Evolve Housing + Support Report and Financial Statements Year ended 31 March 2023 Company number.. 4796537 Registered Charity number. 1099051 Homes England registration number- H4400 Evolve Housing + Support Report and Financial Statements for the year ended 31 March 2023 Contents Pagg: Directors, Executives and Advisers Directors, Report, including Strategic Report 10 Slalemenl of the System of Internal Controls Slalemenl of Directors, Responsibilities Independent Auditor's Report 16 Slalemenl of Comprehensive Income 17 Slalement of Financial Activities 18 Slalement of Financial Position 19 Slalement of Changes in Reserves 20 Slalemenl of Cash Flows 21 Notes forming part of the financsal slalements Evolve Housing + Support Directors, Executives and Advisers Directors Paul Perkin Paul Infield Diana Coman Evonne Coleman-Thomas Simon McGralh Nilavra Mukerji Isabel Lee David Shrimpton Mike Ward Ana Gonzalez Iglesias Colin Maclean Vipan Maini Rebecca Monk Abby Raymond Audltor BDO LLP 55 Baker Street Lon(Jon W1 U 7EU Chair Vice Chair {Resigned 21 September 2022) (Retired 1 November 2022} (Appointed 1 November 20221 {Appoinled 29 June 20231 {Appoinled 29 June 20231 (Appointed 29 June 20231 {Appoinled 29 June 20231 {Appoinled 29 June 20231 Solicitors Winckworlh ShenNood LLP Minerva House 5 Monlague Close London SE1 9BB Keystone Law 48 Chancery Lane London WC2A 1JF Company Secretary Jenny Slrudwick Re9lStered office 16 - 20 Kingston Road South Wimbledon London. SW19 1JZ Bankers HSBC Bank plc 139A Norlh End Croydon CRO 1TN Audit Committee Paul Infield David Shrimpton Diana Coman Evonne Coleman-Thomas Chair from 1 November 2022 Interim Chair to 1 November 2022 Santander UK plc 100 Ludgale Hill Lonéon EC4M 7RE Lgadorship Tgam Jeremy Gray Pamela Newman Jenny Sirudwick Elspelh Hayde Chief Executive Director of Operations Director of Corporate Services Director of People and Culture Evolve Housing + Support Directors, Report for the year ended 31 March 2023 STRUCTURE, GOVERNANCE AND MANAGEMENT Evolve Housing + Support l Evolve") is a company limited by guaran18e, a regislered charity and a registered social landlord. 11 is governed by ils Articles of Association. The governing body of the organisalion is the Board, which comprises not less than seven and not more than twelve members. Board members are elected for a th￿e-year period and may be re-elected for one further three year period. All members of the Board give their lime voluntarily and receive no benefits from the organisation. Direclofs, liability insurance is arranged annually. A regular appraisal exercise is carried out for Board Members by the Chair, together with an annual skills audit. Both of these allow gaps in the Board lo be idenlrfied. to enable largeled recruilmenl. Al members are given the opportunity to ￿Ceive addition81 training. Current customers sil on our Customer Scrutiny Panel, which reports regularly to senior colleagues and the Board. A register is kept ol the interests of Board members and specrfic declarations of interest are sought al every Board meeting. The main responsibility of the Board is lo formulate the strategic plans of the organisalion along with Ihe buégel and financial monrtorirng. 11 receives regular reports on all aspects of the work of the organisalion and meets formally al least quarterly. Away days are held regulady with the Chief Executive and senior managers lo discuss and plan future strategy based around a comprehensive business plan. The Board delegates the main day lo day decisions lo the Chief Executive and the Leadership Team. The Board has established and formally consliluled the Audit Committee as a sub-committee of the Board, with specific terms of reference and functions delegated by the Board and with Board members representing the Board's inleresl on Ihe committee. The Chief Executive, the Director of Operations and the Director of Corporate Services normally allend all the Audit Committee meetings, as do other senior managers as appropriate. The Board confirms that Ihe organisalion complies with the regulatory frameworks and standards issued by ils regulators the Regulator of Social Housing and the Charity Commission. In addition, the organisation has adopted the National Housing Federation's INHF} Code of Governance 2020. The organisalioll complied with the relevant requirements of these frameworks. including the Govern3nce and Viability Standard, throughout the year under review, and continues lo do so. Evolve was incorporated as a company limited by guarantee on 12 June 2003, under the name'soulh London YMCA" 11 was registered as a charity with Ihe Charity Cornmission on 1 g August 2003 and as a social landlord with the Regulato¥ of Social Housing {fomiedy the Homes and Communities Agency) on 11 September 2003. OBJECTIVES AND ACTIVITIES Purpo$es and Aims The primary objects of Evolve are.. lo provide, improve and manage houses or hostels providing residential accommodation and associated amenities, facilities and services for people of all ages who are in need. hardship or distress by reason of their social. physical or economic cir¢umslances'. to relieve or assist in the relief of people of all ages who are in need, hardship or distress by reason of their social, physical or economic circumstances. Our aim is lo help children, young people and adults who are homeless or al risk of homelessness lo become independerTrl and resilienl. We believe in building on people's slrenylhs, aspirations and goals lo help them break the cycle of homelessness. We offer a programme of support tailored lo meet people's individual need5, including housing. employment and skills training, mentoring and counselling. We woik with young parents and children al risk of exclusion lo build the skills and resilien￿ that can help prevent homelessness. Our aims fully reflect the purposes that Ihe organisation was sel up lo further. Evolve Housing + Support Directors. Report for the year ended 31 March 2023 We review our aims. objectives and activities each year. This review looks at what we have achieved and the oulcotnes of our woik. 11 looks al the success of each key activity and the benefits Ih8y have brought lo those groups of people we are sel up lo supporl. The review also helps us er)sure our aims, objectives and activities remain focused on our staled purposes. We refer lo the Charity Commission's general guidance on public benefit when reviewing our aims and objectives and in planning our future aclivilies. In particular, the Board considers how planned activities will contribute lo the aims and objectives il has sel. How our activities deliver publi¢ benefit Our main activity is the provision of supported housing and Ihose who benefit from our services are described below. Our charitable activities focus on the support of homeless people and Ihose al iisk ol homelessness. with the aim of supporting them lo develop the skills andlor insight needed to live independently. The Direcltsrs have taken due regard of the Charity Commission guidance on public benefit and have satisfied themselves that the charitable 8clivilies undertaken by the organisation are for the furtherance of its charitable purposes and satisfy the requirements of public benefit. Who uses and beneflts from our servlces7 Whilst our objects are not geographically limited, our funding streams mean that the servi￿$ we provide are primarily lo the residents of the London Boroughs of Croydon, Lambelh, Merton, Sullon and the Royal Borough of Kensington and Chelsea. We plan lo expand these services into neighbouring boroughs as opportunities arise. Our core client group Is homeless and vulnerable people of all ages. Our accommodalion-based services cover a broad range of customer groups, including young people al risk, teenage parents, care leavers, young families with no recourse lo public funds, sin9le homeless adults, people with severe and enduring mental health neeés and previously excluded rough sleepers with complex needs. Access lo our accommodation-based services is managed via the local aulhorily which funds the particular service. This process ensures that OLJr services continue difeclly lo meet the needs of the boroughs in which we work. During the year we have continued lo provide our Health and Welltieing Service lo deliver focussed support lo our customers. Fundralslng Charity law requires charities lo make a slalemenl regarijing fundraising activities. The legislation defines fundraising as 'soliciling or otherwise procuring money or other properly lor charitable purposes,. Such amounts receivable are presenled in these accounts in other operating income. We have a Fundraising Slralegy and a Stakeholder Engagement Strategy, both approved by our 803rd. We do not work with any professional fundraisers. nor do we use cold calling or direct mail. We are registered wilh the Fundraising Regulator and comply with their code of practice. The day-lo-day management of all ncome generation is delegated to Ihe executive team who are accountable lo the Direclors. We have received no complaints in relation lo fundraising activities in the year under review. Evolve Housing + Support Directors, Report for the year ended 31 March 2023 STRATEGIC REPORT ACHIEVEMENTS AND PERFORMANCE In June 2019, the Board approved our 2019-22 Business Plan. Our strategic objeclive is lo inspire our team lo create positive change. reach more people and sustain our future. As a result of the pandemic, we were unable lo progress many of our plans, and in June 2021. the Board agreed lo extend the term of the current plan to 2023 and approved an interim plan for 2023-25. A new 3-year plan will be developed in 2024. This report gives a snapshot of the many achievements and improvements in service provision for our customers during the year lo 31 March 2023. Our primary focus remains keeping cuslomers and colleagues safe and maintaining the financial security of the organisalion. The Directors acknowledge that the achievements of the year were only possible through the hard work of our colleagues and the commilmenl of our partners, including the London Boroughs of Croydon, Lambelh, Merton, Sullon and the Royal Borough of Kensington and Chelsea, Homes England, National Lollery Community Fund, Nationwide Building Society, London Hostels Association, Greater London Aulhorily, Land Aid and many charitable trusts, corporations, groups and individuals who continue lo support our work. Operations Al 31 March 2023, Evolve provided 554 beds of supported housing in the London Boroughs of Croydon, Lambelh, Sullon and Merton, and the Royal 8orough of Kensington and Chelsea. The support we offer within our accommodalion-based services is funded through local authority conlracls, and we work lo ensure that we are meeting the needs of our Customers and the strategic needs of our commissioners. Our teams are equipped lo work with and support the most vulnerable and complex people within the communities we serve and have the flexibility lo be able lo change our service offering lo meet new strategic needs if required. Health and Safely Building safely land fire safely} continues lo be a eore priority in our Business Plan and day lo day work. All our buildings have expert fire risk assessments in place and are subject lo a regular inspecting regime. We havg. invp.slpd in niir firp. safe.ly work and practice lo pre.pare for Ihe Biiilding Safety Bill and will be registering our buildings with the Joint Fire Safely Aulhorily, where appropriate, in 2023. Improving Quality In the 2022 cuslomer survey. overall customer satisfaction with Evolve services remained high 8184.8010. In 2022. we began the process of embedding our Co-production slralegy, launched in Febru8ry 2022, across the oiganisalion. As part of this we have seen the successful completion of our first Peer Pathways programme. As parl of the strategy. we have also implemented our Together with Tenants plan and Tenant Satisfaction Measures now form a core parl of customer feedback mechanisms. As we exited the panderllic period, we have been able lo re-slarl service visits and aclivilies Iwhilsl remaining mindful of infection controll. During 2022 we completed a full programme of service quality audits. We have co-designed and held several cuslomer events, including a Women's Festival organised by our Women's Opportunity Network made up of colleagues and customers. 81 nominations weie received by colleagues lo celebrate Customers who volunteer in Iheir service or wilhin their community. A recogniliotb event was held in 2022 wilh a further one planned for later in 2023. We have continued lo implement a 'Psychologically Informed, approach, not just in Services bul across Ihe organisalion. This has been achieved through cross-organisalional working groups who have reviewed every area of our work. Evolve Housing + Support Dlrectors, Report forthe year ended 31 March 2023 Community Services Our work and learnlng programme for young people continued in 202￿23 through a mix of unreslricled funds and a continuation grant from the London Hostels Association which lunded the piogramme until October 2022. Outcomes showed 1000/0 of customers had a work ancl learning plan. 109 young people were engaged in the programme including 44 with educalional outcomes in a professional qualification. 16 workshops OGCUTTed with 23 young people completing further studies in entrepreneurship. Our Health and Wellbeing Programme received conlinualion funding and support from the National Lollery Community Fund in 2022. and the programme will now continue until 2025. In our first year of the new programme, we completed 718 Iherapeulic inlervenlions lor 102 Cuslomers. 241 customers engaged in physical health activities and 316 health focused drop-ins were conducted. The Counselling service continued to operate on a lower scale with four counsellors while a review of the project look place. 87 assessments were completed and 47 welll on to formal counselling. The number of sessions delivered was 398. Peer Circles, supported by the National Lollery Community Fund and European Social Fund, came lo an end in 2022 after five years. Final outcomes for the project have yel lo be released by the lead partner, Sl Giles, due to the project being extended slightly. We continued lo provide a high level of engagement with peers leading lo eight gaining full lime employment including three within our own services. Fundraising Our Move 53 challenge, held in July 2022 was 8 huge success. raising £11,500. Each participating supporter committed lo completing 53 activities in one month lo raise these fLJnds for us. In December 2022, the Big Give again saw our supporters give generously and raised £22,000 for our Health and Wellbeing Services. Grants from London Hostels Association and Nationwide Building Society provided funding for Work and Learning services. Some of our supporters who are keen palch-workers created an Evolve patchwork quill, illustrating what home means lo them lané all of us). This beautiful piece of craft work was raffled across our network of local supporters and raised £900 for us. Colleagues In 2022123 we launched wellness action plans for all colleagues, and from these developed a colleague wellbeing strategy. We also delivered the actions from year one of our Race Action Plan, including developing an incbusive reuuitmenl strategy and increasing the number of cuslomeTS who are parl of recruilmenl Interviews. We have brought more clarity lo how facially mo11V8led abuse fTom customers will be robustly responded lo. We gained Disability Confidenl level 2 accredilalion, engaged in an exlernal peer mentoring programme for colleagues and continued lo develop our colleague recognition actions with a monthly focus on achievements across the organisalion and our annual slaff awards. Evolve Housing + Support Directors, Report for the year ended 31 March 2023 FINANCIAL REVIEW The Directors present the Teporl and financial statements for the year endeé 31 March 2023. The slalements are presented according lo the requirements of the Slalemenl of Recommended Practice ISORPI Accounting by Registered Social Landlords and FRSI02. The key financial results for the year are Shown below. Turnover for the year amounted lo £12,825k compared with £13.168k for the year ended 31 March 2022. A surplus of £3.527k was recorded for the year. compared lo a deficit of £2,113k in the previous year. Adjusting for the recovery of cladding remediation costs and legal fees in relation lo the associated liligalioii. an operating surplus of Z1,228k was re¢orded on norn)al operatioris, ¢onip¢Jred lo a surplus of £662k in Ihe previous year. Interest payable, less receivable, was £108k for the year compared with £116k for the previou8 year. During the year lo 31 March 2023 we continued our investment in fire safely, however several major building projects were delayed due to the ongoing costs of liligalion over cladding remediation. In the year lo 31 March 2022. we completed the cladding remediation on one of our buildings, work which was required due lo poor and unsafe inslallalion. Total remediation costs were £2.75m. During the year under review, we sellled our legal claim through mediation, and recovered £3m. representing approximately 700/D of the lolal cosls of remediation and the legal action. The selllemenl conlribuled Signif￿¢antIY lo the surplus for the year. Due lo the recovery of funds, we were able lo commission some capital works and increase cyclical maintenance lo our properties towards the end of the financial year. Going concern We carry out stress testing on our budget projeclions and prepare seven-year forecasls lo model various scenarios. Compliance with bank covenants is monitored quarterly and reported lo the Audit Committee. After reviewing the annual budget, the Business and Corporate Plans, seven-year forecasts and cash flow projections, the Board considers that the organisalion has adequate resources lo continue in operational existence for the foreseeable future. The selllemenl of the cladding litigation restored our cash resources. Accordingly, we continue lo adopt the going concern basis in preparing the accounts. PLANS FOR THE FUTURE Our 2019-2022 Business Plan was approved by the Board al their meeting in June 2019. The plan sel oul our ambition and sliategic objectives for the Ihree-year period. Al their meeling in March 2021, the Board agreed lo extend the period of that business plan by one year, to 2023, to acknowledge that we were unable lo work on some of our strategic objectives due lo the pandemic. In March 2023, the Boaid approved an interim Business Plan, the key aim ol which is a¢hieving further stability and consolidation, building a plalfofm for growth. From the bLJsiness plan, we develop a corporate plan for each year. Our plan for 2023124 was agreed in March 2023. Our key objectives for the 2023124 year are.. Develop and adapt our ServI￿S to meet Customer need within the funding available., Continue our strategy and work on equality, diversity and inclusion,. Slabilise and consolidate finances lo provide a sound platform for future growth. To achieve these objectives, we will strive lo.. Inspire our team: Develop a colleague-led wellbeing calendar with events throughout the year., Review Equality, Diversity and Inclusion Slralegy and develop a new 3-year plan.. Develop an engagement and recognition strategy. Evolve Housing + Support Directors, Report for the year ended 31 March 2023 Create positive change". Explore innovalive uses for our buildings in response lo changing needs and funding", Implement requirements of Building Safety Act., Embed 'Psychologically Informed Environments, across the whole organisalion and demonstrate their impact. Reach more people: Develop our community services and partnerships lo meet unmel needs., Devise new development strategy., Work with local communities lo raise profile and engage wilh supporters. Sustain our future: Implement phase 2 of our IT strategy lo fulureproof our IT systems,. Devise full new three year Business Plan. Develop full environmental sustainability strategy. Risk and Intemal Control The Audit Committee have reviewed the internal audit arrangements and agreed lo appoint specialist providers appropriate lo the work required, with a view lo having regular specialist ieviews. We also have a comprehensive programme of internal quality audits, covering all aspects of our business, and all deparlmenls. Results of these audits are reported to the Board. Policies and procedures have been pul in place lo ensure good governance and these are regularly revSewed and added lo as required. Likewise. detailed procedures covering all aspects of finance related systems and reporting have been developed lo supplement the organisalion's financial regulations. The Boaid is responsible for safeguarding the assets of the organisation and hen￿ for taking reasonable steps for the prevention and detection of fraud and other irregularities. The Board has considered Ihe key risks facin9 the organisalion. Future Government's reforms lo Ihe welfare syslem remain a risk lo our main revenue stream. Rental income provides the major source of income lo the organisalion and our Gustomers rely on benefits lo pay their rent. A tnajor area of risk relates lo Supporting People funding, on which the organisalion also relies heavily, particularly with regard lo the arrangements for competitive tendering Ihal all Local Authorities now follow. The risks inherent with this funding slre8m are addressed in a number of ways. We ensure that Ihe quality of all our services is maintained lo a very high slandard and that all lender submissions are keenly priced. Good relations are maintained with local authorities, and we work wilh Council colleagues lo ensure the continue strategic relevance of the organisalion's services to the Councils, ongoing slralegies. In addition. colleague5 ensure that the Councils are kept fully briefed on the organisalion's services and the imporlance ol maintaining funding. We are also working to widerTr our income streams and thus reduce our reliance on this form of local authority funding. The organisalion's Slalemenl of the System of Internal Controls is sel out on page 10. VALUE FOR MONEY Board acknowledgement of responsibility The Board accepts ils responsibility for knowing how our assets are used lo further our aims and purposes. The Board and senior management team regularly review the organisalion's developmenl and investment strategies with the aim of ensuring that we continue to make appropriate use of our assets in order lo achieve further growth. A key aim for Ihe Board is to demonslrale that we are maximising the relurn on our assets and inveslmenls, in line with our risk appelile, and achieving value for money. Evolve Housing + Support Directors, Report for the year ended 31 March 2023 Value for Money at Evolve Our strategic objectives aim lo deliver our Charitable purpose. They therefore reflect the value we are seeking lo maximise in Ihe context of value for money. To measure our success. we sel key performance indicators IKPlsl and largels against our objectives. Our key strategic objectives remain unchan9ed and can be summarised as follows.. Inspir& our leam lo create positive change, reach more people 8nd sustain our future. Our slralegic objectives and key priorities are summarised below.. Slraleaic Ob eclive 2022123 ke riorilies Measure KPI Inspire our leam Colleague wellbeing Support our custorners lo identify and meet ersonal oals Seek additional funding lo ensure services continue uninterru led ays lost lo sickness absence KPI - /0 of customers wilh slaying safe plans Funds raised increased costs KPIS Y. lost from voids and arrears Creale ositive chan Reach more people compared lo Sustain our future Manage void losses and arrears We report here on our organisalional melrics and largels and the RSH metrics as required by the Vfm standard. Median figures are taken from the Smaller Providers, Benchmarking Group ISPBMI data for our peer group. The peer group is comprised of 15 smaller housing associations primarily providing supported accornmodation across the country. However, ham the group also provide general needs housing which operates on a lower cost base and higher margins. RSH Metric 2020121 2021122 2022123 Actual 2022123 Target SPBM 2022123 Median £13.1k 2023124 Target Headline social housing cost per unll i£'oooi ÉBITDA interest cover lQ/ol Operating Margin. Social housing letlings £14.9k £14.3k £14k £15.2k £14.8k 1660/0 -112810 3780/0 445.1 634°/0 265 /0 11.68/0 8.700/, 3.680/D -so/. 3.500/0 0.8 10 0.76Yo Operalinq marqin.. orqanisation (OIDI Return on capital em loved ('/.) Gearino lO/.I Reinveslmenl lQ/o) New supplv delivered 1.730 1.26Q -1.4°/ 1.99 /.- 27.59Y 0.290/. 501. 10.5°/0 0.37°10 Evolve Metric 2020121 2021122 2022123 Actual 2022123 Target SPBM 2022123 Median 2023124 Target Colleaoue absences Iworkino davs losll Customers with current support plans 12.7 13.4 97.10/0 97.80 1 OO¥L> iy.) Additional funds raised l£'OOOI Void losses ID/.) Arrears IO/ol £202k 4.9°/0 3.9601. £5k 5.4'/0 3.14. £39.6k £25k NIA 5.410 4.770/. £27k 5.5°1. 2.6701. 3.7° 2.22ts/. Our results for the year were significantly improved by settling our legal action regarding unsafe cladding. Through medialion we were able lo sellle the case and recover approximately 70V/o of the lolal remedlalio and legal costs. Evolve Housing + Support Directors. Report for the yeai ended 31 March 2023 Our headline social housing cosl per unil is high, although close lo Ihe peer group rnedian. We work hard lo keep cost increases as low as possible, whilst maintaining the qualily of our services. Many of our Cuslomors have complex needs and as a speciali51 supported housing provider it Is lo be expected Ihal our service charge cosls will be relatively high because ol the special addilional services we need lo provide, including higher staffing levels, grealer security and safely equipment, elc. We Continue lo spend significant sums Dn rire safely work, which together wilh static funding from our commissioning partners puls pressure on our margins. Discussions regarding our developmenl plans continued with a partner local authority. We continue lo pay down our bank loans, deliberately allowing gearing to fall, in order to increase our borrowing capacity for future developments. The settlement of our legal case has significantly replenished our cash reserves. More information on value for money, including details of our social value, Gan be found in our full Vfm review and on our website. RESERVES POLICY The Directors believe that a general reserve representing between three and six months. unreslricled expenditure should be maintained to allovv the organisalion lo be managed efficiently. There is a need lo match variable income with fixed commitments and the nature of the reserves and lo provide a buffer for uninlerrupled services. This level of reserves would provide sufficient funds for the maintenance of the current activities of the organisalion in the event of a significant drop in funding and also provide lime 10 211ow the Directors to consider changes in acllvilies or new sources of funding. During the year. our total reserves increased from £11,161 k to £14,688k. The majority of these reserves are held as fixed assets and, as such. could not be readily converted lo cash. Free reserves, defined as those which could be freely spent on our charitable objects land excluding restricted funds). amount to £4.68m, repiesenling approximately 4.5 month of expendilure12022.. £1.24m, representing 1 month of expendilurel. The recovery of a proportion of our cladding remediation and legal costs, and the resulting surplus for the year, has iestored our reserves. PROVISION OF INFORMATION TO AUDITOR All the current board members have laken all the sl8ps that they ought lo have taken lo make themselves aware of any information needed by the organisalion's auditors for the purposes ol Iheir audit and lo establish that the auditors are aware of that information. The director5 are not aware ol any relevant audit informatio of which the auditors are unaware. BY ORDER OF THE BOARD The Direclors, Reporl including the Strategic Report was approved by the Board on 21 September 2023 and signed on ils behalf by: Jenny Slrudwtck Icompany Secretary) Evolve Housing + Support Statement of the System ol Internal Controls The Board is al the centre of governance and is responsible, in particular, for ensuring that the organisation operates efleclively and achieves ils objectives. The Board acknowledges ils ultimate responsibility for ensuring that the organisalion has in place a sound syslem of internal controls that are appropriate lo the vaiious business environments in which il operates. These controls focus on the signilicanl risks that Ihrealen the organisalion's ability lo meet ils objectives and provide reasonable assurance with respect lo.. the reliability of key information and performance indicators used within the organisalion or for publication-, the maintenance of proper records., the safeguarding of assets against unaulhorised use or disposition., and the organisalion's compliance with relevant laws and regulations. The Board is confident that procedures are in place that effectively identify all risks th81 might prevent the organisalion achieving ils objectives and which manage such risks and mitigate their effects. The organisalion has management arrangements, resources. skills and systems that are appropriate lo the circumstances, scale and scope of ils operalions and ensure that ils activities are backed by proper systems of assurance for internal control. The Board maintains a sound system of internal controls and conducts annual reviews of the effectiveness of the system. The review covers the whole range of controls including financial, operational and compliance controls and risk management. The key steps Ihal the Board lakes are to.. idenlifylreview the organisalion's business objectives, the possible opportunities and the risks or threats lo achieving those objectives., formlreview the ofganisalion's framework for managin9 the idenltfied risks,. and identify how the Board is lo obtain assuran￿ that the risk management policies adopled are adequale and operating effectively. Assurance is obtained by.. the idenlificalion and evaluation of applicable risks.. the desi9n of a system of controls., and the operation of those conlruls. The organisalion's risk management and risk idenlificalion aclivilies provide assurance that the organisalion Is focusing on and addressing the key risks that threaten the allainmenl of the organisalion's business objectives. Particular allenlion is paid lo how the organisalion's risk profile is changing over lime. Such activities include the Leadership Team reviewing key risks al their regular meetings. Members of the Leadership Team regularly discuss these risks with service manageis and their teams lo ensure their full involvement in Ihe risk management process. The Board recognises that performance indicators have an important role in assurance by allowing the Board and the Avdil Committee lo assess whether the OTganisalion is meeting ils objectives. Al Board meetings key performance indicators are reported on regularly. 10 Evolve Housing + Support Statement of Directors, Responsibilities The Directors Iwho are also Ihe Iruslees of Evolve Housing + Support) are responsible for preparing the 51rAlp.iJic'. rp.i)nrl, HiiiiiiAI rp.r>nfl and Ilifi finanrial slalemenls in accordance with applicable law regulations. Company 18w and soclal housing legislation requires the board lo prepare financial slalemenls for each rinancial year in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and appliGable lawl. Under company law, the Board musl not approve the financial slalemenls unless they are satisfied that they give a true and fair view of the slate of affairs of the organisalion and of the surplus or deficit of the organisation for thal period. In preparing these financial slalemenls, the Board are required to: select suitable accounting policies and then apply them consislenlly,. make judgements and accounting eslirnales that are ieasonable and prudent., slate whether applicable UK Accounting Standards have been followed and the Slalemenl of Recommenéed Practice-. Accounting by Registered Providers of Social Housing 2018, subject lo any material departures disclosed and explained in the financial slalemenls,. and prepare the financial slalements on the going concern basis unless il is inappropriate lo presume that the charitable company will continue in business. The Board is responsible for keeping adequate accounting records that are sufficient lo show and explain the Organisalion's transactions and disclose with reasonable accuracy at any lime the financial position of the organisalion and enable them lo ensure that the financial statements comply with the Companies Act 2006, the Housing and Regeneration Act 2008 and the Accounting Direction for Private Registered Providers of Social Housing 2022. It is also responsible for safeguarding the assets of the organisalion and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. The board members are responsible for ensuring that the report of the board is prepared in 8ccordance with the Slalemenl of Recommended Practice.. Accounting by registered social housing providers 2018. Financial slalements are published on the website in accordance with legislation in the United Kingéom governing the preparation and disseminalion of financial slalemenls, which may vary from legislation in othe jurisdictions. The maintenance and integrity of the website is the responsibility of the board. Board responsibility also extends lo the ongoing integrity of the financial slalemenls contained therein. Independent Auditor's Report to the Members of Evolve Housing + Support Opinion on the financial statements In our opinion, the financial slalemenls.. give a Irue and fair view of the stale of Ihe Organisation's affairs a5 al 31 March 2023 and of the Organisalion's incoming resources and application of resources. including ils income and expendilure, for the year Ihen ended., have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice,. and have been properly prepared in accordance with the requirements of the Companies Act 2006, the Housing and Regeneration Act 2008 and the Accounting Dlreclion for Private Registered Providers of Social Housing 2022. We have audited the financial slalemenls of Evolve Housing + Support I"Ihe Organisalion.) for the year ended 31 March 2023 which comprise the statement of comprehensive income, the statement of financial position, the statement of changes in reserves, the cash flow slalemenl and notes lo the financial slalements, inclLJding a summary of significant accounting policies. The financial reporting framework th21 has been applied in Ilieir preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Slai)ddrd 102 Tljv Firi Clthdiiiy rwiiediation cos¢ r￿0very1(CO5ts> 3,OSO,000 12,140.0801 Legal fees 1635,2381 1511.8881 Operating surpluslldeficitl 3.642.994 11,989.0541 Interest recewable and sirnilar income 13 85,121 13,982 In18resl payable and finanung costs 14 1201,1781 1137.4721 Total comprehensive Income for the year 3,526,937 12,112.5441 The notes on pages 22 to 35 form part of these flnancial $lalements. All amounts derive from continuing activities. 16 Evolve Housing + Support Statement of Financial Activities for the year ended 31 March 2023 Unrestrlcted Restrl¢ted Noii. hou$lng a¢tlvltle$ Houglng actlvllles Non.hou$ing activitles 31 MArch 2023 31 March 2022 Note$ Income Grants and Donation5 43.138 274,481 317,619 275,5(K) Charitable activities 12,825,738 20.500 12.846,238 13,168,293 Other tr3ding activilie5 Interest receivable 40.855 40.855 14,112 85.121 85,121 13,982 12,825,738 189.614 211,335 13,289,833 13,471,887 Expendlture Raising Funds Charitable activities 134,115 134,115 109,999 12.017.991 227.330 194,051 12,439.371 15,280.446 Other Iradin9 aclivitE5 Interest payable 38,232 38.232 57.514 14 129.974 71.203 201,178 137,4n 12,147,965 470,881 194,051 12,812.896 15,585,431 Net TrVlCOlll8 677,773 1281,2661 80,430 476.937 12,113,544) 1.000 Profil on disposal of tangib￿ fixed assets Cladding retnediaiio 12 3.050,000 3,050.000 Net movement in funds 3.727,773 1281.2661 80,430 3,526,937 1?,112.5441 Reconciliation of funds Opening balan¢E as at 1 Aprll 2022 5.041,424 6.003,69) 115,636 11,160.750 13.273.294 Clo$lng balancv as at 31 Mar¢h 2023 8.769,197 5,722,424 196.066 14.687.687 11.160,750 The notes on pages 22 10 35 form part of these financial slalemenls. The surplus for the period includes all gains and losses recognised in the period. All amounts derive from continuing aclivilies. 17 Evolve Housing + Support Statement of Financial Position at 31 March 2023 Registered Company number: 4796537 Note 2023 2022 Flxed assets Taroible fixed assets- housin9 properties Taryl￿8 fixed assets other 15 16 25.654.117 26,436.222 2,217,477 2.308,803 27,871,594 28.745,025 Cutrent assFt$ Detitors- rrfeivable wrthin one year Cash and cash equivalents 17 1,003,810 6,755.890 1,070,04T 3.646.731 7,759,700 4,716,778 Creditor5- amounts falling due within one year 18 2.887.793 3,361.264 Net currenl asset$ 4,871,907 1,355,514 Total assets le$$ ¢ul￿nt Ilabilities 32,743,501 30,100,539 Credltors-. amounts falllng due after More than one year 19 18,055,814 18,939,789 Net a5Sgts 14,687,687 11,160,750 Funds and Reserves General Housing Reserve- Unres¢ri¢led Non-Housing Reserves Unreslll¢ted Restri¢led 8.769.197 5.041.424 5.722.424 196,066 6.003,690 115,636 14,6B7,687 11,160,750 The financial slalemenls were approved by the Board of Directors and authorised for issue on 21 September 2023 Paul Perkin Chalr The notes on pages 22 10 35 form parl of these financial statements. Evolve Housing + Support Statement of Changes in Reserves for the year ended 31 March 2023 G8neral Housing Resetvè- Unrèstricted Non-Housing Reserve- Unrestrlcled Non-Housing Tolal Reserve- Reserves Restrlcted Balance al 1 April 2022 5,041,424 6,003,690 115,636 11.160,750 SurplusllDeficltl for the year 3,727,773 1281,2661 80,430 3,526,937 Balance at 31 March 2023 8,769.197 5,722,424 196,066 14,687,687 Sialemenl of Changes in Reserves for the year ended 31 Anarch 2022 General Housing Reserve- Unrestricted NDn-Hou5ing R8serv8- Unrestrict8d Non-Housing Reserve- Restricled Total Reserves B8lan¢e at 1 April 2021 6,915,105 6,229,248 128,941 13,273.294 Surpluslldeficitl for the year 11.873,6811 1225,558) 113.3051 12,112.5441 Balance 8131 March 2022 5,041,424 6,003,690 115,63fj 11.160,750 ## **Evolve Housing + Support** ## **Statement of Cash Flows for the year ended 31 March 2023** |**Note**
**Cash flows from operating activities**
**Surplus/(Deficit) for the financial year**
Adjustments for:
Depreciation of fixed assets - housing properties
15
Depreciation of fixed assets - other
16
Amortised government grants
5
Interest payable and financing costs
14
Interest receivable and similar income
13
Profit on the disposal of fixed assets - housing properties
12
Profit on the disposal of fixed assets – other assets
12
Decrease/(Increase) in trade and other debtors
(Decrease)/ Increase in trade and other creditors
**_Net cash generated from operating activities_**
**Cash flows from investing activities**
Proceeds from disposal of fixed assets – housing properties
Proceeds from disposal of fixed assets - other
Purchases of fixed assets – housing properties
15
Purchases of fixed assets - other
16
Interest received
13
**_Net cash from investing activities_**
**Cash flows from financing activities**
Interest paid
14
Repayment of loans - bank
**_Net cash used in financing activities_**
**Net increase/(decrease) in cash and cash equivalents**
Cash and cash equivalents at beginning of year
**Cash and cash equivalents at end of year**
**Net Debt**
Cash and cash equivalents
Borrowings – repayable in one year
21
Borrowings – repayable after more than one year
21
**Net Debt**
**Reconciliation of net debt**
1 April 2022
Cash flows
Cash at bank
**3,646,731**
3,109,159
Short term loans
**(546,371)**
-
Long term loans
**(4,297,203)**
510,433
**Net debt**
**(1,196,843)**
3,619,592|**Note**
**Cash flows from operating activities**
**Surplus/(Deficit) for the financial year**
Adjustments for:
Depreciation of fixed assets - housing properties
15
Depreciation of fixed assets - other
16
Amortised government grants
5
Interest payable and financing costs
14
Interest receivable and similar income
13
Profit on the disposal of fixed assets - housing properties
12
Profit on the disposal of fixed assets – other assets
12
Decrease/(Increase) in trade and other debtors
(Decrease)/ Increase in trade and other creditors
**_Net cash generated from operating activities_**
**Cash flows from investing activities**
Proceeds from disposal of fixed assets – housing properties
Proceeds from disposal of fixed assets - other
Purchases of fixed assets – housing properties
15
Purchases of fixed assets - other
16
Interest received
13
**_Net cash from investing activities_**
**Cash flows from financing activities**
Interest paid
14
Repayment of loans - bank
**_Net cash used in financing activities_**
**Net increase/(decrease) in cash and cash equivalents**
Cash and cash equivalents at beginning of year
**Cash and cash equivalents at end of year**
**Net Debt**
Cash and cash equivalents
Borrowings – repayable in one year
21
Borrowings – repayable after more than one year
21
**Net Debt**
**Reconciliation of net debt**
1 April 2022
Cash flows
Cash at bank
**3,646,731**
3,109,159
Short term loans
**(546,371)**
-
Long term loans
**(4,297,203)**
510,433
**Net debt**
**(1,196,843)**
3,619,592|**2023**
2022
**£**
£| |---|---|---| |||**3,526,937**
(2,112,544)
**877,705**
874,941
**91,326**
73,618
**(401,190)**
(401,190)
**201,178**
137,472
**(85,121)**
(13,982)
**-**
-
**-**
(1,000)
**66,237**
45,704
**(445,823)**
183,803| |||**3,831,249**
(1,213,178)| |||**-**
-
**-**
1,000
**(95,600)**
(22,649)
**-**
-
**85,121**
13,982| |||**(10,479)**
(7,667)| |||**(201,178)**
(137,742)
**(510,433)**
(535,703)| |||**(711,611)**
(673,175)| |||**3,109,159**
(1,894,020)
**3,646,731**
5,540,751| |||**6,755,890**
3,646,731| |||**6,755,890**
**3,646,731**
**(518,723)**
**(546,371)**
**(3,814,418)**
**(4,297,203)**| |||**2,422,749**
**(1,196,843)**| |||Non cash
changes
**31 March 2023**
**-**
**6,755,890**
27,648
**(518,723)**
(27,648)
**(3,814,418)**| ||**(1,196,843)**
3,619,592|-
**2,422,749**| The notes on pages 21 to 35 form part of these financial statements. 20 Evolve Housing + Support INDEX OF NOTES Ganeral notes Legal status Accounting tiolicies Jud9emenls in applying accounting pollcies and key sources of eslimalion uncertainly Statement of Comprohenslve Income related notes Particulars of turnover. operating Costs ané operating {deficil}Isurplus Income and expendilure from social housing lellings Turnover from non-social housing lellings Units of housing stock Cladding remediation Operating surpluslldeficil) Employees Directors. and senior executives, remuneration Profil on disposal of tangible fixed assets Interest receivable and similar income Interest payable and financing costs 10 11 12 13 14 Statement of Financial Position related notes Tangible fixed assets - housing properties Other tangible fixed assets Debtors Creditors". amounts falling due within one year Creditors". amounts falling due after more than one year Deferied capital grants Loans and bofrowings Pensions Operating leases Related party disclosures 16 17 18 19 20 21 22 23 24 21 Evolve Housing + Support Notes forming part of the financial statements for the year ended 31 March 2023 (continued) Legal status Evolve Housing + Support is a company limited by guarantee (company number 4796537} and a registered charity (number 10990511 and is registered with the Regulator of Social Housing as a social housing provider (number H44001. Accountlng pollcles The financial slalemenls have been prepared in accordance with applicable law and UK accounting standards (Uniled Kingdom Generally Accepted Accounting Practice) which for Evolve Housing + Support includes FRS 102 °Ihe Financial Reporting Slandard applicable in the United Kingdom and the RepLJblic of Ireland. the Statement of Recommended Practice ISORPI. Accounting by registered social housing providers" 2018, the Accounting Direction for Private Registered Providers of Social Housing 2022 and the Companies Act 2006. The preparation of financial slalements in compliance with FRS 102 requires Ihe use of certain critical accounling eslimales. 11 also requires management lo exercise judgement in applying accounting policies. The following principal accounting policies have been applied: Going concern Upon review of the organisalion's financial position and resources, the Board notes the strong Cash position with funds earmarked, though not reslricled, lo fund future developments. The selllemenl of our cladding remediation legal case has restored our cash balarkces. Wilh forecasts that show positive cash whilst still mainlaining a substantial buffer lof approximately half of 2023 annual operating expendilurel, the Board believes that the organisalion is well placed lo manage ils business risks and has a reasonable expectation that the organisalion has adequate resources lo continue in operational existence for al least twelve months from the dale of approval of the financial slalemenls. 11 therefore continues lo adopt the going concern basis in preparing the annual financial slalemenls. Income Income is measured at the fair value of the Consideration received or receivable. Grant income is accounted for on an entillemenl basis. The organisalion generates the following material income slreams- Rental income re￿1vable lafier deducling lost rent from void properties available for lellingl.. Service charges receivable,. Management fee income from managed serVI￿s., Supporting People income., GovernmenVLocal Authority grants Charitable grants and donations., Lclling incomc from nOn-a￿0MmodaIi0n space., Bank interest. Supported housing schenles The Organisalion receives Supporting People grants from a number of London Boroughs. The grants received in the period as well as costs incurred in the provision of support services have been included in the Sialemenl of Comprehensive Income. Any excess of cost over grant received is borne by the organisalion. Service charges The organisalion calculates and charges service charges lo ils customers based on expenditure eslimaled each year as part of the annual budgeting process. 22 Evolve Housing + Support Notes forming part of the financial statèments for the year ended 31 March 2023 lcontinued) Accounting policies (continued) Mdfidyerrieril ul uriil& uwiied by ollFers Management fee5 receivable and reimbursed expenses are shown as income ané included in management fees receivable. C051s of carrying out Ihe managemenl contracts and rechargeable expenses are included in operating costs. Value Added Tax The organisalion charges Value Added Tax IVATI on some of ils income and is able lo recover part of the VAT il incurs on expenditure. The financial slalements include VAT lo the extent that il is suffered by the organisalion and not recoverable from HM Revenue and Customs. Recoverable VAT arises Irom partially exempl activities and is credited to the Slalemenl ol Comprehensive Income. Finance costs Fin8nce costs are charged lo expendilurg over the term of the debt using the effective interest rale method so that the amount charged is al a constant rate on Ihe Carrying amount. Pension costs Conlribulions lo the organisation's defined conlribulion pension schemes are expensed in the year in which they become payable. Tangible fixed assets - housing properties Housing properties con51rucled or acquired (including landl on the open market sin¢e the dale of Iransilion to FRS 102 are staled at cost less depreciation and impairment (where applicable). The cost of housing land and properly represents the purchase price and any directly allribulable costs of acquisition which may include an appropriate amounl for staff costs and other costs of managing development. Expendilure on major refurbishment lo properties is capilalised where the works Increase the nel rental stream over Ihe I￿e of Ihe properly. An increase in the nel rental stream may arise through an increase in the nel ren121 income. a reduction in lulure maintenance costs, or a subsequent extension in the life of the property. All other repair and replacement expendilure is charged lo the Slalemenl of Comprehensive Income. D$precialion of housing property Housing lalld and property is split between land, structure and other major components that are expected lo require replacement over lime. Land is not depreciated because of ils indefinite useful economic life. Assets in (he course of construction are not depreciated until they are completed and ready for use lo ensure that they are depreciated only in periods in which economic benefits are expected lo be consumed. The cost of all olher housing property (net of accumulated depreciation lo dale and impairment, where applicable) and components is deprecialed over the useful economic lives of the assets on the following basis.. 23 Evolve Housing + Support Notès fomiing part of the financial statements for the year ended 31 March 2023 {continued) Accounting pollcies (Gontinued) Housing properties are split between the structure and the major components which require periodic replacement. The costs of replacement or resloralion of these components are capilalised and depreciated over the determined average useful economic life as follows.. Description Economic useful life Ivears) Structure Kitchen Bathroom Roof coverings External doors Boiler Electrics External windows Mechanical systems Lifts 50 15 45 25 30 40 25 35 30 Leasehold properties are depreciated over the length of the lease except where the expected useful economic life of properties is shorter than the lease, when the lease and building elements ale depreciated separately over their expected useful economic lives. Tangiblp fixed assets- Other Other tangible fixed assets are s(aled 81 historical cost less accumulated depreciation and any accumulated impairment losses. Historical cost includes expenditure that is directly allribulable lo bringing the asset to the location arid condition necessary for il lo be capable of operating ill the manner intended by management. The organisalion adds to the carrying amount of an item of fixed as5els the cost of replacing part of such an item when that cost is incurred if the replacement parl is expected to provide incremental future benefits lo the organisalion. The carrying amDunl oflhe replaced parl is derecognised. Repairs anij maintenance costs are charged lo expendilure during the period in which they are incurred. Depreciation of other tanqible fixed assels Depreciation on other assets is charged lo allocate the cost of assets less their residual value over their eslimaled useful lives, using the slraighl-line method. The eslimaled useful lives range as follows.. Economic useful life {yearsl Leasehold land and buildings Plant. machinery and vehicles Fixtures, fillings, tools and equipment Compulers Lease term 10 The assets, residual values, useful lives and depreciation methods are reviewed, and adjusted if appropriate, if there is an indicalion of a significanl change since the last reporling dale. Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are Tecognised wilhin 'olher operating income, in Ihe Sl8lemenl of Comprehensive Income. Government grants Grants received in relation lo assels that are presented at deemed cost al the dale of transition have been accounted for using Ihe performance model as requSred by Housing SORP 2018. In applying this model, such grant has been presented as if il were originally recognised as income within the Statement of Comprehensive Income in the year il wa5 receivable and is therefore included wilhin brought forward reserves. 24 Evolve Housing + Support Notes forming part of the financial statements for the year ended 31 March 2023 {continuedl Accounting policies (conlinu&d) Grants received since the transition dale in relation lo newly acquired or existing housing properties are accounted for using the accrual model set oul in FRS 102 and Ihe Housing SQRP 2018. Grant is carrigd as deferred income in the Statement of Financial Position and released lo the Sialemenl of Cofflprehensive Income on a sy51emalic basis over the useful economic lives of the asset for which il was received. Where social hDLJsing grant ISHGI funded property is sold, the grant becomes recyGlable and is transferred lo a recycled capital grant fund unlll il is reinvesled in a repla￿ment properly. If Iheie is no requirement lo recycle or repay the grant on disposal of the assets, any unamorlised grant remaining wilhin creditors is released and recognised as income within Ihe Statement of Comprehensive Income. Granls relating lo revenue are recognised in the Slalemenl of Comprehensive Income over the same period as the expenditure lo which they relale once perforrnan￿ related conditions have been mel. Grants due from government organisalions or received in advance are included as current assets or current Impalrmenl of fixed assets The housing properly portfolio of the organisalion is assessed for indicators of impairment al each financial year end. Where indicators are identified then a detailed assessment is undertaken lo compare the carrying amount of assets OT cash generalifig units lor which impairment is indicated lo their recoverable amounts. An option appraisal is carried out lo delertnine Ihe oplion which produces the highest nel realisable value. Valuations on rental relurn or potential Sale pToceed5 are obtained and used to inform the options. The organis21ion looks al the nel realisable value, under the oplions available, when considering the recoverable amount for the purposes ol impairment assessment. The recoverable amount Is taken lo be the higher of the fair value less costs to sell or value in use of an asset or cash generating unil. The assessment of value in use may involve consideration5 of the service polenlial of the assets or cash generating units concerned or the present value of future cash flows lo be derived from them appropriately 3djusled lo account for any reslriclions on their use. No properties have been valued al value in use- Service potential IVIU-SPI. The organisalion defines cash generating units as schemes excepl where ils schemes are not sufficiently large in size or where il is geographically sensible lo group schemes into larger cash generating units. Where the recoverable amount of an asset or cash generating unit is lower than ils carrying value an impairment is recorded through a charge lo the Slalemenl of Cotnprehensive Income. Any losses arising from impairmenl are recogni5ed in the Slalemenl of Comprehensive Income in other operating expenses. Deblors and creditors Debtors and creditors with no slated inleresl rale and receNable or payable within one year are recorded al transaction price. Recoverable amount of rental and other trade receivables The organisalion estimates the recoverable value of rental and other receivables and impairs the debtor by appropriate amounts. Vvhen assessing the amount lo impair il reviews the age profile of the debt, historical collection rates and the class of debt. 25 Evolve Housing + Support Notes forming part of the financial statements for the year ended 31 March 2023 Icontinuedl Accounting policies (Guriliiiu¥d) Loans, Inveslmenls and shorl-lerm deposks All loan5, Investments and shorl-lerm deposits held by the organisalion are classrfied as basic financial instruments in accordance with FRS 102. These instruments are ini11311y recorded al the ITansaction price less any transaction Costs Ihislorical costl. FRS 102 requires that basic financial instruments are subsequently measured al amorlised cost, however the organisalion has calculated Ihal the difference between the historical cost and amorlised cost basis is not malerial and so these financial instruments are slated on the Slalement of Financial Position al hislorical cost. Loans and investments Ihal are payable or receivable within one year are not discounted. Financial liabilities and equity Financial liabilities and equity are classified accoTding lo the substance of the financial inslrumenl's conlraclual obligalions, rather than the financial inslrumenl's legal form. Cash and cash equivalents Cash and cash equivalents in the Slalemenl of Financial Position consists of cash at bank, in hand, deposits and short-lerm investments with an original maturity of three months or less. Leased assels.- Lessee Where assets are financed by leasing agreements that give rights Ihal approximate lo ownership (finance leasesl, the assets are Irealed as rf they have been purchased oulrighl. The amount capilalised is the present value of the minimum lease payments payable over the temi of the lease. The corresponding leasing commitments are shown as arnounts payable lo the lessor. Depreciation on the relevant assets is charged to expenditure over the shorter of the estimated useful economic life and the term of the lease. Lease payments are analysed between capital and interest components so that the interest element of the payment 15 charged lo expenditure over the term of the lease and is calculated so that il represents a constant propoition of Ihe balance of capital repayments oulslanding. The capital part reduces the amounts payable lo the lessor. All other leases are Irealed as operating leases. Their annual rentals are charged to expenditure on a straight-line basis over the term of the lease. Reserves Income received, and expenditure incurred, for restricted purposes is separately accounted for within reslri¢led funds. Realised and unrealised gains and losses on assets held by these funds are also allocated lo the fund. 26 Evolve Housing + Support Notes forming part of the financial statements for the year ended 31 March 2023 Icontinuedl Judgements in applying a￿O￿ntIng policies and key sources of estimation uncertainty In preparing Ihese financial slalements, the key judgements have been made in respect of the following.. whether there are indicators of impairment of the organisation's tangible and intangible assets. Factors taken into consideration in reaching such a decision include the economic viability and expected future financial performance of the asset and where il is a component of a larger cash-generaling unil, the viability and expected future performance of that unil. The Board have considered the measurement basis to determine the recoverable amount of assets where there are indicators of impairment based on EUV-SH IExisling Use Value Social Housing) or depreciated replacement cost. The Board have also considered impairment based on Iheir assumptions lo define cash or asset generating units. whether leases entered into by the organisation either as a lessor or as a lessee are operating leases or finance leases. These decisions depend on an assessment of whether the risks and rewards of ownership have been transferred from the le55or lo the lessee on a lease by lease basis. the ¢alegoris8lion of housing properties as investment properties or propety, p12nl and equipment based on the use of the asset. what constitutes a cash generating unil when indicators of impairment require there lo be an impairmenl review. Other key sources ofestimat￿n uncertainly Tangible fixed assets (see notes 15 and 16) Tangible fixed assets, other than investment properties, are depreciated over their useful lives taking into account residual values, where appropriate. The actual lives of the assets and res￿d￿al values are assessed annually and may vary depending on a number of factors. In re-assessing asset lives, faclors such as the condition of the asset and its future income geneiating potential are taken into account. Residual value assessments consider issues such as future market conditions, the remaining life of the asset and projected disposal values. For housing properly assets, the assets are broken down into cornponenls based on management's assessment of the properties. Individu81 useful economic lives are assigned to these components. Rental and other trade receivables (deblors) (see note 17) The eslimale for receivables relates lo the recoverability of the balances outstanding al year end. A review is performed on an individual debtor basis lo consider whether each debt is recoverable. 27 Evolve Housing + Support Notes forming part of the financial statements for the year ended 31 March 2023 {contlnuedl Particulars of turnover. operating costs and operaling surpluslldeficit) Tumover Operating costs OpeTatlng Surplu5 2023 2023 2023 Social housing lettings (Note 51 Other Social Housing Activities 10,268,833 8,980,748 1,288.085 Charges for support Se￿IceS Supporting people 78,803 2,477,441 178,377 2,477,441 199,5741 12,825,076 11,636,566 1,188,511 Actlvitlgs Other than Soclal Houslng Activltles Lettings other 40,855 338,781 38,232 301,682 2.623 37,099 379,636 339,914 39,722 Surplus before dlsposal of tangible fixed assets 13,204,712 11,976,480 1,228,232 Profit on disposal of tangible fixed assets Cladding iemediation recovery ol costs Legal fees 3.050.000 3,050,000 1635,2381 635,238 Operating Surplus 16,254,712 12,611.718 3,642,994 Turnover Operatir costs Operating Surplu5 2022 2022 2022 Soci81 housing lettin9s (Note 51 Other Soci81 Housing Activth"es 10,527,465 9.617,076 910,389 Charges for SUPPOrt services Supporling p&ople 95.613 2,545,215 178,377 2.545,215 182.7641 13,168,293 12,340,668 827,625 Activities other than Social Housing Activities Letlings Other 14.112 275,500 57,514 397,809 143,4021 1122,3091 289,612 455,323 1165,7111 Surplus belorg disposal of langible fixed as￿1$ 13.457,905 1,000 12,795.991 661,914 1,000 12,140,080) 1511,8881 Profit on disposal ol tangible fixed as￿tS Development costs written off Cladding remediation costs Legal [88$ 2,140,080 511.888 Operating Deficit 13,458,905 15,447,959 11,989,054) 28 Evolve Housing + Support Notes forming part of the financial statements for Ihe year ended 31 Mar¢h 2023 (continued) Incomo and expenditure from social housing lettings Supported housing 2023 Supporled housing 2022 Income Rents net ol idenlifiable service charges Service chaige incorne Amortised govemment grants Other income Turnover from soclal housing lettin95 4,521.326 5,184,681 401,190 161,636 10,268,833 4.508,105 5,206,384 401,190 411.786 10.527.465 Expenditure Management Service charge costs Routine maintenance Major repairs expenditure Bad debts Depiecialion of hous*ig properties.. annual charge Other costs 1,698,763 4,517,332 405,242 806,406 392,486 1,562,802 4,970,003 680,684 944,921 fj72,968 877,705 282,813 874,941 410,758 Operatlll9 expendlture on social housTrng lettlngs 8,980,748 9.617,076 OperatSng surplus on social housing lettings 1.288.085 910.389 Void lassts 577,181 590.586 Turnover frorn non-social housinglgttings 2023 2022 Conferencing and nursery facilities 40,855 14.112 Units ol housing stock 2023 Number 2022 Number Supported Housing Owned Units 435 435 Support8d Accomtllodation managed for others 163 Total owned and managed accommodation 554 598 Supported Accommodation managed lor others al 1 April 2022 Units handed back lo landlord 163 163 Supported Accommodation managed for others 8131 M8trh 2023 119 163 29 Evolve Housing + Support Notes forrning part of the financial statements for the year ended 31 March 2023 Icontinuod) Cladding remedlatlon 2023 2022 2021 2020 Oul of court settlement Cost of remedialion Legal fees incurred in litigation 13.050.000) 2,140,080 511,888 566,179 234.766 45,218 222.386 635,238 12.414.762) 2,651,968 800,945 We have completed the remediation of cladding al all affe¢lecJ properties. Operatlng surpluslldeficitl 2023 2022 This is arrived at after chargingllcredrtingl-. Depreciation of housing properties Depreciation of other tangible fixed assets Profjl on disposal of fixed assets 877,705 91,326 874,941 1,000 Operating lease charges- sand & building 117,900 111,053 Auditorfs remuneration.. fees payable to the organisation's auditor for the audit of the annual accounts 38.500 fees for non-audil setvices Defined contribution pension cost 159,811 178,018 10 Employees 2023 2022 Siaff costs Ilncludlng Leadership Tcaml consist of.. W8ges and salaries Social security costs Cost ol defined contribution scheme Redundancy costs 5.150.748 462,139 159.811 106.598 5,587,358 478,257 178,018 19,iIY2 Total siaff cosis 5,879,296 6,263,525 The average number ol employees linduding the Leadership Team) during the year. based on hèadcouni, w8s as follows.. 2023 Number 2022 Number Administration Housing and Support Ch81itable projects 25 150 26 175 191 210 30 Evolve Housing + Support Notes forming part of the financial statements for the year ended 31 March 2023 IcontSnuedl 11 Dlrectors. and senior executives, remuneralion The Directors land memtiers ol the Board) are shown on page 1. Senior ex8eUtives are the Chief ExÈcutive and the Leadership Tearn as disclosed on page 1. 2023 2022 Lèadership Team emoluments 442,247 447,691 Contributions to money purchase pension schemes 40,279 42,933 482,526 4W,624 Included in the above are r8dundancy payments of £18,12512022.' £19,892) None of the members of the Board received any emolumenls from the organlsation12022'. nill. The total amount payable to the Chief Executive, who was also the highèst paid dirèctor in rèspèct of èmoluments, wa5 £104,310 12022- E100,7801. Pension contributions 01 £10.38112022- £ 10,0781 w8r8 rnad8 to a money purcha58 schem8 on his behall. As a mernb8r of the organisation's pe¥sonal pensiun plan, the penslon &nb"tlèment of tha Chiéf Exécutive is identical lo those ol other rnembers. During the year, contributions were paid into the organisation's defined contribution pension 5ch8me on behall of 5 senior exeGulives12022 61. The remuneration lexcluding pension conlributionsl paid to staff Ilncluding Leadership Team) eaming over £e(),ocrf).. 2023 Number 2022 Number £60,000 - £69.999 £70,000 - £79,999 £80,000 . £89,999 £90,000 - £99,999 £100,000- £109,999 £110,000-L119,999 The total of pension contributions paid on b8half membgrs of staff eaming over £60,000 was £40,29712022'. £38,292). 12 Profit on disposal of tangible fixed assets 2023 2022 Housing Properti8S'. Net profit on dispos31 other fix8d assets.. N81 profit on disposal 1,000 Profil on disposal of tangible fixed assets 1,000 31 Evolve Housing + Support Notes fomiing part of the financial statements for the year ended 31 March 2023 (continued> 13 Interest receivable and slmilar income 2023 2022 Bank Inte￿st re￿1vable 85.121 13,892 14 Interest payable and financing ¢osls 2023 2022 Interest payablg on bank loans and overdrafts Bank charges 192.804 8.374 130,426 7.046 201.178 137,472 15 Tanglble fixed assets - housSng properties Freehold Land Long Leasehold & Buildings Land & Buildings Total Land & Buildlngs Cosl or valuation.. At 1 April 2022 Additions Disposals 35,682,755 95.600 1.107,651 36,790,406 95,600 At 31 March 2023 35,778,355 1.107,651 36,886,006 DePre￿allOn.. Al 1 April 2022 Charge for thè year Dibyobalb 9,863,347 863,803 490,837 13,902 10,354,184 877,705 At 31 March 2023 10,727.150 504,739 11,231,889 Nel book value at 31 Mar¢h 2023 25,051,205 602,912 25,654,117 Net book value at 31 March 2022 25,819.408 616,814 26.436,222 2023 2022 Works lo properties Improvements to existing properties capilalised Maltsr repairs expenditure charged to Statement of Comprehensive Inoome 95,600 806,406 3,082,103 902,006 3,082.103 Capital grant- Housing Properties 20,059,486 20.059,486 32 Evolve Housing + Support Notes forming part of the financial statements for tho year ended 31 March 2023 {continued} Impairment The organisation considers £25.654,117 lo repres8nl separate cash generating units ICGU'SI when assessing for impairment in accordance with the requ1￿mentS of FRS102 and SORP 2018. Propgrtlefj held for security Property wth a nel book value of £13,233,651 was pledgèd as $8¢urily al 31 March 202312022 - £13,663,221). 16 Other tangible fixed assets Non-HousSng Freehold Land and Buildin95 Flxtures. fittings, aqulpment and vghicle5 Total other Fixed a5set5 Cosl or valuation At 1 April 2022 Addilions Disposals 2,816,780 1,324,293 4,141,073 At 31 March 2023 2,816,780 1,324,293 4.141.073 Depreciat￿￿ Al 1 April 2022 Charge for year Disp05als At 31 March 2023 555,731 57,164 1.276,539 34,162 1,832,270 91,326 612,895 1,310,701 1,923,596 Net book value At 31 March 2023 2.203,885 13,592 2,217,477 At 31 March 2022 2.261,049 47.754 2,308.803 17 Debtors 2023 2022 Recelvable within one year Rent and service charge arrears Less= Provision for doubllul debts 1,173,127 (560,1891 612,938 992,477 1403,8531 588,624 Trade debtors Other debtors Prepayments and accrued income 186.644 124.495 79,733 46,080 186,260 249,083 1,003,810 1,070,047 33 Evolve Housing + Support Notes forming part of the financial statements for the year ended 31 March 2023 Iconlinued) 18 Creditors: amounts falling due williin one year 2023 2022 Loans and borrowings INole 211 Trade creditors Taxation and social security Oth8r cr8ditor5 Deferred capital giant INote 201 Accruals and deferred income 518,723 308,932 147,076 233.327 401.190 1,278,545 546,371 989.876 121,990 183.863 401,190 1,117.974 2,887,793 3,361,264 The bank loans are repayable in instalments over 10- 15 years. The bank108ns are secured by fixed ¢harges over the freehold properties at btockwell Road, Alexandra House, Ingram Uourt, Burton-white Hous8 and Kingston Road. The loans bear interesl at variable rates calculated at a margin above the Base Rate, On8 loan has an inter8St rat8 of 3¥0 fixed over Ihe temi of Ihe Itsan. 19 Creditors.. arnounts falling due after more than one year 2023 2022 Loans 8nd borrowings (Note 221 Deferred c8Pltal grant (Note 211 3,814,418 14,241,398 4,297,203 14,642.586 18,055,814 18,939,789 20 Deferred capital grants 2023 2022 At 1 April Granls received during the year Rclcasod to income during the year 15,043,775 15.444.965 1401,1901 1401,1901 At 31 March 14,642,585 15,043.775 Total value ol grants recelved 20.059,486 20,059.486 21 Loans and borrowings Maturity of debt.. 2023 2022 In one year or less. or on demand In Tnore than one year but not MO￿ than Iwo years In More th8n Iwo years but not more than five yea[5 In rnore Ih8n five ye8rs 518,723 546,846 546.371 561,015 1,716,156 1,551,415 1,774,911 1.961.276 4,333,140 4,843,573 22 Pensions Ev0￿e prov¢iles a Defined Conttibution Pension Scheme that is open lo all ernployees. 34 Evolve Housing + Support Notes fomiing part of the financial statemenls for the year ended 31 March 2023 Icontlnuedl 23 Oper&tlng lease8 The organisation had mlnimum lease payments under non-cancellable operating leases as sel out b810w'. Amounts payable as Lessee 2023 2022 L8n(J and buildings Not later than 1 year Within 1- 2 years Within 2- 5 years 78,200 82,600 8,eOO 8.fjoo 86,800 91,200 24 Related party disclosure5 The ullimal8 conlrolling party of the organisalion is thg Boarf of Evofve Housing + SupporL 35