a true and fair view of the state of the group's and of the parent company's affairs as at 31 December 2023 and of the group's profit or loss for the year then ended;
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
have been prepared in accordance with the requirements of the Companies Act 2006.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the financial statements section of our report. We are independent of the group and parent company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the directors’ use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
Other information
The directors are responsible for the other information. The other information comprises the information included in the annual report other than the financial statements and our auditor’s report thereon. Our opinion on the financial statements does not cover the other information and, except to the extent 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 doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be 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.
We have nothing to report in this regard.
Opinion on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of the audit:
the information given in the directors’ report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the directors’ report 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 group and the parent company and their environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or directors’ report. 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:
adequate accounting records have not been kept by the parent company, or returns adequate for our audit have not been received from branches not visited by us;
the parent company financial statements are not in agreement with the accounting records and returns;
certain disclosures of directors’ remuneration specified by law are not made; or
we have not obtained all the information and explanations necessary for the purposes of our audit.
Responsibilities of the directors
As explained more fully in the directors’ responsibilities statement set out in the directors’ report, the directors are 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 they determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the directors are responsible for assessing the company’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 directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.
Our 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 the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The procedures we carried out and the extent to which they are capable of detecting irregularities, including fraud, are detailed below:
(1) We obtained an understanding of the legal and regulatory framework that the company operates in, and assessed the risk of non-compliance with applicable laws and regulations. Throughout the audit, we remained alert to possible indications of non-compliance.
(2) We reviewed the company’s policies and procedures in relation to:
Identifying, evaluating and complying with laws and regulations, and whether they were aware of any instances of non-compliance;
Detecting and responding to the risk of fraud, and whether they were aware of any actual, suspected or alleged fraud; and
Designing and implementing internal controls to mitigate the risk of non-compliance with laws and regulations, including fraud.
(3) We inspected the minutes of director meetings.
(4) We enquired about any non-routine communication with regulators and reviewed any reports made to them.
(5) We reviewed the financial statement disclosures and assessed their compliance with applicable laws and regulations.
(6) We performed analytical procedures to identify any unusual or unexpected transactions or balances that may indicate a risk of material fraud or error.
(7) We assessed the risk of fraud through management override of controls and carried out procedures to address this risk. Our procedures included:
Testing the appropriateness of journal entries;
Assessing judgements and accounting estimates for potential bias;
Reviewing related party transactions; and
Testing transactions that are unusual or outside the normal course of business.
Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. Irregularities that arise due to fraud can be even harder to detect than those that arise from error as they may involve deliberate concealment or collusion.
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 auditor’s report.
Use of our report
This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the parent company'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 company's members as a body, for our audit work, for this report, or for the opinions we have formed.
Date: 28 March 2024
Rob Wilson FCA
(Senior Statutory Auditor)
For and on behalf of:
Godfrey Wilson Limited
Chartered accountants and statutory auditors
5th Floor Mariner House
62 Prince Street
Bristol
BS1 4QD
Industrial Common Ownership Finance Limited
Consolidated statement of comprehensive income
For the year ended 31 December 2023
2023 2022
Note £ £
Turnover 2 391,470 292,698
Administrative expenses (412,572) (372,022)
Operating loss 3 (21,102) (79,324)
Other operating income 142,976 -
Income from investments 4,911 3,417
Interest receivable 33,047 8,865
Profit / (loss) on ordinary activities before taxation 159,832 (67,042)
Tax on profit / (loss) on ordinary activities 5 - -
Profit / (loss) on ordinary activities after taxation and total comprehensive income / (expenditure) for the year
159,832 (67,042)
Industrial Common Ownership Finance Limited
Company statement of comprehensive income
For the year ended 31 December 2023
2023 2022
£ £
Turnover 347,702 266,823
Administrative expenses (349,841) (315,575)
Operating loss (2,139) (48,752)
Other operating income 142,976 -
Income from investments 4,186 2,707
Interest receivable 14,463 3,751
Profit / (loss) on ordinary activities before taxation 159,486 (42,294)
Tax on profit / (loss) on ordinary activities - -
Profit / (loss) on ordinary activities after taxation and total comprehensive income / (expenditure) for the year
159,486 (42,294)
Industrial Common Ownership Finance Limited
Consolidated balance sheet
As at 31 December 2023
2023 2022
Note £ £ £
Fixed assets
Tangible assets 6 29,045 20,610
Investments 7 160,051 159,952
189,096 180,562
Current assets
Debtors due within one year 8 270,640 398,878
Debtors falling after one year 8 2,036,771 2,015,410
Cash at bank and in hand 2,359,017 2,333,105
4,666,428 4,747,393
Creditors: amounts due within 1 year 9 (1,187,357) (1,470,916)
Net current assets 3,479,071 3,276,477
Total assets less current liabilities 3,668,167 3,457,039
Creditors: amounts due after 1 year 10 (1,080,682) (1,029,386)
Net assets 12 2,587,485 2,427,653
Capital and reserves
Other funds 13 1,359,983 1,219,983
Capital reserve 228,380 284,555
Profit and loss account 999,122 923,115
Shareholders' funds 13 2,587,485 2,427,653
Approved by the directors on 28 March 2024 and signed on their behalf by
P Mather
Director
Industrial Common Ownership Finance Limited
Company balance sheet
As at 31 December 2023
2023 2022
Note £ £ £
Fixed assets
Tangible assets 6 29,045 20,610
Investments 7 329,294 329,203
358,339 349,813
Current assets
Debtors due within one year 8 189,074 224,570
Debtors falling after one year 8 1,175,782 1,204,156
Cash at bank and in hand 2,359,017 2,333,105
3,723,873 3,761,831
Creditors: amounts due within 1 year 9 (1,644,208) (1,828,247)
Net current assets 2,079,665 1,933,584
Total assets less current liabilities 2,438,004 2,283,397
Creditors: amounts due after 1 year 10 (109,061) (113,940)
Net assets 12 2,328,943 2,169,457
Capital and reserves
Other funds 13 1,359,983 1,219,983
Profit and loss account 968,960 949,474
Shareholders' funds 13 2,328,943 2,169,457
Approved by the directors on 28 March 2024 and signed on their behalf by
P Mather
Director
Industrial Common Ownership Finance Limited
Consolidated statement of changes in equity
As at 31 December 2023
Capital reserve Other funds Profit and loss Total
£ £ £ £
Balance at 1 January 2022 337,482 1,219,983 937,230 2,494,695
Profit for the year - - (67,042) (67,042)
Transfers (52,927) - 52,927 -
Balance at 31 December 2022 284,555 1,219,983 923,115 2,427,653
Profit for the year - 140,000 19,832 159,832
Transfers (56,175) - 56,175 -
Balance at 31 December 2023 228,380 1,359,983 999,122 2,587,485
Industrial Common Ownership Finance Limited
Company statement of changes in equity
As at 31 December 2023
Other funds Profit and loss Total
£ £ £
Balance at 1 January 2022 1,219,983 991,768 2,211,751
Profit for the year - (42,294) (42,294)
Transfers - - -
Balance at 31 December 2022 1,219,983 949,474 2,169,457
Profit for the year 140,000 19,486 159,486
Transfers - - -
Balance at 31 December 2023 1,359,983 968,960 2,328,943
Industrial Common Ownership Finance Limited
Consolidated statement of cash flows
For the year ended 31 December 2023
2023 2022
£ £
Cash used in operating activities:
Profit for the financial year 159,832 (67,042)
Adjustments for:
Depreciation 4,678 1,683
Interest received (33,047) (8,865)
Dividends received (4,911) (3,417)
Loss on disposal 1,767 -
Finance costs 56,175 52,927
Decrease / (increase) in debtors 106,877 (439,256)
Increase / (decrease) in creditors (274,138) (228,703)
Net cash provided by / (used in) operating activities 17,233 (692,673)
Cash flows from investing activities:
Interest received 33,047 8,865
Dividends received 4,911 3,417
Purchase of tangible fixed assets (14,880) (18,006)
Purchase of investments (99) (947)
Net cash provided by / (used in) investing activities 22,979 (6,671)
Cash flows from financing activities:
Redemption of preference share capital (14,300) (7,750)
Net cash provided in / (used in) financing activities (14,300) (7,750)
Increase / (decrease) in cash and cash equivalents in the year 25,912 (707,094)
Cash and cash equivalents at the beginning of the year 2,333,105 3,040,199
Cash and cash equivalents at the end of the year 2,359,017 2,333,105
Analysis of changes in net debt: Brought forward Cash flows Non-cash movements Carried forward
£ £ £ £
Cash held by the company for unrestricted activities
408,679 (61,824) - 346,855
Cash held on behalf of group undertakings 738,935 85,490 - 824,425
Cash held for restricted lending activities 169,006 237,351 - 406,357
Cash held on behalf of clients 1,016,485 (235,105) - 781,380
Total cash held 2,333,105 25,912 - 2,359,017
Non-equity preference shares due within one year or on demand
(378,124) 14,300 - (363,824)
Non-equity preference shares due after one year
(915,446) - (56,175) (971,621)
Net debt 1,039,535 40,212 (56,175) 1,023,572
Less client and restricted cash (1,185,491) (2,246) - (1,187,737)
Net debt less client and restricted cash (145,956) 37,966 (56,175) (164,165)
Industrial Common Ownership Finance Limited
Notes to the financial statements
For the year ended 31 December 2023
1. Accounting policies
a) Basis of preparation
The financial statements have been prepared under the historical cost convention and in accordance with FRS 102 and the Companies Act 2006. The presentation is in £ sterling.
The consolidated financial statements include the financial statements of the company and its subsidiary undertakings made up to 31 December 2023. The acquisitions method of accounting has been adopted. Under this method, the results of the subsidiary undertakings acquired or disposed of in the year are included in the consolidated profit and loss account from the date of acquisition or up to the date of disposal.
b) Going concern
The accounts have been prepared on the assumption that the company is able to continue as a going concern. The directors have considered the ongoing impact of high inflation, bank interest rates and the subsequent cost-of-living crisis on the company’s current and future financial position. The company holds unrestricted, general reserves of £968,960, and a cash balance of £346,855 (excluding amounts held on behalf of clients and restricted lending funds). The directors consider that the company has sufficient cash reserves to continue as a going concern for a period of at least 12 months from the date on which these financial statements are approved.
c) Turnover
Turnover represents the amount derived from interest and fees on loans falling within the group's activities, and fees for provision of loan services to other organisations. All income is derived from the UK.
d) Tangible fixed assets
Tangible fixed assets are stated at cost less accumulated depreciation. Such cost includes costs directly attributable to making the asset capable of operating as intended.
Depreciation is provided on all tangible fixed assets, other than freehold land, at rates calculated to write off the cost, less estimated residual value, of each asset evenly over its expected useful life, as follows:
Computer equipment 3 - 5 years straight line
Office equipment 7 years straight line
e) Fixed asset investments
Fixed asset investments comprise investments in co-operative share capital and are stated at historic cost less impairment.
Investments in publicly traded shares are measured at fair value with changes in fair value recognised through the profit and loss.
1. Accounting policies (continued)
f) Debtors
Short term debtors are measured at transaction price, less any impairment loss for bad and doubtful debts.
Loans and other financial assets are initially recognised at transaction price including any transaction costs, and subsequently measured at amortised cost, determined using effective interest method, less any impairment losses for bad and doubtful debts.
g) Creditors
Short term creditors are measured at transaction price.
Loans and other financial liabilities are initially measured at transaction price net of any transaction costs and subsequently measured at amortised cost determined using the effective interest method.
h) Financial instruments
The company has financial instrument transactions that result in the recognition of financial liabilities like trade and other accounts payable and non-equity preference shares. Trade and other accounts payable are measured at transaction price. Non-equity preference share capital is initially recognised at cost and subsequently at amortised cost using the effective interest method, less any impairment.
i) Deferred tax
Deferred tax is recognised, without discounting, in respect of all timing differences between the treatment of certain items for taxation and accounting purposes, which have arisen but not reversed by the balance sheet date.
Group tax losses of £528,785 can be carried forward and offset against future profits. However, a deferred tax asset has not been recognised as future profits are uncertain.
j) Capital grants
Capital grants received for specified lending activities are received as restricted funds insofar as they are restricted to lending for particular purposes as set out by the funder. Once the funder's lending requirements have been met the funds are then released to unrestricted funds and considered to be available for general lending. Capital grants are recognised as other operating income on receipt.
Capital grants for the purchase of fixed assets are credited to the balance sheet as deferred capital income and released to the profit and loss account in line with the rate of depreciation for the asset.
k) Pension costs
The company operates a defined contribution pension scheme and the pension charge represents the amounts payable by the company to the fund in respect of the year. The assets of the scheme are held separately from those of the company in an independently administered fund.
1. Accounting policies (continued)
l) Capital reserve
The capital reserve has arisen due to the difference between the sum advanced for the redeemable preference shares issued by Industrial Common Ownership Fund Plc and the value of the redeemable preference shares when held at amortised cost. The group has adopted a policy of transferring an amount equal to the effective interest charged on these shares each year from the capital reserve to the profit and loss account. The capital reserve therefore reflects the outstanding effective interest to be charged on the redeemable preference shares prior to their becoming redeemable.
m) Accounting estimates and key judgements
In the application of the company's accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying values of assets and liabilities that are not readily apparent from other sources. The estimates and underlying assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.
The key sources of estimation uncertainty that have a significant effect on the amounts recognised in the financial statements are described below.
(i) Debtors falling due within one year - Forecast capital repayments
As a result of the Bank of England base rate rising throughout 2023, various loan recipients were repaying higher levels of loan interest and reduced capital throughout 2023. The loan book was re-profiled in October 2023 to ensure that capital will be repaid within original loan terms.

In determining the split of capital expected to be repaid in the next 12 months, the directors have had to make an assumption about the number of loan recipients who will make capital repayments in 2024. This is based on historical experience, discussions with the loan recipients and the level of repayments received in 2023. However, actual results may differ.
(ii) Redeemable preference shares - effective interest rate
The preference shares are accounted for under the amortised cost model and the effective interest rate is assumed to be 6%. The effective interest rate is used to calculate the amortised cost of the preference shares and is therefore a key component in determining the carrying amount of the shares on the balance sheet.
There are no other key sources of estimation uncertainty that have a significant effect on the amounts recognised in the financial statements.
2. Turnover
Turnover attributable to geographical markets outside the United Kingdom amounted to 0% (2022 - 0%).
3. Operating profit / (loss)
This is stated after charging / (crediting):
2023 2022
£ £
Depreciation of fixed assets 4,678 1,683
Loss on disposal of fixed assets 1,767 -
Auditors' remuneration - audit (excl VAT) 11,475 9,400
Auditors remuneration - other services (excl VAT) 1,250 1,150
Directors' remuneration - -
4. Employees
The average number of staff employed by the group and the company during the year amounted to:
2023 2022
No. No.
Administrative staff 4 4
The aggregate payroll costs of the above were:
2023 2022
£ £
Wages and salaries 205,607 199,019
Social security costs 19,494 19,640
Pension costs 20,561 20,880
245,662 239,539
5. Taxation
2023 2022
£ £
UK corporation tax based on results for the period - -
Factors affecting current tax charge:
Profit/(loss) on ordinary activities by rate of tax 30,368 (12,738)
Income and expenses not allowable 11,008 10,056
Depreciation in excess of capital allowances 889 (808)
Allowable deductions (27,165) -
Losses brought forward (115,569) (112,079)
Losses carried forward 100,469 115,569
Total current tax charge - -
6. Tangible fixed assets
Group and company Computer equipment Office equipment
Total
£ £ £
Cost
At 1 January 2023 57,714 14,756 72,470
Additions 14,880 - 14,880
Disposals (36,623) (14,281) (50,904)
At 31 December 2023 35,971 475 36,446
Depreciation
At 1 January 2023 38,224 13,636 51,860
Charge for the year 4,555 123 4,678
On disposals (35,693) (13,444) (49,137)
At 31 December 2023 7,086 315 7,401
Net book value
At 31 December 2023 28,885 160 29,045
At 31 December 2022 19,490 1,120 20,610
A change in depreciation policy was applied as of 1 January 2023. The change applies to all tangible fixed assets and applies a straight line policy as disclosed in note 1d. The previous depreciation policy applied was reducing basis.
7. Investments Unquoted shares
Group
£
Cost
At 1 January 2023 159,952
Additions 99
At 31 December 2023 160,051
Company Investments in subsidiary undertakings
Unquoted shares
Total
£ £ £
Cost
At 1 January 2023 190,200 139,003 329,203
Additions - 91 91
At 31 December 2023 190,200 139,094 329,294
The company holds shares in Ethical Property Company. Historically these shares have been traded on the open market and were held at fair value through the profit or loss. During 2023 these shares were no longer traded on the open market resulting in an accounting treatment change to deemed cost less impairment. The historic cost is held as the carrying value of the shares at the date of change in circumstance. The carrying value of these shares as at 31 December 2023 and 31 December 2022 is £34,204.
The company holds 20% or more of the share capital of the following companies:
Company Share held class Capital and reserves Profit for the year
%
£ £
Industrial Common Ownership Fund Plc
Ordinary 100 258,542 346
8. Debtors
Group Company
2023 2022 2023 2022
£ £ £ £
Trade debtors 2,262,029 2,387,476 1,321,231 1,407,559
Other debtors 40,216 23,553 38,459 17,908
Prepayments and accrued income 5,166 3,259 5,166 3,259
2,307,411 2,414,288 1,364,856 1,428,726
Amounts due after more than one year included in:
Trade debtors 2,036,771 2,015,410 1,175,782 1,204,156
9. Creditors: amounts due within 1 year
Group Company
2023 2022 2023 2022
£ £ £ £
Preference shares 363,824 378,124 - -
Trade creditors 3,669 3,997 3,669 3,997
Amount owed to group undertakings - - 824,425 738,935
Amounts owed to ICOF Community Capital Ltd
175,327 262,836 175,327 262,836
Amounts owed to Co-operative Loan Fund
248,034 441,267 248,034 441,267
Amounts owed to Community Shares ICOF Limited
209,714 103,107 209,714 103,107
Amounts owed to Solidfund 148,305 136,012 148,305 136,012
Amounts owed to Plunkett Foundation
11,908 13,460 11,908 13,460
Social security and other taxes 6,708 6,101 6,708 6,101
Other creditors 434 79,152 434 79,152
Accruals and deferred income 19,434 46,860 15,684 43,380
1,187,357 1,470,916 1,644,208 1,828,247
10. Creditors: amounts due after 1 year
Group Company
2023 2022 2023 2022
£ £ £ £
Preference shares 971,621 915,446 - -
Amounts owed to Plunkett Foundation
88,501 113,940 88,501 113,940
Deferred income 20,560 - 20,560 -
1,080,682 1,029,386 109,061 113,940
11. Maturity of borrowings
Group Preference shares Total
£ £
As at 31 December 2023
In one year or less on demand 363,824 363,824
Between 2 - 5 years 971,621 971,621
After more than five years not by instalments - -
1,335,445 1,335,445
As at 31 December 2022
In one year or less on demand 378,124 378,124
Between 2 - 5 years - -
After more than five years not by instalments 915,446 915,446
1,293,570 1,293,570
The preference shares are non-equity co-operative shares which are redeemable in full at par, subject to one month's notice being given. The shares are redeemable by the company at any time without notice.
The non-equity co-operative shares have the following rights:
§ the shares are entitled to a maximum dividend of 6% before tax, which is paid at the discretion of the directors;
§ the shareholders have the opportunity to waive the dividend if they wish;
§ the shareholders have no voting rights. They do however have the right to appoint a representative who will follow the progress of the subsidiary that has issued the preference shares, Industrial Common Ownership Fund Plc, and inform the directors of any matter which they think will affect the co-operative shareholders; and
§ having passed their ten year anniversary of issue, at 31 December 2023 there were 554,024 £1 preference shares in issue (2022: 568,324), which were redeemable subject to one month's notice.
11. Maturity of borrowings (continued)
A further 1,200,000 £1 preference shares are redeemable in full at par, ten years from the date of issue, in September 2027, subject to one month's notice being given. Under the amortised cost method, these shares have been discounted to £971,621 in the accounts. Effective finance costs of £56,175 (2022: £52,927) have been recognised during the year in the consolidated profit and loss. A corresponding amount has been released from the capital reserve.
12. Net assets between funds
Group
Fixed assets Current assets Current liabilities Long term liabilities Total
£ £ £ £ £
ABCF Fund - 313,733 - - 313,733
More than a Pub Fund - 1,006,659 (11,908) (88,501) 906,250
Access Flex Fund - 140,000 - - 140,000
Capital reserve - - - 284,555 284,555
Profit and loss account 189,096 3,206,036 (1,175,449) (1,276,736) 942,947
189,096 4,666,428 (1,187,357) (1,080,682) 2,587,485
Company
Fixed assets Current assets Current liabilities Long term liabilities Total
£ £ £ £ £
ABCF Fund - 313,733 - - 313,733
More than a Pub Fund - 1,006,659 (11,908) (88,501) 906,250
Access Flex Fund - 140,000 - - 140,000
Profit and loss account 358,339 2,263,481 (1,632,300) (20,560) 968,960
358,339 3,723,873 (1,644,208) (109,061) 2,328,943
13. Reconciliation of movement in funds
Group
Brought forward Income Expenditure Transfers between funds Carried forward
£ £ £ £ £
ABCF Fund 313,733 - - - 313,733
More Than a Pub Fund 906,250 - - - 906,250
Access Flex Fund - 140,000 - - 140,000
Capital reserve 284,555 - - - 284,555
Profit and loss account 923,115 432,404 (412,572) - 942,947
2,427,653 572,404 (412,572) - 2,587,485
13. Reconciliation of movement in funds (continued)
Company
Brought forward Income Expenditure Transfers between funds Carried forward
£ £ £ £ £
ABCF Fund 313,733 - - - 313,733
More Than a Pub Fund 906,250 - - - 906,250
Access Flex Fund - 140,000 - - 140,000
Profit and loss account 949,474 369,327 (349,841) - 968,960
2,169,457 509,327 (349,841) - 2,328,943
Purposes of funds
ABCF Fund For the purpose of making loans to co-operatives and social economy businesses situated within the communities of City and County of Bristol, Bath and North East Somerset, South Gloucestershire and North Somerset (West of England).
More than a Pub Fund For the purpose of making loans to community owned and managed pubs which have the following structures: Community Benefit Societies, Co-operative Societies, Companies Limited by Guarantee and Community Interest Companies. The fund is restricted insofar that the lender has specified lending targets to make loans to pubs in the first two years. The Grantor may, if it determines (following consultation with DCLG) that there is insufficient demand for loan financing from the Funding to support community owned and managed pubs, request that that CCF uses the Recycled Monies to support other community owned and managed asset based organisations which satisfy the terms of the Programme.
Access Flex Fund A blended finance programme to provide patient and flexible social investment for organisations post-Covid with the capital provided by Access – The Foundation for Social Investment Business. It is a fund that supports Community Share projects in underserved areas with matching equity in the form of community share purchases, with additional debt finance alongside where needed. The fund is also trialling a new product, providing up-front finance coverage for “subscription shares”, where individuals who can’t afford a lump sum can purchase their share in instalments over the course of a year.
Capital reserve The capital reserve has arisen from the issue of redeemable preference shares by Industrial Common Ownership Fund Plc and their subsequent measurement at amortised cost (see note 11). As the payment of interest on the shares is discretionary, the difference between the par value and the amortised cost when the shares are issued is treated as a contribution to capital, and held within this capital reserve.
14. Pension commitments
The group operates a defined contribution pension scheme. The pension cost charge for the period represents the contribution payable by the group to the scheme and amounted to £20,561 (2022: £20,880). There were no outstanding or prepaid contributions at either the beginning or the end of the financial year.
15. Contingent liabilities
The company has guaranteed to cover any shortfall in reserves in ICOF Community Capital Limited, a related organisation (see note 17 below), in the unlikely event of it ceasing activities. At the year-end, ICOF Community Capital Limited had negative reserves of £2,883 (2022: £29,825).
16. Ultimate controlling party
The company is limited by guarantee and has no ultimate controlling party.
17. Related party transactions
Industrial Common Ownership Finance Limited shares common directors with ICOF Community Capital Limited. It also shares key management personnel with The Co-operative Loan Fund Limited.
Included in the group's and company's creditors is an amount owed to ICOF Community Capital Limited of £175,327 (2022: £262,836) in respect of funds managed. The group's and company's creditors also include amounts owed to The Co-operative Loan Fund of £248,034 (2022: £441,267), and Community Shares ICOF Ltd of £209,714 (2022: £103,107), also in respect of funds managed.
During the year the company charged a management fee of £26,055 (2022: £23,314) to ICOF Community Capital Limited and a management fee of £48,422 (2022: £45,675) to The Co-operative Loan Fund Limited. The company also charged a management fee of £11,946 (2022: £15,431) to Community Shares ICOF Limited. These charges were made on normal commercial terms.
P Mather, director, is a director of Co-operative Futures Limited. During the year, £1,220 was paid to Co-operative Futures Limited for event costs (2022: £0). There was no outstanding liability at the year end.
P Mather, director, is a director of Midcounties Co-operative Limited. During the year, £2,296 of investment income was received by the group (2022: £862). The value of investments held with Midcounties Co-operative Limited as at 31 December 2023 is £48,721 (2022: £48,713).
The company has taken advantage of the exemption under the terms of paragraph 33.1A of FRS 102 from disclosing related party transactions with wholly owned entities that are part of Industrial Common Ownership Finance Limited.
Industrial Common Ownership Finance Limited
Consolidated income and expenditure account
For the year ended 31 December 2023
2023 2022
Restricted Unrestricted Total Total
Note £ £ £ £
Income
Turnover
Loan interest - 186,768 186,768 145,308
Fund management - 87,423 87,423 85,420
Arrangement fees - 6,071 6,071 8,497
Back office income - 99,952 99,952 38,377
Other income - 11,256 11,256 15,096
Total turnover - 391,470 391,470 292,698
Income from investments - 4,911 4,911 3,417
Grants and donations 140,000 2,976 142,976 -
Bank interest receivable - 33,047 33,047 8,865
Total income 140,000 432,404 572,404 304,980
Expenditure
Employee costs - 268,268 268,268 249,705
Premises costs - 18,814 18,814 18,575
General administrative expenses - 33,014 33,014 18,921
Legal and professional costs - 36,410 36,410 36,014
Total expenditure - 356,506 356,506 323,215
Operating profit 3 140,000 75,898 215,898 (18,235)
Provisions and loan losses - 109 109 4,120
Finance costs - (56,175) (56,175) (52,927)
Profit / (loss) on ordinary activities before tax 140,000 19,832 159,832 (67,042)
Tax on profit on ordinary activities 5 - - - -
Profit / (loss) on ordinary activities after tax 140,000 19,832 159,832 (67,042)
Total reserves at 1 January 2023 906,250 1,521,403 2,427,653 2,494,695
Total reserves at 31 December 2023 1,046,250 1,541,235 2,587,485 2,427,653
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