Company no. |
Reference and administrative details | ||||||||
For the year ended |
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Status | The organisation is a company limited by guarantee, incorporated on |
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Company number | ||||||||
Registered office and | ||||||||
operational address | ||||||||
Chair | ||||||||
Directors | appointed |
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resigned |
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resigned |
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appointed |
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Company secretary | ||||||||
Bankers | ||||||||
Four Brindleyplace | ||||||||
Birmingham | ||||||||
B1 2JB | ||||||||
Auditors | ||||||||
Chartered accountants and statutory auditors | ||||||||
5th Floor Mariner House | ||||||||
62 Prince Street | ||||||||
Bristol | ||||||||
BS1 4QD | ||||||||
Report of the directors | ||||||||
For the year ended |
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Registered company number: | ||||||||
The directors present their report and the audited financial statements for the year ended |
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Principal activity | ||||||||
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: | ||||||||
appointed |
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resigned |
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resigned |
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appointed |
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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 |
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P Mather | ||||||||
Director | ||||||||
Strategic report | ||||||||
For the year ended |
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Registered company number: | ||||||||
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. |
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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: |
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§ | 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 | ||||||||
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: |
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(Senior Statutory Auditor) | ||||||||
For and on behalf of: | ||||||||
Chartered accountants and statutory auditors | ||||||||
5th Floor Mariner House | ||||||||
62 Prince Street | ||||||||
Bristol | ||||||||
BS1 4QD | ||||||||
Consolidated statement of comprehensive income | |||||||||||||
For the year ended |
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2023 | 2022 | ||||||||||||
Note | £ | £ | |||||||||||
Turnover | 2 | ||||||||||||
Administrative expenses | ( |
( |
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Operating loss | 3 | ( |
( |
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Other operating income | - | ||||||||||||
Income from investments | |||||||||||||
Interest receivable | |||||||||||||
Profit / (loss) on ordinary activities before taxation | ( |
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Tax on profit / (loss) on ordinary activities | 5 | - | - | ||||||||||
Profit / (loss) on ordinary activities after taxation and total comprehensive income / (expenditure) for the year | |||||||||||||
( |
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Company statement of comprehensive income | |||||||||||||
For the year ended |
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2023 | 2022 | ||||||||||||
£ | £ | ||||||||||||
Turnover | |||||||||||||
Administrative expenses | ( |
( |
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Operating loss | ( |
( |
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Other operating income | - | ||||||||||||
Income from investments | |||||||||||||
Interest receivable | |||||||||||||
Profit / (loss) on ordinary activities before taxation | ( |
||||||||||||
Tax on profit / (loss) on ordinary activities | - | - | |||||||||||
Profit / (loss) on ordinary activities after taxation and total comprehensive income / (expenditure) for the year | |||||||||||||
( |
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Consolidated balance sheet | |||||||||||
As at |
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2023 | 2022 | ||||||||||
Note | £ | £ | £ | ||||||||
Fixed assets | |||||||||||
Tangible assets | 6 | ||||||||||
Investments | 7 | ||||||||||
Current assets | |||||||||||
Debtors due within one year | 8 | ||||||||||
Debtors falling after one year | 8 | ||||||||||
Cash at bank and in hand | |||||||||||
Creditors: amounts due within 1 year | 9 | ( |
( |
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Net current assets | |||||||||||
Total assets less current liabilities | |||||||||||
Creditors: amounts due after 1 year | 10 | ( |
( |
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Net assets | 12 | ||||||||||
Capital and reserves | |||||||||||
Other funds | 13 | ||||||||||
Capital reserve | |||||||||||
Profit and loss account | |||||||||||
Shareholders' funds | 13 | ||||||||||
Approved by the directors on |
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P Mather | |||||||||||
Director | |||||||||||
Company balance sheet | |||||||||||
As at |
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2023 | 2022 | ||||||||||
Note | £ | £ | £ | ||||||||
Fixed assets | |||||||||||
Tangible assets | 6 | ||||||||||
Investments | 7 | ||||||||||
Current assets | |||||||||||
Debtors due within one year | 8 | ||||||||||
Debtors falling after one year | 8 | ||||||||||
Cash at bank and in hand | |||||||||||
Creditors: amounts due within 1 year | 9 | ( |
( |
||||||||
Net current assets | |||||||||||
Total assets less current liabilities | |||||||||||
Creditors: amounts due after 1 year | 10 | ( |
( |
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Net assets | 12 | ||||||||||
Capital and reserves | |||||||||||
Other funds | 13 | ||||||||||
Profit and loss account | |||||||||||
Shareholders' funds | 13 | ||||||||||
Approved by the directors on |
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P Mather | |||||||||||
Director | |||||||||||
Consolidated statement of changes in equity | |||||||||||||
As at |
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Capital reserve | Other funds | Profit and loss | Total | ||||||||||
£ | £ | £ | £ | ||||||||||
Balance at 1 January 2022 | |||||||||||||
Profit for the year | - | - | ( |
( |
|||||||||
Transfers | ( |
- | - | ||||||||||
Balance at 31 December 2022 | |||||||||||||
Profit for the year | - | ||||||||||||
Transfers | ( |
- | - | ||||||||||
Balance at 31 December 2023 | |||||||||||||
Company statement of changes in equity | |||||||||||||
As at |
|||||||||||||
Other funds | Profit and loss | Total | |||||||||||
£ | £ | £ | |||||||||||
Balance at 1 January 2022 | |||||||||||||
Profit for the year | - | ( |
( |
||||||||||
Transfers | - | - | - | ||||||||||
Balance at 31 December 2022 | |||||||||||||
Profit for the year | |||||||||||||
Transfers | - | - | - | ||||||||||
Balance at 31 December 2023 | |||||||||||||
Consolidated statement of cash flows | |||||||||||||
For the year ended |
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2023 | 2022 | ||||||||||||
£ | £ | ||||||||||||
Cash used in operating activities: | |||||||||||||
Profit for the financial year | ( |
||||||||||||
Adjustments for: | |||||||||||||
Depreciation | |||||||||||||
Interest received | ( |
( |
|||||||||||
Dividends received | ( |
( |
|||||||||||
Loss on disposal | - | ||||||||||||
Finance costs | |||||||||||||
Decrease / (increase) in debtors | ( |
||||||||||||
Increase / (decrease) in creditors | ( |
( |
|||||||||||
Net cash provided by / (used in) operating activities | ( |
||||||||||||
Cash flows from investing activities: | |||||||||||||
Interest received | |||||||||||||
Dividends received | |||||||||||||
Purchase of tangible fixed assets | ( |
( |
|||||||||||
Purchase of investments | ( |
( |
|||||||||||
Net cash provided by / (used in) investing activities | ( |
||||||||||||
Cash flows from financing activities: | |||||||||||||
Redemption of preference share capital | ( |
( |
|||||||||||
Net cash provided in / (used in) financing activities | ( |
( |
|||||||||||
Increase / (decrease) in cash and cash equivalents in the year | ( |
||||||||||||
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 | |||||||||||||
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) | |||||||||
Notes to the financial statements | |||||||||||||
For the year ended |
|||||||||||||
1. | Accounting policies | ||||||||||||
a) | Basis of preparation | ||||||||||||
b) | Going concern | ||||||||||||
c) | Turnover | ||||||||||||
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 | ||||||||||||
1. | Accounting policies (continued) | ||||||||||||
l) | Capital reserve | ||||||||||||
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 | ||||||||||||
3. | Operating profit / (loss) | ||||||||||||
This is stated after charging / (crediting): | |||||||||||||
2023 | 2022 | ||||||||||||
£ | £ | ||||||||||||
Depreciation of fixed assets | |||||||||||||
Loss on disposal of fixed assets | - | ||||||||||||
Auditors' remuneration - audit (excl VAT) | |||||||||||||
Auditors remuneration - other services (excl VAT) | |||||||||||||
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 | |||||||||||||
The aggregate payroll costs of the above were: | |||||||||||||
2023 | 2022 | ||||||||||||
£ | £ | ||||||||||||
Wages and salaries | |||||||||||||
Social security costs | |||||||||||||
Pension costs | |||||||||||||
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 | ( |
||||||||||||
Income and expenses not allowable | |||||||||||||
Depreciation in excess of capital allowances | ( |
||||||||||||
Allowable deductions | ( |
- | |||||||||||
Losses brought forward | ( |
( |
|||||||||||
Losses carried forward | |||||||||||||
Total current tax charge | - | - | |||||||||||
6. | Tangible fixed assets | ||||||||||||
Group and company | Computer equipment | Office equipment | |||||||||||
Total | |||||||||||||
£ | £ | £ | |||||||||||
Cost | |||||||||||||
At 1 January 2023 | |||||||||||||
Additions | - | ||||||||||||
Disposals | ( |
( |
( |
||||||||||
At 31 December 2023 | |||||||||||||
Depreciation | |||||||||||||
At 1 January 2023 | |||||||||||||
Charge for the year | |||||||||||||
On disposals | ( |
( |
( |
||||||||||
At 31 December 2023 | |||||||||||||
Net book value | |||||||||||||
At 31 December 2023 | |||||||||||||
At 31 December 2022 | |||||||||||||
7. | Investments | Unquoted shares | |||||||||||
Group | |||||||||||||
£ | |||||||||||||
Cost | |||||||||||||
At 1 January 2023 | |||||||||||||
Additions | 99 | ||||||||||||
At 31 December 2023 | |||||||||||||
Company | Investments in subsidiary undertakings | ||||||||||||
Unquoted shares | |||||||||||||
Total | |||||||||||||
£ | £ | £ | |||||||||||
Cost | |||||||||||||
At 1 January 2023 | |||||||||||||
Additions | - | 91 | 91 | ||||||||||
At 31 December 2023 | |||||||||||||
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 | ||||||||||
% | |||||||||||||
£ | £ | ||||||||||||
8. | Debtors | ||||||||||||
Group | Company | ||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||
£ | £ | £ | £ | ||||||||||
Trade debtors | |||||||||||||
Other debtors | |||||||||||||
Prepayments and accrued income | |||||||||||||
Amounts due after more than one year included in: | |||||||||||||
Trade debtors | |||||||||||||
9. | Creditors: amounts due within 1 year | ||||||||||||
Group | Company | ||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||
£ | £ | £ | £ | ||||||||||
Preference shares | - | - | |||||||||||
Trade creditors | |||||||||||||
Amount owed to group undertakings | - | - | |||||||||||
Amounts owed to ICOF Community Capital Ltd | |||||||||||||
Amounts owed to Co-operative Loan Fund | |||||||||||||
Amounts owed to Community Shares ICOF Limited | |||||||||||||
Amounts owed to Solidfund | |||||||||||||
Amounts owed to Plunkett Foundation | |||||||||||||
Social security and other taxes | |||||||||||||
Other creditors | |||||||||||||
Accruals and deferred income | |||||||||||||
10. | Creditors: amounts due after 1 year | ||||||||||||
Group | Company | ||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||
£ | £ | £ | £ | ||||||||||
Preference shares | - | - | |||||||||||
Amounts owed to Plunkett Foundation | |||||||||||||
Deferred income | - | - | |||||||||||
11. | Maturity of borrowings | ||||||||||||
Group | Preference shares | Total | |||||||||||
£ | £ | ||||||||||||
As at 31 December 2023 | |||||||||||||
In one year or less on demand | 363,824 | ||||||||||||
Between 2 - 5 years | 971,621 | ||||||||||||
After more than five years not by instalments | - | - | |||||||||||
1,335,445 | |||||||||||||
As at 31 December 2022 | |||||||||||||
In one year or less on demand | 378,124 | ||||||||||||
Between 2 - 5 years | - | - | |||||||||||
After more than five years not by instalments | 915,446 | ||||||||||||
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 £ |
|||||||||||||
15. | Contingent liabilities | ||||||||||||
16. | 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. | |||||||||||||
Consolidated income and expenditure account | |||||||||||||
For the year ended |
|||||||||||||
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 |