Company registration number 04653659 (England and Wales)
CARE HOUSING ASSOCIATION LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
CARE HOUSING ASSOCIATION LIMITED
CONTENTS
Page
Company information
1
Strategic report
2 - 5
Directors' report
6 - 7
Directors' responsibilities statement
8
Independent auditor's report
9 - 12
Statement of income and retained earnings
13 - 14
Balance sheet
15
Statement of cash flows
16
Notes to the financial statements
17 - 26
Detailed trading and profit and loss account
CARE HOUSING ASSOCIATION LIMITED
COMPANY INFORMATION
- 1 -
Chairman
Mr R Parr
Directors
Mr R Parr - Chair
Ms N Khan - Vice Chair
Mr A Richards
Mrs D Holmes
Company number
04653659
Registered office
Riverside House
Kings Reach Business Park
Yew Street
Stockport
Cheshire
SK4 2HD
Auditor
Xeinadin Audit Limited
Riverside House Kings Reach Business Park
Yew Street
Stockport
Cheshire
United Kingdom
SK4 2HD
Business address
Suite 29
Hardmans Business Centre
New Hall Hey Road
Rawtenstall
Lancashire
UK
BB4 6HH
CARE HOUSING ASSOCIATION LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 MARCH 2024
- 2 -

The directors present the strategic report for the year ended 31 March 2024.

Fair review of the business

In the year to 31st March 2024 Care Housing Association Limited can report upon a profitable year with relatively healthy growth. This year Care Housing Association Limited acquired one additional four-person property (Penistone Road) using reserves, and leased a further five buildings/sites, to be occupied by 51 tenants. Of the 55 new tenancies, 43 are single-person accommodation across three sites, with the remaining 8 in 3 shared houses.

At 31st March 2024 there were four hundred and thirty seven units in Care Housing Association Limited, of which sixty three were owned. The below ratios (comparatives have been restated) are monitored on a quarterly basis to ensure key areas within the company are maintained at the required level deemed appropriate by the board.

 

Gross profit

Gross profit stands at 37.15% which is a increase from 31.17% in 2023. Purchased properties have generated a higher margin but also this is consistent with historical years prior to 2023.

 

Gearing ratio

The gearing ratio was 34.27% down from 36.60% in 2023. This is within the acceptable range of Care Housing Association Limited's level of gearing. This ratio is calculated using capital employed. As mentioned in the VFM disclosures, high interest rates have resulted in the gearing not reducing to the same extent as in prior years.

 

Return on capital employed

Return on capital employed is 7.42% which is a increase from 3.14% in 2023. The ratio has increased due to the increased profit returned on a fairly stable capital employed.

 

Current ratio

The current ratio is 1.58 which has decreased from 2.19 in 2023, liquidity is positive in the company but the lowest it has been for a number of years. Significant investment in a wide range of areas is partly the reason.

 

Structure, governance and management

Care Housing Association Limited is governed by its Memorandum and Articles of Association dated 17th March 2017 on companies house. Care Housing Association is run by its CEO with strategic decisions overseen by the board. The board usually consists of six directors, with no upper limit and a quorate requirement of two directors.

At each annual general meeting one-third of the directors or, if their number is not three or a multiple of three, the number nearest to one-third, must retire from office. If there is only one director, he or she must retire.

 

The directors to retire by rotation shall be those who have been longest in office since their last appointment. If any directors became or were appointed directors on the same day those to retire shall (unless they otherwise agree among themselves) be determined by lot.

 

If a director is required to retire at an annual general meeting by a provision of the Articles the retirement shall take effect upon the conclusion of the meeting.

 

The Articles dictate that no director may stand for re-election more than three times and no director may remain in office (with or without retirement and re-election) for an aggregate period of more than ten (10) years. However, the National Housing Federation Code of Conduct 2020, which has been adopted by the board, require directors to remain in office for no longer than 6 years, unless there is a valid business case for a years extension, up to 7 years.

CARE HOUSING ASSOCIATION LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 3 -
Principal risks and uncertainties

The supported housing sector has several risks relating to the capital and revenue funding models deployed. In terms of capital, there is limited public funding available to enable sufficient investment in new homes to meet the continued and growing demand for services. The Homes England funding regime does not work at scale for specialised supported housing, which typically requires 70%+ of funding to ensure providers are able to meet their regulatory responsibilities around rent setting. Likewise, although NHS England do make capital available for specialist projects, it is a finite amount and meets only a fraction of the housing demand.

Although private capital is more readily available, the market is in a period of transition due to high-profile failings from private capital investors over the previous decade, increasing return expectations driven by rising interest rates, and a lack of confidence in the long-term sustainability of the model. In addition, construction costs have increased significantly higher than inflation, and so the costs of delivering new homes, and the subsequent increasing rent levels, are making it more difficult to deliver homes which are financially sustainable for housing providers.

Despite the challenges in delivering new homes, the Association still retains ambitious growth targets. However, this must be balanced with the need to undertake sufficient due diligence on all parties (care providers, local authorities, developers, and contractors) and ensure that our homes retain the appropriate level of quality and sustainability.

 

April 2024 saw the introduction of revised consumer standards and delivered greater powers for the Regulator of Social Housing. This has led to greater expectations around quality, safety, and ensuring tenants have appropriate means of engagement with their landlord. Care backs the move to raise standards further but must also be conscious of the resourcing and practical implications of meeting the standards. Other legislative changes include the introduction of the Supported Housing (Regulatory Oversight) Act 2023, which will see the introduction of a licensing system for supported housing providers and will look to introduce minimum standards for care and support. The Association may need to adapt its practices and ensure that and adaptation is resourced adequately.

 

The Board itself has remained steady and consistent throughout the year, which has helped address a number of long-standing key risks and mitigate to the protect the future of the Association. The staff team has grown further, with the introduction of key staff in asset management and finance. The increased capacity and experience of the team will help to meet some of the legislative and regulatory challenges, and also equip the Association well to continue to grow in a sustainable way. Staff retention and morale remains high, as demonstrated in the result of an annual staff survey.

 

CARE HOUSING ASSOCIATION LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 4 -

Objectives and activities

- Relieving aged, disabled (whether physically or mentally) or chronically sick people including (without limitation), individuals with learning difficulties and other vulnerable groups of persons including offenders who are in need by providing and managing social housing, providing and managing housing and other activities and services connected with or incidental to the provision of social housing primarily in the North West of England;

- Promoting social inclusion by providing and managing social housing, providing and managing housing and other activities and services connected with or incidental to the provision of social housing in each case for the benefit of people at risk of exclusion from society as a result of age, disability (whether physical or mental), chronic illness including (without limitation) learning difficulties or forming part of other vulnerable groups including offenders and not having suitable accommodation provided within their financial means primarily in the North West of England;

- Improving the health of aged, disabled (whether physically or mentally) or chronically sick people including (without limitation), individuals with learning difficulties and other vulnerable groups of persons including offenders by providing and managing social housing, providing and managing housing and other activities and services connected with or incidental to the provision of social housing primarily in the North West of England.

Public benefit

In planning our activities for the year, the trustees have considered the Charity Commission’s guidance on public benefit, including the guidance on public benefit and rental charging. The Association relies on its rental income to cover its operating costs. In setting the level of rental income, the directors give due consideration to the need to ensure the accommodation is accessible by it’s tenants through housing benefit or via their own personal funds.

 

Plan for future periods

Care Housing Association Limited plans to continue developing new properties to meet our objects over the coming 12 months. Although it is anticipated that most new business will be through leases with third party landlords, a significant amount of focus has been on ensuring risks associated with lease arrangements are reduced. This has been achieved through renegotiation of terms with landlords. However, access to capital is more limited than in previous years due to concerns form investors regarding the stability of the market, and rising finance costs which apply upwards pressures on rent levels.

 

Non-Financial KPI's

The Board considers non-financial KPI’s on a quarterly basis. This includes the following information:

 

Performance Indicator                             Actual         Target

Emergency Repairs completed within timescales (4 hours)             95.60%     95%

Non-emergency repairs completed within timescales (4-21 days)        92.20%         95%

Average time taken to complete urgent repair                 2.26 days     4 days

Average time taken to complete routine repair                 9.4 days     21 days

Overall satisfaction with the repairs service (good or better)             90%         95%

Quarterly visits completed within timescales                     100%        100%

Complaints                                 4      -

 

Any underperformance is reported to Board by the CEO.

 

 

Performance against repairs KPI’s dropped slightly below our targets this year for two main reasons:

 

CARE HOUSING ASSOCIATION LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 5 -

Financial KPI's

 

Value for money metrics

In addition to the ratios measured internally, the following ratios have been calculated for the value for money standard in accordance with the Regulator of Social Housing. Some of these ratios are included above and may be calculated differently as mentioned in the standard.

 

 

Reinvestment %

7.42%

Care Housing Association has reinvested in one freehold property in 2023-24 and is still growing through the leasehold market.

 

 

New supply delivered %

6.35%

Care Housing Association has delivered an additional fifty five units of Specialised Supported Housing with one being freehold purchases.

 

 

Gearing % (per VFM report)

9.75%

Care Housing have not taken on any additional debt, however, interest rate increases has resulted in capital not reducing to the same extent as in the comparative year.

 

 

Earnings before interest, tax, depreciation, amortisation, major repairs included (EBITDA MRI) interest cover %

522.47%

The increase in profit has resulted in more interest cover.

 

Headline social housing cost per unit £

£11,847

This is a measurement of key social housing costs against the number of units at the year end. The costs are identified by the Regulator of Social Housing.

 

 

Operating margin %

6.69%

 

 

Return on capital employed (ROCE) % (per VFM report)

5.55%

 

Approved by the Board on
26 September 2024
26 September 2024
and signed on its behalf by
Mr R Parr - Chair
Ms N Khan - Vice Chair
CARE HOUSING ASSOCIATION LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 MARCH 2024
- 6 -

The directors present their annual report and financial statements for the year ended 31 March 2024.

Principal activities

The principal activity of the company is the provision of social housing accommodation.

 

Care Housing Association Limited is a not for profit organisation. The Memorandum of the Company prohibits any of the shareholders from participating in the distribution of the profits. Care Housing Association Limited has had charitable status for the year.

Directors

The directors who held office during the year and up to the date of signature of the financial statements were as follows:

Mr R Parr - Chair
Ms N Khan - Vice Chair
Mr B Gallagher
(Resigned 23 May 2024)
Ms G Fazackerley
(Resigned 15 August 2024)
Mr A Richards
Mrs D Holmes
Financial instruments

Objectives and policies

The company holds or issues financial instruments in order to achieve three main objectives, being:

 

i) to finance its operations;

 

ii) to manage its exposure to interest, credit and liquidity risks arising from its operations and from its sources of finance; and

 

iii) for trading purposes.

 

In addition various financial instruments (e.g. accounts receivable, accounts payable, accruals and prepayments) arise directly from the company's operations.

 

Transactions in financial instruments result in the company assuming or transferring to another party one or

more of the financial risks described below.

Liquidity risk

Working capital and liquidity is managed as part of day to day business routines such as the company has no significant concentrations of liquidity risk.

Credit risk

The company has no significant concentrations of credit risk. Amounts shown in the balance sheet best represent the maximum credit risk exposure in the event other parties fail to perform their obligations under financial instruments.

CARE HOUSING ASSOCIATION LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 7 -
Statement of disclosure to auditor

So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the company’s auditor is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the company’s auditor is aware of that information.

Approved by the Board on 26 September 2024 and signed on its behalf by
Mr R Parr - Chair
Ms N Khan - Vice Chair
CARE HOUSING ASSOCIATION LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 MARCH 2024
- 8 -

The directors are responsible for preparing the annual 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 affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to:

 

 

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company’s transactions and 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 hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

CARE HOUSING ASSOCIATION LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF CARE HOUSING ASSOCIATION LIMITED
- 9 -
Opinion

We have audited the financial statements of CARE HOUSING ASSOCIATION LIMITED (the 'company') for the year ended 31 March 2024 which comprise the statement of income and retained earnings, the balance sheet, the statement of cash flows and notes to the financial statements, including 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:

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 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 other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual report. 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. 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 course of 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 this gives rise to a material misstatement in the financial statements themselves. 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.

Opinions on other matters prescribed by the Companies Act 2006

In our opinion, based on the work undertaken in the course of our audit:

CARE HOUSING ASSOCIATION LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF CARE HOUSING ASSOCIATION LIMITED
- 10 -
Matters on which we are required to report by exception

In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the 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:

 

 

Responsibilities of directors

As explained more fully in the directors' responsibilities statement, 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 the directors 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.

Auditor's responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in 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 extent to which our procedures are capable of detecting irregularities, including fraud is detailed below.

CARE HOUSING ASSOCIATION LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF CARE HOUSING ASSOCIATION LIMITED
- 11 -

The extent to which the audit was considered capable of detecting irregularities including fraud

Our approach to identifying and assessing the risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, was as follows:

 

• the engagement partner ensured that the engagement team collectively had the appropriate competence, capabilities and skills to identify or recognise non-compliance with applicable laws and regulations;

 

• we identified the laws and regulations applicable to the company through discussions with directors and other management, and from our commercial knowledge and experience of the computer component manufacturing and supply sector;

 

• we focused on specific laws and regulations which we considered may have a direct material effect on the financial statements or the operations of the company, including the Companies Act 2006, taxation legislation and data protection, anti-bribery, employment, environmental and health and safety legislation;

 

• we assessed the extent of compliance with the laws and regulations identified above through making enquiries of management and inspecting legal correspondence; and

 

• identified laws and regulations were communicated within the audit team regularly and the team remained alert to instances of non-compliance throughout the audit.

 

We assessed the susceptibility of the company’s financial statements to material misstatement, including obtaining an understanding of how fraud might occur, by:

 

• making enquiries of management as to where they considered there was susceptibility to fraud, their knowledge of actual, suspected and alleged fraud; and

 

• considering the internal controls in place to mitigate risks of fraud and non-compliance with laws and regulations.

 

To address the risk of fraud through management bias and override of controls, we:

 

• performed analytical procedures to identify any unusual or unexpected relationships;

 

• tested journal entries to identify unusual transactions;

 

• assessed whether judgements and assumptions made in determining the accounting

estimates were indicative of potential bias; and

 

• investigated the rationale behind significant or unusual transactions

 

CARE HOUSING ASSOCIATION LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF CARE HOUSING ASSOCIATION LIMITED
- 12 -

In response to the risk of irregularities and non-compliance with laws and regulations, we designed procedures which included, but were not limited to:

 

• agreeing financial statement disclosures to underlying supporting documentation;

 

• reading the minutes of meetings of those charged with governance;

 

• enquiring of management as to actual and potential litigation and claims; and

 

• reviewing correspondence with HMRC, relevant regulators including the Health and Safety Executive, and the company’s legal advisors.

 

There are inherent limitations in our audit procedures described above. The more removed that laws and regulations are from financial transactions, the less likely it is that we would become aware of non-compliance.

 

Auditing standards also limit the audit procedures required to identify non-compliance with laws and regulations to enquiry of the directors and other management and the inspection of regulatory and legal correspondence, if any.

 

Material misstatements that arise due to fraud can be harder to detect than those that arise from error as they may involve deliberate concealment or collusion.

A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://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 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 and the company's members as a body, for our audit work, for this report, or for the opinions we have formed.

Philip Jones BA Hons (FCCA) (Senior Statutory Auditor)
For and on behalf of Xeinadin Audit Limited
27 September 2024
Accountants
Riverside House Kings Reach Business Park
Yew Street
Stockport
Cheshire
United Kingdom
SK4 2HD
CARE HOUSING ASSOCIATION LIMITED
STATEMENT OF INCOME AND RETAINED EARNINGS
FOR THE YEAR ENDED 31 MARCH 2024
- 13 -
2024
2023
Notes
£
£
Turnover
3
7,081,475
5,650,655
Cost of sales
(4,450,783)
(3,889,511)
Gross profit
2,630,692
1,761,144
Administrative expenses
(2,182,970)
(1,655,786)
Other operating income
25,883
18,190
Operating profit
4
473,605
123,548
Interest receivable and similar income
8
5,211
1,271
Interest payable and similar expenses
7
(117,319)
(98,801)
Profit before taxation
361,497
26,018
Tax on profit
-
0
-
0
Profit for the financial year
361,497
26,018
Retained earnings brought forward as previously reported
3,115,747
3,237,866
CARE HOUSING ASSOCIATION LIMITED
STATEMENT OF INCOME AND RETAINED EARNINGS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
2024
2023
Notes
£
£
- 14 -
Restatement of retained earnings
-
(148,137)
Retained earnings carried forward
3,477,244
3,115,747

The profit and loss account has been prepared on the basis that all operations are continuing operations.

CARE HOUSING ASSOCIATION LIMITED
BALANCE SHEET
AS AT
31 MARCH 2024
31 March 2024
- 15 -
2024
2023
Notes
£
£
£
£
Fixed assets
Tangible assets
9
7,326,040
6,849,639
Current assets
Debtors
10
2,220,424
710,975
Cash at bank and in hand
1,089,148
1,434,273
3,309,572
2,145,248
Creditors: amounts falling due within one year
11
(2,096,067)
(978,959)
Net current assets
1,213,505
1,166,289
Total assets less current liabilities
8,539,545
8,015,928
Creditors: amounts falling due after more than one year
12
(5,062,298)
(4,900,179)
Net assets
3,477,247
3,115,749
Capital and reserves
Called up share capital
15
2
2
Profit and loss reserves
3,477,245
3,115,747
Total equity
3,477,247
3,115,749
The financial statements were approved by the board of directors and authorised for issue on 26 September 2024 and are signed on its behalf by:
Mr R Parr - Chair
Ms N Khan - Vice Chair
Company Registration No. 04653659
CARE HOUSING ASSOCIATION LIMITED
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 MARCH 2024
- 16 -
2024
2023
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from operations
18
424,772
1,074,422
Interest paid
(117,319)
(98,801)
Net cash inflow from operating activities
307,453
975,621
Investing activities
Purchase of tangible fixed assets
(636,422)
(1,169,840)
Interest received
5,211
1,271
Net cash used in investing activities
(631,211)
(1,168,569)
Financing activities
Repayment of bank loans
(21,366)
(42,929)
Net cash used in financing activities
(21,366)
(42,929)
Net decrease in cash and cash equivalents
(345,124)
(235,877)
Cash and cash equivalents at beginning of year
1,434,273
1,670,150
Cash and cash equivalents at end of year
1,089,148
1,434,273
CARE HOUSING ASSOCIATION LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
- 17 -
1
Accounting policies
Company information

The company is a private company limited by share capital incorporated in United Kingdom.

The address of its registered office is:

 

Riverside House

Kings Reach Business Park

Yew Street

Stockport

Cheshire

SK4 2HD

 

The principal place of business is:

Suite 29

Hardmans Business Centre

New Hall Hey Road

Rawtenstall

Lancashire

BB4 6HH

1.1
Accounting convention

Summary of significant accounting policies and key accounting estimates

The principal accounting policies applied in the preparation of these financial statements are set out below.

These policies have been consistently applied to all the years presented, unless otherwise stated.

The financial statements have been prepared under the historical cost convention The principal accounting policies adopted are set out below.

Statement of compliance

These financial statements were prepared in accordance with Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland' and in accordance with the Housing SORP: 2018 (Statement of Recommended Practice for registered social housing providers)

 

Basis of preparation

These financial statements have been prepared using the historical cost convention except that as disclosed in the accounting policies certain items are shown at fair value.

 

Care Housing Association Limited is a public benefit entity in accordance with FRS 102 paragraph 3.3A

1.2
Going concern

Atruet the time of approving the financial statements, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.

CARE HOUSING ASSOCIATION LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
1
Accounting policies
(Continued)
- 18 -
1.3
Turnover

Turnover comprises the fair value of the rental income received or receivable for the provision of services in the ordinary course of the Company’s activities.

 

The Company recognises revenue when:

The amount of revenue can be reliably measured;

it is probable that future economic benefits will flow to the entity;

and specific criteria have been met for each of the Company's activities.

 

More specifically the majority of income is received via housing benefit from local authorities. The rental income is received in 4 weekly terms; therefore, Care Housing Association recognises income on a 53 week period. In these accounts the period is from 24th March 2023 - 31st March 2024.

 

Other income that is invoiced for void occupancy is recognised up to 31st March 2024.

1.4
Tangible fixed assets

Tangible assets are stated in the statement of financial position at cost, less any subsequent accumulated depreciation and subsequent accumulated impairment losses.

 

The cost of tangible assets includes directly attributable incremental costs incurred in their acquisition and installation.

 

Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:

Land and buildings
Term of lease
Leasehold costs
25% Written down value
Freehold Buildings - Structure
100 years
Freehold Buildings - Kitchen
10 years
Fixtures and fittings
15 years
Computer equipment
30 years
Freehold Buildings - Heating
30 years
Freehold Buildings - Boiler
10 years
Freehold Buildings - Windows
25 years
Freehold Building - Roof
40 years
Office equipment
33% Written down value

The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is credited or charged to profit or loss.

1.5
Cash and cash equivalents

Cash and cash equivalents comprise cash on hand and call deposits, and other short-term highly liquid investments that are readily convertible to a known amount of cash and are subject to an insignificant risk of change in value.

 

1.6
Financial instruments

Classification

Financial instruments are classified for, according to the substance of the contractual agreement, as financial assets, financial liabilities or equity instruments.

 

CARE HOUSING ASSOCIATION LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
1
Accounting policies
(Continued)
- 19 -
Fair value measurement of financial instruments

Recognition and measurement

An equity instrument is any contact that evidences a residual interest in the assets of the company after deducting all of its liabilities. Where shares are issued, any component that creates a financial liability in the balance sheet. The corresponding dividends relating to the liability component are charged as interest expense in the profit and loss account.

Basic financial assets

Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.

Trade debtors

Trade debtors are amounts due from customers for merchandise sold or services performed in the ordinary course of business.

 

Trade debtors are recognised initially at the transaction price. They are subsequently measured at amortised cost using the effective interest method, less provision for impairment. A provision for the impairment of trade debtors is established when there is objective evidence that the company will not be able to collect all amounts due according to the original terms of the receivables.

Other financial assets

Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.

Impairment of financial assets

Impairment

Financial instruments are reviewed annually for any changes in value and/or written down if they are impaired.

Derecognition of financial assets

Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the company transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.

Classification of financial liabilities

Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.

Trade creditors

Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Accounts payable are classified as current liabilities if the company does not have an unconditional right, at the end of the reporting period, to defer settlement of the creditor for at least twelve months after the reporting date. If there is an unconditional right to defer settlement for at least twelve months after the reporting date, they are presented as non-current liabilities.

 

Trade creditors are recognised initially at the transaction price and subsequently measured at amortised cost using the effective interest method.

CARE HOUSING ASSOCIATION LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
1
Accounting policies
(Continued)
- 20 -
Other financial liabilities

Derivatives, including interest rate swaps and forward foreign exchange contracts, are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.

 

Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as being measured at fair value through profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.

Derecognition of financial liabilities

Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.

1.7
Retirement benefits

A defined contribution plan is a pension plan under which fixed contributions are paid into a pension fund and the company has no legal or constructive obligation to pay further contributions even if the fund does

not hold sufficient assets to pay all employees the benefits relating to employee service in the current and prior periods.

Contributions to defined contribution plans are recognised as employee benefit expense when they are due. If contribution payments exceed the contribution due for service, the excess is recognised as a prepayment.

 

1.8
Government grants

Government grants are recognised at the fair value of the asset received or receivable when there is reasonable assurance that the grant conditions will be met and the grants will be received.

 

A grant that specifies performance conditions is recognised in income when the performance conditions are met. Where a grant does not specify performance conditions it is recognised in income when the proceeds are received or receivable. A grant received before the recognition criteria are satisfied is recognised as a liability.

1.9

Share capital

Ordinary shares are classified as equity. Equity instruments are measured at the fair value of the cash or other resources received or receivable, net of the direct costs of issuing the equity instruments. If payment is deferred and the time value of money is material, the initial measurement is on a present value basis.

2
Judgements and key sources of estimation uncertainty

In the application of the company’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated 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 where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.

CARE HOUSING ASSOCIATION LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
2
Judgements and key sources of estimation uncertainty
(Continued)
- 21 -

Operating lease commitments

The company has entered into a number of operating leases which it obtains the use of. The classification of such leases as operating or finance lease requires the company to determine, based on an evaluation of the terms and conditions of the arrangements, whether it retains or acquires the significant risks and rewards of ownership of these assets and accordingly whether the lease requires an asset and liability to be recognised in the statement of financial position.

3
Turnover and other revenue
2024
2023
£
£
Turnover analysed by class of business
Rental income
6,844,672
5,615,990
Other income
236,804
34,666
7,081,476
5,650,655
Analysis per statutory database
7,081,476
5,650,656
Statutory database analysis does not agree to the trial balance by:
-
1
2024
2023
£
£
Other revenue
Interest income
5,211
1,271
Grants received
25,883
18,190
4
Operating profit
2024
2023
Operating profit for the year is stated after charging/(crediting):
£
£
Government grants
(25,883)
(18,190)
Fees payable to the company's auditor for the audit of the company's financial statements
6,918
6,918
Depreciation of owned tangible fixed assets
160,022
128,346
5
Auditor's remuneration
2024
2023
Fees payable to the company's auditor and associates:
£
£
For audit services
Audit of the financial statements of the company
6,918
6,918
For other services
All other non-audit services
12,948
14,088
CARE HOUSING ASSOCIATION LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 22 -
6
Employees

The average monthly number of persons employed by the company during the year was:

2024
2023
Number
Number
Administration and support
14
13

Their aggregate remuneration comprised:

2024
2023
£
£
Wages and salaries
493,248
448,417
Social security costs
47,606
43,617
Pension costs
22,887
19,938
563,741
511,972

The remuneration paid to key management in the year was £101,776 (2023: £100,313) including benefit in kind payments plus £3,141 (2023: £5,306) in employers pension contributions.

7
Interest payable and similar expenses
2024
2023
£
£
Interest on financial liabilities measured at amortised cost:
Other interest on financial liabilities
117,319
98,801
8
Interest receivable and similar income
2024
2023
£
£
Interest income
Interest on bank deposits
5,211
1,271
CARE HOUSING ASSOCIATION LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 23 -
9
Tangible fixed assets
Land and buildings
Leasehold costs
Fixtures and fittings
Computer equipment
Total
£
£
£
£
£
Cost
At 1 April 2023
7,065,997
267,770
213,923
22,862
7,570,552
Additions
520,741
43,442
52,320
19,919
636,422
At 31 March 2024
7,586,739
311,212
266,243
42,781
8,206,975
Depreciation and impairment
At 1 April 2023
460,929
107,110
138,977
13,897
720,913
Depreciation charged in the year
103,264
21,689
30,726
4,343
160,022
At 31 March 2024
564,193
128,799
169,703
18,240
880,935
Carrying amount
At 31 March 2024
7,022,546
182,413
96,540
24,541
7,326,040
At 31 March 2023
6,605,068
160,660
74,946
8,965
6,849,639
10
Debtors
2024
2023
Amounts falling due within one year:
£
£
Trade debtors
227,278
138,892
Other debtors
12,363
-
0
Prepayments and accrued income
1,789,259
558,725
Accrued income
191,524
13,358
2,220,424
710,975
11
Creditors: amounts falling due within one year
2024
2023
Notes
£
£
Bank loans
13
44,777
6,028
Trade creditors
1,839,654
825,492
Taxation and social security
(1,562)
10,058
Accruals and deferred income
213,198
137,381
2,096,067
978,959
CARE HOUSING ASSOCIATION LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 24 -
12
Creditors: amounts falling due after more than one year
2024
2023
Notes
£
£
Bank loans and overdrafts
13
1,728,882
1,788,997
Other creditors
3,333,416
3,111,182
5,062,298
5,695,744
13
Loans and overdrafts
2024
2023
£
£
Bank loans
1,773,659
1,795,025
Payable within one year
44,777
6,028
Payable after one year
1,728,882
1,788,997

The bank loans are secured by a legal charge over 14 Daybrook,Skelmersdale, 34 Farringdon Road, Warrington, 519 Hempshaw Lane Stockport, 48 Ebdale Close, Stockport, 16 Corinthian Avenue, Liverpool, 148 Nangreave Road, Stockport, 6 Bangor Road, Cheadle, 18 Hertford Close, Warrington, 2 Savernake Road, Stockport, 31 Summerbridge Crescent, Bradford, 6 Lindbury Avenue, Stockport, Flats 1-9 Victoria Gardens, Clitheroe.

 

The cumulative capital repayments after 5 years are £1,559,034 and the interest rate on these repayments are 2.5% above the Bank of England base rate.

14
Pension schemes
2024
2023
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
22,887
19,938

The company operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the company in an independently administered fund.

15
Share capital
2024
2023
2024
2023
Ordinary share capital
Number
Number
£
£
Issued and fully paid
175 of 1p each
175
175
2
2
CARE HOUSING ASSOCIATION LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 25 -
16
Contingent liabiities

Rental Income

Included in the rental income collected by the association is a percentage relating to future voids. This element is deferred in the financial statements and will be released to the profit and loss account as and when a void arises.

 

If, at the end of the agreement period, any of the deferred rental income for properties with Lancashire County Council is not released to the profit and loss account, one third of the balance is payable to Lancashire Social Services. This amount per the void provision at the 31st March 2024 is £168,998 (2023: £146,746). Due to the nature of the agreements there is a possible transfer of economic benefits, of which the amount remains uncertain.

 

The management agreements are in place for 10 or 15 years from when they commenced and are linked to the properties on an individual and property by property basis.

 

Grants

Within other creditors more than one year is a second grant that was issued to Care Housing which was in the year ended 31st March 2017. This was also used to purchase a property for individuals with learning disabilities (or such other needs as are agreed by NHS England). The terms of the grant stipulate that if the property is sold the grant is repayable, unless NHS England waiver its right to repayment. NHS England have 1st legal charge over the property. This is released using the accruals model in accordance with FRS102 due to the clause.

 

During 2020 a third grant was issued by NHS England with the same terms as the above NHS grant. The grant was issued for £419,000 in 2020 with a further £98,819 being issued in the 2021 year end.

 

During 2021 a fourth grant was issued by NHS England with the same terms as the above NHS grant. The grant was issued for £300,000 in 2021 with a further £125,616 issued in the 2022 year end.

 

During 2023 a fifth grant was issued by NHS England with the same terms as the above NHS grant. The grant was issued for £500,356 in 2023 with a further £90,003 issued in the 2024 year end.

 

17
Operating lease commitments

At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:

2024
2023
£
£
Within one year
11,311
16,814
Between two and five years
740,189
258,499
In over five years
51,248,325
55,594,901
51,999,825
55,870,214
CARE HOUSING ASSOCIATION LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 26 -
18
Cash generated from operations
2024
2023
£
£
Profit for the year after tax
361,497
26,018
Adjustments for:
Finance costs
117,319
98,801
Investment income
(5,211)
(1,271)
Depreciation and impairment of tangible fixed assets
160,022
128,346
Movements in working capital:
Increase in debtors
(1,509,449)
(484,583)
Increase in creditors
1,300,593
1,307,111
Cash generated from operations
424,772
1,074,422
19
Analysis of changes in net debt
1 April 2023
Cash flows
31 March 2024
£
£
£
Cash at bank and in hand
1,434,273
(345,125)
1,089,148
Borrowings excluding overdrafts
(1,795,025)
21,366
(1,773,659)
(360,752)
(323,759)
(684,511)
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