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2022-03-31-accounts

Charity registration number 1118922

Company registration number 06082488 (England and Wales)

ZETETICK HOUSING

ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2022

ZETETICK HOUSING

LEGAL AND ADMINISTRATIVE INFORMATION

Trustees I Moore
G Scott CEO
G Emerson
M Hurst
L Worrall
N Pendleton (Appointed 4 November 2021)
A Chequers (Appointed 10 February 2022)
C Linden (Appointed 10 February 2022)
N Hussain (Appointed 10 February 2022)
Charity number 1118922
Company number 06082488
Principal address Innovation Centre Highfield Drive
Churchfields Industrial Estate
St Leonards on Sea
East Sussex
TN38 9UH
Registered office Innovation Centre Highfield Drive
Churchfields Industrial Estate
St Leonards on Sea
East Sussex
TN38 9UH
Auditor Knill James LLP
One Bell Lane
Lewes
East Sussex
BN7 1JU
Bankers Lloyds Bank PLC
24 Broad Street
Reading
RG1 2BT

ZETETICK HOUSING

CONTENTS

Page
Chairman's statement 1
Trustees' report 2 - 11
Statement of Trustees' responsibilities 12
Independent auditor's report 13 - 16
Statement of financial activities 17 - 18
Balance sheet 19
Statement of cash flows 20
Notes to the financial statements 21 - 33

ZETETICK HOUSING

CHAIRMAN'S STATEMENT FOR THE YEAR ENDED 31 MARCH 2022

Over the past twelve months, our charity, Zetetick Housing (ZHC) has continued to make a difference to the people we provide housing for. Many had years of inadequate provision, before they came to us, with resulting detriment to their quality of life and inevitable pressure on the NHS. We are immensely proud of the value we give them and the ability they have as a result to experience the stability and support they deserve and which a civilised society should deliver as a matter of course.

The last year saw a major new departure for our ZHC, as we became for the first time a property owner, rather than simply an intermediary (renting properties from the market and sub-letting them, with maintenance, to our tenants at below market rents). With thanks to a grant from the NHS we bought a property in Croydon for one of our tenants with particular needs, and in May 22, completed on a second property.

ZHC has also continued to grow in capacity. We now have executive support, and our new part time Finance Director will soon be increasing her hours. Combined with our governance review, the recruitment of 3 new trustees, and our strong reserves, this places ZHC in an excellent position to take advantage of future opportunities to improve the quality and number of our homes. Our regular and insightful social media comment has enhanced our brand and has already brought new landlords into the ZHC family.

No organisation working through 21-22 has been without its challenges, and ZHC is no exception. The private rental market has been extremely competitive. Inflation is impacting both on our bottom line and on a number of our tenants. The finances in our partner councils are severely stretched. Supply chain and labour market issues continue to be a concern for property maintenance. And property access during Covid has remained a challenge, along with keeping our customers safe.

Looking forward, our new vision emphasises the twin goals of improving our homes and building our portfolio. It is our quality offer which is our biggest strength, both for our customers and their families, and is the major attractor bringing in new properties.

Chairman: Martin Hurst Dated: 3rd November 2022...

ZETETICK HOUSING

TRUSTEES' REPORT (INCLUDING DIRECTORS' REPORT) FOR THE YEAR ENDED 31 MARCH 2022

The Trustees present their annual report and financial statements for the year ended 31 March 2022.

The financial statements have been prepared in accordance with the accounting policies set out in note 1 to the financial statements and comply with the charity's Memorandum & Articles of Association. the Companies Act 2006 and "Accounting and Reporting by Charities: Statement of Recommended Practice applicable to charities preparing their accounts in accordance with the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102)" (effective 1 January 2019).

Objectives and activities

Charitable Objectives

The objectives of the charity are the relief of financial hardship among disadvantaged people by providing services, in particular but not exclusively, to disabled people living and working in London Boroughs and Southeast Counties, including through:

The Trustees are pleased to report that we continue to support vulnerable adults with the provision of high quality accommodation and housing support, who would otherwise not have a fair opportunity to secure their own homes during the continued high demand for social housing and the highly competitive private rental market. In many cases this will be the tenants' first home away from family and/or residential care, giving them true independence and opportunities to become valued members of the local community.

Our Vision

Empowering people with learning disabilities and autism to live as valued members of their community by finding them quality homes, not just housing; offering safety security and opportunity where care, friendship and freedom can come first every day

Our Mission

To provide and maintain specialised quality homes, not just housing.

To empower choice and deliver dignity to those people, primarily with learning disabilities and autism, who need our offer of quality housing for supported living.

To align our values and activities to work with a range of partners across housing, commissioning, and care, in the fulfilment of our charitable aims.

Our Aspiration

Our aspiration is to harness the passion that each of our members of staff have and use it to give some of the most marginalised people in our society a home.

To reach more families and give homes to more people with complex learning disabilities.

ZETETICK HOUSING

TRUSTEES' REPORT (INCLUDING DIRECTORS' REPORT) (CONTINUED) FOR THE YEAR ENDED 31 MARCH 2022

KEY ACHIEVEMENTS AND PERFORMANCE

Whilst our focus is to continue to establish ourselves as best practice thought leaders to other housing organisations and people in need, by continuing with high quality services and unique provision, we want to develop our procedures, processes and resources so that they are always sensitive to the people we give homes to. In addition to this, by doing so, we also reaffirm our commitment to doing our best for the people we give homes to, their families and the wider community.

Our bottom line must be about delivering quality and honouring our promise to the people we support because from this will be able to help more people in a sustainable way.

During the year 2021-22 we achieved the following:

We continue to work predominantly in Croydon, with approximately 2/3 of our tenants being housed in properties in thus area, but we are seeing an increase in the numbers in South East.

Grant-making

The Trustees have designated a fund to be granted to charities that help deliver social inclusion and welfare of learning-disabled adults, working in the locations where we provide housing. This fund will help us to deliver objective (vi) above. During the year, a grant was given to Club Soda. At 31 March 2022 the balance on the fund was £45,807 (2021- £52,022)

ZETETICK HOUSING

TRUSTEES' REPORT (INCLUDING DIRECTORS' REPORT) (CONTINUED) FOR THE YEAR ENDED 31 MARCH 2022

VALUES AND WAYS OF WORKING

Our values are equally important in reviewing our progress and in setting future targets. They are literally the ‘BEDROCK’ of all we do. Our tenants are people we all know, yet they are often those with a learning disability, autistic and/or mental health challenges and have vulnerabilities that impact on the way we work.

We continue to gather feedback from our stakeholders to ensure we practice our values in all areas of the business.

We employ staff that share our values and with the necessary knowledge, experience and skills to be able to represent the charity at the highest levels. We pay staff salaries at or above the London Living Wage and at a competitive level they would receive if they were undertaking a similar role in NHS social care or a comparable organisation. Relevant salaries are disclosed in our financial statements.

ZETETICK HOUSING

TRUSTEES' REPORT (INCLUDING DIRECTORS' REPORT) (CONTINUED) FOR THE YEAR ENDED 31 MARCH 2022

OPERATING MODEL

We fund our work through Government funding and good financial management to achieve operating surpluses to invest in our Objects. We operate a team of volunteers for some areas of our outreach, which provides an opportunity for our supporters to give their time in a way that benefits the charity and our beneficiaries, in addition it offers some valuable work experience that many have used to gain meaningful employment.

Whilst understanding the desire for people to donate to a good cause and the positive impact this could have on the charity, the founder wanted to ensure the charity could operate independently without the need and reliance for constant fundraising, ensuring business planning was central to the administration of the charity.

The charity also has a strong and regularly reviewed reserves policy that ensures our reserves are of the strength and depth necessary to cover all eventualities in order to protect our tenants. Trustees acknowledge there are risks in housing vulnerable individuals and ensure our risk assessment and risk management are reviewed annually and are up to date.

This year was the beginning of diversification plans, with the first property asset acquisition using NHS England grant funding. Further acquisitions are planned for 2022/23.

Financial review

The charity's financial position remains very strong with sufficient reserves and liquidity to enable it to fulfil its objectives, meet its operational commitments and to allow for most foreseeable contingencies. The charity has an aspirational target to increase the number of people we house by 50% in the next five years and will use excess reserves (general reserves above reserves target) to support this goal.

The number of beneficiaries served increased marginally from 160 to 164, up 2.5%, and in addition to this we found new homes for 5 existing tenants whose current homes were no longer available and/or suitable for them.

Total incoming resources increased from £3.7m in 2021 to £4.5m in 2022 due to the following:

Direct charitable activity expenditure increased year on year to £3.9m (2021 - £3.67m). The main reasons for this increase are as follows:

Support and governance cost expenditure ratio was 4.02% of total income (2021 - 3.43%).

ZETETICK HOUSING

TRUSTEES' REPORT (INCLUDING DIRECTORS' REPORT) (CONTINUED) FOR THE YEAR ENDED 31 MARCH 2022

Staff costs accounted for 13.4% of total income (2021 – 14.4%) as headcount grew from a full time equivalent of 12.1 to 14.1 (actual headcount as at March 2022 was 16). The charity was committed to investing further in staff resources over 2021-22 and is moving towards a regional model, with an Area Housing Manager planned for both London and the Southeast. The charity has also increased its back office administrative support and employed a Marketing and Engagement Manager.

The overall surplus (net movement of funds) on unrestricted funds was £33k (2021 - £138k) - representing a surplus ratio of 0.8% of income.

As the restrictions surrounding the Covid-19 pandemic were gradually relaxed throughout the year, the health and safety of our tenants remained of paramount importance. The charity continued to provide essential maintenance support to all our tenants and resumed half-yearly inspections which increased the amount of non- urgent work. We had no serious cases of COVID-19 amongst tenants or staff

The first few months of 2021-22 continued with a noticeable low level of activity regarding new referrals, properties and maintenance costs. Quarter 1 saw very little activity, with no new tenants or properties, and no transfers. From June 2021 – March 2022, however, we took on 11 new tenants largely in the Northcote Road development which we had taken on at the end of the previous financial year, and 5 new properties. We transferred 5 tenants to more suitable properties that were already in Zetetick management, and 6 tenants left the charity. In total we handed back 11 properties, spending £61k from the Designated Fund for End of Tenancy Dilapidations fund.

The End of Tenancy Dilapidations Fund is calculated to need £208,650 for the year 2022-23, which means we will need to transfer £59,045 from unrestricted funds.

Reserves Policy

The purpose of the Reserves Policy is to ensure the Charity holds enough funds in general reserves for the stability of the mission, programmes, employment and ongoing operations of the organisation. Holding an acceptable level of reserves will protect our tenants from unforeseen future events. The Reserves Policy is intended to give a clear indication of internal funds required to provide a cushion against unexpected events, losses of income, and large unbudgeted expenses.

The Reserves Target is calculated as:

Total amount calculated as at March 2022 is £616,526.

Actual Free Reserves are calculated as Total reserves, less Restricted and Designated Funds.

The Actual Free Reserves of the charity are calculated as £1,451,578.

The excess general reserves of are £835,052. The charity is planning on purchasing two properties for charitable use during the financial year 22-23, and will use excess funds to leverage the loan required.

Trustees are committed to maintaining balances in liquid funds (cash, plus debtors, less creditors) which cover the sum of the free reserves target, plus any designated and restricted funds.

ZETETICK HOUSING

TRUSTEES' REPORT (INCLUDING DIRECTORS' REPORT) (CONTINUED) FOR THE YEAR ENDED 31 MARCH 2022

£ 31 March 2022
31 March 2021
Total Funds 2,216,762
1,686,786
Less: Restricted Funds 510,726 5,000
Less: Designated Funds 254,457 262,729
General (Free) Reserves 1,451,579
1,419,057

The Trustees have reviewed this position and are committed to maintaining balances in liquid funds (cash, plus debtors, less creditors) which cover the sum of the free reserves target, plus any designated and restricted funds. At March 2022 liquid funds were £1,697k.

Post-balance sheet events

In May 2022, we completed the second purchase of a property with NHS grant funding for £510k.

Principle Risks

The Board of Trustees remains extremely diligent in monitoring the changing situation within the sector with regularly reviews of our strategic aims and stress-testing of our financial viability. The risk register is reviewed in summary form every 3 months, with a bi-annual detailed review of new and emerging risks.

The key risks identified by the Board at March 2022 are:

• Loss of Exemption Status for Specified Supported Accommodation

Changes to legislation may require that all social landlords providing exempt accommodation need to be registered with the Register of Social Housing. In addition, the Department for Work & Pensions is clarifying the meaning of ‘more than minimum support’ which may impact on our status as an exempt provider.

The trustees believe that any clarification by DWP would further our claim as we will be able to prove we meet the criteria. The trustees are moving forward with registration with the RSH.

• Converging gap between income and core costs .

As inflation increases, the cost of providing our quality homes does also. We are able to pass on inflationary increases through uplifts in Housing Benefit once a year, but this leaves us vulnerable to mid-year above inflationary increases. This is of particular concern regarding utility bills (which we manage on behalf of our tenants and fall outside of Housing Benefit claims) and maintenance costs. There is also a risk that local authorities may challenge uplifts as they themselves are struggling to meet costs.

This risk is managed by carefully monitoring surpluses and voids so timely decisions can be made to minimise any losses. Mitigating action could see schemes merged, or, as a last resort, terminated. The Board makes careful informed decisions to subsidise some schemes as part of meeting its charitable objectives.

• Lack of rental property available to meet existing tenant’s needs and to fulfil our growth strategy. The rental market continues to provide challenging conditions for securing new properties. The Executive are using new approaches and developments, based on Zetetick’s reputational standing, to acquire longer leases (510 years) for small blocks of properties where a larger number of tenants can be housed. The exploring of property acquisitions remains under constant review.

The Board recognises the need for substantial investment to expand the service model beyond its current localities. Expansion across the Southeast is a managed decision by the Board. Local arrangements with care provider partners will minimise initial step-costs prior to formal investment in local infrastructure.

ZETETICK HOUSING

TRUSTEES' REPORT (INCLUDING DIRECTORS' REPORT) (CONTINUED) FOR THE YEAR ENDED 31 MARCH 2022

• De-Carbonisation

Although the responsibility for EPC rating falls with the owner-landlord, there is an inherent risk to our tenants of them not achieving Minimum Energy Efficiency Standards (MEES). The new Government target to move to all rented properties reaching band C will be phased in and only new leases from 2025 will need to meet this target and existing lease will have until 2028 to comply.

Zetetick intends to work in partnership with property owners to achieve compliance whilst securing long term leases for the security of our tenants.

• Safeguarding

Zetetick has a no tolerance safeguarding policy. Abuse or neglect in any form, of tenants, employees or anyone connected with the charity will be reported and acted upon. All staff are safeguarding trained and, where appropriate, DBS checked. Safeguarding is a standing item on weekly senior manager meetings and all board meetings.

• Stress Testing

The charity has undertaken multiple stress-testing that demonstrates that the organisation is financial resilient to the identified risks. Strong links with Local Authorities and a track record of excellent performance with all referrals contribute positively towards the mitigation of risks.

Future Developments

In order to develop our service provision, maintain quality and reach more people, putting them at the heart of our organisation, Zetetick Housing plans to meet the increasingly complex housing and housing management needs of people with learning disabilities, autism and mental health challenges by:

ZETETICK HOUSING

TRUSTEES' REPORT (INCLUDING DIRECTORS' REPORT) (CONTINUED) FOR THE YEAR ENDED 31 MARCH 2022

Future Aims and Outcomes

Growth plans can only be achieved if we have access to properties to meet the referral demands. Seeking homes for each person separately is resource intensive, and apartment blocks such as Henderson House or Providence Place provide a faster route to reach out to and meeting the needs of more people. Developing such properties, is not predictable and does not come with an immediate promise of filling spaces and void costs are factored in, we will stay open to them.

Structure, governance and management

The Charity is constituted as a limited company, limited by guarantee as defined by the Companies Act 2006. It is controlled by its Memorandum and Articles of Association dated 5th February 2007.

Management Committee

The members of the Management Committee, who were also directors and trustees, during the year were:

I Moore

G Scott CEO G Emerson M Hurst R Wilkinson (Resigned 4 November 2021) L Worrall N Pendleton (Appointed 4 November 2021) A Chequers (Appointed 10 February 2022) C Linden (Appointed 10 February 2022) N Hussain (Appointed 10 February 2022)

ZETETICK HOUSING

TRUSTEES' REPORT (INCLUDING DIRECTORS' REPORT) (CONTINUED) FOR THE YEAR ENDED 31 MARCH 2022

Public Benefit

Trustees ensure that the charity maintains its public benefit. We do this daily through the services we provide, but also, more specifically; through subsidising rents where local authority rental caps fall short of our true costs; sourcing specialist properties for our tenant group; covering the cost of pre-let voids; holding reserves to cover endof-tenancy repair costs unique to our tenant group.

Trustees

Trustees meet four times a year and also held an away-day with senior staff this year. The Board will review all charity policies on a rolling three-year cycle and request an annual report from the Chief Executive Officer on how policies are adhered to within the charity’s values and risk appetite. An Audit, Risk and Finance Committee of two Trustees meets a minimum of four times a year to ensure these key areas are given appropriate scrutiny prior to each Board meeting. A Customer Committee has been recently established, with 3 Trustees, formalising the voice of tenants at Board level and looking to develop and strengthen this area further. A Governance, Nomination and Remuneration Committee has also been formally established, to continue to drive governance standards as well as provide a forum for senior recruitment and pay issues.

We currently meet the Charity Governance Code, but most recently the Board have confirmed that we will adopt and seek compliance with the National Housing Federation’s 2020 Governance code. Our website contains details of our Trustees and our staff team.

Our recruitment principles for Trustees and best practice, is ensured through the appointment of an independent HR consultancy firm, who lead, shortlist against key skill mix criterion and present to the Board Selection Panel recommendation for short-list interviews. A selection panel of three Trustees interview and make a final recommendation to the remaining Board members. All appointed Trustees are formally confirmed at the following AGM and undertake full induction and training to reflect their needs to fully understand and participate in business decisions.

The Charity is managed by a strong leadership team consisting of Chief Executive Officer (CEO), Deputy CEO, Director of Housing. The Director of Finance was appointed in May 2021.

Zetetick has three offices; Croydon, St Leonards and Lewes. This supports the regional model which is key to future growth strategy.

Remuneration of Key Personnel

The Board undertake a full annual pay review of all staff. The Chair of Trustees plus one other Trustee forms the Remuneration Committee and sets the remuneration for the Chief Executive Officer.

Affiliations with Umbrella Groups

Zetetick is a member of the National Housing Federation.

Auditor

Knill James LLP were appointed as auditor to the company and a resolution proposing that they be re-appointed will be put at a General Meeting.

ZETETICK HOUSING

TRUSTEES' REPORT (INCLUDING DIRECTORS' REPORT) (CONTINUED) FOR THE YEAR ENDED 31 MARCH 2022

Disclosure of information to auditor

Each of the Trustees has confirmed that there is no information of which they are aware which is relevant to the audit, but of which the auditor is unaware. They have further confirmed that they have taken appropriate steps to identify such relevant information and to establish that the auditor is aware of such information.

The Trustees' report was approved by the Board of Trustees.

.............................. I Moore Trustee

Date: 03.11.22

ZETETICK HOUSING

STATEMENT OF TRUSTEES' RESPONSIBILITIES

FOR THE YEAR ENDED 31 MARCH 2022

The Trustees, who are also the directors of Zetetick Housing for the purpose of company law, are responsible for preparing the Trustees' Report and the financial statements in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice).

Company Law requires the Trustees to prepare financial statements for each financial year which give a true and fair view of the state of affairs of the charitable company and of the incoming resources and application of resources, including the income and expenditure, of the charitable company for that year.

In preparing these financial statements, the Trustees are required to:

The Trustees are responsible for keeping adequate accounting records that disclose with reasonable accuracy at any time the financial position of the charitable 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 charitable company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

ZETETICK HOUSING

INDEPENDENT AUDITOR'S REPORT TO THE TRUSTEES OF ZETETICK HOUSING

Opinion

We have audited the financial statements of Zetetick Housing (the ‘charitable company’) for the year ended 31 March 2022 which comprise the statement of financial activities, 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 charitable 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 Trustees' 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 charitable 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 Trustees 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 Trustees 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.

ZETETICK HOUSING

INDEPENDENT AUDITOR'S REPORT (CONTINUED) TO THE TRUSTEES OF ZETETICK HOUSING

Opinions on other matters prescribed by the Companies Act 2006

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

Matters on which we are required to report by exception

In the light of the knowledge and understanding of the charitable company and its environment obtained in the course of the audit, we have not identified material misstatements in the directors' report included within the Trustees' report.

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 Trustees' 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 Trustees

As explained more fully in the statement of Trustees' responsibilities, the Trustees, who are also the directors of the charitable company for the purpose of company law, 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 Trustees 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 Trustees are responsible for assessing the charitable 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 Trustees either intend to liquidate the charitable 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.

The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below:

ZETETICK HOUSING

INDEPENDENT AUDITOR'S REPORT (CONTINUED) TO THE TRUSTEES OF ZETETICK HOUSING

In identifying and assessing the risk of material misstatement in respect of irregularities, including fraud, we:

As a result of these procedures we consider the most significant laws and regulations that have a direct impact on the financial statements are FRS 102, Charities SORP (FRS 102), Companies Act 2006, Charities Act 2011, the charitable company's governing document, tax legislation and Charities (Protection and Social Investment) Act 2016. We performed audit procedures to detect non-compliances which may have a material impact on the financial statements which included reviewing the financial statements, including the Trustees' report, remaining alert to new or unusual transactions which may not be in accordance with the governing document.

The most significant laws and regulations that have an indirect impact on the financial statements are employment law and the UK General Data Protection Regulation (UK GDPR). We performed audit procedures to inquire of management and those charged with governance whether the charitable company is in compliance with these laws and regulations and inspected correspondence with regulatory authorities.

We identified the risk of management override of controls as the area where the financial statements were most susceptible to material misstatement due to fraud. Audit procedures performed included, but were not limited to, testing manual journal entries and other adjustments, evaluating the business rationale in relation to significant, unusual transactions and transactions entered into outside the normal course of business and challenging judgments and estimates.

Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation.

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.

ZETETICK HOUSING

INDEPENDENT AUDITOR'S REPORT (CONTINUED) TO THE TRUSTEES OF ZETETICK HOUSING

Use of our report

This report is made solely to the charitable 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 charitable company's members those matters we are required to state to them in an auditors' 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 charitable company and the charitable company’s members as a body, for our audit work, for this report, or for the opinions we have formed.

Mark Filsell FCA (Senior Statutory Auditor) for and on behalf of Knill James LLP

03.11.22

Chartered Accountants Statutory Auditor

One Bell Lane Lewes East Sussex BN7 1JU

ZETETICK HOUSING

STATEMENT OF FINANCIAL ACTIVITIES INCLUDING INCOME AND EXPENDITURE ACCOUNT FOR THE YEAR ENDED 31 MARCH 2022

Current financial year
Unrestricted Unrestricted
funds
general
2022
funds
designated
2022
Notes
£
£
Income and endowments from:
Donations and legacies
2
159
-
Charitable activities
3
3,907,257
-
Investments
4
467
-
Other income
5
34,672
-
Total income
3,942,555
-
Expenditure on:
Charitable activities
6
3,850,989
67,317
Net incoming resources before transfers
91,566
(67,317)
Gross transfers between funds
(59,045)
59,045
Net income for the year/
Net movement in funds
32,521
(8,272)
Fund balances at 1 April 2021
1,419,057
262,729
Fund balances at 31 March 2022
1,451,578
254,457		 Restricted
funds
2022
£
525,756
-
-
-
525,756
20,030
505,726
-
505,726
5,000
510,726		 Total
2022
£
525,915
3,907,257
467
34,672
4,468,311
3,938,336
529,975
-
529,975
1,686,786
2,216,761		 Total
2021
£
5,000
3,737,107
1,027
45,600
3,788,734
3,670,395
118,339
-
118,339
1,568,447
1,686,786

The statement of financial activities includes all gains and losses recognised in the year.

All income and expenditure derive from continuing activities.

The statement of financial activities also complies with the requirements for an income and expenditure account under the Companies Act 2006.

ZETETICK HOUSING

STATEMENT OF FINANCIAL ACTIVITIES (CONTINUED) INCLUDING INCOME AND EXPENDITURE ACCOUNT FOR THE YEAR ENDED 31 MARCH 2022

Prior financial year
Unrestricted Unrestricted
Restricted
funds
general
funds
designated
funds
Notes
2021
£
2021
£
2021
£
Income and endowments from:
Donations and legacies
2
-
-
5,000
Charitable activities
3
3,737,107
-
-
Investments
4
1,005
22
-
Other income
5
45,600
-
-
Total income
3,783,712
22
5,000
Expenditure on:
Charitable activities
6
3,662,395
8,000
-
Net incoming resources before transfers
121,317
(7,978)
5,000
Gross transfers between funds
17,117
(17,117)
-
Net income for the year/
Net movement in funds
138,434
(25,095)
5,000
Fund balances at 1 April 2020
1,280,623
287,824
-
Fund balances at 31 March 2021
1,419,057
262,729
5,000		 Total
2021
£
5,000
3,737,107
1,027
45,600
3,788,734
3,670,395
118,339
-
118,339
1,568,447
1,686,786

ZETETICK HOUSING

BALANCE SHEET

AS AT 31 MARCH 2022

Notes
Fixed assets
Tangible assets
10
Current assets
Debtors
11
Cash at bank and in hand
Creditors: amounts falling due within
one year
12
Net current assets
Total assets less current liabilities
Income funds
Restricted funds
14
Unrestricted funds - designated
Unrestricted funds - general
15		 2022
£
537,599
1,438,537
1,976,136
(279,303)
£
519,928
1,696,833
2,216,761
510,726
254,457
1,451,578
2,216,761		 2021
£
£
23,097
351,910
1,577,639
1,929,549
(265,860)
1,663,689
1,686,786
5,000
262,729
1,419,057
1,686,786		 2021
£
£
23,097
351,910
1,577,639
1,929,549
(265,860)
1,663,689
1,686,786
5,000
262,729
1,419,057
1,686,786
1,686,786
5,000
262,729
1,419,057
1,686,786

The financial statements were approved by the Trustees on 03/11/22

..............................

I Moore Trustee

Company Registration No. 06082488

ZETETICK HOUSING

STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 31 MARCH 2022

Notes
Cash flows from operating activities
Cash generated from operations
20
Investing activities
Purchase of tangible fixed assets
Proceeds on disposal of tangible fixed
assets
Investment income received
Net cash (used in)/generated from
investing activities
Net cash used in financing activities
Net (decrease)/increase in cash and cash
equivalents
Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of year		 2022
£
£
350,831
(510,000)
19,600
467
(489,933)
-
(139,102)
1,577,639
1,438,537		 2021
£
£
187,275
-
-
1,027
1,027
-
188,302
1,389,337
1,577,639

ZETETICK HOUSING

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 MARCH 2022

1 Accounting policies

Charity information

Zetetick Housing is a private company limited by guarantee incorporated in England and Wales. The registered office is Innovation Centre Highfield Drive, Churchfields Industrial Estate, St Leonards on Sea, East Sussex, TN38 9UH.

1.1 Accounting convention

The financial statements have been prepared in accordance with the charitable company's Memorandum and Articles of Association, the Companies Act 2006 and "Accounting and Reporting by Charities: Statement of Recommended Practice applicable to charities preparing their accounts in accordance with the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102)" (effective 1 January 2019). The charitable company is a Public Benefit Entity as defined by FRS 102.

The financial statements are prepared in sterling, which is the functional currency of the charitable company. Monetary amounts in these financial statements are rounded to the nearest £.

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

1.2 Going concern

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

1.3 Charitable funds

Unrestricted funds are available for use at the discretion of the Trustees in furtherance of their charitable objectives.

Restricted funds are subject to specific conditions by donors as to how they may be used. The purposes and uses of the restricted funds are set out in the notes to the financial statements.

Endowment funds are subject to specific conditions by donors that the capital must be maintained by the charitable company.

1.4 Income

Income is recognised when the charitable company is legally entitled to it after any performance conditions have been met, the amounts can be measured reliably, and it is probable that income will be received.

Cash donations are recognised on receipt. Other donations are recognised once the charitable company has been notified of the donation, unless performance conditions require deferral of the amount. Income tax recoverable in relation to donations received under Gift Aid or deeds of covenant is recognised at the time of the donation.

1.5 Expenditure

Liabilities are recognised as expenditure as soon as there is a legal or constructive obligation committing the charity to that expenditure, it is probable that a transfer of economic benefits will be required in settlement and the amount of the obligation can be measured reliably. Expenditure is accounted for on an accruals basis and has been classified under headings that aggregate all cost related to the category. Where costs cannot be directly attributed to particular headings they have been allocated to activities on a basis consistent with the use of resources.

ZETETICK HOUSING

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) FOR THE YEAR ENDED 31 MARCH 2022

1 Accounting policies

(Continued)

1.6 Tangible fixed assets

Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.

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:

Freehold land and buildings Not depreciated Motor vehicles 25% on the reducing balance

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 recognised in the statement of financial activities.

1.7 Impairment of fixed assets

At each reporting end date, the charitable company reviews the carrying amounts of its tangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any).

1.8 Cash and cash equivalents

Cash and cash equivalents include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.

1.9 Financial instruments

The charitable company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.

Financial instruments are recognised in the charitable company's balance sheet when the charitable company becomes party to the contractual provisions of the instrument.

Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.

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.

ZETETICK HOUSING

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) FOR THE YEAR ENDED 31 MARCH 2022

1 Accounting policies

(Continued)

Basic financial liabilities

Basic financial liabilities, including creditors and bank loans are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.

Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.

Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of operations from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.

Derecognition of financial liabilities

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

1.10 Employee benefits

The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.

Termination benefits are recognised immediately as an expense when the charitable company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.

1.11 Retirement benefits

Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.

2 Donations and legacies

Donations and gifts
NHS Grant		 Unrestricted
funds
general
2022
£
159
-
159		 Restricted
funds
2022
£
-
525,756
525,756		 Total
2022
£
159
525,756
525,915		 Restricted
funds
2021
£
5,000
-
5,000

3 Charitable activities

Rental Rental
activities activities
2022 2021
£ £
Charitable rental income 3,907,257 3,737,107

ZETETICK HOUSING

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) FOR THE YEAR ENDED 31 MARCH 2022

4 Investments

Unre stricted Unrestricted Unrestricted Total
funds funds funds
general general designated
2022 2021 2021 2021
£ £ £ £
Interest receivable 467 1,005 22 1,027

5 Other income

Net gain on disposal of tangible fixed assets
Rental of premises
Recharged services		 Unrestricted
Unrestricted
funds
funds
general
general
2022
£
2021
£
10,262
-
5,895
30,000
18,515
15,600
34,672
45,600

ZETETICK HOUSING

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) FOR THE YEAR ENDED 31 MARCH 2022

6 Charitable activities

Staff costs
Depreciation and impairment
Charitable expenditure
Share of support costs (see note 7)
Share of governance costs (see note 7)
Analysis by fund
Unrestricted funds - general
Unrestricted funds - designated
Restricted funds		 Rental
Activities
2022
£
509,521
3,831
3,245,487
3,758,839
125,893
53,604
3,938,336
3,850,989
67,317
20,030
3,938,336		 Rental
Activities
2021
£
464,013
7,849
3,068,636
3,540,498
107,486
22,411
3,670,395
3,662,395
8,000
-
3,670,395

ZETETICK HOUSING

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) FOR THE YEAR ENDED 31 MARCH 2022

7
Support costs
Staff costs
Motor & travel
General office costs
Printing, postage and
stationery
IT costs
Communications
Insurance
General expenses
Bank charges
Audit fees
Accountancy
Legal and professional
Governance costs
heading 1
Analysed between
Charitable activities		 Support Governance
costs
costs
£
£
89,916
-
9,379
-
462
-
3,130
-
15,011
-
1,060
-
5,037
-
1,185
-
713
-
-
6,540
-
2,024
-
27,218
-
17,822
125,893
53,604
125,893
53,604		 2022
£
89,916
9,379
462
3,130
15,011
1,060
5,037
1,185
713
6,540
2,024
27,218
17,822
179,497
179,497		 Support Governance
costs
costs
£
£
81,885
-
3,642
-
1,893
-
3,264
-
9,642
-
1,228
-
3,966
-
1,319
-
647
-
-
6,240
-
1,268
-
14,903
-
-
107,486
22,411
107,486
22,411		 2021
£
81,885
3,642
1,893
3,264
9,642
1,228
3,966
1,319
647
6,240
1,268
14,903
-
125,893 129,897
125,893 129,897

Governance costs includes payments to the auditors of £6,540 (2021 - £6,240) for audit fees.

8 Trustees

During the year, three trustees (2021 - none) were reimbursed expenses totalling £324 (2021 - £nil).

As permitted by the Memorandum and Articles of Association, a trustee, Mr G Scott, fulfils the executive role of CEO. He was remunerated under normal employee terms in the amount of £103,676 (2021 - £111,187) plus pension contributions of £Nil (2021 - £13,424). No trustee is remunerated for their role as trustee.

9 Employees

The average monthly number of employees during the year was:

2022 2021
Number Number
Office and administration 14 12

ZETETICK HOUSING

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) FOR THE YEAR ENDED 31 MARCH 2022

9
Employees
Employment costs
Wages and salaries
Social security costs
Other pension costs		 (Continued)
2022
2021
£
£
520,955
477,074
56,064
48,032
22,418
20,792
599,437
545,898		 (Continued)
2022
2021
£
£
520,955
477,074
56,064
48,032
22,418
20,792
599,437
545,898
545,898

The number of employees whose annual remuneration was more than £60,000 is as follows:

£60,001 to £70,000
£70,001 to £80,000
£100,001 to £110,000
£110,001 to £120,000
Tangible fixed assets
Cost
At 1 April 2021
Additions
Disposals
At 31 March 2022
Depreciation and impairment
At 1 April 2021
Depreciation charged in the year
Eliminated in respect of disposals
At 31 March 2022
Carrying amount
At 31 March 2022
At 31 March 2021		 Freehold
land and
buildings
£
-
510,000
-		 Freehold
land and
buildings
£
-
510,000
-
510,000
-
-
-
-
510,000
-

10 Tangible fixed assets

ZETETICK HOUSING

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) FOR THE YEAR ENDED 31 MARCH 2022

11 Debtors

Debtors
Amounts falling due within one year:
Trade debtors
Other debtors
Prepayments and accrued income		 2022
£
437,434
4,007
96,158
537,599		 2021
£
230,645
-
121,265
351,910

12 Creditors: amounts falling due within one year

Other taxation and social security
Trade creditors
Other creditors
Accruals and deferred income		 2022
£
15,835
48,702
3,834
210,932
279,303		 2021
£
13,220
19,297
3,834
229,509
265,860

13 Retirement benefit schemes

Defined contribution schemes

The charitable company operates two defined contribution pension schemes for qualifying employees. The assets of the schemes are held separately from those of the charitable company in independently administered funds.

The charge to profit or loss in respect of defined contribution schemes was £22,418 (2021 - £20,792).

ZETETICK HOUSING

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) FOR THE YEAR ENDED 31 MARCH 2022

14 Restricted funds

The income funds of the charity include restricted funds comprising the following unexpended balances of donations and grants held on trust for specific purposes:

Mov
in f
ement
unds
Movement in funds
I
r
ncoming
esources
Balance at
1 April 2021
Incoming
Resources
resources
expended 31
Balance at
March 2022
£
£
£
£
£
Digital Inclusion fund
5,000
5,000
-
(4,276)
724
NHS Property fund
-
-
525,756
(15,754)
510,002
5,000
5,000
525,756
(20,030)
510,726		 Mov
in f
ement
unds
Movement in funds
I
r
ncoming
esources
Balance at
1 April 2021
Incoming
Resources
resources
expended 31
Balance at
March 2022
£
£
£
£
£
Digital Inclusion fund
5,000
5,000
-
(4,276)
724
NHS Property fund
-
-
525,756
(15,754)
510,002
5,000
5,000
525,756
(20,030)
510,726		 Mov
in f
ement
unds
Movement in funds
I
r
ncoming
esources
Balance at
1 April 2021
Incoming
Resources
resources
expended 31
Balance at
March 2022
£
£
£
£
£
Digital Inclusion fund
5,000
5,000
-
(4,276)
724
NHS Property fund
-
-
525,756
(15,754)
510,002
5,000
5,000
525,756
(20,030)
510,726
525,756
(20,030)
510,726

During the year Zetetick continued with the Digital Inclusion project funded by Lambeth Borough Council. In total we provided 5 tenants with digital equipment to reduce social isolation, along with a full training and connectivity support.

A capital grant was also received from the NHS to purchase a property for a tenant. The grant is to be repaid on sale of the property, or change of use.

ZETETICK HOUSING

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) FOR THE YEAR ENDED 31 MARCH 2022

15 Designated funds

The income funds of the charity include the following designated funds which have been set aside out of unrestricted funds by the trustees for specific purposes:

Movement in funds

Grant Giving
End of Lease Liability Fund		 Balance at
1 April 2020
£
60,000
227,824
287,824		 Incoming
resources
Resources
expended
£
£
22
(8,000)
-
-
22
(8,000)		 Transfers
Balance at
1 April 2021
Resources
expended
£
£
£
-
52,022
(6,215)
(17,117)
210,707
(61,102)
(17,117)
262,729
(67,317)		 Transfers
Balance at
31 March 2022
£
£
-
45,807
59,045
208,650
59,045
254,457

Grant giving

Funds have been set aside for future grant giving. Interest earned on the funds is allocated to the fund.

End of Lease Liability Fund

The Trustees recognise that there is potentially a need to spend large amounts on repairs and maintenance when handing back properties. The costs may exceed the standard 6-week amount calculated for the reserves target. This is especially true for some tenants who have highly complex needs, and where the property may have been adapted to meet the requirements of the tenant. At 31 March 2022 The Trustees calculated this amount to be £208,650.

ZETETICK HOUSING

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) FOR THE YEAR ENDED 31 MARCH 2022

16 Analysis of net assets between funds

Analysis of net assets between funds
Unrestricted
funds
Designated
funds
2022
2022
£
£
Fund balances at 31 March 2022 are represented
by:
Tangible assets
9,928
-
Current assets/(liabilities)
1,441,650
254,457
1,451,578
254,457		 Restricted
funds
2022
£
510,000
726
510,726		 Total
Unrestricted
funds
2022
2021
£
£
519,928
23,097
1,696,833
1,395,960
2,216,761
1,419,057		 Designated
funds
2021
£
-
262,729
262,729		 Restricted
funds
2021
£
-
5,000
5,000		 Total
2021
£
23,097
1,663,689
1,686,786

ZETETICK HOUSING

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) FOR THE YEAR ENDED 31 MARCH 2022

17 Operating lease commitments

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

Within one year
Between two and five years		 2022
£
390,322
524,979
915,301		 2021
£
394,523
582,500
977,023

The Trustees recognise the need to enter into longer lease commitments in order to source properties for our tenants and give them the security of a home for several years.

18 Events after the reporting date

In May 2022, Zetetick Housing completed the second purchase of a property with NHS grant funding for £510k.

19 Related party transactions

Remuneration of key management personnel

The remuneration of key management personnel is as follows.

2022 2021
£ £
Aggregate compensation 306,418 284,900

Transactions with related parties

G Scott is a director and shareholder in Frontier Support Services Limited (FSS) which provides services to the charity. Included in these accounts under direct costs are concierge fees of £294,654 (2021 - £278,143) which were incurred on normal trading terms. Rents receivable includes £5,000 (2021 - £30,000) for office space sublet to FSS by the charity and book-keeping services of £15,600 (2021 - £15,600) were charged to FSS during the year. An amount of £26,179 (2021 - £18,493) was due to FSS at the year and and is included in trade creditors.

ZETETICK HOUSING

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) FOR THE YEAR ENDED 31 MARCH 2022

20
Cash generated from operations
Surplus for the year
Adjustments for:
Investment income recognised in statement of financial activities
Gain on disposal of tangible fixed assets
Depreciation and impairment of tangible fixed assets
Movements in working capital:
(Increase) in debtors
Increase in creditors
Cash generated from operations
21
Analysis of changes in net funds
The charitable company had no debt during the year.		 2022
£
529,975
(467)
(10,262)
3,831
(185,689)
13,443
350,831		 2021
£
118,339
(1,027)
-
7,849
(14,492)
76,606
187,275

Signature: Email: adavies@zhc.org.uk