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2023-03-31-accounts

Annual report and financial statement 2022123 Selwood Cft Housing

Contents

Page
Directors, executive officers, advisors, and bankers 1
Letter from the chair 2
Group strategic report including the operating and financial 5
review for the year ended 31 March 2023
Independent auditor’s report 34
Consolidated and company statement of comprehensive
income		 38
Consolidated and company statement of financial position 39
Consolidated statement of changes in reserves 40
Company statement of changes in reserves 41
Consolidated statement of cash flows 42
Notes forming part of the financial statements 43

Directors, executive officers, advisors, and bankers

The directors of the Selwood Housing Group who were in office during the year and up to the date of signing the financial statements were:

Group Board of Directors

Sheila Lewis * Stella Shepherd ** Steve Oldrieve to 06/10/22 David Knight Hannah Jones from 06/10/22 Koo Chai Young Li Mow Ching from 06/10/22 *chair ** vice chair

Richard Britton ** to 06/10/22 Chris Butters Richard Yates Valerie Lee Neil Hales-Owen to 29/06/22 Philip Whitehead from 06/10/22

Executive officers

Group chief executive Group finance director Group transformation and people director Group operations director Group development director Group IT director

Barry Hughes Mark Mayler Ria Bristow Verena Buchanan Paul Walsh John Rogers to 31/03/23

Registered office

Bryer Ash Business Park Bradford Road Trowbridge Wiltshire BA14 8RT

Advisors and bankers

Independent Beever and Struthers Internal auditors TIAA Limited
auditor 20 Colmore Circus Artillery House
Queensway Fort Fareham
Birmingham Newgate Ln
B4 6AT Fareham
PO14 1AH
Principal funder Nationwide Building Society Principal bankers Lloyds Bank
Kings Park Road 64 Fore Street
Moulton Park Trowbridge
Northampton Wiltshire
NN3 6NW BA14 8EU
Principal Trowers & Hamlins Capsticks Solicitors Anthony Collins
legal advisors The Senate LLP Solicitors
Southernhay Gardens 1 St George’s Road 143 Edmund Street
Exeter London Birmingham
EX1 1UG SW19 4DR B3 2ES

Charity commission registration No. 1141124 Company limited by guarantee - registration No. 4168336 Registered with the Regulator of Social Housing – registration No. LH4097

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Selwood Housing Society Ltd

Welcome from the chair of our board of directors

Following on from the pandemic, 2022-23 delivered new challenges for Selwood Housing and its customers.

We had to make tough decisions responding to cost-of-living pressures and rising inflation and interest rates.

The below inflation 7% rent cap for 23/24 added further pressure to an already difficult balance between affordability for our customers and the rising costs to provide our services and invest in our homes.

The Regulator of Social Housing confirmed our G1 governance rating but regraded our viability rating from V1 to V2. Although disappointing, we are just one of 62 housing associations regraded, many of those with active home-building programmes. These changes reflect the difficult economic circumstances facing the sector nationally.

In the face of these challenges, we prioritised our planned investment in areas that would bring substantial benefits to customers, such as energy efficiency.

Our homes and communities

Many more of our customers have faced financial hardship over the past 12 months. Our tenancy sustainment team managed a substantial rise in demand which peaked in January when 63 households received additional support to maintain their tenancies. This included support for customers struggling to afford to heat their homes.

Referrals to debt and hardship charities, budget planning, and benefit eligibility advice helped other customers in need. As did practical support, including a scheme providing customers with recycled white goods and another delivering food parcels to housebound customers and those without transport.

Alongside the work of our income team, this support helped minimise rent arrears to just 0.70%, a record low for the third year in a row.

Our Priority Neighbourhoods project teams continued to work with local communities in Studley Green (Trowbridge) and Queensway (Melksham). In September, a well-attended family fun day and garden makeover in Studley Green, Trowbridge, marked the end of the year-long initiative in those areas. Encouraged by some very positive outcomes, we plan to take a similar approach supporting two neighbourhoods in Warminster and Westbury through 2023/24.

With a net loss of affordable social homes in England over the last decade and 1.2 million households on the waiting list in 2021/22, our commitment to investing in our communities has never been stronger.

During the year, we built 154 new homes with a pledge to build a further 1,700 homes over the next ten years. This 2.2% annual increase is higher than the average growth in our sector.

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In December, we celebrated a significant milestone, handing over the keys to our 7000[th] home. As a locally based housing association, this is a proud achievement and we’re grateful for the ongoing support of our partners.

In the last year, we welcomed 553 households as new customers to Selwood Housing, including those moving to Nunney and Malmesbury, where we provided homes for the first time.

Progress towards our sustainability targets continued with our first fully EPC ‘A’ rated development, John Bull, nearing completion. We published our first environmental, social and governance (ESG) report and adopted the Sustainability Reporting Standard for Social Housing, providing direction and transparency in our ESG reporting.

We continued our dual approach to resolving damp and mould issues, reacting immediately to issues raised by our customers as well as proactively checking properties with historic damp and mould issues to assess whether further work is needed. Funding of around £500k has been ring-fenced to invest in remedial works during 2023/24.

Two dedicated specialist damp and mould surveyors were appointed to help us prioritise our lowest energy efficiency properties. All our surveyors were trained in domestic energy assessment to enable in-house Energy Performance Certificate (‘EPC’) assessments.

In March, we welcomed the award of £1.4m from the government’s Social Housing Decarbonisation Fund . Combined with our £4.3m co-funding, we can now begin delivering improvements to these homes over the next two years.

Two sheltered housing refurbishments as well as two major sewerage maintenance upgrades were completed during the year.

Our people and processes

We started to reap the benefits of the previous year’s operational team restructure, with productivity increasing from an average of 2.8 jobs per operative per day in April 2022 to 3.1 in February 2023.

Closer team collaboration proved invaluable in ensuring our customers remained safe in their homes with gas servicing achieving an excellent 100% compliance.

A staggering 47K calls and 16K emails were handled by customer support, with 17K response repairs and 12.5K services booked by the planning team.

Rant & Rave , our new real-time customer feedback platform, received 6,500 responses. This information allowed us to identify activities and services where customers said we excelled and areas where we could improve.

The launch of our new customer complaints forum helped to improve both the complaints process and our learning from outcomes. We continued developing our

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positive complaints culture and rolled out a well-received online complaints training programme to all staff.

Our procurement team successfully implemented new contract guidance and regulations to improve governance and reduce risk around the award of new supplier contracts. This proved timely with multiple contracts awarded during the year, including grounds maintenance and asbestos surveying.

In August, we were pleased to secure a £20m loan from MORHomes. The fast turnaround helped us mitigate short-term interest rate risks to continue our work providing local affordable homes.

Looking ahead

The achievements and dedication of our teams over the past few difficult years give me no doubt that they will continue to deliver for our customers and communities, whatever challenges lie ahead.

Sheila Lewis Chair

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Selwood Housing Society Ltd

Group strategic report including the report of the board for the year ended 31 March 2023

The group board presents its report and audited consolidated financial statements of Selwood Housing Society Limited and its subsidiary undertakings, for the year ended 31 March 2023.

Selwood Housing Group

Selwood Housing Society Limited (Selwood Housing) is the parent company of Silcoa Limited, Cottsbury Homes Limited, and Selwood DevCo Limited.

Selwood Housing is a company limited by guarantee governed by its articles of association. It is registered with the Charity Commission and the Regulator of Social Housing (RSH) and administered by a board of non-executive directors (the board).

Principal activities

The principal activities of the group are the development and provision of affordable housing, incorporating the letting, management and maintenance of dwellings for people in housing need and the provision of support services.

Overview of the business

The purpose of Selwood Housing is to develop, manage and maintain quality affordable housing and provide support services for the benefit of people in housing need.

We manage and maintain homes across Wiltshire, Bath, North East Somerset, and the parts of the county of Somerset which are within one hour’s drive of our head office in Trowbridge. We have a strong local presence and involvement with our local communities. We own 7,053 properties and are the largest social landlord in the West of Wiltshire.

The Regulator of Social Housing refreshed their assessment of Selwood’s compliance with the Governance and Financial Viability Standard in December 2022 which resulted in Selwood Housing retaining our G1 governance rating but regraded our viability rating from V1 to V2.

We have an active programme to develop new homes in our areas of operation, offering a range of affordable homes that meet the needs identified by our local authority partners. In addition to substantial investment in new homes, we are continuing a large programme of improvements to our existing properties.

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Overview of the business continued

We are committed to neighbourhoods, customers and excellence and we undertake a wide range of community activities. We provide lifeline services to our tenants.

Selwood Housing has three commercial subsidiaries, set up for specific purposes. They are all wholly owned by Selwood Housing and the profits they make stay within the group to support Selwood Housing’s charitable objectives.

Silcoa Ltd was our property repairs and improvement company which was integrated into Selwood Housing on the 1 July 2021. No activity remains in the company and so is now dormant.

Cottsbury Homes Ltd is a company that develops homes for market sale. It is not currently active.

Selwood DevCo Ltd is the owner of photovoltaic (PV) panels which are installed on 115 properties owned by Selwood Housing. In addition, during 22/23 several new properties were partially completed and transferred to Selwood for completion.

Objectives and strategy

The board has referred to the Charity Commission’s general guidance on public benefit when reviewing Selwood Housing’s aims and objectives and in planning our future activities. The board has considered how planned activities for the year will contribute to the aims and objectives they have set.

Our strategy is underpinned by four guiding principles:

These principles will guide our work over the coming years. Our corporate plan develops these into the key areas for us to develop in the next few years.

Our key challenge is:

“To be able to deliver quickly on a wide range of complicated, changing targets to meet rising customer expectations”

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Objectives and strategy continued

The key areas for us in the next few years are:

The specific targets for 2023/24 are:

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Objectives and strategy continued

Selwood Housing’s values

Operational performance

Financial review

The group turnover in the year was £46m (2022: £44.3m). This represents an increase of 4% (2022: increase of 6%).

Operating costs are higher than last year at £34.1m (2022: £32.2m), this is mainly due to inflationary increases, the completion of some large, planned programmes of work in year and catching up on response work delayed by the pandemic. Operating costs include depreciation charges of £9.0m (2022: £8.2m), a key accounting estimate. Impairment losses of £433k have been recognised in the year in respect of office property. (2022: nil).

The surplus from the sale of properties was higher than last year at £1.6m (2022: £1.2m) due to selling more properties. The properties’ sold included a mix of right to buy, right to acquire, staircasing and open market sales. Selwood Housing remains committed to considering the suitability and efficiency of our properties.

The overall surplus for the Group in the year is £6.1m, (2022: £6m), largely unchanged from the previous year despite rent increases and additional property sales, as a result of increasing operational & interest costs.

Selwood Housing carries fixed assets in its financial statements at cost (not valuation). Selwood Housing’s residential property asset base at cost was £533m as at 31 March 2023 (2022: £502m). This increase was a combination of the addition of newly developed homes and works to existing properties.

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Operational performance continued

The pension asset of £26.3m has been restricted to £nil (2022: liability £4.7m) as the recoverability of this asset would require a right to reduce employer contributions or to request a refund from the fund. Neither of these options are considered to be available.

The existing use value – social housing (EUV-SH) of Selwood Housing’s properties was estimated to be in the region of £433m at 31 March 2023 (2022: £415m). The directors consider there is no impairment following an impairment review conducted as described in the notes to these accounts.

Selwood Housing finances its property assets through a loan facility of £108.6m (2022: £113m) made available by Nationwide Building Society, a £50m (2022: £50m) facility from Affordable Housing Finance Plc (AHF), a £30m (2022: £30m) facility from Lloyds Bank Plc and a £20m facility from MORhomes Plc. At 31 March 2023 £88.6m (2022: £93m) of the Nationwide facility had been drawn down. This left £20m (2022: £20m) available from Nationwide. £50m (2022: £50m) of the AHF funding had been drawn down at year end, £8m had been drawn from the Lloyds Bank facility (2022: £6m) and £20m from Morhomes Plc (2022: nil)

The board of Selwood Housing Group has adopted a treasury management policy statement. This sets out the group’s policies concerning all treasury management activities, including managing cash flow, borrowing, investing, and hedging. In the financial year net cash inflow from operating activities of £17m (2022: £17.4m) helped to fund net cash spend of £28.1.m (2022: £18.1m) on developing new homes before receipt of social housing grant.

In the 2022/23 corporate plan Selwood Housing had several key areas of focus. Our achievements against each of those areas during 2022/23 include the following:

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Operational performance continued

Key risks

Financial risk management policy

Selwood Housing’s operations expose it to a variety of financial risks that include the effects of changes in credit risk, liquidity risk, interest rate risk and covenant breach risk.

The main credit risk for Selwood Housing relates to non-payment of rents from tenants. We actively manage arrears ensuring tenancies are affordable for new tenants. We provide clear payment terms, a structured process of credit control and regular review of individual tenants' accounts.

The risk that Selwood Housing does not have sufficient liquid assets to carry on its activities is managed through active cash flow monitoring and forecasting.

Interest rate risk for Selwood Housing is particularly relevant regarding its loan facilities with Nationwide Building Society and Lloyds Bank plc. Selwood Housing has in place a risk management programme and treasury management strategy that seeks to limit the adverse effects of interest rate fluctuations on its financial performance.

Covenant performance is monitored throughout the year by the board.

Selwood Housing is not directly exposed to commodity price or exchange rate risk as a result of its operations.

The group maintains effective control over the risks in the business through the use of an online tool, Decision Time. The risk register for Selwood Housing and all its subsidiaries is regularly reviewed by the board.

The Selwood Housing risk register identifies the most significant risks to the business, the causes of these risks, controls that are in place and mitigating actions that are being taken to reduce the impact and/or probability of those risks. The register covers both strategic and operational risks.

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Key risks continued

The major strategic risk areas and mitigating controls identified on the risk register are:

Risk Area Key Controls/Actions
Lack of financial
resilience to withstand
changing socioeconomic
environment		 •
Budget and business plan approved by the board and reported on
•
Financial plan stress tested with various scenarios
•
Value for money strategy with regular review
•
New contracts in place for key repairs and maintenance suppliers
•
Contracts for supply of goods and services are regularly reviewed
•
Identify and monitor appropriate benchmarking
Asset management –
providing homes that are
decent, warm and meet
required need		 •
Asset management strategy and plan reported to Group Asset and
Development Committee (GADC) on a quarterly basis
•
Provision for expenditure in financial plan to get properties to EPC C
by 2030 and net zero carbon by 2050
•
External stock condition survey undertaken
•
Budgeting and forecast process and subsequent monitoring
•
Contract management and procurement processes in place
•
Damp and mould action plan monitored by GADC
•
Internal stock condition survey target of 205 per annum
Risk that people and
culture do not allow us to
deliver strategic
objectives		 •
Executive portfolio board in place to prioritise projects and agree
resource allocation
•
Project Brief and Business Case approval process in place
•
Structured processes for 1-2-1’s and annual evaluations
•
Management development and training in place
•
Professional development for relevant staff
•
Flexible working policy determines approach to hybrid working
•
Training and development programmes for digital skills
New homes delivery does
not meet corporate plan
targets		 •
Development strategy approved by the board and progress reviewed
on a quarterly basis by GADC
•
Comprehensive monitoring and reporting of development
programme
•
Sites, suppliers, and key materials reviewed daily
•
Regular dialogues with relevant local authorities, agents, developers,
and landowners to seek future opportunities
•
Strong links with local planning and housing departments
Technology failures that
disrupt business
(excluding cyber-attack)		 •
Implement a cloud-based application
•
Review hosting options
•
Implement actions to reduce risk of network outage
•
Complete implementation of Microsoft Dynamics
Risk of Cyber security
attack		 •
ICT and data protection policies in place
•
Information dashboard in place
•
Internal periodic reviews to ensure appropriate security levels in
place
•
Vulnerability scanner to review potential security issues
•
Business continuity plan includes plan to address cyber risks

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Environmental, Social & Governance (ESG) matters

Selwood Housing is committed to its environmental, social and governance aims in providing affordable homes both now and into the future, delivering these to high environmental standards possible whilst meeting our regulatory and governance requirements. Selwood issued the first ESG report in 2022 and have adopted the principles of the sustainability for reporting standard (SRS) and aligned this to key strategies including how we build new and manage our existing homes.

Environmental

Selwood Housing has developed a carbon reduction strategy and action plan that aims to ensure all homes meet SAP C standard by 2030 and introduces new low carbon and renewable technologies to meet the 2050 net carbon zero targets. Our newly developed properties achieve very high environmental standards, and we are continuing to invest to improve the environmental performance of our existing housing properties. One of our key performance indicators is the average SAP rating achieved across all housing properties, which is a measure of their environmental performance.

Streamlined Energy and Carbon Reporting

Selwood Housing have generated a Streamlined Energy and Carbon Reporting (SECR) statement to comply with the latest SECR Regulations (2019). This report presents a full 3rd party verified SECR statement, compared to the previous financial year’s usage, for use in Selwood Housing’s annual reporting. All emissions throughout this report are displayed in terms of carbon dioxide equivalents (CO2e) and have been rounded to 2 decimal places.

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Energy efficiency action statement

Reported emissions and energy use data for 1st April 2022 – 31st March 2023 Reported emissions and energy use data for 1st April 2022 – 31st March 2023 Reported emissions and energy use data for 1st April 2022 – 31st March 2023
Current reporting year 1st April Current reporting year 1st April
2022 – 31st March 2023 2021 – 31st March 2022
Energy consumption used to *Gas: 1,361,941 kWh Gas: 1,361,941 kWh
calculate emissions: /kWh *Electricity: 985,237 kWh Electricity: 985,237 kWh
[mandatory] – optional to provide Transport fuel: 1,631,429 kWh Transport fuel: 1,927,848 kWh
separate figures for gas, electricity,
transport fuel and other energy
Sources Total:
3,978,607 kWh		 Total:
4,275,026 kWh
Emissions from combustion of gas 248.61 tonnes CO2e1 **249.45 tonnes CO2e **
tCO2e (Scope 1) [mandatory] 11.26 tonnes CO2e office usage 11.30 tonnes CO2e office usage
27.16 tonnes CO2e communal areas 27.25 tonnes CO2e communal areas
210.19 tonnes CO2e communal heating 210.90 tonnes CO2e communal heating
systems systems
Emissions from combustion of fuel **393.31 tonnes CO2e ** **456.56 tonnes CO2e **
for transport purposes (Scope 1) (in-house maintenance fleet) (in-house maintenance fleet)
[mandatory]
Emissions from purchased electricity 190.52 tonnes CO2e1 **209.20 tonnes CO2e **
(Scope 2, location-based) 10.01 tonnes CO2e office usage 11.00 tonnes CO2e office usage

[mandatory]		 180.51 tonnes CO2e communal areas 198.20 tonnes CO2e communal areas
See below for transmission and See below for transmission and
distribution losses distribution losses
Total gross CO2e based on above - **832.44 tonnes CO2e ** **915.21 tonnes CO2e **
[mandatory] Excludes scope 3 emissions Excludes scope 3 emissions
Intensity ratio: tCO2e gross figure 124.39 kgCO2per home managed 138.95 kgCO2per home managed
based from mandatory fields above/ (exc. office emissions) (exc. office emissions)
e.g. £100,000 revenue [mandatory]
Office intensity: 12.25 kgCO2per Office intensity: 13.39 kgCO2per
m2 (includes T&D losses) m2 (includes T&D losses)
Methodology [mandatory] SHIFT methodologySECR Reporting SHIFT Environment
Using DEFRA (2022) Conversion Factors in line with Environmental
Reporting Guidelines (2019) as the majority of the financial year falls
into the calendar year 2022. Comparison data from the previous
year’s SECR is using DEFRA 2021 Conversion Factors.

1 Energy use from buildings is based on previous data (21/22 financial year) due to difficulty obtaining updated figures after changing energy brokers. The 2022 Defra conversion factors have been applied. * Energy consumption is based on previous data (21/22 financial year) due to difficulty obtaining updated figures after changing energy brokers

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Energy efficiency action statement continued

Emissions from purchase of electricity, Emissions from purchase of electricity, Only reporting on location based Only reporting on location based Only reporting on location based
heat, steam and cooling purchased for
own use (Scope 2,
market-based) / tCO2e [optional]
Emissions from generation of electricity 17.43 tonnes CO2eTransmission 18.51 tonnes CO2eTransmission
that is consumed in a transmission and and distribution (T&D) losses and distribution (T&D) losses
distribution system for which the associated with UK electricity associated with UK electricity
company does not own or control (Scope
3) / tCO2e
[optional]
Emissions from employee business travel 32.09 tonnes CO2e 23.61 tonnes CO2e
for which the company does not own or 32.03 tonnes CO2e employee vehicles 23.51 tonnes CO2e employee vehicles
control (Scope 3) / tCO2e [optional] 0.06 tonnes CO2e public transport 0.09 tonnes CO2e public transport
Emissions from leased assets, The regulated emissions from the The regulated emissions from the
franchises, and outsourced activities independently heated homes we independently heated homes we manage
(Scope 3) / tCO2e [optional] manage far outweigh our operational
far outweigh our operational emissions and
emissions and are therefore reported are therefore reported here on a voluntary
here on a voluntary basis. Our SHIFT basis. Our SHIFT methodology estimated
methodology estimated emissions at emissions at 17,038.13 tonnes in total, or
16,733.13 tonnes in total, or 2.61 2.65 tonnes per home managed.
tonnesper home managed.
Total gross Scope 3 emissions / 16,782.65 tonnes CO2e 17,080.25 tonnes CO2e
tCO2e [optional]
Total gross Scope 1, Scope 2 17,615.09 tonnes CO2e 17,995.46 tonnes CO2e
[location / market] & Scope 3
emissions / tCO2e [optional]
Additional intensity ratio: tCO2e net 2.70 tonnes per home managed 2.80 tonnes per home managed
figure / e.g. £100,000 revenue for total Scope 1, 2 and 3 for total Scope 1, 2 and 3
[optional] emissions recorded. emissions recorded.
Third Party verification [optional] SHIFT Environment

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Energy efficiency action statement continued

During the period 1st April 2022 to 31st March 2023, we installed:

During 2021 Selwood issued a new asset management strategy. A key priority is to achieve SAP band C in all our properties by 2030. During 2022/23 we have successfully completed two energy efficiency pilots improving 90 homes using a

mixture of fabric first, heating upgrade and PV technology. We are gathering learning on these projects from customers and those involved to form our Social Housing Decarbonisation Fund Wave 2 project which will continue to increase the energy efficiency of our bungalows that are off gas as well as upgrade out EPC E and F properties to EPC C.

Social

Affordability

The Valuation Office Agency sets the Local Housing Allowance (LHA) affordability criteria at the 30th centile point between what, in the local rent officer’s opinion, are the highest and lowest non-exceptional rent in a Broad Rental Market Area. These statistics are used as a reference point for housing benefit and are a good indication of rent levels which are affordable in an area. Our valuer’s have compared our rents with the average sector rent and LHA in the same localities. Selwood Housing’s rents are demonstrably lower than those of other housing associations in the same area and are affordable when compared with the local housing allowance. This is supported by our customer satisfaction results that recorded over 76.6% of customers rating rent as value for money in our 22/23 survey.

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Resident Voice

In May and June 2022, we delivered a new, innovative customer training programme called We Are All Selwood Housing. We wanted to increase customer understanding of social housing and how Selwood operates. We also wanted to encourage customers to apply to be either Board or Scrutiny members and give them the knowledge required to perform their best in the application stage. Eleven customers completed the whole four-day programme, with three of them going on to successfully apply to the Scrutiny Team.

Through the year customers were involved in shaping our services and influencing our thinking through 274 interactions across 12 projects that included an assessment of our Pets & Animals policy, the value for money strategy review and redevelopment of our Damp & Mould leaflet. We also held focus groups with customers to assess the usability of the lettings side of our forthcoming customer portal, which will be delivered through the Horizon project.

We supported the Neighbourhood team’s pilot of Priority Neighbourhoods in Trowbridge and Melksham, assisting with customer consultation and community events. We worked with the development team to engage the local primary school on Studley Green estate and involve pupils in naming our new development on the old John Bull pub site.

Working with the customer complaints specialist and head of housing we established a new customer complaints forum. This group will support the process of complaint

resolution by ensuring best practice and developing effective approaches to resolving, learning, and improving complaint management. It will give customers more power in holding us to account for the decisions, performance, and conduct.

The scrutiny team delivered a customer-led review into communications. The communications team have since submitted a document to our portfolio board which will start a project to take forward actions which came out of that scrutiny review. Selwood and the scrutiny team have contracted leading tenant engagement experts TPAS to work with us over 2023-2024 on a new more efficient model of scrutiny. The team also continue to monitor our Together with Tenants plan.

We invested over £42,000 of our Stronger Communities Funding across 21 local projects. This enabled the groups we supported to attract another £433,515 of match-funding into our communities and neighbourhoods. Projects included Bradford on Avon Skate Park, Trowbridge Lantern Festival and Alzheimer’s Support. We also gave repeat core-funding to Group 5. This is a local charity who provide free furniture and household items to families and individuals in need, we know that our customers are their main users, so we continue to support them. We are into the second year of a three-year funding commitment to local charity, Trowbridge

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Futures, to fund a Neighbourhood Connector who is working across our three main housing estates in Trowbridge.

Resident Support

Selwood Housing’s charitable donations were £18k (2022: £21k) during the year to 31 March 2023. In addition to this we lease The Hub to Trowbridge Town Council for a peppercorn rent. We estimate the rental income foregone on these to be equal to donations of around £7k (2022: £8.9k, including 4 garages).

Governance

Selwood Housing is fully committed to the principles of openness, accountability, and competence. We welcome and support the principal recommendations laid down in the National Housing Federation’s Excellence in Governance, Code for members (revised 2020). The code was reviewed and adopted by the board in December 2021. The board concluded that we are fully compliant with the code.

Staff wellbeing

Our ability to meet our objectives and commitments to tenants and other customers in an efficient and effective manner depends on the expertise, commitment, and enthusiasm of all our employees. We take seriously the need to be an employer that recruits high calibre staff, we then ensure they are motivated, skilled, and able to deliver for our customers and provide an excellent service. This is a guiding principle in our corporate strategy, as described above.

Selwood Housing provides information on its objectives, progress and activities through regular team meetings, staff briefings, CEO monthly updates and our staff forum. Selwood Housing seeks employees’ views on how to improve services and on matters of common concern through our monthly pulse survey. The executive team also take part in a monthly live question and answer session with all staff. The group supports the employment of a diverse workforce, both in recruitment and in the retention of employees.

Board and executive composition

At 31 March 2023 Selwood Housing’s board was made up of 5 females and four male directors. The senior management team was made up of four male and two female members.

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Committees of the group board

During the year the following committees were in operation:

All other matters including strategy and business planning and other financial matters are considered directly by the full group board.

Board and executive directors

The group board and executive directors of Selwood Housing who served during the financial year are listed on page 1. The group board comprises of nine members, who are regarded as non-executive directors for legal purposes.

The board is responsible for the governance of Selwood Housing Group. Their role in practice may be summarised as:

Board members regularly participate in training and development to ensure they maintain and develop their skills and have a high level of awareness of current issues in the social housing sector.

Board members undergo a formal appraisal of performance on an annual basis. The format of the appraisal involves a review of everyone’s performance over the year and an assessment of training, skills, and development needs.

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Each board member is expected to take responsibility for fulfilling their training plan while Selwood Housing Group is committed to ensuring that resources are in place to enable this. As part of the appraisal process the board also considers its collective effectiveness in delivering the aims and objectives in the corporate plan.

At 31 March 2023, the executive directors consisted of the group chief executive, the group finance director, the group development director, the group operations director, the group transformation and people director and the group IT director.

The IT director left the organisation on 31 March 2023 and all directorship responsibilities for IT transferred to the group finance director

Insurance policies indemnify board members and staff against liability when acting for Selwood Housing. These policies were in force throughout the financial year and

at the date of approval of the financial statements. The indemnity is a qualifying third-party indemnity.

Board members are recruited based on selecting skill sets, the demographic makeup and experience that are required for the existing board.

Candidates are short-listed by the interview panel made up of the group chief executive, two appropriate board members and the group transformation and people director against the board director specification, which is contained in Selwood Housing’s governance manual. Interviews are carried out by the interview panel and the best candidate for the role is selected. The procedure used is full, fair, and inclusive. Each new board member goes through a structured induction.

Remuneration

Board members are remunerated for their services and are entitled to claim out of pocket expenses such as travelling. Travel costs to and from Selwood Housing’s offices are reimbursed as a taxable benefit. Some board members choose not to reclaim their travel costs.

Payments to board members are shown in note 10 to the financial statements, which shows the actual payments in the financial year, the level of payments and the proportion which the total amount paid forms of Selwood Housing’s annual turnover.

Any changes in remuneration do not take effect until approved by the company in the general meeting and increases to board members’ remuneration do not take effect more frequently than once every three years.

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Group strategic report including the report of the board for the year ended 31 March 2023 continued

The board decides the pay and benefits of the executive directors and agrees the terms on which the chief executive can set other staff salaries, within the agreed market pay based framework.

The executive directors are either members of the Wiltshire Pension Scheme or members of the group personal pension plan, depending on when they joined the organisation. They participate in the scheme on the same terms as all other eligible staff. Selwood Housing contributes to the schemes on behalf of all eligible staff and does not offer alternative benefits such as cars.

There are no service contracts for executive directors. They are employed on similar terms to other staff, with a notice period of three months.

Reserves policy

Selwood Housing’s reserves are invested in its properties. They have been used to fund the development of new homes for letting to people in housing need and the improvement and replacement of components in existing properties. They provide working capital and help Selwood Housing to maximise its borrowing capacity. Selwood Housing sets a target for reserves in its 30-year business plan and ensures that actual reserves stay in line with the plan.

Regulatory standards

The board undertook a review of Selwood Housing’s compliance with the Regulator of Social Housing’s governance and financial viability standard in December 2022 and the board concluded that Selwood Housing complies with the standard.

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Group strategic report including the report of the board for the year ended 31 March 2023 continued

Value for Money

Selwood Housing Group’s approach to value for money (VfM)

Value for money forms one of the key pillars of our principles and values as outlined in our corporate strategy:

Our VfM strategy was reviewed in 2022 and agreed with the board in October 2022. It was presented to a group of customers and received some very positive feedback. Details of the review can be found here:

' ' - What is value for money ? Selwood Housing

The aims of our value for money strategy are:

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Group strategic report including the report of the board for the year ended 31 March 2023 continued

Value for Money continued

Value for money for Selwood Housing includes considering:

Value for Money

Value for Money Standard (VfM)

The Regulator of Social Housing (RSH) issued a new VfM Standard in April 2018 which includes a requirement for registered providers to publish their performance against a series of common metrics with which to measure economy, efficiency and effectiveness as set by the Regulator. The table below compares our performance over the last three years with our peer group, Place shapers (PS), the RSH global accounts performance and our targets for next year.

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Group strategic report including the report of the board for the year ended 31 March 2023 continued

Value for Money continued

Performance Metric
2020/21
Actual
2021/22
Actual
2022/23
Target		 2022/23
Actual		 2023/24
Target
2021/22
PS
Median
*
2021/22
Sector
Median
****
Business health % efficiency
Operating margin
- Overall
24.4%
17.1%
11.4%		 18.1% 17.5%
24.3%
20.5%
Operating margin
- Social housing lettings
23.1%
18.8%
12.8%		 18.9% 16.4%
27.2%
23.3%
Interest cover % (EBITDA-MRI)
426.0%
311.3%
122.0%		 260.4% 102.7%
185.0%
145.7%
Headline social housing cost per
unit £ CPU
£3,732
£4,343
£5,240		 £4,332 £5,548
£3,587
£4,150
Return on capital employed %
2.4%
1.9%
1.4%		 2.1% 2.5%
3.3%
3.2%
Development & investment
New supply delivered %
- Social housing units
1.8%
2.3%
2.3%		 2.2% 2.1%
1.3%
1.4%
Gearing %
31.2%
31.7%
35.9%		 33.6% 36.7%
44.9%
44.1%
Reinvestment %
5.3%
5.4%
7.3%		 7.2% 7.0%
5.9%
6.5%

** Sector median is the latest published sector results (2021/22) as reported by the Regulator of Social Housing

The past two years have been a challenging time for all organisations across every sector. The global pandemic forced us to change our working practices and be flexible and adaptable in our approach. The subsequent supply chain shortages and the economic crisis that has resulted from the war in Ukraine continues to challenge our value for money aims and have been a main focus. The impacts of inflation are also only just starting to materialise and begin to influence our KPIs.

Given this backdrop, it is perhaps surprising that Selwood’s headline social housing cost per unit (CPU) has outperformed our 21/22 result and our target for 22/23. However, this has been largely due to delays in our planned maintenance and major repairs programmes following resource shortages and contractor failures that resulted in re-tendering of the activities. Our target for 23/24 reflect an improved resource availability and more realistic mobilisation periods for newly acquired contractors for major works like window replacements and roofing. Selwood board are confident that the new contracts are robust as they have been managed by a larger and more experienced procurement function.

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Group strategic report including the report of the board for the year ended 31 March 2023 continued

Value for Money continued

EBITDA-MRI interest cover (*) was well ahead of our 22/23 target, due to the reasons above but is expected to fall in 23/24. Selwood board recognised the impact rising interest rates would have on the cost of debt and instructed management to renegotiate our interest cover covenants with lenders. By December 2022, all agreements had been amended to remove MRI from the covenant calculation, moving to an EBITDA only requirement. This means that Selwood now have significant headroom on all of the covenants (e.g. over 2x cover in 22/23), however the board agreed that Selwood would still maintain a minimum cover of 100% for EBITDA-MRI to provide further financial security to the plan.

Gearing was better than target and well below Selwood’s golden rule target of 50% and the existing loan covenant of 60%. Gearing measures, the relationship between debt and tangible fixed housing assets and will increase over the next few years as we borrow more money to fund our development programme and meet our environmental targets.

The improved return on capital employed (ROCE) was better than target due to an increase in gains from disposals of fixed assets. The board agreed to a targeted disposal strategy for properties that would not meet EPC C levels by 2030 without a significant investment beyond the properties 30-year return. This will result in the disposal of a handful of properties over the coming years which will continue to boost the Selwood ROCE performance.

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Group strategic report including the report of the board for the year ended 31 March 2023 continued

Value for Money continued

----- Start of picture text -----
Operating Margin (overall) %
35.0%
30.0%
25.0%
20.0%
15.0%
10.0%
5.0%
0.0%
2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032
PS LQ PS Med PS UQ Forecast ACTUAL
----- End of picture text -----

The improved operating margin is partly due to the delays in planned programmes as detailed above but also from efficiency gains in our responsive repair teams, improved by circa 11% year on year, and a reduction in maintenance costs on our sheltered housing properties, following previous years’ work.

The work on Selwood’s major transformation project, Horizon, has also continued. This will allow us to develop and expand our system capabilities, improve our processes, and explore further efficiencies. This project continues to require additional staff and investment in new systems which impacts our operating margin.

It is anticipated that investment in Horizon, additional costs in maintenance for activities relating to damp and mould along with more surveying and further impact of inflation on supply and staffing, will continue to reduce our operating margin for the next 3 years before the benefits of Horizon programme start to reverse the trend.

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Group strategic report including the report of the board for the year ended 31 March 2023 continued

Value for Money (continued)

----- Start of picture text -----
New supply delivered
(social housing units) %
2.5%
2.0%
1.5%
1.0%
0.5%
0.0%
2020 2021 2022 2023 2024 2025 2026 2027 2028
PS LQ PS Med PS UQ Forecast ACTUAL
----- End of picture text -----

The economic conditions led to management agreeing to slow down the development programme, reducing the new supply delivery from 200 to 150 units for the next two years. This is the main reason for the slight fall in the development and investment results compared to the target for the year and prior years. This trend will continue in 23/24 and is reflected in those targets. Selwood are still committed to development and our recent corporate strategy lays out a plan to build 1,700 homes over the next 10 years. This, combined with our commitment to invest in our existing properties is shown in our re-investment percentage remaining above the median benchmark. Shared ownership demand still remains strong, and the Board have agreed to maintain our average of 30% shared ownership for all newly developed properties. We will continue to monitor this in our performance triggers to mitigate any risk of unsold properties.

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Group strategic report including the report of the board for the year ended 31 March 2023 continued

Value for Money (continued)

In addition to the indicators included in the VfM standard, two key areas of performance monitored by the board are rent loss due to empty properties as a % of rent due and current tenant arrears net of unpaid housing benefit as a % of rent due. These are financial KPIs but also helps us to fulfil our social purpose:

It has been another good year for our lettings team, both in terms of performance and of adapting service delivery to embed lessons learned from the pandemic and a changing environment. During the year the team let 399 homes and the neighbourhoods team facilitated 88 mutual exchanges. At the end of March 2023, the void loss attributable to rented dwellings (including shared ownership) was 0.63% (March 2022 0.9%).

The graph below compares the actual performance and target for Selwood Housing with the quartiles calculated by HouseMark for our benchmarking group during 2021/22:

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Group strategic report including the report of the board for the year ended 31 March 2023 continued

Value for Money (continued)

Despite the increased cost of living the collection of rent and service charges remains strong. This is in part due to our robust pre-tenancy assessment of affordability, the firm, consistent and timely intervention of the income team, and timely referrals to our tenancy sustainment coordinators and financial inclusion partners.

The decision to contact customers in advance of the unprecedented annual rent increase has been positive; with only a small amount dissatisfaction being recorded and early indications are that rent debt has not increased.

The strong collection ethos has shone through again this year with only 4 evictions taking place. The principles of timely support and decisive intervention have resulted in another top-quartile performance from the income team of 0.7% current customer arrears.

2023 has seen the organisation re-join the Housemark benchmarking group. Peer group comparison has validated our income collection performance. Our 2023 year end figure compares favourably against the sector (reported at 2.7%) and a comparable cohort of providers (at 2.6%). Selwood Housing is amongst the best performers in the sector

Supporting actions to deliver the 23/24 targets

To support the delivery of the targets set out for the value for money metrics shown above, we will:

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Group strategic report including the report of the board for the year ended 31 March 2023 continued

Value for Money (continued)

Section 172 Statement

The board of directors, in line with their duties under s172 of the Companies Act 2006, act in a way they consider, in good faith, would be most likely to promote the success of the company for the benefit of its stakeholders as a whole, and in doing so have regard to a range of matters including:

Key decisions and matters that are of strategic importance to the company are appropriately informed by s172 factors. These include but are not limited to:

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Group strategic report including the report of the board for the year ended 31 March 2023 continued

Through an open and transparent dialogue with our key stakeholders, we have been able to develop a clear understanding of their needs, assess their perspectives and monitor their impact on our strategic ambition and culture.

As part of the board’s decision-making process, the board considers the potential impact of decisions on relevant stakeholders whilst also having regard to a number of broader factors, including the impact of the company’s operations on the community and environment, responsible business practices and the likely consequences of decisions in the long term.

In making material decisions the board has sought to deliver benefit to our customers and the communities that we build in, provide secure employment opportunities and fair economic relationships with our suppliers.

Internal controls assurance

The board has overall responsibility for establishing and maintaining the whole system of internal control and for reviewing its effectiveness. The system of internal control is designed to manage, rather than eliminate, the risk of failure to achieve business objectives and to provide reasonable, and not absolute, assurance against material misstatement or loss.

The board receives and considers annual reports at the group audit and finance committee, group asset and development committee and management on the management of risk and control arrangements. The board review the strategic risk register at each of its meetings and receive the full risk register annually for review. The group audit and finance committee set the plans for internal audits based on the risk register to ensure that appropriate work is being undertaken to mitigate risks with corrective actions, where necessary.

The process for identifying, evaluating, and managing the strategic risks faced by Selwood Housing is ongoing, and has been in place prior to and throughout the period commencing 1 April 2022 up to the date of approval of the annual report and financial statements. Selwood Housing introduced a new system for monitoring risk management which is more intuitive, interactive and puts emphasis on ensuring that good controls are in place and actions are progressed to deliver improvement in risk scores.

The arrangements adopted by the board in reviewing the effectiveness of the system of internal control, together with some of the key elements of the control framework include:

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Group strategic report including the report of the board for the year ended 31 March 2023 continued

Internal controls assurance continued

The board cannot delegate ultimate responsibility for the system of internal control, but it can, and has, delegated authority to the group audit and finance committee to review the effectiveness of the system of internal control regularly. The board receives minutes from each committee meeting.

The means by which the group audit and finance committee reviews the effectiveness of the system of internal control include considering internal audit reports, management assurances and the external audit reports. The committee agrees and monitors a three-year rolling programme of internal audit reviews, which have been undertaken by an independent audit firm, TIAA Limited.

The group audit and finance committee has received the executive team’s annual review of the effectiveness of the system of internal control for Selwood Housing, together with the annual report of the internal auditor and has reported its findings to the board.

The internal auditors concluded in their annual report that “TIAA is satisfied that, for the areas reviewed during the year, Selwood Housing Group, has reasonable and effective risk management, control and governance processes in place”. The board has in turn conducted its own annual review of the effectiveness of the system of internal control and considers there is nothing adverse to bring to the attention of company members.

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Group strategic report including the report of the board for the year ended 31 March 2023 continued

Statement of responsibilities of the board

The board are responsible for preparing the strategic report, annual report, and the financial statements in accordance with applicable law and regulations.

Company law and social housing legislation require the board to prepare financial statements for each financial year in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the board must not approve the financial statements

unless they are satisfied that they give a true and fair view of the situation of the group and company and of the surplus of the group and company for that period.

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

The board are responsible for keeping adequate accounting records that are sufficient to show and explain the group and company’s transactions and disclose with reasonable accuracy at any time the financial position of the group and company and enable them to 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. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

The board members are responsible for ensuring that the report of the board is prepared in accordance with the Statement of Recommended Practice for registered social housing providers 2018.

Financial statements are published on the group’s website in accordance with legislation in the United Kingdom governing the preparation and dissemination of financial statements, which may vary from legislation in other jurisdictions. The maintenance and integrity of the group’s website is the responsibility of the board. The board responsibility also extends to the ongoing integrity of the financial statements contained therein.

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Group strategic report including the report of the board for the year ended 31 March 2023 continued

Going concern

After making enquiries the board has a reasonable expectation that Selwood Housing has adequate resources to continue in operational existence for the foreseeable future. The board defines the foreseeable future as at least 12 months from the date of signing the financial statements. For this reason, it continues to adopt the going concern basis in the financial statements.

Annual General Meeting

The Annual General Meeting is planned to be held on 4[th] October 2023 in the boardroom of Selwood Housing’s office.

Independent auditor

A resolution to appoint Selwood Housing’s auditor will be proposed at the forthcoming Annual General Meeting.

Statement of disclosure of information to auditor

So far as the board is aware, there is no relevant audit information of which the company’s auditor is unaware. Each director has taken all the steps that they ought to have taken as a director to make themselves aware of any relevant audit information and to establish that the company’s auditor is aware of that information.

Approval

The report of the board of directors including the strategic report was approved by the board on 5 July 2023 and signed on its behalf by:

Sheila Lewis Chair 5 July 2023

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Selwood Housing Society Ltd

INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF SELWOOD HOUSING SOCIETY LIMITED

Opinion

We have audited the financial statements of Selwood Housing Society Limited (“the Company”) and its subsidiaries (“the Group”) for the year ended 31 March 2023 which comprise the consolidated and company statement of comprehensive income, the consolidated and company statement of financial position, the consolidated and company statements of changes in reserves, , the consolidated statement of cash flows and notes to the financial statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).

In our opinion, the financial statements:

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (“ISAs (UK)”) and applicable law. Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the financial statements section of our report. We are independent of the Group and 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 Board’s use of the going concern basis of accounting in the preparation of the financial statements is appropriate.

Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the Company’s or Group’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 Board with respect to going concern are described in the relevant sections of this report.

Other information

The board are responsible for the other information. Other information comprises the information included in the annual report, other than the financial statements and our auditor’s report thereon. Our opinion on the financial statements does not cover the other information we do not express any form of assurance conclusion thereon.

In connection with our audit of the financial statements, our responsibility is to read the other information including the letter from the chair and Group Strategic Report including

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Selwood Housing Society Ltd

the operating and financial review and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. If, based on the work we have performed, we conclude that there is a material misstatement of this other information we are required to report that fact.

We have nothing to report in this regard.

Opinions on other matters prescribed by the Companies Act 2006

In our opinion, based on the work undertaken during the audit:

Matters on which we are required to report by exception

In the light of the knowledge and understanding of the Group and the Parent Company and its environment obtained during the audit, we have not identified material misstatements in the Strategic report and Report of the Directors.

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 the board

As explained more fully in the statement of responsibilities of the board set out on page 25, the board is 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 board members 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 board are responsible for assessing the Group and the Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the board either intend to liquidate the Group or the Company or to cease operations, or have no realistic alternative but to do so.

Auditor’s responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists.

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Selwood Housing Society Ltd

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 based on these financial statements.

A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council’s website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.

Extent to which the audit was considered capable of detecting irregularities, including fraud

We identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and then design and perform audit procedures responsive to those risks, including obtaining audit evidence that is sufficient and appropriate to provide a basis for our opinion.

In identifying and addressing risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, our procedures included the following:

Due to the inherent limitations of an audit, there is an unavoidable risk that we may not have detected some material misstatements in the financial statements, even though we have properly planned and performed our audit in accordance with auditing standards. For example, as with any audit, there remained a higher risk of non-detection of irregularities, as these may involve collusion, forgery, intentional omissions, misrepresentations, or the

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Selwood Housing Society Ltd

override of internal controls. We are not responsible for preventing fraud or non-compliance with laws and regulations and cannot be expected to detect all fraud and non-compliance with laws and regulations.

Use of our report

This report is made solely to the members of the Company, as a body, in accordance with the Housing and Regeneration Act 2008 and Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the Company’s members those matters we are required to state to them in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the members as a body, for our audit work, for this report, or for the opinions we have formed.

Lee Cartwright (Senior Statutory Auditor) For and on behalf of Beever and Struthers, statutory auditor 20 Colmore Circus Queensway Birmingham B4 6AT Date: 20 July 2023

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Selwood Housing Society Ltd

Consolidated and company statement of comprehensive income for the year ended 31 March 2023

Turnover
Cost of sales
Operating costs
Gain on disposal of fixed assets
Operating surplus
Other interest receivable and similar income
Interest and financing costs
Other finance costs
Movement in fair value of investment properties
Surplus before taxation
Taxation on surplus
Surplus for the financial year
Actuarial gains on defined benefit pension
scheme
Total comprehensive income for year		 Note Group
Group
Company
Company
2023
2022
2023
2022
£'000
£'000
£'000
£'000
4
4
4
11
12
26
16
13
26		 45,967
44,284
45,951
44,630
(3,455)
(4,458)
(3,455)
(4,457)
(34,147)
(32,237)
(34,155)
(32,420)
1,652
1,208
1,652
1,208
10,017
8,797
9,993
8,961
53
6
49
5
(3,835)
(2,594)
(3,835)
(2,594)
(126)
(175)
(126)
(175)
1
23
1
23
6,110
6,057
6,082
6,220
2
(13)
0
0
6,112
6,044
6,082
6,220
4,736
4,179
4,736
4,179
10,848
10,223
10,818
10,399

The notes on pages 44 to 85 form part of these financial statements.

All activities relate to continuing operations.

Charity Commission Registration No 1141124 Company Limited by Guarantee - Registration No. 4168336 Registered with the Regulator of Social Housing No. LH4097

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Selwood Housing Society Ltd

Consolidated and company statement of financial position at 31 March 2023

Note
Fixed assets
Tangible fixed assets - housing properties
14
Tangible fixed assets - other
15
Investment properties
16
Investments in companies
17
Current assets
Stocks
19
Debtors - receivable within 1 year
20
Cash and cash equivalents
20a
Creditors: amounts falling due within
1 year
21
Net current assets / (liabilities)
Total assets less current liabilities
Creditors: amounts falling due after
more than 1 year
22
Net assets excluding pension liability
Provision for deferred tax
30
Pension liability
26
Net assets
Capital and reserves
Income and expenditure reserve
Revaluation reserve		 Group
Group
Company
Company
2023
2022
2023
2022
£'000
£'000
£'000
£'000

471,855
448,308
471,907
448,308

3,575
3,760
3,247
3,404

352
351
352
351
125
25
2,225
2,125
475,907
452,444
477,731
454,188

4,840
4,052
4,840
3,557

3,177
3,172
3,161
3,165
8,720
8,864
6,688
7,422
16,737
16,088
14,689
14,144
(17,638)
(14,565)
(17,602)
(14,524)
(902)
1,523
(2,914)
(380)
475,006
453,967
474,818
453,808
(194,944)
(180,012)
(194,944)
(180,012)
280,062
273,955
279,874
273,796

(7)
(9)
0
0
0
(4,741)
0
(4,741)
280,055
269,205
279,874
269,055
148,691
136,347
148,510
136,197
131,364
132,858
131,364
132,858
280,055
269,205
279,874
269,055

The notes on pages 44 to 88 form part of these financial statements.

The financial statements were approved by the Board of Directors and authorised for issue on 5 July 2023

Sheila Lewis Chair

Mark Mayler Secretary

Charity Commission Registration No 1141124 Company Limited by Guarantee - Registration No. 4168336 Registered with the Regulator of Social Housing No. LH4097

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Selwood Housing Society Ltd

Consolidated statement of changes in reserves for the year ended 31 March 2023

Group
Opening funds April 2021
Total comprehensive income for the year
Actuarial gains on defined benefit pension
scheme
Total comprehensive income
Transfer from revaluation reserve to income and
expenditure
Opening funds March 2022
Total comprehensive income for the year
Actuarial gains on defined benefit pension
scheme
Total comprehensive income
Transfer from revaluation reserve to income and
expenditure
Closing total funds March 2023		 I&E
Revaluation
Total
Reserve
Reserve
£'000
£'000
£'000
124,836
134,147
258,983
6,044
0
6,044
4,179
0
4,179
10,222
0
10,222
1,289
(1,289)
0
136,347
132,858
269,205
6,112
0
6,112
4,736
0
4,736
10,848
0
10,848
1,494
(1,494)
0
148,689
131,364
280,053

The notes on pages 44 to 85 form part of these financial statements.

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Selwood Housing Society Ltd

Company statement of changes in reserves for the year ended 31 March 2023

Company
Opening funds April 2021
Total comprehensive income for the year
Actuarial gains on defined benefit pension
scheme
Total comprehensive income
Transfer from revaluation reserve to income and
expenditure
Opening funds April 2022
Total comprehensive income for the year
Actuarial gains on defined benefit pension
scheme
Total comprehensive income
Transfer from revaluation reserve to income and
expenditure
Closing total funds March 2023		 I&E
Revaluation
Total
Reserve
Reserve
£'000
£'000
£'000
124,509
134,147 258,656
6,220
0
6,220
4,179
0
4,179
10,399
0
10,399
1,289
(1,289)
0
136,197
132,858
269,055
6,082
0
6,082
4,736
0
4,736
10,818
0
10,818
1,494
(1,494)
0
148,509
131,364
279,873

The notes on pages 44 to 85 form part of these financial statements.

41

Selwood Housing Society Ltd

Consolidated statement of cash flows for the year ended 31 March 2023

Note
Cash flows from operating activities
Surplus for the financial year
Adjustments for:
Depreciation of fixed assets - housing properties
14
Depreciation of fixed assets - other
15
Amortised grant
23
Interest payable and finance costs
Interest received
Difference between net pension expenses and
cash contribution
Proceeds from sale of fixed assets- housing
properties
11
Decrease /(Increase) in trade and other debtors
Decrease /(Increase) in stocks
Increase in trade and other creditors
Carrying amount of disposals
Movement in fair value of investment properties
Cash from operations
Taxation paid
Net cash generated from operating activities
Cash flows from investing activities
Proceeds from sale of fixed assets - housing
properties
11
Purchase of fixed assets - housing properties
14
Purchase of fixed assets - other
15
Purchase of investments
Receipt of grant
23
Interest received
Net cash from investing activities
Cashflows from financing activities
Interest paid
12
Taxation Paid
New loans
Debt issue costs incurred
Repayment of loans
25
Net cash used in financing activities
Net (decrease) / increase in cash and cash
equivalents
Cash and cash equivalents at beginning of year		 2023
2022
£'000
£'000
6,110
6,057
8,063
7,741
866
409
(385)
(395)
3,961
2,769
(53)
(6)
(131)
(45)
(3,043)
(2,275)
(5)
305
(788)
370
959
1,428
1,463
1,014
(1)
(23)
17,016
17,350
0
0
17,016
17,350
3,043
2,275
(33,063)
(23,977)
(691)
(167)
(100)
0
1,446
103
53
6
(29,311)
(21,760)
(3,835)
(2,594)
0
0
20,000
6,000
377
0
(4,390)
0
12,152
3,406
(144)
(1,004)
8,864
9,868

The notes on pages 44 to 85 form part of these financial statements.

42

Selwood Housing Society Ltd

Notes to the financial statements For the year ended 31 March 2023

Index of notes

General notes

  1. Legal status

  2. Accounting policies

  3. Judgements in applying accounting policies and key sources of estimation uncertainty

Statement of comprehensive income related notes

  1. Particulars of turnover, cost of sales, operating costs, and operating surplus

  2. Income and expenditure from social housing lettings

  3. Units of housing stock

  4. Operating surplus

  5. Employees

  6. Directors’ and senior executive remuneration

  7. Board members

  8. Surplus on disposal of fixed assets

  9. Interest payable and similar charges

  10. Taxation on profit from operating activities

Statement of financial position related notes

  1. Tangible fixed assets – housing properties

  2. Other tangible fixed assets

  3. Investment properties

  4. Fixed asset investments

  5. Subsidiary undertakings / other investments

  6. Properties for sale and other stock

  7. Debtors

  8. 20a.Cash and Cash Equivalents

  9. Creditors: amounts falling due within 1 year

  10. Creditors: amounts falling due after more than 1 year

  11. Deferred capital grant

  12. Recycled capital grant

  13. Loans and borrowings

  14. Pension obligations

  15. Operating leases

  16. Capital commitments

  17. Related party transactions

  18. Provision for liabilities

  19. Net debt reconciliation

43

Selwood Housing Society Ltd

Notes to the financial statements For the year ended 31 March 2023

1 Legal status

Selwood Housing is incorporated in England and Wales under the Companies Act 2006 and is registered with the Regulator of Social Housing. Selwood Housing is a company limited by guarantee. The guarantors are the company members. Selwood Housing is registered with the Charity Commission. The address of the registered office is given on page 1 and the nature of the group’s operations and principal activities are set out in the strategic report. The Society is a public benefit entity.

2 Accounting policies

All accounting policies have been applied consistently year to year.

Basis of accounting

The financial statements of Selwood Housing have been prepared in accordance with applicable law and accounting standards in the United Kingdom, FRS 102 “the Financial Reporting Standard in the United Kingdom and the Republic of Ireland”, the Statement of Recommended Practice (SORP): Accounting by registered social housing providers (update 2018) and the Accounting Direction for Private Registered Providers of Social Housing 2022.

The accounts are prepared under the historic cost basis except for the modification to a fair value basis for investment properties as specified in the accounting policies below.

Consolidation

The consolidated financial statements incorporate the results of Selwood Housing Society Limited and all its subsidiary undertakings for the year. Intra-group transactions and balances have been eliminated on consolidation. Subsidiaries are deconsolidated from the date control ceases.

Going concern

After making enquiries and reviewing the financial plan, the board has a reasonable expectation that the company and the group have adequate resources to continue in operational existence for the foreseeable future. For this reason, it continues to adopt the going concern basis in the financial statements.

44

Selwood Housing Society Ltd

Notes to the financial statements For the year ended 31 March 2023

2 Accounting policies (continued)

Turnover

Turnover comprises rental income receivable in the year, income from shared ownership first tranche sales, sales of properties built for sale and other services included at the invoiced value (excluding value added tax (VAT)) of goods and services supplied in the year and revenue grants receivable in the year and capitalised capital grants. Rental income is recognised from the point when properties under development reach practical completion or otherwise become available for letting. Income from first tranche sales and sales of properties built for sale is recognised at the legal completion of sale. Income from the supply of goods and services is recognised when those goods or services are provided. Income is measured at the fair value of the consideration received or receivable. All turnover arises in the UK.

Grant income (non-Social Housing Grant)

The treatment of grant income depends on the terms of the funding. Where the grant is not conditional upon specific targets being met, then it is treated as income as it becomes receivable. Where grant income received is conditional upon the completion of certain targets and is returnable to the grant giver if the targets are not met, the income is credited to the Statement of Comprehensive Income as the targets are achieved. Any grants received, where the targets have not yet been achieved, are held as deferred income.

Other grants are receivable from local authorities and other organisations. Grants in respect of revenue expenditure are credited to the Statement of Comprehensive Income in the same period as the expenditure to which they relate.

Value added tax

Selwood Housing Society Ltd is registered for VAT. All amounts disclosed in the financial statements are adjusted to reflect Selwood Housing Society Ltd’s agreed method for the treatment of VAT and the financial statements include VAT to the extent that is suffered by the group and is not recoverable from HM Revenues and Customs. The balance of VAT payable or recoverable at the year-end is included as a current liability or asset.

45

Selwood Housing Society Ltd

Notes to the financial statements For the year ended 31 March 2023

2 Accounting policies (continued)

Taxation

Selwood Housing is a registered charity and as such, is entitled to certain tax exemptions on income and profits from investments, and surpluses on any trading activities carried on in furtherance of the charity’s primary objectives, if these profits and surpluses are applied solely for charitable purposes.

Qualifying Charitable Donations of Subsidiaries

The parent company only recognises gift aid income when a qualifying charitable donation is paid by a subsidiary.

Interest

Interest is capitalised on borrowings used to fund new development under construction for the period until the property is available for letting.

Other interest payable, interest receivable and related funding costs are charged to the Statement of Comprehensive Income in the year incurred.

Pensions

Defined benefit scheme

Selwood Housing Society Ltd participates as an admitted body in the Local Government Pension Scheme administered by Wiltshire Council, a defined benefit final salary scheme. The operating costs of providing retirement benefits to participating employees are recognised in the accounting periods in which the benefits are earned. The related finance costs, expected return on assets and any other changes in fair value of the assets and present value of liabilities, are recognised in the accounting period in which they arise.

Pension scheme assets are measured using market value. Pension scheme liabilities are measured using the projected unit actuarial method and are discounted at the current rate of return on a high-quality corporate bond of equivalent terms and currency to the liability. The increase in the present value of the liabilities of Selwood Housing Society Ltd’s defined benefit pension scheme expected to arise from employee service in the period is charged to operating surplus. The expected return on the scheme’s assets and the increase during the year in the present value of the scheme’s liabilities arising from the passage of time are included in operating surplus. Actuarial gains and losses are recognised in the Statement of Comprehensive Income. This pension scheme was closed to new members on 1 October 2010.

46

Selwood Housing Society Limited

Notes to the financial statements For the year ended 31 March 2023

2 Accounting policies (continued)

Defined contribution scheme

Selwood Housing also participates in a defined contribution scheme where the amount charged to the Statement of Comprehensive Income represents the contributions payable to the scheme in respect of the accounting period.

Holiday pay accrual

A liability is recognised to the extent any unused holiday pay entitlement has accrued at the year end and is material; it is carried forward to future periods.

Housing properties

Housing properties are principally dwellings available for rent and are stated at cost less depreciation. Cost includes the cost of acquiring land and buildings, development costs, interest charges incurred during the development period and expenditure incurred in respect of improvements.

Development administration costs are capitalised on an apportionment of the staff time spent on this activity up to the point where the property is available for letting.

Improvements are works which result in an increase in the net rental income, such as a reduction in future maintenance costs, or result in a significant extension of the useful economic life of the property to the business. Only the direct overhead costs associated with new developments or improvements are capitalised.

Works to existing properties which replace a component that has been treated separately for depreciation purposes are capitalised and the replaced component treated as disposed of in the year of replacement.

Shared ownership properties are split proportionally between current and fixed assets based on the element relating to expected first tranche sales.

47

Selwood Housing Society Limited

Notes to the financial statements For the year ended 31 March 2023

2 Accounting policies (continued)

The first tranche proportion is classed as current asset and related sales proceeds included in turnover and the remaining element is classed as fixed asset and included in housing properties at cost, less any provisions needed for depreciation or impairment.

Deemed cost on transition to FRS 102

On transition to FRS 102 the Group took the option of carrying out a one-off valuation exercise of selected housing properties and using that amount as deemed cost. The Group engaged independent valuation specialist Jones Lang LaSalle (JLL) to value properties on an existing use social housing (EUVSH) basis to determine the deemed cost as at 1 April 2014. The adoption of the deemed cost option resulted in a net increase in fixed assets as at 1 April 2014 of £144.4m revaluation gains which was credited to the revaluation reserve.

Depreciation of Housing properties

Selwood Housing depreciates its housing properties by component on a straight-line basis over the estimated useful economic lives of component categories. Freehold land is not depreciated.

The useful economic lives of the components are as follows:

Structure 100 years Roofs 60 years Windows 25 years Bathrooms 25 years Kitchens 20 years Boilers 15 years PV panels 20 years Fixtures & Fittings 10 years Lighting 20 years Fire Alarms 15 years Door entry systems 10 years Electric Heat Pumps 15 years

Housing properties under construction are not depreciated until practical completion. A full year’s depreciation is charged in the year the property is first available for letting.

48

Selwood Housing Society Limited

Notes to the financial statements For the year ended 31 March 2023

2 Accounting policies (continued)

Impairment

Housing properties, which are depreciated over a period more than 50 years, are subject to impairment reviews annually. Other assets are reviewed for impairment if there is an indication that impairment may have occurred.

Where there is evidence of impairment, a detailed assessment is undertaken to compare the carrying amount of assets or cash generating units for which impairment is indicated to their recoverable amounts.

Where necessary, fixed assets are written down to the recoverable amount, being the higher of the fair value less costs to sell or value in use of an asset or cash generating unit. Any such write down is charged to operating surplus.

What constitutes a cash generating unit (CGU) when indicators of impairment require there to be an impairment review. Selwood Housing considers those properties revalued to deemed cost on adoption of FRS102 and within specific schemes as CGU’s.

Social Housing Grant

Social Housing Grant (SHG) is receivable from Homes England. Where properties are held at deemed cost under the transition to FRS102, the related SHG was initially recognised under the performance model. Subsequent grant is accounted for using the accrual model set out in FRS 102 and the Housing SORP. Grant is carried as deferred income in the statement of financial position and released to the statement of comprehensive income on a systematic basis over the useful economic life of the structure of the property.

If SHG is received in respect of revenue expenditure, it will be credited to the Statement of Comprehensive Income in the same period as the expenditure to which it relates.

SHG is subordinated to the repayment of loans by agreement with Homes England. SHG released on sale of a property may be repayable but is normally available to be recycled and is credited to a Recycled Capital Grant Fund and included in the Statement of Financial Position in creditors.

49

Selwood Housing Society Limited

Notes to the financial statements For the year ended 31 March 2023

2 Accounting policies (continued)

Other tangible fixed assets and depreciation

Other fixed assets are stated at cost less depreciation. Cost includes the purchase price of the asset and any costs incurred in bringing the asset into use. Depreciation is provided to write off the cost of tangible fixed assets, less their residual values, over their expected useful lives using the straightline basis.

Freehold land is not depreciated.

Where website and software costs can be treated as either tangible or intangible assets, they are treated as tangible fixed assets by the group.

Surpluses or deficits arising on the disposal of other fixed assets are determined as the difference between the disposal proceeds and the carrying amount of the assets and are recognised as part of the surplus/deficit for the year.

Stocks

Stocks are valued at the lower of cost and net realisable value. Cost is based on the cost of purchase on a first in, first out basis. Net realisable value is based on estimated selling price less additional costs to completion and disposal.

Shared ownership first tranche sales, completed properties for outright sale and property under construction are valued at the lower of cost and net realisable value. Cost comprises materials, direct labour, capitalised interest, and direct development overheads. Net realisable value is based on estimated sales price after allowing for all further costs of completion and disposal.

50

Selwood Housing Society Limited

Notes to the financial statements For the year ended 31 March 2023

2 Accounting policies (continued)

Recoverable amount of rental and other receivables

The Group estimates the recoverable value of rent and other receivables and impairs the debtor by appropriate amounts. When assessing the amount to impair it reviews the age profile of the debt and the class of debt.

Operating leases

Rentals paid under operating leases are charged to the Statement of Comprehensive Income on a straight-line basis over the term of the lease.

Schemes managed by agents

In accordance with financial reporting standards, where the risks and rewards of running the scheme accrue to the managing agent the Statement of Comprehensive Income includes only that income and expenditure which relates solely to Selwood Housing. Revenue is recognised as services are provided.

Cash and cash equivalents

Cash and cash equivalents in the Group’s Consolidated Statement of Financial Position consists of cash at bank, in hand, deposits and short-term investments with an original maturity of 95 days or less.

Short-term investments

Investments are stated at the lower of cost or market value.

Investment properties

Investment properties consist of commercial properties and other properties not held for social benefit or for use in the business. These properties are held at fair value determined annually by external valuers. Any changes in fair value are recognised in the Statement of Comprehensive Income. No depreciation is provided.

In the Company’s individual financial statements, investment properties rented to other group companies are classified as freehold office (other tangible fixed assets) and held at historical cost less depreciation and impairment.

51

Selwood Housing Society Limited

Notes to the financial statements For the year ended 31 March 2023

2 Accounting policies (continued)

Loans

All loans held by the group are classified as basic financial instruments in accordance with FRS 102. These instruments are initially recorded at the transaction price (the amount of cash received including any loan premiums) less any transaction costs. FRS 102 requires that basic financial instruments are subsequently measured at amortised cost using the effective interest rate method. The group has calculated that the difference between the historical cost basis amortising costs and premiums on a straight-line basis and the application of the effective interest rate method is not material and so loan transaction costs and premiums are amortised to the income and expenditure account on a straight-line basis over the term of the loan.

Financial Instruments

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

Sinking funds

All sinking funds are dealt with as creditors.

Revaluation reserve

The difference on transition to FRS 102 between the deemed cost of social housing properties and the historical cost carrying value is credited to the revaluation reserve. The difference between historical cost depreciation and depreciation charged on the deemed cost is transferred from the revaluation reserve to the income and expenditure reserve each year

52

Selwood Housing Society Limited

Notes to the financial statements For the year ended 31 March 2023

2 Accounting policies (continued)

Debtors and creditors

Debtors and creditors with no stated interest rate and receivable or payable within one year are recorded initially at transaction price less attributable transaction costs. Subsequent to initial recognition they are measured at amortised cost using the effective interest rate method, less any impairment losses. Any losses arising from impairment are recognised in the statement of comprehensive income in other operating expenses. The Group estimates the recoverable value of rental and other receivables and impairs the debtor by appropriate amounts.

The Group has made arrangement with individuals and households for arrears payments of rent and service charges. These arrangements are effectively loans granted at nil interest rate.

3 Judgements in applying accounting policies and key sources of estimation uncertainty

In preparing these financial statements, key judgements have been made in respect of the following:

53

Selwood Housing Society Limited

Notes to the financial statements For the year ended 31 March 2023

3 Judgements in applying accounting policies and key sources of estimation uncertainty (continued)

Other key sources of estimation uncertainty

• Tangible fixed assets (see notes 14 and 15)

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 residual values are assessed annually and may vary depending on several factors. In reassessing asset lives, factors such as the Group’s experience over several years of actual component lives and the Group’s ability to protect the life of a property by continuing investment 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 property assets, the assets are broken down into components based on management’s assessment of the properties. Individual useful economic lives are assigned to these components.

54

Selwood Housing Society Limited

Notes to the financial statements For the year ended 31 March 2023

3 Judgements in applying accounting policies and key sources of estimation uncertainty (continued)

Investment properties are professionally valued annually using a yield methodology. This uses market rental values capitalised at a market capitalisation rate but there is an inevitable degree of judgement involved in that each property is unique and value can only ultimately be reliably tested in the market itself. Key inputs into the valuations for the commercial units were

The estimate for receivables relates to the recoverability of the balance outstanding at year end. A review is performed on the debt to consider whether it is recoverable.

55

Selwood Housing Society Limited

Notes to the financial statements For the year ended 31 March 2023

4 Particulars of turnover, cost of sales, operating costs, and operating surplus - group

Surplus Operating
Cost of Operating on surplus
Turnover sales costs disposal /(deficit)
2023 2023 2023 2023 2023
£'000 £'000 £'000 £'000 £'000
Social housing lettings (note 5) 40,417 0 32,736 0 7,681
Other social housing activities
First tranche low cost home ownership
sales 5,114 3,455 183 0 1,476
Gain on disposal of fixed assets 0 0 0 1,652 1,652
Charges for support services 25 0 4 0 21
Development costs not capitalised 0 0 734 0 (734)
5,139 3,455 921 1,652 2,415
Activities other than social housing activities
Lettings 10 0 4 0 6
Other 401 0 487 0 (86)
411 0 491 0 (80)
45,967 3,455 34,148 1,652 10,016
Surplus Operating
Cost of Operating on surplus
Turnover sales costs disposal /(deficit)
2022 2022 2022 2022 2022
£'000 £'000 £'000 £'000 £'000
Social housing lettings (note 5) 38,078 0 30,933 0 7,145
Other social housing activities
First tranche low cost home ownership
sales 5,801 4,458 164 0 1,179
Gain on disposal of fixed assets 0 0 0 1,208 1,208
Charges for support services 17 0 4 0 13
Development costs not capitalised 0 0 661 0 (661)
5,818 4,458 829 1,208 1,739
Activities other than social housing activities
Lettings 13 0 3 0 10
Other 375 0 473 0 (99)
388 0 476 0 (89)
44,284 4,458 32,238 1,208 8,796

56

Selwood Housing Society Limited

Notes to the financial statements For the year ended 31 March 2023

4 Particulars of turnover, cost of sales, operating costs, and operating surplus - company

Surplus Operating
Cost of Operating on surplus
Turnover sales costs disposal /(deficit)
2023 2023 2023 2023 2023
£'000 £'000 £'000 £'000 £'000
Social housing lettings (note 5) 40,417 0 32,735 0 7,682
Other social housing activities
First tranche low cost home ownership
sales 5,114 3,455 182 0 1,477
Gain on disposal of fixed assets 0 0 0 1,652 1,652
Charges for support services 25 0 4 0 21
Development costs not capitalised 0 0 734 0 (734)
5,139 3,455 920 1,652 2,416
Activities other than social housing activities
Lettings 10 0 4 0 6
Other 385 0 496 0 (111)
395 500 0 (105)
45,951 3,455 34,155 1,652 9,993
Surplus Operating
Cost of Operating on surplus
Turnover sales costs disposal /(deficit)
2022 2022 2022 2022 2022
£'000 £'000 £'000 £'000 £'000
Social housing lettings (note 5) 38,078 0 30,987 0 7,091
Other social housing activities
First tranche low cost home ownership
sales 5,801 4,457 163 0 1,181
Gain on disposal of fixed assets 0 0 0 1,208 1,208
Charges for support services 17 0 4 0 13
Development costs not capitalised 0 0 661 0 (661)
5,818 4,457 828 1,208 1,741
Activities other than social housing activities
Lettings 13 0 3 0 10
Other 721 0 602 0 119
734 605 0 129
44,630 4,457 32,420 1,208 8,961

57

Selwood Housing Society Limited

Notes to the financial statements For the year ended 31 March 2023

5 Income and expenditure from social housing lettings – group

Income
Rents net of identifiable service charges
Service charge income
Amortised government grants
Other grants
Turnover from social housing lettings
Expenditure
Management
Service charge costs
Routine maintenance
Planned maintenance
Major repairs expenditure
Bad debts
Depreciation of housing properties:
-annual charge
-accelerated on disposal of components
Operating expenditure on social housing lettings
Operating surplus / (deficit) on social housing
lettings
Void Losses		 General
needs
Supported
& older
people's
housing
Low cost
home
ownership
Care
Homes
Garages
Total
2023
Total
2022
£'000
£'000
£'000
£'000
£'000
£'000
£'000
28,564
7,956
1,261
254
655
38,691
36,345
504
787
49
0
0
1,341
1,317
385
0
0
0
0
385
385
0
0
0
0
0
0
31
29,453
8,744
1,310
254
655
40,417
38,078
4,408
1,666
265
92
90
6,521
6,166
1,309
904
0
19
9
2,241
2,333
4,686
1,471
0
242
49
6,448
5,274
4,209
1,289
0
12
26
5,536
4,912
2,807
884
0
9
21
3,721
4,506
76
22
0
0
0
98
(70)
6,228
1,840
0
0
0
8,068
7,741
77
23
0
0
0
100
71
23,800
8,099
268
374
195
32,736
30,933
5,653
645
1,043
(120)
460
7,681
7,145
111
98
57
0
45
312
339

58

Selwood Housing Society Limited

Notes to the financial statements For the year ended 31 March 2023

5 Income and expenditure from social housing lettings – company

Income
Rents net of identifiable service charges
Service charge income
Amortised government grants
Other grants
Turnover from social housing lettings
Expenditure
Management
Service charge costs
Routine maintenance
Planned maintenance
Major repairs expenditure
Bad debts
Depreciation of housing properties:
-annual charge
-accelerated on disposal of components
Operating expenditure on social housing lettings
Operating surplus / (deficit) on social housing
lettings
Void Losses		 General
needs
Supported
& older
people's
housing
Low cost
home
ownership
Care
Homes
Garages
Total
2023
Total
2022
£'000
£'000
£'000
£'000
£'000
£'000
£'000
28,565
7,956
1,261
254
655
38,691
36,345
504
787
49
0
0
1,341
1,317
385
0
0
0
0
385
385
0
0
0
0
0
0
31
29,454
8,744
1,310
254
655
40,417
38,078
4,408
1,666
265
92
90
6,521
6,166
1,309
904
0
19
9
2,241
2,332
4,685
1,472
0
242
49
6,448
5,329
4,209
1,289
0
12
26
5,536
4,912
2,807
884
0
9
21
3,721
4,506
76
22
0
0
0
98
(70)
0
0
0
0
0
0
0
6,228
1,840
0
0
0
8,068
7,741
77
23
0
0
0
100
71
23,799
8,100
265
374
195
32,733
30,987
5,655
644
1,045
(120)
460
7,684
7,091
111
98
57
0
45
312
339

59

Selwood Housing Society Limited

Notes to the financial statements For the year ended 31 March 2023

6 Units of housing stock

At the end of the year accommodation in management was as follows:

General needs housing:
- social
- affordable
Low cost home ownership
Supported housing
Housing for older people
Sheltered units for older people / supported
living
Total social housing units
Residential care home bed spaces
Total owned and managed
Leaseholders of sold flats
Leaseholders units for supported living
Market rent
Total owned and managed accommodation
Units under construction
Total owned and managed accommodation as at
Apr 22
Newly built rental accommodation, built by
or for Selwood Housing.
Sales to the open market
Right to Buy Disposals
Right to Acquire Disposals
Fully Staircased LCHO
Total owned and managed accommodation as at
Mar 23		 Group &
Company
Group &
Company
2023
2022
Number
Number
4,192
4,173
861
805
367
308
76
72
701
701
714
714
6,911
6,773
46
49
6,957
6,822
90
90
4
4
2
2
7,053
6,918
250
299
Group &
Company
Number
6,918
155
(3)
(4)
(5)
(8)
7,053		 Group &
Company
Group &
Company
2023
2022
Number
Number
4,192
4,173
861
805
367
308
76
72
701
701
714
714
6,911
6,773
46
49
6,957
6,822
90
90
4
4
2
2
7,053
6,918
250
299

60

Selwood Housing Society Limited

Notes to the financial statements For the year ended 31 March 2023

6 Units of housing stock (continued)

Selwood Housing owns 76 supported housing units (2022: 72) and tenancy sustainment support was provided for 11 of these units by Selwood Housing in 2023. The rest are managed by bodies that contract with adult social care and carry the financial risk relating to these supported housing units. Other organisations manage 46 care home units on our behalf.

Selwood Housing also owns 1,158 garages, 1 shop unit used by Selwood Housing as a resource centre and 1 doctors’ surgery.

7 Operating surplus

Group Group Company Company
2023 2022 2023 2022
£'000 £'000 £'000 £'000
This is arrived at after charging / (crediting):
Depreciation of housing properties:
-annual charge 8,063 7,741 8,063 7,741
-accelerated depreciation on replaced components 100 71 100 71
Depreciation of other tangible fixed assets 433 409 404 381
Impairement of Office property 433 0 433 0
Auditor's remuneration (excluding VAT):
-fees payable to the group's auditor for the audit
of the group's annual accounts 27 27 19 18

8 Employees

Staff costs (including Executive Team) consist of:
Wages and salaries
Social security costs
Cost of defined benefit scheme (see note 26)
Cost of defined contribution scheme		 Group
Group
Company
Company
2023
2022
2023
2022
£'000
£'000
£'000
£'000
10,615
10,950
10,615
9,827
1,029
964
1,029
866
458
580
458
580
741
707
741
657
12,843
13,201
12,843
11,930

The average number of employees (including the executive team) expressed as full-time equivalents (calculated based on a standard working week of 35 hours during the year) was as follows:

61

Selwood Housing Society Limited

Notes to the financial statements For the year ended 31 March 2023

8 Employees (continued)

Employees(continued)
Group Group Company Company
2023 2022 2023 2022
Administration 61 59 61 59
Development 10 10 10 10
Maintenance 92 117 92 87
Housing, Support and care 149 155 149 147
312 341 312 303

9 Directors’ and senior executive remuneration

The directors and senior executives are defined as the members of the board of directors, the group chief executive and the executive team disclosed on page 1.

Group and company

Executive directors' emoluments
Amounts paid to non-executive directors
Contributions to money purchase pension schemes
Contributions to defined benefits pension scheme		 2023
2022
£'000
£'000
718
644
51
49
10
9
75
112
854
814

The remuneration paid to staff (including the executive team) earning over £60,000 upwards (excluding employer pension contributions):

2023
2022
No.
No.
£60,000 - £69,999 5
5
£70,000 - £79,999 7
3
£80,000 - £89,999 0
0
£90,000 - £99,999 2
2
£100,000 - £109,999 1
3
£110,000 - £119,999 1
0
120,000 - 129,999 0
0
130,000 - 139,999 0
1
140,000 - 149,999 0
0
150,000 - 159,999 0
0
160,000 - 169,999 0
0
170,000 - 179,999 0
0
180,000 - 189,999 0
0
190,000 - 199,999 1
0
17
14

62

Selwood Housing Society Limited

Notes to the financial statements For the year ended 31 March 2023

9 Directors’ and senior executive remuneration (continued)

The CEO left the Wiltshire local government pension scheme as of the 31[st] March 2022. From 1[st] April 2022 the CEO salary was adjusted to include the amount that would have been paid into the Wiltshire pension fund as employer contributions on their behalf.

Benefits have accrued to 3 executive officers under the Wiltshire pension fund defined benefit scheme (2022 – 4, including 1 leaver) and 1 director accrued benefits under the group’s defined contribution pension scheme during the year (2022 – 1).

The group chief executive’s salary is 6.06 times the median salary of all members of staff (2022: 4.68 times).

10 Board members

The Chair of the board receives a salary of £10,500 (2022: £10,500) per annum, the committee chairs each receive £1,750 per annum (2022: £1,750), in addition to their basic board member payment. The standard other group board member payment is £4,250 (2022: £4,250). Emoluments paid to board members in 2023 were 0.1% (2022: 0.1%) of Selwood Housing’s annual turnover.

Board member Remuneration
& Expenses
£		 Current
Member of
Group Asset &
Development
Committee		 Current
Member
of Group
Audit and
Finance
committee		 Group
Board
Sheila Lewis* 12,720 x x
Richard Britton ** to 06/10/22 3,188 x x
Chris Butters 5,734 x x
Stella Shepherd** 4,250 x x
Steve Oldrieve to 06/10/22 2,192 x x
Richard Yates 4,250 x x
David Knight 4,476 x x
Valerie Lee 6,167 x x
Neil Hales-Owen to 29/06/22 1,034 x x
Hannah Jones from 06/10/22 2,086 x x
Koo Chai Young Li Mow Ching from
06/10/22		 2,684 x x
PhilipWhitehead from 06/10/22 2,074 x x
Total 50,857

** Vice Chair

63

Selwood Housing Society Limited

Notes to the financial statements For the year ended 31 March 2023

11 Surplus on disposal of fixed assets

Group and Company
Disposal proceeds
Costs of disposals
Selling costs
Grant recycled
Surplus on disposal of other
tangible fixed assets		 Right to Buy
and Right to
Acquire
Other
housing
properties
Staircasing
Total
Total
2023
2023
2023
2023
2022
£'000
£'000
£'000
£'000
£'000
1,334
493
1,216
3,043
2,275
(509)
(137)
(711)
(1,357)
(1,055)
(11)
(5)
(8)
(24)
(12)
0
0
0
0
0
814
351
497
1,662
1,208
0
0
0
(10)
0
814
351
497
1,652
1,208

12 Interest payable and similar charges

Group and company
Bank loans and overdrafts
All other loans (excluding loans from group
entities)
Interest capitalised on construction of housing
properties		 2023
2022
£'000
£'000
2,618
1,580
1,861
1,342
(644)
(328)
3,835
2,594

13 Taxation on profit from ordinary activities

Current tax
UK corporation tax on profits of the year
Effect of changes in rates
Origination and reversal of timing differences
Taxation on profit on ordinary activities		 Group
Group
2023
2022
£'000
£'000
0
(10)
0
(2)
2
(1)
2
(13)

64

Selwood Housing Society Limited

Notes to the financial statements For the year ended 31 March 2023

13 Taxation on profit from ordinary activities (continued)

The tax assessed for the period is higher than the standard rate of corporation tax in the UK. The differences are explained below.

Profit on ordinary activities before tax
Tax on profit on ordinary activities at the
standard rate of corporation tax in the UK of
19% (2022: 19%)
Effects of:
Charitable income
Gift Aid Payment to parent
Expenses not deductible
Tax rate changes
Current tax charge for year		 Group
Group
Company
Company
2023
2022
2023
2022
£'000
£'000
£'000
£'000
6,110
6,057
6,082
6,220
(1,161)
(1,151)
(1,156)
(1,182)
1,137
1,131
1,156
1,182
26
9
0
0
0
0
0
0
0
(2)
0
0
2
(13)
0
0

65

Selwood Housing Society Limited

Notes to the financial statements For the year ended 31 March 2023

14 Tangible fixed assets – housing properties

All housing properties were freehold at 31 March 2023 (2022: all freehold).

Group and company
Cost
1st April 2022
Construction Costs
Replaced components - Additions
Completed Schemes
Disposals - RTB, RTA & market
sales
Disposals - replaced components
Disposals - staircasing
Transfers
At 31 March 2023
Depreciation
1st April 2022
Charge for the year
Eliminated on disposals
Replaced components - Disposals
Disposals - staircasing
At 31 March 2023
Net Book Value at 31 March 2023
Net Book Value at 31 March 2022		 General
needs
completed
General
needs under
construction
Shared
ownership
completed
Shared
ownership
under
construction
Total
£'000
£'000
£'000
£'000
£'000
459,761
11,276
26,231
4,309
501,577
0
20,751
0
7,458
28,209
5,371
(465)
0
0
4,906
17,093
(17,093)
7,819
(7,819)
0
(739)
0
0
0
(739)
(651)
0
0
0
(651)
0
0
(731)
0
(731)
0
0
0
0
0
480,834
14,469
33,318
3,949
532,571
(52,603)
0
(667)
0
(53,269)
(7,825)
0
(239)
0
(8,063)
98
0
0
0
98
551
0
0
0
551
0
0
20
0
20
(59,778)
0
(885)
0
(60,664)
421,056
14,469
32,433
3,949
471,907
407,158
11,276
25,564
4,309
448,308

66

Selwood Housing Society Limited

Notes to the financial statements For the year ended 31 March 2023

14 Tangible fixed assets – housing properties (continued)

Group
Cost
1st April 2022
Construction Costs
Replaced components - Additions
Completed Schemes
Disposals - RTB, RTA & market
sales
Disposals - replaced components
Disposals - staircasing
Transfers
At 31 March 2023
Depreciation
1st April 2022
Charge for the year
Eliminated on disposals
Replaced components - Disposals
Disposals - staircasing
At 31 March 2023
Net Book Value at 31 March 2023
Net Book Value at 31 March 2022		 General
needs
completed
General
needs under
construction
Shared
ownership
completed
Shared
ownership
under
construction
Total
£'000
£'000
£'000
£'000
£'000
459,761
11,276
26,231
4,309
501,577
0
20,716
0
7,441
28,157
5,371
(465)
0
0
4,906
17,093
(17,093)
7,819
(7,819)
0
(739)
0
0
0
(739)
(651)
0
0
0
(651)
0
0
(731)
0
(731)
0
0
0
0
0
480,834
14,434
33,318
3,931
532,519
(52,603)
0
(667)
0
(53,269)
(7,825)
0
(239)
0
(8,063)
98
0
0
0
98
551
0
0
0
551
0
0
20
0
20
(59,778)
0
(885)
0
(60,664)
421,056
14,434
32,433
3,931
471,855
407,158
11,276
25,564
4,309
448,308

67

Selwood Housing Society Limited

Notes to the financial statements For the year ended 31 March 2023

14 Tangible fixed assets – housing properties (continued)

Interest capitalised in the year
Rate used for capitalisation
Total social housing grant received or receivable
to date
as follows
Capital grant - Housing properties
Recycled Capital Grant Fund
Revenue grant - I&E
Revenue grant - reserves		 Group
Group
Company
Company
2023
2022
2023
2022
£'000
£'000
£'000
£'000
(644)
(328)
(644)
(328)
3%
2%
3%
2%
Group
Group
Company
Company
2023
2022
2023
2022
£'000
£'000
£'000
£'000
34,518
33,132
34,518
33,132
205
150
205
150
385
385
385
385
4,642
4,257
4,642
4,257
39,750
37,924
39,750
37,924

Properties held for security

Selwood Housing Society Ltd had property with an existing use value of £239 million pledged as security at 31 March 2023 (£206 million – 2022).

68

Selwood Housing Society Limited

Notes to the financial statements For the year ended 31 March 2023

15 Other tangible fixed assets – group

Group
Cost
At 1 April 2022
Additions
Disposals
At 31 March 2023
Accumulated Depreciation
At 1 April 2022
Charged in year
Impairment
Disposals
At 31 March 2023
Net book value at 31
March
2023
Net book value at 31
March
2022		 Freehold
Fixtures
Plant &
Motor
IT
Total
Office
& Fittings
&
Equipment
Vehicles
£'000
£'000
£'000
£'000
£'000
£'000
3,556
52
554
13
2,177
6,352
0
0
0
0
691
691
0
0
0
0
(58)
(58)
3,556
52
554
13
2,810
6,985
(801)
(17)
(198)
(13)
(1,563)
(2,592)
(70)
(5)
(28)
0
(329)
(433)
(433)
0
0
0
0
(433)
0
0
0
0
47
47
(1,303)
(22)
(226)
(13)
(1,845)
(3,410)
2,253
30
328
0
965
3,575
2,755
35
356
0
614
3,760

Freehold office includes freehold land at cost of £360,000 (2022: £360,000) which is not depreciated.

69

Selwood Housing Society Limited

Notes to the financial statements For the year ended 31 March 2023

15 Other tangible fixed assets – company

Cost
At 1 April 2022
Transfer
Additions
Disposals
At 31 March 2023
Accumulated Depreciation
At 1 April 2022
Depreciation on Transfer
Charged in year
Impairment
Disposals
At 31 March 2023
Net book value at 31 March
2023
Net book value at 31 March
2022		 Freehold
Fixtures
Plant
Motor
IT
Total
Office
& Fittings
&
Equipment Vehicles
£'000
£'000
£'000
£'000
£'000
£'000
3,556
52
6
13
2,177
5,804
0
0
0
0
0
0
0
0
0
0
691
691
0
0
0
0
(58)
(58)
3,556
52
6
13
2,810
6,437
(801)
(17)
(6)
(13)
(1,563)
(2,400)
0
0
0
0
0
0
(70)
(5)
0
0
(329)
(405)
(433)
0
0
0
0
(433)
0
0
0
0
47
47
(1,303)
(22)
(6)
(13)
(1,845)
(3,190)
2,253
30
0
0
965
3,247
2,755
35
0
0
614
3,404

Freehold office includes freehold land at cost of £360,000 (2022: £360,000) which is not depreciated.

70

Selwood Housing Society Limited

Notes to the financial statements For the year ended 31 March 2023

16 Investment properties

Group and Company
At 1 April 2022
Disposals
Revaluations
At 31 March 2023		 Market
rent
Commercial
Total
£'000
£'000
£'000
221
130
351
0
0
0
3
(2)
1
224
128
352

The group’s investment properties are valued annually on 31 March at fair value, determined by an independent, professionally qualified valuer. The valuations were undertaken in accordance with the Royal Institution of Chartered Surveyors’ Appraisal and Valuation Manual. Details on the assumptions made and the key sources of estimation uncertainty are given in note 3.

The surplus on revaluation of investment property arising £1k (2022 – surplus of £23k) has been credited to the statement of comprehensive income for the year (company and group).

17 Fixed asset investments

Cost or valuation
At 1 April 2022
Additions
At 31 March 2023		 Group
Company
£'000
£'000
25
2,125
100
100
125
2,225

71

Selwood Housing Society Limited

Notes to the financial statements For the year ended 31 March 2023

18 Subsidiary undertakings

The principal undertakings in which the company has an interest are as follows:

Proportion of
Country of voting rights
Name incorporation / ordinary share Nature of business Nature of entity Number of shares
or
registration capital held
Private company 100,000 ordinary £1
Silcoa Ltd * England 100% Dormant limited by shares shares
Cottsbury Homes Sale of properties at Private company 500,000 ordinary £1
Ltd England 100% market cost limited by shares shares
Selwood DevCo Generation and supply Private company 1,500,000 ordinary
Ltd England 100% of electricity limited by shares £1 shares

All subsidiary undertakings have the same registered office as the company, shown on page 1.

72

Selwood Housing Society Limited

Notes to the financial statements For the year ended 31 March 2023

19 Properties for sale & other stock

Group
Completed properties
Other
Properties under construction
Company
Completed properties
Other
Properties under construction		 First tranche
shared
ownership
Other
properties
Stock
Total
Total
2023
2023
2023
2022
£'000
£'000
£'000
£'000
2,120
0
2,120
613
0
88
88
72
2,632
0
2,632
3,367
4,752
88
4,840
4,052
First tranche
shared
ownership
Other
properties
Stock
Total
Total
2023
2023
2023
2022
£'000
£'000
£'000
£'000
2,120
0
2,120
613
0
88
88
72
2,632
0
2,632
2,872
4,752
88
4,840
3,557

Properties developed for sale include capitalised interest of £26k (2022 - £21k).

73

Selwood Housing Society Limited

Notes to the financial statements For the year ended 31 March 2023

20 Debtors

Due within one year
Arrears of rent and service charges
Less: Provision for doubtful debts
Amounts owed by group undertakings
Other debtors
Prepayments and accrued income		 Group
Group
Company
Company
2023
2022
2023
2022
£'000
£'000
£'000
£'000
492
638
492
638
(280)
(359)
(280)
(359)
212
279
212
279
0
0
0
0
2,077
1,875
2,067
1,873
887
1,018
881
1,013
3,176
3,172
3,160
3,165

The other debtors figure includes £486k (2022: £479k) in respect of 19 days’ (2022:18 days) housing benefit due from Wiltshire Council.

20a Cash and cash equivalents

Cash
Deposit accounts		 Group
Group
Company
Company
2023
2022
2023
2022
£'000
£'000
£'000
£'000
7,425
8,251
6,075
6,809
1,295
613
613
613
8,720
8,864
6,688
7,422

74

Selwood Housing Society Limited

Notes to the financial statements For the year ended 31 March 2023

21 Creditors: Amounts falling due within one year

Trade creditors
Rent and service charges received in advance
Amounts owed to group undertakings
Taxation and social security
Other creditors
Accruals and deferred income
Loans due within 1 year
Recycled Capital Grant
Deferred Capital grant		 Group
Group
Company Company
2023
2022
2023
2022
£'000
£'000
£'000
£'000
2,743
1,237
2,742
1,235
858
868
858
868
0
0
9
9
3
266
0
256
593
838
560
840
6,564
6,590
6,556
6,550
6,849
4,390
6,849
4,390
28
0
28
0
385
376
385
376
18,023
14,565
17,987
14,524

75

Selwood Housing Society Limited

Notes to the financial statements For the year ended 31 March 2023

22 Creditors: Amounts falling due after more than one year

Group and company

Group and company
Loans and borrowings (note 25)
Deferred capital grant (note 23)
Recycled capital grant (note 24)
Sinking fund balances		 2023
2022
£'000
£'000
160,100
146,576
34,134
33,132
177
150
148
154
194,559
180,012

23 Deferred capital grant

Group and company
At 1 April
Grants received in the year
Grants accrued
Grants recycled from the recycled capital grant fund
Released to income in the year
At 31 March		 2023
2022
£'000
£'000
33,508
33,697
1,446
103
0
0
(51)
104
(385)
(395)
34,518
33,508

24 Recycled capital grant

At 1 April
Inputs to fund:
- grants recycled from deferred capital grants
Use / allocation of funds:
- new build
At 31 March
Amounts 3 years or older where repayment may
be required		 Group
Group
Company Company
2023
2022
2023
2022
£'000
£'000
£'000
£'000
150
254
150
254
55
123
55
123
0
(227)
0
(227)
205
150
205
150
0
0
0
0

76

Selwood Housing Society Limited

Notes to the financial statements For the year ended 31 March 2023

25 Loans and borrowings

Loans are secured by specific charges on the housing properties of the group and are secured on the assets of Selwood Housing, including fixed charges on individual properties.

In one year or less, or on demand
In more than one year but not more than two years
In more than two years but not more than five years
In more than five years
Total debt		 Bank
Loans
Total
Total
2023
2023
2022
£'000
£'000
£'000
6,849
6,849
4,390
7,702
7,702
6,849
36,888
36,888
32,234
115,510
115,510
107,493
166,949
166,949
150,966

New fixed rate funding of £20m was secured in 22/23 with MORHomes.

The loans bear interest at fixed rates ranging from 1.41% to 4.98% or at variable rates calculated at a margin above the London Inter Bank Offer Rate. The current loan outstanding is made up of £120m fixed and £46.6m variable, against agreed facilities of £208.6m. At 31 March 2023 the group had undrawn loan facilities of £20m (2022 - £20m) with Nationwide and £22m (2022 £24m) with Lloyds.

26 Pension obligations

Group and Company

The Wiltshire Pension Fund (“WPF”) is a multi-employer scheme with more than one participating employer, which is administered by Wiltshire Council under the regulations governing the Local Government Pension Scheme (LGPS), a defined benefit scheme. The assets of the WPF are held separately from those of Selwood Housing in independently administered funds. The actuaries have used the projected unit credit method of valuation in accordance with FRS 17.

The employers’ contributions to the WPF by Selwood Housing for the year ended 31 March 2023 were £585,547 (2022: £621,195) at a contribution rate of 25.7% of pensionable salaries including an annual contribution of £343,000 to fund the deficit, set until the next funding valuation.

77

Selwood Housing Society Limited

Notes to the financial statements For the year ended 31 March 2023

26 Pensions obligations (continued)

Financial assumptions

The main financial assumptions used by the actuary were:

31 March 2023 31 March 2022
% per annum % per annum
Discount rate 4.75 2.70
Future salary increases 3.45 3.60
Future pension increases 2.95 3.20

Mortality assumptions

Life expectancy is based on the Fund’s VitaCurves with improvements in line with the CMI 2021 model, with a 10% weighting of 2021 (and 2020) data, standard smoothing (Sk7), initial adjustment of 0.25% and a longterm rate of improvement of 1.5% per annum for both males and females. Based on these assumptions, the average future life expectancies at age 65 are summarised below:

2023 2022
No. of years No. of years
Current pensioners:
Males 21.5 21.7
Females 24.5 24.2
Future pensioners: *
Males 24 22.6
Females 26.1 26

Commutation

A commutation allowance is included for future retirements to elect to take 50% of the maximum additional tax-free cash up to HMRC limits.

78

Selwood Housing Society Limited

Notes to the financial statements For the year ended 31 March 2023

26 Pensions obligations (continued)

Amounts recognised in the statement of financial position

Present value of funded obligations relating
to Selwood Housing
Fair value of plan assets relating to
Selwood Housing
Unrecognised Asset
Net Deficit		 2023
2022
£'000
£'000
(23,324)
(32,863)
26,289
28,122
(2,965)
0
(4,741)

Analysis of the amount (credited)/charged to the statement of comprehensive income:

Current service cost
Expected return on pension scheme assets
Interest on pension scheme liabilities
Total operating charge		 2023
2022
£'000
£'000
458
580
(757)
(520)
883
695
584
755

Of the above amount, £126,000 (2022: £175,000) was charged to other finance charges. £131,000 (2022: £45,000) was credited to operating surplus.

Changes in fair value of employer assets

Opening fair value of employer assets
Contributions by the Employer
Actuarial gains
Benefits paid
Contributions by members
Interest
Closing fair value of employer assets		 2023
2022
£'000
£'000
28,122
26,017
589
625
(2,478)
1,606
(778)
(737)
77
91
757
520
26,289
28,122

79

Selwood Housing Society Limited

Notes to the financial statements For the year ended 31 March 2023

26 Pensions obligations (continued)

Changes in present value of defined benefit obligation

Opening defined benefit obligation
Current service cost
Interest cost
Actuarial losses /(gains)
Estimated benefits paid
Contributions by members
Closing defined benefit obligation		 2023
2022
£'000
£'000
32,863
34,807
458
580
883
695
(10,179)
(2,573)
(778)
(737)
77
91
23,324
32,863

Major categories of plan assets as a percentage of total plan assets:

2023 2022
Equities 55% 53%
Bonds 31% 33%
Property 13% 13%
Cash 1% 1%

Fair value of employer assets

Equities
Bonds
Property
Cash		 2023
2022
£'000
£'000
14,459
14,905
8,150
9,280
3,418
3,656
263
281
26,289
28,122

80

Selwood Housing Society Limited

Notes to the financial statements For the year ended 31 March 2023

26 Pensions obligations (continued)

Amounts for the current and previous four years are as follows:

2023 2022 2021 2020 2019
£'000 £'000 £'000 £'000 £'000
Present value of defined benefit obligation (23,324) (32,863) (34,807) (26,518) (30,074)
Fair value of scheme assets 26,289 28,122 26,017 22,039 22,876
Surplus/(Deficit) on scheme 2,965 (4,741) (8,790) (4,479) (7,198)
Experience adjustments on plan liabilities (1,743) (68) 298 1,027 0
Experience adjustments on plan assets (2,457) 1,606 3,269 (1,681) 1,183
Cumulative actuarial gains/losses 5,092 (2,609) (6,788) (2,379) (5,184)

Projected pension expense for the year to 31 March 2023

Projected Current Service Cost
Interest on Obligation
Expected Return on Plan Assets
Total		 £'000
229
1097
(1,246)
80

The estimated employer contributions for the year to 31 March 2024 are approximately £589,000.

Defined Contribution Scheme

A defined contribution pension scheme is operated by the group on behalf of some employees. The assets of the scheme are held separately from those of the group and the company in an independently administered fund. All existing and new colleagues are eligible to join. The costs associated with providing this scheme are outlined in note 8.

81

Selwood Housing Society Limited

Notes to the financial statements For the year ended 31 March 2023

27 Operating leases

At 31 March 2023, the group and company had future minimum lease payments under non-cancellable operating leases as set out below:

Amounts payable as Lessee Group Group Company Company
2023 2022 2023 2022
£'000 £'000 £'000 £'000
Not later than 1 year 493 325 493 325
later than 1 year and no later than 5 years 1013 500 1013 500
Later than 5 years 0 0 0 0
Total 1,506 825 1506 825
Amounts receivable as Lessor Group Group Company Company
2023 2022 2023 2022
£'000 £'000 £'000 £'000
Not later than 1 year 1 1 1 1
later than 1 year and no later than 5 years 0 0 0 0
Later than 5 years 0 0 0 0
Total 1 1 1 1

28 Capital commitments

Commitments contracted but not provided
for in the accounts
Commitments approved by the Board but
not contracted for		 Group
Group
Company
Company
2023
2022
2023
2022
£'000
£'000
£'000
£'000

60,907
45,702
60,907
45,702
92,218
103,341
92,218
103,341
153,125
149,042
153,125
149,042

82

Selwood Housing Society Limited

Notes to the financial statements For the year ended 31 March 2023

28 Capital commitments (continued)

The above commitments will be financed primarily through borrowings, new funding, social housing grant, property sales and internal cash balances.

29 Related party transactions

The directors Stella Shepherd, Richard Yates and Hannah Jones are tenants of Selwood Housing. Their tenancy agreements are under normal commercial terms and they are not able to use their position to their advantage.

The director Philip Whitehead is also a councillor of Wiltshire Council. Any transactions made with Wiltshire Council are made at arm’s length, on normal commercial terms and the councillors cannot use their position on the board to their advantage.

Except for the disclosures below, Selwood Housing Group has taken advantage of the exemption allowed under FRS 102 not to disclose related party transactions within the group. All intra-group transactions are with subsidiaries that are wholly owned. These have been eliminated on consolidation in the group’s financial statements

Transactions with non-regulated entities

The association provides management services and other services to some of its subsidiaries. Selwood Housing also receives charges from its subsidiaries. The quantum and basis of those charges is set out below.

83

Selwood Housing Society Limited

Notes to the financial statements For the year ended 31 March 2023

29 Related party transactions (continued)

Transactions with non-regulated entities
Payable to Selwood Housing by
Subsidiaries:
Silcoa Ltd
Selwood DevCo Ltd
Cottsbury Homes Ltd
Payable by Selwood Housing to
Subsidiaries:
Silcoa Ltd
Selwood DevCo Ltd		 Management
Charges
Silcoa Transfer
Gift Aid
2023
2022
2023
2022
2023
2022
£'000
£'000
£'000
£'000
£'000 £'000
0
146
0
217
0
219
0
0
0
0
46
47
0
0
0
0
0
3
0
146
0
217
46
269
Other Charges
2023
2022
£'000
£'000
0
2,913
1,050
27
1,050
2,941

Other intra-group charges

No other intra-group charges are payable to the society from subsidiaries. Charges from subsidiaries to the society are for goods and services provided, such as repairs and maintenance.

84

Selwood Housing Society Limited

Notes to the financial statements For the year ended 31 March 2023

30 Provision for liabilities – Deferred Tax

At 31 March 2022
Charge / (Credit)
Origination and reversal of timing
differences
At 31 March 2023
1 Net debt reconciliation
01 April 2022
£'000
Group
Cash and cash
equivalents
8,864
Loans and borrowings
(150,966)
(142,102)
Company
Cash and cash
equivalents
7,422
Loans and borrowings
(150,966)
(143,544)		 At 31 March 2022
Charge / (Credit)
Origination and reversal of timing
differences
At 31 March 2023
1 Net debt reconciliation
01 April 2022
£'000
Group
Cash and cash
equivalents
8,864
Loans and borrowings
(150,966)
(142,102)
Company
Cash and cash
equivalents
7,422
Loans and borrowings
(150,966)
(143,544)		 Group
Group
Company
Company
2023
2022
2023
2022
£'000
£'000
£'000
£'000
9
5
0
0
(2)
4
0
0
0
0
0
0
7
9
0
0

Cash flows
Non -cash
changes
31 March
2023
£'000
£'000
£'000

(144)
0
8,720
(15,671)
-312
(166,949)
(142,102) (15,815)
(312)
(158,229)
7,422
(150,966)
(734)
0
6,688
(15,671)
(312)
(166,949)
(143,544) (16,405)
(312)
(160,261)

31 Net debt reconciliation

85

Annual report and financial statement 2022123 Selwood Cft Housing

Contents

Page
Directors, executive officers, advisors, and bankers 1
Letter from the chair 2
Group strategic report including the operating and financial 5
review for the year ended 31 March 2023
Independent auditor’s report 34
Consolidated and company statement of comprehensive
income		 38
Consolidated and company statement of financial position 39
Consolidated statement of changes in reserves 40
Company statement of changes in reserves 41
Consolidated statement of cash flows 42
Notes forming part of the financial statements 43

Directors, executive officers, advisors, and bankers

The directors of the Selwood Housing Group who were in office during the year and up to the date of signing the financial statements were:

Group Board of Directors

Sheila Lewis * Stella Shepherd ** Steve Oldrieve to 06/10/22 David Knight Hannah Jones from 06/10/22 Koo Chai Young Li Mow Ching from 06/10/22 *chair ** vice chair

Richard Britton ** to 06/10/22 Chris Butters Richard Yates Valerie Lee Neil Hales-Owen to 29/06/22 Philip Whitehead from 06/10/22

Executive officers

Group chief executive Group finance director Group transformation and people director Group operations director Group development director Group IT director

Barry Hughes Mark Mayler Ria Bristow Verena Buchanan Paul Walsh John Rogers to 31/03/23

Registered office

Bryer Ash Business Park Bradford Road Trowbridge Wiltshire BA14 8RT

Advisors and bankers

Independent Beever and Struthers Internal auditors TIAA Limited
auditor 20 Colmore Circus Artillery House
Queensway Fort Fareham
Birmingham Newgate Ln
B4 6AT Fareham
PO14 1AH
Principal funder Nationwide Building Society Principal bankers Lloyds Bank
Kings Park Road 64 Fore Street
Moulton Park Trowbridge
Northampton Wiltshire
NN3 6NW BA14 8EU
Principal Trowers & Hamlins Capsticks Solicitors Anthony Collins
legal advisors The Senate LLP Solicitors
Southernhay Gardens 1 St George’s Road 143 Edmund Street
Exeter London Birmingham
EX1 1UG SW19 4DR B3 2ES

Charity commission registration No. 1141124 Company limited by guarantee - registration No. 4168336 Registered with the Regulator of Social Housing – registration No. LH4097

1

Selwood Housing Society Ltd

Welcome from the chair of our board of directors

Following on from the pandemic, 2022-23 delivered new challenges for Selwood Housing and its customers.

We had to make tough decisions responding to cost-of-living pressures and rising inflation and interest rates.

The below inflation 7% rent cap for 23/24 added further pressure to an already difficult balance between affordability for our customers and the rising costs to provide our services and invest in our homes.

The Regulator of Social Housing confirmed our G1 governance rating but regraded our viability rating from V1 to V2. Although disappointing, we are just one of 62 housing associations regraded, many of those with active home-building programmes. These changes reflect the difficult economic circumstances facing the sector nationally.

In the face of these challenges, we prioritised our planned investment in areas that would bring substantial benefits to customers, such as energy efficiency.

Our homes and communities

Many more of our customers have faced financial hardship over the past 12 months. Our tenancy sustainment team managed a substantial rise in demand which peaked in January when 63 households received additional support to maintain their tenancies. This included support for customers struggling to afford to heat their homes.

Referrals to debt and hardship charities, budget planning, and benefit eligibility advice helped other customers in need. As did practical support, including a scheme providing customers with recycled white goods and another delivering food parcels to housebound customers and those without transport.

Alongside the work of our income team, this support helped minimise rent arrears to just 0.70%, a record low for the third year in a row.

Our Priority Neighbourhoods project teams continued to work with local communities in Studley Green (Trowbridge) and Queensway (Melksham). In September, a well-attended family fun day and garden makeover in Studley Green, Trowbridge, marked the end of the year-long initiative in those areas. Encouraged by some very positive outcomes, we plan to take a similar approach supporting two neighbourhoods in Warminster and Westbury through 2023/24.

With a net loss of affordable social homes in England over the last decade and 1.2 million households on the waiting list in 2021/22, our commitment to investing in our communities has never been stronger.

During the year, we built 154 new homes with a pledge to build a further 1,700 homes over the next ten years. This 2.2% annual increase is higher than the average growth in our sector.

2

Selwood Housing Society Ltd

In December, we celebrated a significant milestone, handing over the keys to our 7000[th] home. As a locally based housing association, this is a proud achievement and we’re grateful for the ongoing support of our partners.

In the last year, we welcomed 553 households as new customers to Selwood Housing, including those moving to Nunney and Malmesbury, where we provided homes for the first time.

Progress towards our sustainability targets continued with our first fully EPC ‘A’ rated development, John Bull, nearing completion. We published our first environmental, social and governance (ESG) report and adopted the Sustainability Reporting Standard for Social Housing, providing direction and transparency in our ESG reporting.

We continued our dual approach to resolving damp and mould issues, reacting immediately to issues raised by our customers as well as proactively checking properties with historic damp and mould issues to assess whether further work is needed. Funding of around £500k has been ring-fenced to invest in remedial works during 2023/24.

Two dedicated specialist damp and mould surveyors were appointed to help us prioritise our lowest energy efficiency properties. All our surveyors were trained in domestic energy assessment to enable in-house Energy Performance Certificate (‘EPC’) assessments.

In March, we welcomed the award of £1.4m from the government’s Social Housing Decarbonisation Fund . Combined with our £4.3m co-funding, we can now begin delivering improvements to these homes over the next two years.

Two sheltered housing refurbishments as well as two major sewerage maintenance upgrades were completed during the year.

Our people and processes

We started to reap the benefits of the previous year’s operational team restructure, with productivity increasing from an average of 2.8 jobs per operative per day in April 2022 to 3.1 in February 2023.

Closer team collaboration proved invaluable in ensuring our customers remained safe in their homes with gas servicing achieving an excellent 100% compliance.

A staggering 47K calls and 16K emails were handled by customer support, with 17K response repairs and 12.5K services booked by the planning team.

Rant & Rave , our new real-time customer feedback platform, received 6,500 responses. This information allowed us to identify activities and services where customers said we excelled and areas where we could improve.

The launch of our new customer complaints forum helped to improve both the complaints process and our learning from outcomes. We continued developing our

3

Selwood Housing Society Ltd

positive complaints culture and rolled out a well-received online complaints training programme to all staff.

Our procurement team successfully implemented new contract guidance and regulations to improve governance and reduce risk around the award of new supplier contracts. This proved timely with multiple contracts awarded during the year, including grounds maintenance and asbestos surveying.

In August, we were pleased to secure a £20m loan from MORHomes. The fast turnaround helped us mitigate short-term interest rate risks to continue our work providing local affordable homes.

Looking ahead

The achievements and dedication of our teams over the past few difficult years give me no doubt that they will continue to deliver for our customers and communities, whatever challenges lie ahead.

Sheila Lewis Chair

4

Selwood Housing Society Ltd

Group strategic report including the report of the board for the year ended 31 March 2023

The group board presents its report and audited consolidated financial statements of Selwood Housing Society Limited and its subsidiary undertakings, for the year ended 31 March 2023.

Selwood Housing Group

Selwood Housing Society Limited (Selwood Housing) is the parent company of Silcoa Limited, Cottsbury Homes Limited, and Selwood DevCo Limited.

Selwood Housing is a company limited by guarantee governed by its articles of association. It is registered with the Charity Commission and the Regulator of Social Housing (RSH) and administered by a board of non-executive directors (the board).

Principal activities

The principal activities of the group are the development and provision of affordable housing, incorporating the letting, management and maintenance of dwellings for people in housing need and the provision of support services.

Overview of the business

The purpose of Selwood Housing is to develop, manage and maintain quality affordable housing and provide support services for the benefit of people in housing need.

We manage and maintain homes across Wiltshire, Bath, North East Somerset, and the parts of the county of Somerset which are within one hour’s drive of our head office in Trowbridge. We have a strong local presence and involvement with our local communities. We own 7,053 properties and are the largest social landlord in the West of Wiltshire.

The Regulator of Social Housing refreshed their assessment of Selwood’s compliance with the Governance and Financial Viability Standard in December 2022 which resulted in Selwood Housing retaining our G1 governance rating but regraded our viability rating from V1 to V2.

We have an active programme to develop new homes in our areas of operation, offering a range of affordable homes that meet the needs identified by our local authority partners. In addition to substantial investment in new homes, we are continuing a large programme of improvements to our existing properties.

5

Selwood Housing Society Ltd

Group strategic report including the report of the board for the year ended 31 March 2023 continued

Overview of the business continued

We are committed to neighbourhoods, customers and excellence and we undertake a wide range of community activities. We provide lifeline services to our tenants.

Selwood Housing has three commercial subsidiaries, set up for specific purposes. They are all wholly owned by Selwood Housing and the profits they make stay within the group to support Selwood Housing’s charitable objectives.

Silcoa Ltd was our property repairs and improvement company which was integrated into Selwood Housing on the 1 July 2021. No activity remains in the company and so is now dormant.

Cottsbury Homes Ltd is a company that develops homes for market sale. It is not currently active.

Selwood DevCo Ltd is the owner of photovoltaic (PV) panels which are installed on 115 properties owned by Selwood Housing. In addition, during 22/23 several new properties were partially completed and transferred to Selwood for completion.

Objectives and strategy

The board has referred to the Charity Commission’s general guidance on public benefit when reviewing Selwood Housing’s aims and objectives and in planning our future activities. The board has considered how planned activities for the year will contribute to the aims and objectives they have set.

Our strategy is underpinned by four guiding principles:

These principles will guide our work over the coming years. Our corporate plan develops these into the key areas for us to develop in the next few years.

Our key challenge is:

“To be able to deliver quickly on a wide range of complicated, changing targets to meet rising customer expectations”

6

Selwood Housing Society Ltd

Group strategic report including the report of the board for the year ended 31 March 2023 continued

Objectives and strategy continued

The key areas for us in the next few years are:

The specific targets for 2023/24 are:

7

Selwood Housing Society Ltd

Group strategic report including the report of the board for the year ended 31 March 2023 continued

Objectives and strategy continued

Selwood Housing’s values

Operational performance

Financial review

The group turnover in the year was £46m (2022: £44.3m). This represents an increase of 4% (2022: increase of 6%).

Operating costs are higher than last year at £34.1m (2022: £32.2m), this is mainly due to inflationary increases, the completion of some large, planned programmes of work in year and catching up on response work delayed by the pandemic. Operating costs include depreciation charges of £9.0m (2022: £8.2m), a key accounting estimate. Impairment losses of £433k have been recognised in the year in respect of office property. (2022: nil).

The surplus from the sale of properties was higher than last year at £1.6m (2022: £1.2m) due to selling more properties. The properties’ sold included a mix of right to buy, right to acquire, staircasing and open market sales. Selwood Housing remains committed to considering the suitability and efficiency of our properties.

The overall surplus for the Group in the year is £6.1m, (2022: £6m), largely unchanged from the previous year despite rent increases and additional property sales, as a result of increasing operational & interest costs.

Selwood Housing carries fixed assets in its financial statements at cost (not valuation). Selwood Housing’s residential property asset base at cost was £533m as at 31 March 2023 (2022: £502m). This increase was a combination of the addition of newly developed homes and works to existing properties.

8

Selwood Housing Society Ltd

Group strategic report including the report of the board for the year ended 31 March 2023 continued

Operational performance continued

The pension asset of £26.3m has been restricted to £nil (2022: liability £4.7m) as the recoverability of this asset would require a right to reduce employer contributions or to request a refund from the fund. Neither of these options are considered to be available.

The existing use value – social housing (EUV-SH) of Selwood Housing’s properties was estimated to be in the region of £433m at 31 March 2023 (2022: £415m). The directors consider there is no impairment following an impairment review conducted as described in the notes to these accounts.

Selwood Housing finances its property assets through a loan facility of £108.6m (2022: £113m) made available by Nationwide Building Society, a £50m (2022: £50m) facility from Affordable Housing Finance Plc (AHF), a £30m (2022: £30m) facility from Lloyds Bank Plc and a £20m facility from MORhomes Plc. At 31 March 2023 £88.6m (2022: £93m) of the Nationwide facility had been drawn down. This left £20m (2022: £20m) available from Nationwide. £50m (2022: £50m) of the AHF funding had been drawn down at year end, £8m had been drawn from the Lloyds Bank facility (2022: £6m) and £20m from Morhomes Plc (2022: nil)

The board of Selwood Housing Group has adopted a treasury management policy statement. This sets out the group’s policies concerning all treasury management activities, including managing cash flow, borrowing, investing, and hedging. In the financial year net cash inflow from operating activities of £17m (2022: £17.4m) helped to fund net cash spend of £28.1.m (2022: £18.1m) on developing new homes before receipt of social housing grant.

In the 2022/23 corporate plan Selwood Housing had several key areas of focus. Our achievements against each of those areas during 2022/23 include the following:

9

Selwood Housing Society Ltd

Group strategic report including the report of the board for the year ended 31 March 2023 continued

Operational performance continued

Key risks

Financial risk management policy

Selwood Housing’s operations expose it to a variety of financial risks that include the effects of changes in credit risk, liquidity risk, interest rate risk and covenant breach risk.

The main credit risk for Selwood Housing relates to non-payment of rents from tenants. We actively manage arrears ensuring tenancies are affordable for new tenants. We provide clear payment terms, a structured process of credit control and regular review of individual tenants' accounts.

The risk that Selwood Housing does not have sufficient liquid assets to carry on its activities is managed through active cash flow monitoring and forecasting.

Interest rate risk for Selwood Housing is particularly relevant regarding its loan facilities with Nationwide Building Society and Lloyds Bank plc. Selwood Housing has in place a risk management programme and treasury management strategy that seeks to limit the adverse effects of interest rate fluctuations on its financial performance.

Covenant performance is monitored throughout the year by the board.

Selwood Housing is not directly exposed to commodity price or exchange rate risk as a result of its operations.

The group maintains effective control over the risks in the business through the use of an online tool, Decision Time. The risk register for Selwood Housing and all its subsidiaries is regularly reviewed by the board.

The Selwood Housing risk register identifies the most significant risks to the business, the causes of these risks, controls that are in place and mitigating actions that are being taken to reduce the impact and/or probability of those risks. The register covers both strategic and operational risks.

10

Selwood Housing Society Ltd

Group strategic report including the report of the board for the year ended 31 March 2023 continued

Key risks continued

The major strategic risk areas and mitigating controls identified on the risk register are:

Risk Area Key Controls/Actions
Lack of financial
resilience to withstand
changing socioeconomic
environment		 •
Budget and business plan approved by the board and reported on
•
Financial plan stress tested with various scenarios
•
Value for money strategy with regular review
•
New contracts in place for key repairs and maintenance suppliers
•
Contracts for supply of goods and services are regularly reviewed
•
Identify and monitor appropriate benchmarking
Asset management –
providing homes that are
decent, warm and meet
required need		 •
Asset management strategy and plan reported to Group Asset and
Development Committee (GADC) on a quarterly basis
•
Provision for expenditure in financial plan to get properties to EPC C
by 2030 and net zero carbon by 2050
•
External stock condition survey undertaken
•
Budgeting and forecast process and subsequent monitoring
•
Contract management and procurement processes in place
•
Damp and mould action plan monitored by GADC
•
Internal stock condition survey target of 205 per annum
Risk that people and
culture do not allow us to
deliver strategic
objectives		 •
Executive portfolio board in place to prioritise projects and agree
resource allocation
•
Project Brief and Business Case approval process in place
•
Structured processes for 1-2-1’s and annual evaluations
•
Management development and training in place
•
Professional development for relevant staff
•
Flexible working policy determines approach to hybrid working
•
Training and development programmes for digital skills
New homes delivery does
not meet corporate plan
targets		 •
Development strategy approved by the board and progress reviewed
on a quarterly basis by GADC
•
Comprehensive monitoring and reporting of development
programme
•
Sites, suppliers, and key materials reviewed daily
•
Regular dialogues with relevant local authorities, agents, developers,
and landowners to seek future opportunities
•
Strong links with local planning and housing departments
Technology failures that
disrupt business
(excluding cyber-attack)		 •
Implement a cloud-based application
•
Review hosting options
•
Implement actions to reduce risk of network outage
•
Complete implementation of Microsoft Dynamics
Risk of Cyber security
attack		 •
ICT and data protection policies in place
•
Information dashboard in place
•
Internal periodic reviews to ensure appropriate security levels in
place
•
Vulnerability scanner to review potential security issues
•
Business continuity plan includes plan to address cyber risks

11

Selwood Housing Society Ltd

Group strategic report including the report of the board for the year ended 31 March 2023 continued

Environmental, Social & Governance (ESG) matters

Selwood Housing is committed to its environmental, social and governance aims in providing affordable homes both now and into the future, delivering these to high environmental standards possible whilst meeting our regulatory and governance requirements. Selwood issued the first ESG report in 2022 and have adopted the principles of the sustainability for reporting standard (SRS) and aligned this to key strategies including how we build new and manage our existing homes.

Environmental

Selwood Housing has developed a carbon reduction strategy and action plan that aims to ensure all homes meet SAP C standard by 2030 and introduces new low carbon and renewable technologies to meet the 2050 net carbon zero targets. Our newly developed properties achieve very high environmental standards, and we are continuing to invest to improve the environmental performance of our existing housing properties. One of our key performance indicators is the average SAP rating achieved across all housing properties, which is a measure of their environmental performance.

Streamlined Energy and Carbon Reporting

Selwood Housing have generated a Streamlined Energy and Carbon Reporting (SECR) statement to comply with the latest SECR Regulations (2019). This report presents a full 3rd party verified SECR statement, compared to the previous financial year’s usage, for use in Selwood Housing’s annual reporting. All emissions throughout this report are displayed in terms of carbon dioxide equivalents (CO2e) and have been rounded to 2 decimal places.

12

Selwood Housing Society Ltd

Group strategic report including the report of the board for the year ended 31 March 2023 continued

Energy efficiency action statement

Reported emissions and energy use data for 1st April 2022 – 31st March 2023 Reported emissions and energy use data for 1st April 2022 – 31st March 2023 Reported emissions and energy use data for 1st April 2022 – 31st March 2023
Current reporting year 1st April Current reporting year 1st April
2022 – 31st March 2023 2021 – 31st March 2022
Energy consumption used to *Gas: 1,361,941 kWh Gas: 1,361,941 kWh
calculate emissions: /kWh *Electricity: 985,237 kWh Electricity: 985,237 kWh
[mandatory] – optional to provide Transport fuel: 1,631,429 kWh Transport fuel: 1,927,848 kWh
separate figures for gas, electricity,
transport fuel and other energy
Sources Total:
3,978,607 kWh		 Total:
4,275,026 kWh
Emissions from combustion of gas 248.61 tonnes CO2e1 **249.45 tonnes CO2e **
tCO2e (Scope 1) [mandatory] 11.26 tonnes CO2e office usage 11.30 tonnes CO2e office usage
27.16 tonnes CO2e communal areas 27.25 tonnes CO2e communal areas
210.19 tonnes CO2e communal heating 210.90 tonnes CO2e communal heating
systems systems
Emissions from combustion of fuel **393.31 tonnes CO2e ** **456.56 tonnes CO2e **
for transport purposes (Scope 1) (in-house maintenance fleet) (in-house maintenance fleet)
[mandatory]
Emissions from purchased electricity 190.52 tonnes CO2e1 **209.20 tonnes CO2e **
(Scope 2, location-based) 10.01 tonnes CO2e office usage 11.00 tonnes CO2e office usage

[mandatory]		 180.51 tonnes CO2e communal areas 198.20 tonnes CO2e communal areas
See below for transmission and See below for transmission and
distribution losses distribution losses
Total gross CO2e based on above - **832.44 tonnes CO2e ** **915.21 tonnes CO2e **
[mandatory] Excludes scope 3 emissions Excludes scope 3 emissions
Intensity ratio: tCO2e gross figure 124.39 kgCO2per home managed 138.95 kgCO2per home managed
based from mandatory fields above/ (exc. office emissions) (exc. office emissions)
e.g. £100,000 revenue [mandatory]
Office intensity: 12.25 kgCO2per Office intensity: 13.39 kgCO2per
m2 (includes T&D losses) m2 (includes T&D losses)
Methodology [mandatory] SHIFT methodologySECR Reporting SHIFT Environment
Using DEFRA (2022) Conversion Factors in line with Environmental
Reporting Guidelines (2019) as the majority of the financial year falls
into the calendar year 2022. Comparison data from the previous
year’s SECR is using DEFRA 2021 Conversion Factors.

1 Energy use from buildings is based on previous data (21/22 financial year) due to difficulty obtaining updated figures after changing energy brokers. The 2022 Defra conversion factors have been applied. * Energy consumption is based on previous data (21/22 financial year) due to difficulty obtaining updated figures after changing energy brokers

13

Selwood Housing Society Ltd

Group strategic report including the report of the board for the year ended 31 March 2023 continued

Energy efficiency action statement continued

Emissions from purchase of electricity, Emissions from purchase of electricity, Only reporting on location based Only reporting on location based Only reporting on location based
heat, steam and cooling purchased for
own use (Scope 2,
market-based) / tCO2e [optional]
Emissions from generation of electricity 17.43 tonnes CO2eTransmission 18.51 tonnes CO2eTransmission
that is consumed in a transmission and and distribution (T&D) losses and distribution (T&D) losses
distribution system for which the associated with UK electricity associated with UK electricity
company does not own or control (Scope
3) / tCO2e
[optional]
Emissions from employee business travel 32.09 tonnes CO2e 23.61 tonnes CO2e
for which the company does not own or 32.03 tonnes CO2e employee vehicles 23.51 tonnes CO2e employee vehicles
control (Scope 3) / tCO2e [optional] 0.06 tonnes CO2e public transport 0.09 tonnes CO2e public transport
Emissions from leased assets, The regulated emissions from the The regulated emissions from the
franchises, and outsourced activities independently heated homes we independently heated homes we manage
(Scope 3) / tCO2e [optional] manage far outweigh our operational
far outweigh our operational emissions and
emissions and are therefore reported are therefore reported here on a voluntary
here on a voluntary basis. Our SHIFT basis. Our SHIFT methodology estimated
methodology estimated emissions at emissions at 17,038.13 tonnes in total, or
16,733.13 tonnes in total, or 2.61 2.65 tonnes per home managed.
tonnesper home managed.
Total gross Scope 3 emissions / 16,782.65 tonnes CO2e 17,080.25 tonnes CO2e
tCO2e [optional]
Total gross Scope 1, Scope 2 17,615.09 tonnes CO2e 17,995.46 tonnes CO2e
[location / market] & Scope 3
emissions / tCO2e [optional]
Additional intensity ratio: tCO2e net 2.70 tonnes per home managed 2.80 tonnes per home managed
figure / e.g. £100,000 revenue for total Scope 1, 2 and 3 for total Scope 1, 2 and 3
[optional] emissions recorded. emissions recorded.
Third Party verification [optional] SHIFT Environment

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Energy efficiency action statement continued

During the period 1st April 2022 to 31st March 2023, we installed:

During 2021 Selwood issued a new asset management strategy. A key priority is to achieve SAP band C in all our properties by 2030. During 2022/23 we have successfully completed two energy efficiency pilots improving 90 homes using a

mixture of fabric first, heating upgrade and PV technology. We are gathering learning on these projects from customers and those involved to form our Social Housing Decarbonisation Fund Wave 2 project which will continue to increase the energy efficiency of our bungalows that are off gas as well as upgrade out EPC E and F properties to EPC C.

Social

Affordability

The Valuation Office Agency sets the Local Housing Allowance (LHA) affordability criteria at the 30th centile point between what, in the local rent officer’s opinion, are the highest and lowest non-exceptional rent in a Broad Rental Market Area. These statistics are used as a reference point for housing benefit and are a good indication of rent levels which are affordable in an area. Our valuer’s have compared our rents with the average sector rent and LHA in the same localities. Selwood Housing’s rents are demonstrably lower than those of other housing associations in the same area and are affordable when compared with the local housing allowance. This is supported by our customer satisfaction results that recorded over 76.6% of customers rating rent as value for money in our 22/23 survey.

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Resident Voice

In May and June 2022, we delivered a new, innovative customer training programme called We Are All Selwood Housing. We wanted to increase customer understanding of social housing and how Selwood operates. We also wanted to encourage customers to apply to be either Board or Scrutiny members and give them the knowledge required to perform their best in the application stage. Eleven customers completed the whole four-day programme, with three of them going on to successfully apply to the Scrutiny Team.

Through the year customers were involved in shaping our services and influencing our thinking through 274 interactions across 12 projects that included an assessment of our Pets & Animals policy, the value for money strategy review and redevelopment of our Damp & Mould leaflet. We also held focus groups with customers to assess the usability of the lettings side of our forthcoming customer portal, which will be delivered through the Horizon project.

We supported the Neighbourhood team’s pilot of Priority Neighbourhoods in Trowbridge and Melksham, assisting with customer consultation and community events. We worked with the development team to engage the local primary school on Studley Green estate and involve pupils in naming our new development on the old John Bull pub site.

Working with the customer complaints specialist and head of housing we established a new customer complaints forum. This group will support the process of complaint

resolution by ensuring best practice and developing effective approaches to resolving, learning, and improving complaint management. It will give customers more power in holding us to account for the decisions, performance, and conduct.

The scrutiny team delivered a customer-led review into communications. The communications team have since submitted a document to our portfolio board which will start a project to take forward actions which came out of that scrutiny review. Selwood and the scrutiny team have contracted leading tenant engagement experts TPAS to work with us over 2023-2024 on a new more efficient model of scrutiny. The team also continue to monitor our Together with Tenants plan.

We invested over £42,000 of our Stronger Communities Funding across 21 local projects. This enabled the groups we supported to attract another £433,515 of match-funding into our communities and neighbourhoods. Projects included Bradford on Avon Skate Park, Trowbridge Lantern Festival and Alzheimer’s Support. We also gave repeat core-funding to Group 5. This is a local charity who provide free furniture and household items to families and individuals in need, we know that our customers are their main users, so we continue to support them. We are into the second year of a three-year funding commitment to local charity, Trowbridge

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Futures, to fund a Neighbourhood Connector who is working across our three main housing estates in Trowbridge.

Resident Support

Selwood Housing’s charitable donations were £18k (2022: £21k) during the year to 31 March 2023. In addition to this we lease The Hub to Trowbridge Town Council for a peppercorn rent. We estimate the rental income foregone on these to be equal to donations of around £7k (2022: £8.9k, including 4 garages).

Governance

Selwood Housing is fully committed to the principles of openness, accountability, and competence. We welcome and support the principal recommendations laid down in the National Housing Federation’s Excellence in Governance, Code for members (revised 2020). The code was reviewed and adopted by the board in December 2021. The board concluded that we are fully compliant with the code.

Staff wellbeing

Our ability to meet our objectives and commitments to tenants and other customers in an efficient and effective manner depends on the expertise, commitment, and enthusiasm of all our employees. We take seriously the need to be an employer that recruits high calibre staff, we then ensure they are motivated, skilled, and able to deliver for our customers and provide an excellent service. This is a guiding principle in our corporate strategy, as described above.

Selwood Housing provides information on its objectives, progress and activities through regular team meetings, staff briefings, CEO monthly updates and our staff forum. Selwood Housing seeks employees’ views on how to improve services and on matters of common concern through our monthly pulse survey. The executive team also take part in a monthly live question and answer session with all staff. The group supports the employment of a diverse workforce, both in recruitment and in the retention of employees.

Board and executive composition

At 31 March 2023 Selwood Housing’s board was made up of 5 females and four male directors. The senior management team was made up of four male and two female members.

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Committees of the group board

During the year the following committees were in operation:

All other matters including strategy and business planning and other financial matters are considered directly by the full group board.

Board and executive directors

The group board and executive directors of Selwood Housing who served during the financial year are listed on page 1. The group board comprises of nine members, who are regarded as non-executive directors for legal purposes.

The board is responsible for the governance of Selwood Housing Group. Their role in practice may be summarised as:

Board members regularly participate in training and development to ensure they maintain and develop their skills and have a high level of awareness of current issues in the social housing sector.

Board members undergo a formal appraisal of performance on an annual basis. The format of the appraisal involves a review of everyone’s performance over the year and an assessment of training, skills, and development needs.

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Each board member is expected to take responsibility for fulfilling their training plan while Selwood Housing Group is committed to ensuring that resources are in place to enable this. As part of the appraisal process the board also considers its collective effectiveness in delivering the aims and objectives in the corporate plan.

At 31 March 2023, the executive directors consisted of the group chief executive, the group finance director, the group development director, the group operations director, the group transformation and people director and the group IT director.

The IT director left the organisation on 31 March 2023 and all directorship responsibilities for IT transferred to the group finance director

Insurance policies indemnify board members and staff against liability when acting for Selwood Housing. These policies were in force throughout the financial year and

at the date of approval of the financial statements. The indemnity is a qualifying third-party indemnity.

Board members are recruited based on selecting skill sets, the demographic makeup and experience that are required for the existing board.

Candidates are short-listed by the interview panel made up of the group chief executive, two appropriate board members and the group transformation and people director against the board director specification, which is contained in Selwood Housing’s governance manual. Interviews are carried out by the interview panel and the best candidate for the role is selected. The procedure used is full, fair, and inclusive. Each new board member goes through a structured induction.

Remuneration

Board members are remunerated for their services and are entitled to claim out of pocket expenses such as travelling. Travel costs to and from Selwood Housing’s offices are reimbursed as a taxable benefit. Some board members choose not to reclaim their travel costs.

Payments to board members are shown in note 10 to the financial statements, which shows the actual payments in the financial year, the level of payments and the proportion which the total amount paid forms of Selwood Housing’s annual turnover.

Any changes in remuneration do not take effect until approved by the company in the general meeting and increases to board members’ remuneration do not take effect more frequently than once every three years.

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The board decides the pay and benefits of the executive directors and agrees the terms on which the chief executive can set other staff salaries, within the agreed market pay based framework.

The executive directors are either members of the Wiltshire Pension Scheme or members of the group personal pension plan, depending on when they joined the organisation. They participate in the scheme on the same terms as all other eligible staff. Selwood Housing contributes to the schemes on behalf of all eligible staff and does not offer alternative benefits such as cars.

There are no service contracts for executive directors. They are employed on similar terms to other staff, with a notice period of three months.

Reserves policy

Selwood Housing’s reserves are invested in its properties. They have been used to fund the development of new homes for letting to people in housing need and the improvement and replacement of components in existing properties. They provide working capital and help Selwood Housing to maximise its borrowing capacity. Selwood Housing sets a target for reserves in its 30-year business plan and ensures that actual reserves stay in line with the plan.

Regulatory standards

The board undertook a review of Selwood Housing’s compliance with the Regulator of Social Housing’s governance and financial viability standard in December 2022 and the board concluded that Selwood Housing complies with the standard.

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Value for Money

Selwood Housing Group’s approach to value for money (VfM)

Value for money forms one of the key pillars of our principles and values as outlined in our corporate strategy:

Our VfM strategy was reviewed in 2022 and agreed with the board in October 2022. It was presented to a group of customers and received some very positive feedback. Details of the review can be found here:

' ' - What is value for money ? Selwood Housing

The aims of our value for money strategy are:

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Value for Money continued

Value for money for Selwood Housing includes considering:

Value for Money

Value for Money Standard (VfM)

The Regulator of Social Housing (RSH) issued a new VfM Standard in April 2018 which includes a requirement for registered providers to publish their performance against a series of common metrics with which to measure economy, efficiency and effectiveness as set by the Regulator. The table below compares our performance over the last three years with our peer group, Place shapers (PS), the RSH global accounts performance and our targets for next year.

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Value for Money continued

Performance Metric
2020/21
Actual
2021/22
Actual
2022/23
Target		 2022/23
Actual		 2023/24
Target
2021/22
PS
Median
*
2021/22
Sector
Median
****
Business health % efficiency
Operating margin
- Overall
24.4%
17.1%
11.4%		 18.1% 17.5%
24.3%
20.5%
Operating margin
- Social housing lettings
23.1%
18.8%
12.8%		 18.9% 16.4%
27.2%
23.3%
Interest cover % (EBITDA-MRI)
426.0%
311.3%
122.0%		 260.4% 102.7%
185.0%
145.7%
Headline social housing cost per
unit £ CPU
£3,732
£4,343
£5,240		 £4,332 £5,548
£3,587
£4,150
Return on capital employed %
2.4%
1.9%
1.4%		 2.1% 2.5%
3.3%
3.2%
Development & investment
New supply delivered %
- Social housing units
1.8%
2.3%
2.3%		 2.2% 2.1%
1.3%
1.4%
Gearing %
31.2%
31.7%
35.9%		 33.6% 36.7%
44.9%
44.1%
Reinvestment %
5.3%
5.4%
7.3%		 7.2% 7.0%
5.9%
6.5%

** Sector median is the latest published sector results (2021/22) as reported by the Regulator of Social Housing

The past two years have been a challenging time for all organisations across every sector. The global pandemic forced us to change our working practices and be flexible and adaptable in our approach. The subsequent supply chain shortages and the economic crisis that has resulted from the war in Ukraine continues to challenge our value for money aims and have been a main focus. The impacts of inflation are also only just starting to materialise and begin to influence our KPIs.

Given this backdrop, it is perhaps surprising that Selwood’s headline social housing cost per unit (CPU) has outperformed our 21/22 result and our target for 22/23. However, this has been largely due to delays in our planned maintenance and major repairs programmes following resource shortages and contractor failures that resulted in re-tendering of the activities. Our target for 23/24 reflect an improved resource availability and more realistic mobilisation periods for newly acquired contractors for major works like window replacements and roofing. Selwood board are confident that the new contracts are robust as they have been managed by a larger and more experienced procurement function.

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Value for Money continued

EBITDA-MRI interest cover (*) was well ahead of our 22/23 target, due to the reasons above but is expected to fall in 23/24. Selwood board recognised the impact rising interest rates would have on the cost of debt and instructed management to renegotiate our interest cover covenants with lenders. By December 2022, all agreements had been amended to remove MRI from the covenant calculation, moving to an EBITDA only requirement. This means that Selwood now have significant headroom on all of the covenants (e.g. over 2x cover in 22/23), however the board agreed that Selwood would still maintain a minimum cover of 100% for EBITDA-MRI to provide further financial security to the plan.

Gearing was better than target and well below Selwood’s golden rule target of 50% and the existing loan covenant of 60%. Gearing measures, the relationship between debt and tangible fixed housing assets and will increase over the next few years as we borrow more money to fund our development programme and meet our environmental targets.

The improved return on capital employed (ROCE) was better than target due to an increase in gains from disposals of fixed assets. The board agreed to a targeted disposal strategy for properties that would not meet EPC C levels by 2030 without a significant investment beyond the properties 30-year return. This will result in the disposal of a handful of properties over the coming years which will continue to boost the Selwood ROCE performance.

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Value for Money continued

----- Start of picture text -----
Operating Margin (overall) %
35.0%
30.0%
25.0%
20.0%
15.0%
10.0%
5.0%
0.0%
2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032
PS LQ PS Med PS UQ Forecast ACTUAL
----- End of picture text -----

The improved operating margin is partly due to the delays in planned programmes as detailed above but also from efficiency gains in our responsive repair teams, improved by circa 11% year on year, and a reduction in maintenance costs on our sheltered housing properties, following previous years’ work.

The work on Selwood’s major transformation project, Horizon, has also continued. This will allow us to develop and expand our system capabilities, improve our processes, and explore further efficiencies. This project continues to require additional staff and investment in new systems which impacts our operating margin.

It is anticipated that investment in Horizon, additional costs in maintenance for activities relating to damp and mould along with more surveying and further impact of inflation on supply and staffing, will continue to reduce our operating margin for the next 3 years before the benefits of Horizon programme start to reverse the trend.

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Value for Money (continued)

----- Start of picture text -----
New supply delivered
(social housing units) %
2.5%
2.0%
1.5%
1.0%
0.5%
0.0%
2020 2021 2022 2023 2024 2025 2026 2027 2028
PS LQ PS Med PS UQ Forecast ACTUAL
----- End of picture text -----

The economic conditions led to management agreeing to slow down the development programme, reducing the new supply delivery from 200 to 150 units for the next two years. This is the main reason for the slight fall in the development and investment results compared to the target for the year and prior years. This trend will continue in 23/24 and is reflected in those targets. Selwood are still committed to development and our recent corporate strategy lays out a plan to build 1,700 homes over the next 10 years. This, combined with our commitment to invest in our existing properties is shown in our re-investment percentage remaining above the median benchmark. Shared ownership demand still remains strong, and the Board have agreed to maintain our average of 30% shared ownership for all newly developed properties. We will continue to monitor this in our performance triggers to mitigate any risk of unsold properties.

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Value for Money (continued)

In addition to the indicators included in the VfM standard, two key areas of performance monitored by the board are rent loss due to empty properties as a % of rent due and current tenant arrears net of unpaid housing benefit as a % of rent due. These are financial KPIs but also helps us to fulfil our social purpose:

It has been another good year for our lettings team, both in terms of performance and of adapting service delivery to embed lessons learned from the pandemic and a changing environment. During the year the team let 399 homes and the neighbourhoods team facilitated 88 mutual exchanges. At the end of March 2023, the void loss attributable to rented dwellings (including shared ownership) was 0.63% (March 2022 0.9%).

The graph below compares the actual performance and target for Selwood Housing with the quartiles calculated by HouseMark for our benchmarking group during 2021/22:

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Value for Money (continued)

Despite the increased cost of living the collection of rent and service charges remains strong. This is in part due to our robust pre-tenancy assessment of affordability, the firm, consistent and timely intervention of the income team, and timely referrals to our tenancy sustainment coordinators and financial inclusion partners.

The decision to contact customers in advance of the unprecedented annual rent increase has been positive; with only a small amount dissatisfaction being recorded and early indications are that rent debt has not increased.

The strong collection ethos has shone through again this year with only 4 evictions taking place. The principles of timely support and decisive intervention have resulted in another top-quartile performance from the income team of 0.7% current customer arrears.

2023 has seen the organisation re-join the Housemark benchmarking group. Peer group comparison has validated our income collection performance. Our 2023 year end figure compares favourably against the sector (reported at 2.7%) and a comparable cohort of providers (at 2.6%). Selwood Housing is amongst the best performers in the sector

Supporting actions to deliver the 23/24 targets

To support the delivery of the targets set out for the value for money metrics shown above, we will:

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Value for Money (continued)

Section 172 Statement

The board of directors, in line with their duties under s172 of the Companies Act 2006, act in a way they consider, in good faith, would be most likely to promote the success of the company for the benefit of its stakeholders as a whole, and in doing so have regard to a range of matters including:

Key decisions and matters that are of strategic importance to the company are appropriately informed by s172 factors. These include but are not limited to:

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Through an open and transparent dialogue with our key stakeholders, we have been able to develop a clear understanding of their needs, assess their perspectives and monitor their impact on our strategic ambition and culture.

As part of the board’s decision-making process, the board considers the potential impact of decisions on relevant stakeholders whilst also having regard to a number of broader factors, including the impact of the company’s operations on the community and environment, responsible business practices and the likely consequences of decisions in the long term.

In making material decisions the board has sought to deliver benefit to our customers and the communities that we build in, provide secure employment opportunities and fair economic relationships with our suppliers.

Internal controls assurance

The board has overall responsibility for establishing and maintaining the whole system of internal control and for reviewing its effectiveness. The system of internal control is designed to manage, rather than eliminate, the risk of failure to achieve business objectives and to provide reasonable, and not absolute, assurance against material misstatement or loss.

The board receives and considers annual reports at the group audit and finance committee, group asset and development committee and management on the management of risk and control arrangements. The board review the strategic risk register at each of its meetings and receive the full risk register annually for review. The group audit and finance committee set the plans for internal audits based on the risk register to ensure that appropriate work is being undertaken to mitigate risks with corrective actions, where necessary.

The process for identifying, evaluating, and managing the strategic risks faced by Selwood Housing is ongoing, and has been in place prior to and throughout the period commencing 1 April 2022 up to the date of approval of the annual report and financial statements. Selwood Housing introduced a new system for monitoring risk management which is more intuitive, interactive and puts emphasis on ensuring that good controls are in place and actions are progressed to deliver improvement in risk scores.

The arrangements adopted by the board in reviewing the effectiveness of the system of internal control, together with some of the key elements of the control framework include:

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Internal controls assurance continued

The board cannot delegate ultimate responsibility for the system of internal control, but it can, and has, delegated authority to the group audit and finance committee to review the effectiveness of the system of internal control regularly. The board receives minutes from each committee meeting.

The means by which the group audit and finance committee reviews the effectiveness of the system of internal control include considering internal audit reports, management assurances and the external audit reports. The committee agrees and monitors a three-year rolling programme of internal audit reviews, which have been undertaken by an independent audit firm, TIAA Limited.

The group audit and finance committee has received the executive team’s annual review of the effectiveness of the system of internal control for Selwood Housing, together with the annual report of the internal auditor and has reported its findings to the board.

The internal auditors concluded in their annual report that “TIAA is satisfied that, for the areas reviewed during the year, Selwood Housing Group, has reasonable and effective risk management, control and governance processes in place”. The board has in turn conducted its own annual review of the effectiveness of the system of internal control and considers there is nothing adverse to bring to the attention of company members.

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Statement of responsibilities of the board

The board are responsible for preparing the strategic report, annual report, and the financial statements in accordance with applicable law and regulations.

Company law and social housing legislation require the board to prepare financial statements for each financial year in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the board must not approve the financial statements

unless they are satisfied that they give a true and fair view of the situation of the group and company and of the surplus of the group and company for that period.

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

The board are responsible for keeping adequate accounting records that are sufficient to show and explain the group and company’s transactions and disclose with reasonable accuracy at any time the financial position of the group and company and enable them to 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. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

The board members are responsible for ensuring that the report of the board is prepared in accordance with the Statement of Recommended Practice for registered social housing providers 2018.

Financial statements are published on the group’s website in accordance with legislation in the United Kingdom governing the preparation and dissemination of financial statements, which may vary from legislation in other jurisdictions. The maintenance and integrity of the group’s website is the responsibility of the board. The board responsibility also extends to the ongoing integrity of the financial statements contained therein.

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Going concern

After making enquiries the board has a reasonable expectation that Selwood Housing has adequate resources to continue in operational existence for the foreseeable future. The board defines the foreseeable future as at least 12 months from the date of signing the financial statements. For this reason, it continues to adopt the going concern basis in the financial statements.

Annual General Meeting

The Annual General Meeting is planned to be held on 4[th] October 2023 in the boardroom of Selwood Housing’s office.

Independent auditor

A resolution to appoint Selwood Housing’s auditor will be proposed at the forthcoming Annual General Meeting.

Statement of disclosure of information to auditor

So far as the board is aware, there is no relevant audit information of which the company’s auditor is unaware. Each director has taken all the steps that they ought to have taken as a director to make themselves aware of any relevant audit information and to establish that the company’s auditor is aware of that information.

Approval

The report of the board of directors including the strategic report was approved by the board on 5 July 2023 and signed on its behalf by:

Sheila Lewis Chair 5 July 2023

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INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF SELWOOD HOUSING SOCIETY LIMITED

Opinion

We have audited the financial statements of Selwood Housing Society Limited (“the Company”) and its subsidiaries (“the Group”) for the year ended 31 March 2023 which comprise the consolidated and company statement of comprehensive income, the consolidated and company statement of financial position, the consolidated and company statements of changes in reserves, , the consolidated statement of cash flows and notes to the financial statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).

In our opinion, the financial statements:

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (“ISAs (UK)”) and applicable law. Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the financial statements section of our report. We are independent of the Group and 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 Board’s use of the going concern basis of accounting in the preparation of the financial statements is appropriate.

Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the Company’s or Group’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 Board with respect to going concern are described in the relevant sections of this report.

Other information

The board are responsible for the other information. Other information comprises the information included in the annual report, other than the financial statements and our auditor’s report thereon. Our opinion on the financial statements does not cover the other information we do not express any form of assurance conclusion thereon.

In connection with our audit of the financial statements, our responsibility is to read the other information including the letter from the chair and Group Strategic Report including

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the operating and financial review and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. If, based on the work we have performed, we conclude that there is a material misstatement of this other information we are required to report that fact.

We have nothing to report in this regard.

Opinions on other matters prescribed by the Companies Act 2006

In our opinion, based on the work undertaken during the audit:

Matters on which we are required to report by exception

In the light of the knowledge and understanding of the Group and the Parent Company and its environment obtained during the audit, we have not identified material misstatements in the Strategic report and Report of the Directors.

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 the board

As explained more fully in the statement of responsibilities of the board set out on page 25, the board is 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 board members 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 board are responsible for assessing the Group and the Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the board either intend to liquidate the Group or the Company or to cease operations, or have no realistic alternative but to do so.

Auditor’s responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists.

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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 based on these financial statements.

A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council’s website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.

Extent to which the audit was considered capable of detecting irregularities, including fraud

We identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and then design and perform audit procedures responsive to those risks, including obtaining audit evidence that is sufficient and appropriate to provide a basis for our opinion.

In identifying and addressing risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, our procedures included the following:

Due to the inherent limitations of an audit, there is an unavoidable risk that we may not have detected some material misstatements in the financial statements, even though we have properly planned and performed our audit in accordance with auditing standards. For example, as with any audit, there remained a higher risk of non-detection of irregularities, as these may involve collusion, forgery, intentional omissions, misrepresentations, or the

36

Selwood Housing Society Ltd

override of internal controls. We are not responsible for preventing fraud or non-compliance with laws and regulations and cannot be expected to detect all fraud and non-compliance with laws and regulations.

Use of our report

This report is made solely to the members of the Company, as a body, in accordance with the Housing and Regeneration Act 2008 and Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the Company’s members those matters we are required to state to them in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the members as a body, for our audit work, for this report, or for the opinions we have formed.

Lee Cartwright (Senior Statutory Auditor) For and on behalf of Beever and Struthers, statutory auditor 20 Colmore Circus Queensway Birmingham B4 6AT Date: 20 July 2023

37

Selwood Housing Society Ltd

Consolidated and company statement of comprehensive income for the year ended 31 March 2023

Turnover
Cost of sales
Operating costs
Gain on disposal of fixed assets
Operating surplus
Other interest receivable and similar income
Interest and financing costs
Other finance costs
Movement in fair value of investment properties
Surplus before taxation
Taxation on surplus
Surplus for the financial year
Actuarial gains on defined benefit pension
scheme
Total comprehensive income for year		 Note Group
Group
Company
Company
2023
2022
2023
2022
£'000
£'000
£'000
£'000
4
4
4
11
12
26
16
13
26		 45,967
44,284
45,951
44,630
(3,455)
(4,458)
(3,455)
(4,457)
(34,147)
(32,237)
(34,155)
(32,420)
1,652
1,208
1,652
1,208
10,017
8,797
9,993
8,961
53
6
49
5
(3,835)
(2,594)
(3,835)
(2,594)
(126)
(175)
(126)
(175)
1
23
1
23
6,110
6,057
6,082
6,220
2
(13)
0
0
6,112
6,044
6,082
6,220
4,736
4,179
4,736
4,179
10,848
10,223
10,818
10,399

The notes on pages 44 to 85 form part of these financial statements.

All activities relate to continuing operations.

Charity Commission Registration No 1141124 Company Limited by Guarantee - Registration No. 4168336 Registered with the Regulator of Social Housing No. LH4097

38

Selwood Housing Society Ltd

Consolidated and company statement of financial position at 31 March 2023

Note
Fixed assets
Tangible fixed assets - housing properties
14
Tangible fixed assets - other
15
Investment properties
16
Investments in companies
17
Current assets
Stocks
19
Debtors - receivable within 1 year
20
Cash and cash equivalents
20a
Creditors: amounts falling due within
1 year
21
Net current assets / (liabilities)
Total assets less current liabilities
Creditors: amounts falling due after
more than 1 year
22
Net assets excluding pension liability
Provision for deferred tax
30
Pension liability
26
Net assets
Capital and reserves
Income and expenditure reserve
Revaluation reserve		 Group
Group
Company
Company
2023
2022
2023
2022
£'000
£'000
£'000
£'000

471,855
448,308
471,907
448,308

3,575
3,760
3,247
3,404

352
351
352
351
125
25
2,225
2,125
475,907
452,444
477,731
454,188

4,840
4,052
4,840
3,557

3,177
3,172
3,161
3,165
8,720
8,864
6,688
7,422
16,737
16,088
14,689
14,144
(17,638)
(14,565)
(17,602)
(14,524)
(902)
1,523
(2,914)
(380)
475,006
453,967
474,818
453,808
(194,944)
(180,012)
(194,944)
(180,012)
280,062
273,955
279,874
273,796

(7)
(9)
0
0
0
(4,741)
0
(4,741)
280,055
269,205
279,874
269,055
148,691
136,347
148,510
136,197
131,364
132,858
131,364
132,858
280,055
269,205
279,874
269,055

The notes on pages 44 to 88 form part of these financial statements.

The financial statements were approved by the Board of Directors and authorised for issue on 5 July 2023

Sheila Lewis Chair

Mark Mayler Secretary

Charity Commission Registration No 1141124 Company Limited by Guarantee - Registration No. 4168336 Registered with the Regulator of Social Housing No. LH4097

39

Selwood Housing Society Ltd

Consolidated statement of changes in reserves for the year ended 31 March 2023

Group
Opening funds April 2021
Total comprehensive income for the year
Actuarial gains on defined benefit pension
scheme
Total comprehensive income
Transfer from revaluation reserve to income and
expenditure
Opening funds March 2022
Total comprehensive income for the year
Actuarial gains on defined benefit pension
scheme
Total comprehensive income
Transfer from revaluation reserve to income and
expenditure
Closing total funds March 2023		 I&E
Revaluation
Total
Reserve
Reserve
£'000
£'000
£'000
124,836
134,147
258,983
6,044
0
6,044
4,179
0
4,179
10,222
0
10,222
1,289
(1,289)
0
136,347
132,858
269,205
6,112
0
6,112
4,736
0
4,736
10,848
0
10,848
1,494
(1,494)
0
148,689
131,364
280,053

The notes on pages 44 to 85 form part of these financial statements.

40

Selwood Housing Society Ltd

Company statement of changes in reserves for the year ended 31 March 2023

Company
Opening funds April 2021
Total comprehensive income for the year
Actuarial gains on defined benefit pension
scheme
Total comprehensive income
Transfer from revaluation reserve to income and
expenditure
Opening funds April 2022
Total comprehensive income for the year
Actuarial gains on defined benefit pension
scheme
Total comprehensive income
Transfer from revaluation reserve to income and
expenditure
Closing total funds March 2023		 I&E
Revaluation
Total
Reserve
Reserve
£'000
£'000
£'000
124,509
134,147 258,656
6,220
0
6,220
4,179
0
4,179
10,399
0
10,399
1,289
(1,289)
0
136,197
132,858
269,055
6,082
0
6,082
4,736
0
4,736
10,818
0
10,818
1,494
(1,494)
0
148,509
131,364
279,873

The notes on pages 44 to 85 form part of these financial statements.

41

Selwood Housing Society Ltd

Consolidated statement of cash flows for the year ended 31 March 2023

Note
Cash flows from operating activities
Surplus for the financial year
Adjustments for:
Depreciation of fixed assets - housing properties
14
Depreciation of fixed assets - other
15
Amortised grant
23
Interest payable and finance costs
Interest received
Difference between net pension expenses and
cash contribution
Proceeds from sale of fixed assets- housing
properties
11
Decrease /(Increase) in trade and other debtors
Decrease /(Increase) in stocks
Increase in trade and other creditors
Carrying amount of disposals
Movement in fair value of investment properties
Cash from operations
Taxation paid
Net cash generated from operating activities
Cash flows from investing activities
Proceeds from sale of fixed assets - housing
properties
11
Purchase of fixed assets - housing properties
14
Purchase of fixed assets - other
15
Purchase of investments
Receipt of grant
23
Interest received
Net cash from investing activities
Cashflows from financing activities
Interest paid
12
Taxation Paid
New loans
Debt issue costs incurred
Repayment of loans
25
Net cash used in financing activities
Net (decrease) / increase in cash and cash
equivalents
Cash and cash equivalents at beginning of year		 2023
2022
£'000
£'000
6,110
6,057
8,063
7,741
866
409
(385)
(395)
3,961
2,769
(53)
(6)
(131)
(45)
(3,043)
(2,275)
(5)
305
(788)
370
959
1,428
1,463
1,014
(1)
(23)
17,016
17,350
0
0
17,016
17,350
3,043
2,275
(33,063)
(23,977)
(691)
(167)
(100)
0
1,446
103
53
6
(29,311)
(21,760)
(3,835)
(2,594)
0
0
20,000
6,000
377
0
(4,390)
0
12,152
3,406
(144)
(1,004)
8,864
9,868

The notes on pages 44 to 85 form part of these financial statements.

42

Selwood Housing Society Ltd

Notes to the financial statements For the year ended 31 March 2023

Index of notes

General notes

  1. Legal status

  2. Accounting policies

  3. Judgements in applying accounting policies and key sources of estimation uncertainty

Statement of comprehensive income related notes

  1. Particulars of turnover, cost of sales, operating costs, and operating surplus

  2. Income and expenditure from social housing lettings

  3. Units of housing stock

  4. Operating surplus

  5. Employees

  6. Directors’ and senior executive remuneration

  7. Board members

  8. Surplus on disposal of fixed assets

  9. Interest payable and similar charges

  10. Taxation on profit from operating activities

Statement of financial position related notes

  1. Tangible fixed assets – housing properties

  2. Other tangible fixed assets

  3. Investment properties

  4. Fixed asset investments

  5. Subsidiary undertakings / other investments

  6. Properties for sale and other stock

  7. Debtors

  8. 20a.Cash and Cash Equivalents

  9. Creditors: amounts falling due within 1 year

  10. Creditors: amounts falling due after more than 1 year

  11. Deferred capital grant

  12. Recycled capital grant

  13. Loans and borrowings

  14. Pension obligations

  15. Operating leases

  16. Capital commitments

  17. Related party transactions

  18. Provision for liabilities

  19. Net debt reconciliation

43

Selwood Housing Society Ltd

Notes to the financial statements For the year ended 31 March 2023

1 Legal status

Selwood Housing is incorporated in England and Wales under the Companies Act 2006 and is registered with the Regulator of Social Housing. Selwood Housing is a company limited by guarantee. The guarantors are the company members. Selwood Housing is registered with the Charity Commission. The address of the registered office is given on page 1 and the nature of the group’s operations and principal activities are set out in the strategic report. The Society is a public benefit entity.

2 Accounting policies

All accounting policies have been applied consistently year to year.

Basis of accounting

The financial statements of Selwood Housing have been prepared in accordance with applicable law and accounting standards in the United Kingdom, FRS 102 “the Financial Reporting Standard in the United Kingdom and the Republic of Ireland”, the Statement of Recommended Practice (SORP): Accounting by registered social housing providers (update 2018) and the Accounting Direction for Private Registered Providers of Social Housing 2022.

The accounts are prepared under the historic cost basis except for the modification to a fair value basis for investment properties as specified in the accounting policies below.

Consolidation

The consolidated financial statements incorporate the results of Selwood Housing Society Limited and all its subsidiary undertakings for the year. Intra-group transactions and balances have been eliminated on consolidation. Subsidiaries are deconsolidated from the date control ceases.

Going concern

After making enquiries and reviewing the financial plan, the board has a reasonable expectation that the company and the group have adequate resources to continue in operational existence for the foreseeable future. For this reason, it continues to adopt the going concern basis in the financial statements.

44

Selwood Housing Society Ltd

Notes to the financial statements For the year ended 31 March 2023

2 Accounting policies (continued)

Turnover

Turnover comprises rental income receivable in the year, income from shared ownership first tranche sales, sales of properties built for sale and other services included at the invoiced value (excluding value added tax (VAT)) of goods and services supplied in the year and revenue grants receivable in the year and capitalised capital grants. Rental income is recognised from the point when properties under development reach practical completion or otherwise become available for letting. Income from first tranche sales and sales of properties built for sale is recognised at the legal completion of sale. Income from the supply of goods and services is recognised when those goods or services are provided. Income is measured at the fair value of the consideration received or receivable. All turnover arises in the UK.

Grant income (non-Social Housing Grant)

The treatment of grant income depends on the terms of the funding. Where the grant is not conditional upon specific targets being met, then it is treated as income as it becomes receivable. Where grant income received is conditional upon the completion of certain targets and is returnable to the grant giver if the targets are not met, the income is credited to the Statement of Comprehensive Income as the targets are achieved. Any grants received, where the targets have not yet been achieved, are held as deferred income.

Other grants are receivable from local authorities and other organisations. Grants in respect of revenue expenditure are credited to the Statement of Comprehensive Income in the same period as the expenditure to which they relate.

Value added tax

Selwood Housing Society Ltd is registered for VAT. All amounts disclosed in the financial statements are adjusted to reflect Selwood Housing Society Ltd’s agreed method for the treatment of VAT and the financial statements include VAT to the extent that is suffered by the group and is not recoverable from HM Revenues and Customs. The balance of VAT payable or recoverable at the year-end is included as a current liability or asset.

45

Selwood Housing Society Ltd

Notes to the financial statements For the year ended 31 March 2023

2 Accounting policies (continued)

Taxation

Selwood Housing is a registered charity and as such, is entitled to certain tax exemptions on income and profits from investments, and surpluses on any trading activities carried on in furtherance of the charity’s primary objectives, if these profits and surpluses are applied solely for charitable purposes.

Qualifying Charitable Donations of Subsidiaries

The parent company only recognises gift aid income when a qualifying charitable donation is paid by a subsidiary.

Interest

Interest is capitalised on borrowings used to fund new development under construction for the period until the property is available for letting.

Other interest payable, interest receivable and related funding costs are charged to the Statement of Comprehensive Income in the year incurred.

Pensions

Defined benefit scheme

Selwood Housing Society Ltd participates as an admitted body in the Local Government Pension Scheme administered by Wiltshire Council, a defined benefit final salary scheme. The operating costs of providing retirement benefits to participating employees are recognised in the accounting periods in which the benefits are earned. The related finance costs, expected return on assets and any other changes in fair value of the assets and present value of liabilities, are recognised in the accounting period in which they arise.

Pension scheme assets are measured using market value. Pension scheme liabilities are measured using the projected unit actuarial method and are discounted at the current rate of return on a high-quality corporate bond of equivalent terms and currency to the liability. The increase in the present value of the liabilities of Selwood Housing Society Ltd’s defined benefit pension scheme expected to arise from employee service in the period is charged to operating surplus. The expected return on the scheme’s assets and the increase during the year in the present value of the scheme’s liabilities arising from the passage of time are included in operating surplus. Actuarial gains and losses are recognised in the Statement of Comprehensive Income. This pension scheme was closed to new members on 1 October 2010.

46

Selwood Housing Society Limited

Notes to the financial statements For the year ended 31 March 2023

2 Accounting policies (continued)

Defined contribution scheme

Selwood Housing also participates in a defined contribution scheme where the amount charged to the Statement of Comprehensive Income represents the contributions payable to the scheme in respect of the accounting period.

Holiday pay accrual

A liability is recognised to the extent any unused holiday pay entitlement has accrued at the year end and is material; it is carried forward to future periods.

Housing properties

Housing properties are principally dwellings available for rent and are stated at cost less depreciation. Cost includes the cost of acquiring land and buildings, development costs, interest charges incurred during the development period and expenditure incurred in respect of improvements.

Development administration costs are capitalised on an apportionment of the staff time spent on this activity up to the point where the property is available for letting.

Improvements are works which result in an increase in the net rental income, such as a reduction in future maintenance costs, or result in a significant extension of the useful economic life of the property to the business. Only the direct overhead costs associated with new developments or improvements are capitalised.

Works to existing properties which replace a component that has been treated separately for depreciation purposes are capitalised and the replaced component treated as disposed of in the year of replacement.

Shared ownership properties are split proportionally between current and fixed assets based on the element relating to expected first tranche sales.

47

Selwood Housing Society Limited

Notes to the financial statements For the year ended 31 March 2023

2 Accounting policies (continued)

The first tranche proportion is classed as current asset and related sales proceeds included in turnover and the remaining element is classed as fixed asset and included in housing properties at cost, less any provisions needed for depreciation or impairment.

Deemed cost on transition to FRS 102

On transition to FRS 102 the Group took the option of carrying out a one-off valuation exercise of selected housing properties and using that amount as deemed cost. The Group engaged independent valuation specialist Jones Lang LaSalle (JLL) to value properties on an existing use social housing (EUVSH) basis to determine the deemed cost as at 1 April 2014. The adoption of the deemed cost option resulted in a net increase in fixed assets as at 1 April 2014 of £144.4m revaluation gains which was credited to the revaluation reserve.

Depreciation of Housing properties

Selwood Housing depreciates its housing properties by component on a straight-line basis over the estimated useful economic lives of component categories. Freehold land is not depreciated.

The useful economic lives of the components are as follows:

Structure 100 years Roofs 60 years Windows 25 years Bathrooms 25 years Kitchens 20 years Boilers 15 years PV panels 20 years Fixtures & Fittings 10 years Lighting 20 years Fire Alarms 15 years Door entry systems 10 years Electric Heat Pumps 15 years

Housing properties under construction are not depreciated until practical completion. A full year’s depreciation is charged in the year the property is first available for letting.

48

Selwood Housing Society Limited

Notes to the financial statements For the year ended 31 March 2023

2 Accounting policies (continued)

Impairment

Housing properties, which are depreciated over a period more than 50 years, are subject to impairment reviews annually. Other assets are reviewed for impairment if there is an indication that impairment may have occurred.

Where there is evidence of impairment, a detailed assessment is undertaken to compare the carrying amount of assets or cash generating units for which impairment is indicated to their recoverable amounts.

Where necessary, fixed assets are written down to the recoverable amount, being the higher of the fair value less costs to sell or value in use of an asset or cash generating unit. Any such write down is charged to operating surplus.

What constitutes a cash generating unit (CGU) when indicators of impairment require there to be an impairment review. Selwood Housing considers those properties revalued to deemed cost on adoption of FRS102 and within specific schemes as CGU’s.

Social Housing Grant

Social Housing Grant (SHG) is receivable from Homes England. Where properties are held at deemed cost under the transition to FRS102, the related SHG was initially recognised under the performance model. Subsequent grant is accounted for using the accrual model set out in FRS 102 and the Housing SORP. Grant is carried as deferred income in the statement of financial position and released to the statement of comprehensive income on a systematic basis over the useful economic life of the structure of the property.

If SHG is received in respect of revenue expenditure, it will be credited to the Statement of Comprehensive Income in the same period as the expenditure to which it relates.

SHG is subordinated to the repayment of loans by agreement with Homes England. SHG released on sale of a property may be repayable but is normally available to be recycled and is credited to a Recycled Capital Grant Fund and included in the Statement of Financial Position in creditors.

49

Selwood Housing Society Limited

Notes to the financial statements For the year ended 31 March 2023

2 Accounting policies (continued)

Other tangible fixed assets and depreciation

Other fixed assets are stated at cost less depreciation. Cost includes the purchase price of the asset and any costs incurred in bringing the asset into use. Depreciation is provided to write off the cost of tangible fixed assets, less their residual values, over their expected useful lives using the straightline basis.

Freehold land is not depreciated.

Where website and software costs can be treated as either tangible or intangible assets, they are treated as tangible fixed assets by the group.

Surpluses or deficits arising on the disposal of other fixed assets are determined as the difference between the disposal proceeds and the carrying amount of the assets and are recognised as part of the surplus/deficit for the year.

Stocks

Stocks are valued at the lower of cost and net realisable value. Cost is based on the cost of purchase on a first in, first out basis. Net realisable value is based on estimated selling price less additional costs to completion and disposal.

Shared ownership first tranche sales, completed properties for outright sale and property under construction are valued at the lower of cost and net realisable value. Cost comprises materials, direct labour, capitalised interest, and direct development overheads. Net realisable value is based on estimated sales price after allowing for all further costs of completion and disposal.

50

Selwood Housing Society Limited

Notes to the financial statements For the year ended 31 March 2023

2 Accounting policies (continued)

Recoverable amount of rental and other receivables

The Group estimates the recoverable value of rent and other receivables and impairs the debtor by appropriate amounts. When assessing the amount to impair it reviews the age profile of the debt and the class of debt.

Operating leases

Rentals paid under operating leases are charged to the Statement of Comprehensive Income on a straight-line basis over the term of the lease.

Schemes managed by agents

In accordance with financial reporting standards, where the risks and rewards of running the scheme accrue to the managing agent the Statement of Comprehensive Income includes only that income and expenditure which relates solely to Selwood Housing. Revenue is recognised as services are provided.

Cash and cash equivalents

Cash and cash equivalents in the Group’s Consolidated Statement of Financial Position consists of cash at bank, in hand, deposits and short-term investments with an original maturity of 95 days or less.

Short-term investments

Investments are stated at the lower of cost or market value.

Investment properties

Investment properties consist of commercial properties and other properties not held for social benefit or for use in the business. These properties are held at fair value determined annually by external valuers. Any changes in fair value are recognised in the Statement of Comprehensive Income. No depreciation is provided.

In the Company’s individual financial statements, investment properties rented to other group companies are classified as freehold office (other tangible fixed assets) and held at historical cost less depreciation and impairment.

51

Selwood Housing Society Limited

Notes to the financial statements For the year ended 31 March 2023

2 Accounting policies (continued)

Loans

All loans held by the group are classified as basic financial instruments in accordance with FRS 102. These instruments are initially recorded at the transaction price (the amount of cash received including any loan premiums) less any transaction costs. FRS 102 requires that basic financial instruments are subsequently measured at amortised cost using the effective interest rate method. The group has calculated that the difference between the historical cost basis amortising costs and premiums on a straight-line basis and the application of the effective interest rate method is not material and so loan transaction costs and premiums are amortised to the income and expenditure account on a straight-line basis over the term of the loan.

Financial Instruments

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

Sinking funds

All sinking funds are dealt with as creditors.

Revaluation reserve

The difference on transition to FRS 102 between the deemed cost of social housing properties and the historical cost carrying value is credited to the revaluation reserve. The difference between historical cost depreciation and depreciation charged on the deemed cost is transferred from the revaluation reserve to the income and expenditure reserve each year

52

Selwood Housing Society Limited

Notes to the financial statements For the year ended 31 March 2023

2 Accounting policies (continued)

Debtors and creditors

Debtors and creditors with no stated interest rate and receivable or payable within one year are recorded initially at transaction price less attributable transaction costs. Subsequent to initial recognition they are measured at amortised cost using the effective interest rate method, less any impairment losses. Any losses arising from impairment are recognised in the statement of comprehensive income in other operating expenses. The Group estimates the recoverable value of rental and other receivables and impairs the debtor by appropriate amounts.

The Group has made arrangement with individuals and households for arrears payments of rent and service charges. These arrangements are effectively loans granted at nil interest rate.

3 Judgements in applying accounting policies and key sources of estimation uncertainty

In preparing these financial statements, key judgements have been made in respect of the following:

53

Selwood Housing Society Limited

Notes to the financial statements For the year ended 31 March 2023

3 Judgements in applying accounting policies and key sources of estimation uncertainty (continued)

Other key sources of estimation uncertainty

• Tangible fixed assets (see notes 14 and 15)

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 residual values are assessed annually and may vary depending on several factors. In reassessing asset lives, factors such as the Group’s experience over several years of actual component lives and the Group’s ability to protect the life of a property by continuing investment 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 property assets, the assets are broken down into components based on management’s assessment of the properties. Individual useful economic lives are assigned to these components.

54

Selwood Housing Society Limited

Notes to the financial statements For the year ended 31 March 2023

3 Judgements in applying accounting policies and key sources of estimation uncertainty (continued)

Investment properties are professionally valued annually using a yield methodology. This uses market rental values capitalised at a market capitalisation rate but there is an inevitable degree of judgement involved in that each property is unique and value can only ultimately be reliably tested in the market itself. Key inputs into the valuations for the commercial units were

The estimate for receivables relates to the recoverability of the balance outstanding at year end. A review is performed on the debt to consider whether it is recoverable.

55

Selwood Housing Society Limited

Notes to the financial statements For the year ended 31 March 2023

4 Particulars of turnover, cost of sales, operating costs, and operating surplus - group

Surplus Operating
Cost of Operating on surplus
Turnover sales costs disposal /(deficit)
2023 2023 2023 2023 2023
£'000 £'000 £'000 £'000 £'000
Social housing lettings (note 5) 40,417 0 32,736 0 7,681
Other social housing activities
First tranche low cost home ownership
sales 5,114 3,455 183 0 1,476
Gain on disposal of fixed assets 0 0 0 1,652 1,652
Charges for support services 25 0 4 0 21
Development costs not capitalised 0 0 734 0 (734)
5,139 3,455 921 1,652 2,415
Activities other than social housing activities
Lettings 10 0 4 0 6
Other 401 0 487 0 (86)
411 0 491 0 (80)
45,967 3,455 34,148 1,652 10,016
Surplus Operating
Cost of Operating on surplus
Turnover sales costs disposal /(deficit)
2022 2022 2022 2022 2022
£'000 £'000 £'000 £'000 £'000
Social housing lettings (note 5) 38,078 0 30,933 0 7,145
Other social housing activities
First tranche low cost home ownership
sales 5,801 4,458 164 0 1,179
Gain on disposal of fixed assets 0 0 0 1,208 1,208
Charges for support services 17 0 4 0 13
Development costs not capitalised 0 0 661 0 (661)
5,818 4,458 829 1,208 1,739
Activities other than social housing activities
Lettings 13 0 3 0 10
Other 375 0 473 0 (99)
388 0 476 0 (89)
44,284 4,458 32,238 1,208 8,796

56

Selwood Housing Society Limited

Notes to the financial statements For the year ended 31 March 2023

4 Particulars of turnover, cost of sales, operating costs, and operating surplus - company

Surplus Operating
Cost of Operating on surplus
Turnover sales costs disposal /(deficit)
2023 2023 2023 2023 2023
£'000 £'000 £'000 £'000 £'000
Social housing lettings (note 5) 40,417 0 32,735 0 7,682
Other social housing activities
First tranche low cost home ownership
sales 5,114 3,455 182 0 1,477
Gain on disposal of fixed assets 0 0 0 1,652 1,652
Charges for support services 25 0 4 0 21
Development costs not capitalised 0 0 734 0 (734)
5,139 3,455 920 1,652 2,416
Activities other than social housing activities
Lettings 10 0 4 0 6
Other 385 0 496 0 (111)
395 500 0 (105)
45,951 3,455 34,155 1,652 9,993
Surplus Operating
Cost of Operating on surplus
Turnover sales costs disposal /(deficit)
2022 2022 2022 2022 2022
£'000 £'000 £'000 £'000 £'000
Social housing lettings (note 5) 38,078 0 30,987 0 7,091
Other social housing activities
First tranche low cost home ownership
sales 5,801 4,457 163 0 1,181
Gain on disposal of fixed assets 0 0 0 1,208 1,208
Charges for support services 17 0 4 0 13
Development costs not capitalised 0 0 661 0 (661)
5,818 4,457 828 1,208 1,741
Activities other than social housing activities
Lettings 13 0 3 0 10
Other 721 0 602 0 119
734 605 0 129
44,630 4,457 32,420 1,208 8,961

57

Selwood Housing Society Limited

Notes to the financial statements For the year ended 31 March 2023

5 Income and expenditure from social housing lettings – group

Income
Rents net of identifiable service charges
Service charge income
Amortised government grants
Other grants
Turnover from social housing lettings
Expenditure
Management
Service charge costs
Routine maintenance
Planned maintenance
Major repairs expenditure
Bad debts
Depreciation of housing properties:
-annual charge
-accelerated on disposal of components
Operating expenditure on social housing lettings
Operating surplus / (deficit) on social housing
lettings
Void Losses		 General
needs
Supported
& older
people's
housing
Low cost
home
ownership
Care
Homes
Garages
Total
2023
Total
2022
£'000
£'000
£'000
£'000
£'000
£'000
£'000
28,564
7,956
1,261
254
655
38,691
36,345
504
787
49
0
0
1,341
1,317
385
0
0
0
0
385
385
0
0
0
0
0
0
31
29,453
8,744
1,310
254
655
40,417
38,078
4,408
1,666
265
92
90
6,521
6,166
1,309
904
0
19
9
2,241
2,333
4,686
1,471
0
242
49
6,448
5,274
4,209
1,289
0
12
26
5,536
4,912
2,807
884
0
9
21
3,721
4,506
76
22
0
0
0
98
(70)
6,228
1,840
0
0
0
8,068
7,741
77
23
0
0
0
100
71
23,800
8,099
268
374
195
32,736
30,933
5,653
645
1,043
(120)
460
7,681
7,145
111
98
57
0
45
312
339

58

Selwood Housing Society Limited

Notes to the financial statements For the year ended 31 March 2023

5 Income and expenditure from social housing lettings – company

Income
Rents net of identifiable service charges
Service charge income
Amortised government grants
Other grants
Turnover from social housing lettings
Expenditure
Management
Service charge costs
Routine maintenance
Planned maintenance
Major repairs expenditure
Bad debts
Depreciation of housing properties:
-annual charge
-accelerated on disposal of components
Operating expenditure on social housing lettings
Operating surplus / (deficit) on social housing
lettings
Void Losses		 General
needs
Supported
& older
people's
housing
Low cost
home
ownership
Care
Homes
Garages
Total
2023
Total
2022
£'000
£'000
£'000
£'000
£'000
£'000
£'000
28,565
7,956
1,261
254
655
38,691
36,345
504
787
49
0
0
1,341
1,317
385
0
0
0
0
385
385
0
0
0
0
0
0
31
29,454
8,744
1,310
254
655
40,417
38,078
4,408
1,666
265
92
90
6,521
6,166
1,309
904
0
19
9
2,241
2,332
4,685
1,472
0
242
49
6,448
5,329
4,209
1,289
0
12
26
5,536
4,912
2,807
884
0
9
21
3,721
4,506
76
22
0
0
0
98
(70)
0
0
0
0
0
0
0
6,228
1,840
0
0
0
8,068
7,741
77
23
0
0
0
100
71
23,799
8,100
265
374
195
32,733
30,987
5,655
644
1,045
(120)
460
7,684
7,091
111
98
57
0
45
312
339

59

Selwood Housing Society Limited

Notes to the financial statements For the year ended 31 March 2023

6 Units of housing stock

At the end of the year accommodation in management was as follows:

General needs housing:
- social
- affordable
Low cost home ownership
Supported housing
Housing for older people
Sheltered units for older people / supported
living
Total social housing units
Residential care home bed spaces
Total owned and managed
Leaseholders of sold flats
Leaseholders units for supported living
Market rent
Total owned and managed accommodation
Units under construction
Total owned and managed accommodation as at
Apr 22
Newly built rental accommodation, built by
or for Selwood Housing.
Sales to the open market
Right to Buy Disposals
Right to Acquire Disposals
Fully Staircased LCHO
Total owned and managed accommodation as at
Mar 23		 Group &
Company
Group &
Company
2023
2022
Number
Number
4,192
4,173
861
805
367
308
76
72
701
701
714
714
6,911
6,773
46
49
6,957
6,822
90
90
4
4
2
2
7,053
6,918
250
299
Group &
Company
Number
6,918
155
(3)
(4)
(5)
(8)
7,053		 Group &
Company
Group &
Company
2023
2022
Number
Number
4,192
4,173
861
805
367
308
76
72
701
701
714
714
6,911
6,773
46
49
6,957
6,822
90
90
4
4
2
2
7,053
6,918
250
299

60

Selwood Housing Society Limited

Notes to the financial statements For the year ended 31 March 2023

6 Units of housing stock (continued)

Selwood Housing owns 76 supported housing units (2022: 72) and tenancy sustainment support was provided for 11 of these units by Selwood Housing in 2023. The rest are managed by bodies that contract with adult social care and carry the financial risk relating to these supported housing units. Other organisations manage 46 care home units on our behalf.

Selwood Housing also owns 1,158 garages, 1 shop unit used by Selwood Housing as a resource centre and 1 doctors’ surgery.

7 Operating surplus

Group Group Company Company
2023 2022 2023 2022
£'000 £'000 £'000 £'000
This is arrived at after charging / (crediting):
Depreciation of housing properties:
-annual charge 8,063 7,741 8,063 7,741
-accelerated depreciation on replaced components 100 71 100 71
Depreciation of other tangible fixed assets 433 409 404 381
Impairement of Office property 433 0 433 0
Auditor's remuneration (excluding VAT):
-fees payable to the group's auditor for the audit
of the group's annual accounts 27 27 19 18

8 Employees

Staff costs (including Executive Team) consist of:
Wages and salaries
Social security costs
Cost of defined benefit scheme (see note 26)
Cost of defined contribution scheme		 Group
Group
Company
Company
2023
2022
2023
2022
£'000
£'000
£'000
£'000
10,615
10,950
10,615
9,827
1,029
964
1,029
866
458
580
458
580
741
707
741
657
12,843
13,201
12,843
11,930

The average number of employees (including the executive team) expressed as full-time equivalents (calculated based on a standard working week of 35 hours during the year) was as follows:

61

Selwood Housing Society Limited

Notes to the financial statements For the year ended 31 March 2023

8 Employees (continued)

Employees(continued)
Group Group Company Company
2023 2022 2023 2022
Administration 61 59 61 59
Development 10 10 10 10
Maintenance 92 117 92 87
Housing, Support and care 149 155 149 147
312 341 312 303

9 Directors’ and senior executive remuneration

The directors and senior executives are defined as the members of the board of directors, the group chief executive and the executive team disclosed on page 1.

Group and company

Executive directors' emoluments
Amounts paid to non-executive directors
Contributions to money purchase pension schemes
Contributions to defined benefits pension scheme		 2023
2022
£'000
£'000
718
644
51
49
10
9
75
112
854
814

The remuneration paid to staff (including the executive team) earning over £60,000 upwards (excluding employer pension contributions):

2023
2022
No.
No.
£60,000 - £69,999 5
5
£70,000 - £79,999 7
3
£80,000 - £89,999 0
0
£90,000 - £99,999 2
2
£100,000 - £109,999 1
3
£110,000 - £119,999 1
0
120,000 - 129,999 0
0
130,000 - 139,999 0
1
140,000 - 149,999 0
0
150,000 - 159,999 0
0
160,000 - 169,999 0
0
170,000 - 179,999 0
0
180,000 - 189,999 0
0
190,000 - 199,999 1
0
17
14

62

Selwood Housing Society Limited

Notes to the financial statements For the year ended 31 March 2023

9 Directors’ and senior executive remuneration (continued)

The CEO left the Wiltshire local government pension scheme as of the 31[st] March 2022. From 1[st] April 2022 the CEO salary was adjusted to include the amount that would have been paid into the Wiltshire pension fund as employer contributions on their behalf.

Benefits have accrued to 3 executive officers under the Wiltshire pension fund defined benefit scheme (2022 – 4, including 1 leaver) and 1 director accrued benefits under the group’s defined contribution pension scheme during the year (2022 – 1).

The group chief executive’s salary is 6.06 times the median salary of all members of staff (2022: 4.68 times).

10 Board members

The Chair of the board receives a salary of £10,500 (2022: £10,500) per annum, the committee chairs each receive £1,750 per annum (2022: £1,750), in addition to their basic board member payment. The standard other group board member payment is £4,250 (2022: £4,250). Emoluments paid to board members in 2023 were 0.1% (2022: 0.1%) of Selwood Housing’s annual turnover.

Board member Remuneration
& Expenses
£		 Current
Member of
Group Asset &
Development
Committee		 Current
Member
of Group
Audit and
Finance
committee		 Group
Board
Sheila Lewis* 12,720 x x
Richard Britton ** to 06/10/22 3,188 x x
Chris Butters 5,734 x x
Stella Shepherd** 4,250 x x
Steve Oldrieve to 06/10/22 2,192 x x
Richard Yates 4,250 x x
David Knight 4,476 x x
Valerie Lee 6,167 x x
Neil Hales-Owen to 29/06/22 1,034 x x
Hannah Jones from 06/10/22 2,086 x x
Koo Chai Young Li Mow Ching from
06/10/22		 2,684 x x
PhilipWhitehead from 06/10/22 2,074 x x
Total 50,857

** Vice Chair

63

Selwood Housing Society Limited

Notes to the financial statements For the year ended 31 March 2023

11 Surplus on disposal of fixed assets

Group and Company
Disposal proceeds
Costs of disposals
Selling costs
Grant recycled
Surplus on disposal of other
tangible fixed assets		 Right to Buy
and Right to
Acquire
Other
housing
properties
Staircasing
Total
Total
2023
2023
2023
2023
2022
£'000
£'000
£'000
£'000
£'000
1,334
493
1,216
3,043
2,275
(509)
(137)
(711)
(1,357)
(1,055)
(11)
(5)
(8)
(24)
(12)
0
0
0
0
0
814
351
497
1,662
1,208
0
0
0
(10)
0
814
351
497
1,652
1,208

12 Interest payable and similar charges

Group and company
Bank loans and overdrafts
All other loans (excluding loans from group
entities)
Interest capitalised on construction of housing
properties		 2023
2022
£'000
£'000
2,618
1,580
1,861
1,342
(644)
(328)
3,835
2,594

13 Taxation on profit from ordinary activities

Current tax
UK corporation tax on profits of the year
Effect of changes in rates
Origination and reversal of timing differences
Taxation on profit on ordinary activities		 Group
Group
2023
2022
£'000
£'000
0
(10)
0
(2)
2
(1)
2
(13)

64

Selwood Housing Society Limited

Notes to the financial statements For the year ended 31 March 2023

13 Taxation on profit from ordinary activities (continued)

The tax assessed for the period is higher than the standard rate of corporation tax in the UK. The differences are explained below.

Profit on ordinary activities before tax
Tax on profit on ordinary activities at the
standard rate of corporation tax in the UK of
19% (2022: 19%)
Effects of:
Charitable income
Gift Aid Payment to parent
Expenses not deductible
Tax rate changes
Current tax charge for year		 Group
Group
Company
Company
2023
2022
2023
2022
£'000
£'000
£'000
£'000
6,110
6,057
6,082
6,220
(1,161)
(1,151)
(1,156)
(1,182)
1,137
1,131
1,156
1,182
26
9
0
0
0
0
0
0
0
(2)
0
0
2
(13)
0
0

65

Selwood Housing Society Limited

Notes to the financial statements For the year ended 31 March 2023

14 Tangible fixed assets – housing properties

All housing properties were freehold at 31 March 2023 (2022: all freehold).

Group and company
Cost
1st April 2022
Construction Costs
Replaced components - Additions
Completed Schemes
Disposals - RTB, RTA & market
sales
Disposals - replaced components
Disposals - staircasing
Transfers
At 31 March 2023
Depreciation
1st April 2022
Charge for the year
Eliminated on disposals
Replaced components - Disposals
Disposals - staircasing
At 31 March 2023
Net Book Value at 31 March 2023
Net Book Value at 31 March 2022		 General
needs
completed
General
needs under
construction
Shared
ownership
completed
Shared
ownership
under
construction
Total
£'000
£'000
£'000
£'000
£'000
459,761
11,276
26,231
4,309
501,577
0
20,751
0
7,458
28,209
5,371
(465)
0
0
4,906
17,093
(17,093)
7,819
(7,819)
0
(739)
0
0
0
(739)
(651)
0
0
0
(651)
0
0
(731)
0
(731)
0
0
0
0
0
480,834
14,469
33,318
3,949
532,571
(52,603)
0
(667)
0
(53,269)
(7,825)
0
(239)
0
(8,063)
98
0
0
0
98
551
0
0
0
551
0
0
20
0
20
(59,778)
0
(885)
0
(60,664)
421,056
14,469
32,433
3,949
471,907
407,158
11,276
25,564
4,309
448,308

66

Selwood Housing Society Limited

Notes to the financial statements For the year ended 31 March 2023

14 Tangible fixed assets – housing properties (continued)

Group
Cost
1st April 2022
Construction Costs
Replaced components - Additions
Completed Schemes
Disposals - RTB, RTA & market
sales
Disposals - replaced components
Disposals - staircasing
Transfers
At 31 March 2023
Depreciation
1st April 2022
Charge for the year
Eliminated on disposals
Replaced components - Disposals
Disposals - staircasing
At 31 March 2023
Net Book Value at 31 March 2023
Net Book Value at 31 March 2022		 General
needs
completed
General
needs under
construction
Shared
ownership
completed
Shared
ownership
under
construction
Total
£'000
£'000
£'000
£'000
£'000
459,761
11,276
26,231
4,309
501,577
0
20,716
0
7,441
28,157
5,371
(465)
0
0
4,906
17,093
(17,093)
7,819
(7,819)
0
(739)
0
0
0
(739)
(651)
0
0
0
(651)
0
0
(731)
0
(731)
0
0
0
0
0
480,834
14,434
33,318
3,931
532,519
(52,603)
0
(667)
0
(53,269)
(7,825)
0
(239)
0
(8,063)
98
0
0
0
98
551
0
0
0
551
0
0
20
0
20
(59,778)
0
(885)
0
(60,664)
421,056
14,434
32,433
3,931
471,855
407,158
11,276
25,564
4,309
448,308

67

Selwood Housing Society Limited

Notes to the financial statements For the year ended 31 March 2023

14 Tangible fixed assets – housing properties (continued)

Interest capitalised in the year
Rate used for capitalisation
Total social housing grant received or receivable
to date
as follows
Capital grant - Housing properties
Recycled Capital Grant Fund
Revenue grant - I&E
Revenue grant - reserves		 Group
Group
Company
Company
2023
2022
2023
2022
£'000
£'000
£'000
£'000
(644)
(328)
(644)
(328)
3%
2%
3%
2%
Group
Group
Company
Company
2023
2022
2023
2022
£'000
£'000
£'000
£'000
34,518
33,132
34,518
33,132
205
150
205
150
385
385
385
385
4,642
4,257
4,642
4,257
39,750
37,924
39,750
37,924

Properties held for security

Selwood Housing Society Ltd had property with an existing use value of £239 million pledged as security at 31 March 2023 (£206 million – 2022).

68

Selwood Housing Society Limited

Notes to the financial statements For the year ended 31 March 2023

15 Other tangible fixed assets – group

Group
Cost
At 1 April 2022
Additions
Disposals
At 31 March 2023
Accumulated Depreciation
At 1 April 2022
Charged in year
Impairment
Disposals
At 31 March 2023
Net book value at 31
March
2023
Net book value at 31
March
2022		 Freehold
Fixtures
Plant &
Motor
IT
Total
Office
& Fittings
&
Equipment
Vehicles
£'000
£'000
£'000
£'000
£'000
£'000
3,556
52
554
13
2,177
6,352
0
0
0
0
691
691
0
0
0
0
(58)
(58)
3,556
52
554
13
2,810
6,985
(801)
(17)
(198)
(13)
(1,563)
(2,592)
(70)
(5)
(28)
0
(329)
(433)
(433)
0
0
0
0
(433)
0
0
0
0
47
47
(1,303)
(22)
(226)
(13)
(1,845)
(3,410)
2,253
30
328
0
965
3,575
2,755
35
356
0
614
3,760

Freehold office includes freehold land at cost of £360,000 (2022: £360,000) which is not depreciated.

69

Selwood Housing Society Limited

Notes to the financial statements For the year ended 31 March 2023

15 Other tangible fixed assets – company

Cost
At 1 April 2022
Transfer
Additions
Disposals
At 31 March 2023
Accumulated Depreciation
At 1 April 2022
Depreciation on Transfer
Charged in year
Impairment
Disposals
At 31 March 2023
Net book value at 31 March
2023
Net book value at 31 March
2022		 Freehold
Fixtures
Plant
Motor
IT
Total
Office
& Fittings
&
Equipment Vehicles
£'000
£'000
£'000
£'000
£'000
£'000
3,556
52
6
13
2,177
5,804
0
0
0
0
0
0
0
0
0
0
691
691
0
0
0
0
(58)
(58)
3,556
52
6
13
2,810
6,437
(801)
(17)
(6)
(13)
(1,563)
(2,400)
0
0
0
0
0
0
(70)
(5)
0
0
(329)
(405)
(433)
0
0
0
0
(433)
0
0
0
0
47
47
(1,303)
(22)
(6)
(13)
(1,845)
(3,190)
2,253
30
0
0
965
3,247
2,755
35
0
0
614
3,404

Freehold office includes freehold land at cost of £360,000 (2022: £360,000) which is not depreciated.

70

Selwood Housing Society Limited

Notes to the financial statements For the year ended 31 March 2023

16 Investment properties

Group and Company
At 1 April 2022
Disposals
Revaluations
At 31 March 2023		 Market
rent
Commercial
Total
£'000
£'000
£'000
221
130
351
0
0
0
3
(2)
1
224
128
352

The group’s investment properties are valued annually on 31 March at fair value, determined by an independent, professionally qualified valuer. The valuations were undertaken in accordance with the Royal Institution of Chartered Surveyors’ Appraisal and Valuation Manual. Details on the assumptions made and the key sources of estimation uncertainty are given in note 3.

The surplus on revaluation of investment property arising £1k (2022 – surplus of £23k) has been credited to the statement of comprehensive income for the year (company and group).

17 Fixed asset investments

Cost or valuation
At 1 April 2022
Additions
At 31 March 2023		 Group
Company
£'000
£'000
25
2,125
100
100
125
2,225

71

Selwood Housing Society Limited

Notes to the financial statements For the year ended 31 March 2023

18 Subsidiary undertakings

The principal undertakings in which the company has an interest are as follows:

Proportion of
Country of voting rights
Name incorporation / ordinary share Nature of business Nature of entity Number of shares
or
registration capital held
Private company 100,000 ordinary £1
Silcoa Ltd * England 100% Dormant limited by shares shares
Cottsbury Homes Sale of properties at Private company 500,000 ordinary £1
Ltd England 100% market cost limited by shares shares
Selwood DevCo Generation and supply Private company 1,500,000 ordinary
Ltd England 100% of electricity limited by shares £1 shares

All subsidiary undertakings have the same registered office as the company, shown on page 1.

72

Selwood Housing Society Limited

Notes to the financial statements For the year ended 31 March 2023

19 Properties for sale & other stock

Group
Completed properties
Other
Properties under construction
Company
Completed properties
Other
Properties under construction		 First tranche
shared
ownership
Other
properties
Stock
Total
Total
2023
2023
2023
2022
£'000
£'000
£'000
£'000
2,120
0
2,120
613
0
88
88
72
2,632
0
2,632
3,367
4,752
88
4,840
4,052
First tranche
shared
ownership
Other
properties
Stock
Total
Total
2023
2023
2023
2022
£'000
£'000
£'000
£'000
2,120
0
2,120
613
0
88
88
72
2,632
0
2,632
2,872
4,752
88
4,840
3,557

Properties developed for sale include capitalised interest of £26k (2022 - £21k).

73

Selwood Housing Society Limited

Notes to the financial statements For the year ended 31 March 2023

20 Debtors

Due within one year
Arrears of rent and service charges
Less: Provision for doubtful debts
Amounts owed by group undertakings
Other debtors
Prepayments and accrued income		 Group
Group
Company
Company
2023
2022
2023
2022
£'000
£'000
£'000
£'000
492
638
492
638
(280)
(359)
(280)
(359)
212
279
212
279
0
0
0
0
2,077
1,875
2,067
1,873
887
1,018
881
1,013
3,176
3,172
3,160
3,165

The other debtors figure includes £486k (2022: £479k) in respect of 19 days’ (2022:18 days) housing benefit due from Wiltshire Council.

20a Cash and cash equivalents

Cash
Deposit accounts		 Group
Group
Company
Company
2023
2022
2023
2022
£'000
£'000
£'000
£'000
7,425
8,251
6,075
6,809
1,295
613
613
613
8,720
8,864
6,688
7,422

74

Selwood Housing Society Limited

Notes to the financial statements For the year ended 31 March 2023

21 Creditors: Amounts falling due within one year

Trade creditors
Rent and service charges received in advance
Amounts owed to group undertakings
Taxation and social security
Other creditors
Accruals and deferred income
Loans due within 1 year
Recycled Capital Grant
Deferred Capital grant		 Group
Group
Company Company
2023
2022
2023
2022
£'000
£'000
£'000
£'000
2,743
1,237
2,742
1,235
858
868
858
868
0
0
9
9
3
266
0
256
593
838
560
840
6,564
6,590
6,556
6,550
6,849
4,390
6,849
4,390
28
0
28
0
385
376
385
376
18,023
14,565
17,987
14,524

75

Selwood Housing Society Limited

Notes to the financial statements For the year ended 31 March 2023

22 Creditors: Amounts falling due after more than one year

Group and company

Group and company
Loans and borrowings (note 25)
Deferred capital grant (note 23)
Recycled capital grant (note 24)
Sinking fund balances		 2023
2022
£'000
£'000
160,100
146,576
34,134
33,132
177
150
148
154
194,559
180,012

23 Deferred capital grant

Group and company
At 1 April
Grants received in the year
Grants accrued
Grants recycled from the recycled capital grant fund
Released to income in the year
At 31 March		 2023
2022
£'000
£'000
33,508
33,697
1,446
103
0
0
(51)
104
(385)
(395)
34,518
33,508

24 Recycled capital grant

At 1 April
Inputs to fund:
- grants recycled from deferred capital grants
Use / allocation of funds:
- new build
At 31 March
Amounts 3 years or older where repayment may
be required		 Group
Group
Company Company
2023
2022
2023
2022
£'000
£'000
£'000
£'000
150
254
150
254
55
123
55
123
0
(227)
0
(227)
205
150
205
150
0
0
0
0

76

Selwood Housing Society Limited

Notes to the financial statements For the year ended 31 March 2023

25 Loans and borrowings

Loans are secured by specific charges on the housing properties of the group and are secured on the assets of Selwood Housing, including fixed charges on individual properties.

In one year or less, or on demand
In more than one year but not more than two years
In more than two years but not more than five years
In more than five years
Total debt		 Bank
Loans
Total
Total
2023
2023
2022
£'000
£'000
£'000
6,849
6,849
4,390
7,702
7,702
6,849
36,888
36,888
32,234
115,510
115,510
107,493
166,949
166,949
150,966

New fixed rate funding of £20m was secured in 22/23 with MORHomes.

The loans bear interest at fixed rates ranging from 1.41% to 4.98% or at variable rates calculated at a margin above the London Inter Bank Offer Rate. The current loan outstanding is made up of £120m fixed and £46.6m variable, against agreed facilities of £208.6m. At 31 March 2023 the group had undrawn loan facilities of £20m (2022 - £20m) with Nationwide and £22m (2022 £24m) with Lloyds.

26 Pension obligations

Group and Company

The Wiltshire Pension Fund (“WPF”) is a multi-employer scheme with more than one participating employer, which is administered by Wiltshire Council under the regulations governing the Local Government Pension Scheme (LGPS), a defined benefit scheme. The assets of the WPF are held separately from those of Selwood Housing in independently administered funds. The actuaries have used the projected unit credit method of valuation in accordance with FRS 17.

The employers’ contributions to the WPF by Selwood Housing for the year ended 31 March 2023 were £585,547 (2022: £621,195) at a contribution rate of 25.7% of pensionable salaries including an annual contribution of £343,000 to fund the deficit, set until the next funding valuation.

77

Selwood Housing Society Limited

Notes to the financial statements For the year ended 31 March 2023

26 Pensions obligations (continued)

Financial assumptions

The main financial assumptions used by the actuary were:

31 March 2023 31 March 2022
% per annum % per annum
Discount rate 4.75 2.70
Future salary increases 3.45 3.60
Future pension increases 2.95 3.20

Mortality assumptions

Life expectancy is based on the Fund’s VitaCurves with improvements in line with the CMI 2021 model, with a 10% weighting of 2021 (and 2020) data, standard smoothing (Sk7), initial adjustment of 0.25% and a longterm rate of improvement of 1.5% per annum for both males and females. Based on these assumptions, the average future life expectancies at age 65 are summarised below:

2023 2022
No. of years No. of years
Current pensioners:
Males 21.5 21.7
Females 24.5 24.2
Future pensioners: *
Males 24 22.6
Females 26.1 26

Commutation

A commutation allowance is included for future retirements to elect to take 50% of the maximum additional tax-free cash up to HMRC limits.

78

Selwood Housing Society Limited

Notes to the financial statements For the year ended 31 March 2023

26 Pensions obligations (continued)

Amounts recognised in the statement of financial position

Present value of funded obligations relating
to Selwood Housing
Fair value of plan assets relating to
Selwood Housing
Unrecognised Asset
Net Deficit		 2023
2022
£'000
£'000
(23,324)
(32,863)
26,289
28,122
(2,965)
0
(4,741)

Analysis of the amount (credited)/charged to the statement of comprehensive income:

Current service cost
Expected return on pension scheme assets
Interest on pension scheme liabilities
Total operating charge		 2023
2022
£'000
£'000
458
580
(757)
(520)
883
695
584
755

Of the above amount, £126,000 (2022: £175,000) was charged to other finance charges. £131,000 (2022: £45,000) was credited to operating surplus.

Changes in fair value of employer assets

Opening fair value of employer assets
Contributions by the Employer
Actuarial gains
Benefits paid
Contributions by members
Interest
Closing fair value of employer assets		 2023
2022
£'000
£'000
28,122
26,017
589
625
(2,478)
1,606
(778)
(737)
77
91
757
520
26,289
28,122

79

Selwood Housing Society Limited

Notes to the financial statements For the year ended 31 March 2023

26 Pensions obligations (continued)

Changes in present value of defined benefit obligation

Opening defined benefit obligation
Current service cost
Interest cost
Actuarial losses /(gains)
Estimated benefits paid
Contributions by members
Closing defined benefit obligation		 2023
2022
£'000
£'000
32,863
34,807
458
580
883
695
(10,179)
(2,573)
(778)
(737)
77
91
23,324
32,863

Major categories of plan assets as a percentage of total plan assets:

2023 2022
Equities 55% 53%
Bonds 31% 33%
Property 13% 13%
Cash 1% 1%

Fair value of employer assets

Equities
Bonds
Property
Cash		 2023
2022
£'000
£'000
14,459
14,905
8,150
9,280
3,418
3,656
263
281
26,289
28,122

80

Selwood Housing Society Limited

Notes to the financial statements For the year ended 31 March 2023

26 Pensions obligations (continued)

Amounts for the current and previous four years are as follows:

2023 2022 2021 2020 2019
£'000 £'000 £'000 £'000 £'000
Present value of defined benefit obligation (23,324) (32,863) (34,807) (26,518) (30,074)
Fair value of scheme assets 26,289 28,122 26,017 22,039 22,876
Surplus/(Deficit) on scheme 2,965 (4,741) (8,790) (4,479) (7,198)
Experience adjustments on plan liabilities (1,743) (68) 298 1,027 0
Experience adjustments on plan assets (2,457) 1,606 3,269 (1,681) 1,183
Cumulative actuarial gains/losses 5,092 (2,609) (6,788) (2,379) (5,184)

Projected pension expense for the year to 31 March 2023

Projected Current Service Cost
Interest on Obligation
Expected Return on Plan Assets
Total		 £'000
229
1097
(1,246)
80

The estimated employer contributions for the year to 31 March 2024 are approximately £589,000.

Defined Contribution Scheme

A defined contribution pension scheme is operated by the group on behalf of some employees. The assets of the scheme are held separately from those of the group and the company in an independently administered fund. All existing and new colleagues are eligible to join. The costs associated with providing this scheme are outlined in note 8.

81

Selwood Housing Society Limited

Notes to the financial statements For the year ended 31 March 2023

27 Operating leases

At 31 March 2023, the group and company had future minimum lease payments under non-cancellable operating leases as set out below:

Amounts payable as Lessee Group Group Company Company
2023 2022 2023 2022
£'000 £'000 £'000 £'000
Not later than 1 year 493 325 493 325
later than 1 year and no later than 5 years 1013 500 1013 500
Later than 5 years 0 0 0 0
Total 1,506 825 1506 825
Amounts receivable as Lessor Group Group Company Company
2023 2022 2023 2022
£'000 £'000 £'000 £'000
Not later than 1 year 1 1 1 1
later than 1 year and no later than 5 years 0 0 0 0
Later than 5 years 0 0 0 0
Total 1 1 1 1

28 Capital commitments

Commitments contracted but not provided
for in the accounts
Commitments approved by the Board but
not contracted for		 Group
Group
Company
Company
2023
2022
2023
2022
£'000
£'000
£'000
£'000

60,907
45,702
60,907
45,702
92,218
103,341
92,218
103,341
153,125
149,042
153,125
149,042

82

Selwood Housing Society Limited

Notes to the financial statements For the year ended 31 March 2023

28 Capital commitments (continued)

The above commitments will be financed primarily through borrowings, new funding, social housing grant, property sales and internal cash balances.

29 Related party transactions

The directors Stella Shepherd, Richard Yates and Hannah Jones are tenants of Selwood Housing. Their tenancy agreements are under normal commercial terms and they are not able to use their position to their advantage.

The director Philip Whitehead is also a councillor of Wiltshire Council. Any transactions made with Wiltshire Council are made at arm’s length, on normal commercial terms and the councillors cannot use their position on the board to their advantage.

Except for the disclosures below, Selwood Housing Group has taken advantage of the exemption allowed under FRS 102 not to disclose related party transactions within the group. All intra-group transactions are with subsidiaries that are wholly owned. These have been eliminated on consolidation in the group’s financial statements

Transactions with non-regulated entities

The association provides management services and other services to some of its subsidiaries. Selwood Housing also receives charges from its subsidiaries. The quantum and basis of those charges is set out below.

83

Selwood Housing Society Limited

Notes to the financial statements For the year ended 31 March 2023

29 Related party transactions (continued)

Transactions with non-regulated entities
Payable to Selwood Housing by
Subsidiaries:
Silcoa Ltd
Selwood DevCo Ltd
Cottsbury Homes Ltd
Payable by Selwood Housing to
Subsidiaries:
Silcoa Ltd
Selwood DevCo Ltd		 Management
Charges
Silcoa Transfer
Gift Aid
2023
2022
2023
2022
2023
2022
£'000
£'000
£'000
£'000
£'000 £'000
0
146
0
217
0
219
0
0
0
0
46
47
0
0
0
0
0
3
0
146
0
217
46
269
Other Charges
2023
2022
£'000
£'000
0
2,913
1,050
27
1,050
2,941

Other intra-group charges

No other intra-group charges are payable to the society from subsidiaries. Charges from subsidiaries to the society are for goods and services provided, such as repairs and maintenance.

84

Selwood Housing Society Limited

Notes to the financial statements For the year ended 31 March 2023

30 Provision for liabilities – Deferred Tax

At 31 March 2022
Charge / (Credit)
Origination and reversal of timing
differences
At 31 March 2023
1 Net debt reconciliation
01 April 2022
£'000
Group
Cash and cash
equivalents
8,864
Loans and borrowings
(150,966)
(142,102)
Company
Cash and cash
equivalents
7,422
Loans and borrowings
(150,966)
(143,544)		 At 31 March 2022
Charge / (Credit)
Origination and reversal of timing
differences
At 31 March 2023
1 Net debt reconciliation
01 April 2022
£'000
Group
Cash and cash
equivalents
8,864
Loans and borrowings
(150,966)
(142,102)
Company
Cash and cash
equivalents
7,422
Loans and borrowings
(150,966)
(143,544)		 Group
Group
Company
Company
2023
2022
2023
2022
£'000
£'000
£'000
£'000
9
5
0
0
(2)
4
0
0
0
0
0
0
7
9
0
0

Cash flows
Non -cash
changes
31 March
2023
£'000
£'000
£'000

(144)
0
8,720
(15,671)
-312
(166,949)
(142,102) (15,815)
(312)
(158,229)
7,422
(150,966)
(734)
0
6,688
(15,671)
(312)
(166,949)
(143,544) (16,405)
(312)
(160,261)

31 Net debt reconciliation

85

GROUP AUDIT MANAGEMENT LETTER

~~Year ending 31 March 2023~~

Audit Management Letter

CONTENTS

Introduction and Scope of the Audit Work ........................................................... 1 Key Audit Issues ............................................................................................ 2-5 Overview of Financial Statements ................................................................... 6-7 Independance ................................................................................................... 8 Qualitative Aspects of Accounting Practices and Financial Reporting............. 9-10 Management Representation Letter and Audit Opinion ...................................... 11 Audit Adjustments ........................................................................................... 12 Accounting and Internal Control System .......................................................13-14

Audit Management Letter

INTRODUCTION

Our audit of the financial statements of Selwood Housing Society Limited (the parent) and its 100% owned subsidiaries (Silcoa Limited, Cottsbury Homes Limited and Selwood DevCo Limited) is substantally complete. These companies comprise “the Group” for the purpose of this report.

The purpose of this letter is to bring to your attention the findings from our audit.

In order to comply with the provisions of the International Standard on Auditing (ISA) 260 – ‘Communication of Audit Matters with those Charged with Governance’ we report to management on the findings of our audit, with particular reference to:

We also take this opportunity to comment on the Group’s performance for the year and to confirm our professional integrity, objectivity and independence.

We see effective communication with the Board and Group Audit and Finance Committee as being a key part of our audit, and it is important that there is effective two way communication. We welcome any feedback or questions regarding the conduct of the audit process.

This report is not intended to cover every matter which came to our attention during the audit. We do not accept any responsibility for any reliance placed on it by third parties. Our procedures are designed to support our audit opinion and cannot be relied upon to identify any weakness in systems or controls which may exist.

We would like to take this opportunity to formally record our appreciation for the assistance and co-operation provided to us by the Finance Team who assisted us during the course of our audit.

Beever and Struthers

Audit Management Letter

1

KEY AUDIT AREAS

Audit issue per audit plan overview Audit procedures and results
Loan Covenants and Treasury Management
As part of our audit work we planned to consider the risk
that the Group might breach its loan covenants by
reviewing the loan agreements, budgets and cash flow
forecasts.
Performance year to date was better than forecast by
£1.7m. The main drivers for this favourable variance is
underspends in property and staff costs, plus higher that
forecasts proceeds from shared ownership sales.
At the year end the Group surplus before pension
actuarial adjustments was £6.1m, the same as in the prior
year.		 We agreed all loan balances in the financial statements
to the Group’s accounting records, and to third party
confirmations.
We obtained supporting documentation for interest
payments and receipts in the year and confirmed the
accuracy of those figures in the financial statements.
We reviewed the Group’s 2023/24 budget and the
underlying assumptions. We reviewed the Group’s
longer term budgets, business plans and cash flow
forecasts, and tested the calculations for loan covenant
compliance prepared by management.
Wefoundnoissues ofconcern inthis area.
Property Sales
In the year to 31 March 2023 proceeds from sale of
existing properties were £3m generating a surplus of
£1.7m.
First tranche shared ownership sales generated
proceeds of £5.1m and a surplus of £1.5m.		 We completed the following testing:
•
Reviewed the systems and controls over
development of outright sales, intra-group transfers,
low-cost home ownership and other sales;
•
Reviewed the systems and controls over allocated
development costs and work in progress;
•
Tested the surplus on disposal on a sample of low-
cost home ownership and RTB sales;
•
Tested a sample of transactions within the Recycled
Capital Grant Fund; and
•
Reviewed the carrying value of the Group’s work-in-
progress at the year-end to ensure it is stated at its
selling price less costs to complete and sell. This
included an assessment of the profitability on the
current schemes.
Wefoundnoissues ofconcern inthis area.

Audit Management Letter

2

KEY AUDIT AREAS

Audit issue per audit plan overview Audit procedures and results
Housing Properties
In the year to 31 March 2022 £18.2m was spent on new
developments and £5.8m on new components.
The audit risks for housing properties include:
•
Additions, including expenditure on replaced
components, are not authorised or are not recorded
correctly.
•
The carrying amount of housing properties at the
year-end is impaired.
•
Components which have been replaced are not
removed from the carrying value.
•
The depreciation charge is incorrectly calculated,
and associated grant has not been recognised in
the correct accounting period.
In the year to 31 March 2023, a further £28.2m was spent
on new developments and £4.9m on new components.		 We completed the following testing:
•
Evaluated and tested the key controls over the
approval and recording of development expenditure,
including development appraisal assumptions;
•
Evaluated and tested the controls over the
capitalisation of expenditure on major repairs and
components to ensure the requirements of the
Statement of Recommended Practice (SORP) have
been met. This has included evaluating and testing
of the arrangements for budgetary control;
•
Assessed the accounting policies for capitalising
development overheads and interest on loans;
•
Reviewed the useful economic lives of components
to ensure they accord with best practice in the
sector;
•
Agreed the movements in the housing properties
notes and the closing balances to the asset register;
•
Considered whether there is any evidence of
impairment in the general needs schemes e.g. high
void levels, and reviewed the Group’s assessment
of impairment;
•
Reviewed the carrying value of the Group’s work-in-
progress at the year-end to ensure it is stated at its
selling price less costs to complete and sell. This
has included an assessment of the profitability on
the current schemes;
•
Performed a proof in total test on the depreciation
charge for the year;
•
Confirmed that accruals have been made for all
development expenditure incurred up to 31 March
but not yet invoiced; and
•
Reviewed recognition of grants received, grant
allocated to completed schemes across the Group
and any amounts due back to Homes England
included in liabilities.
We found no issues of concern in this area

Audit Management Letter

3

KEY AUDIT AREAS

Audit issue per audit plan overview

Audit procedures and results

Defined Benefit Pension Scheme

Selwood is a member of the Wiltshire Pension Fund, a Local Government Pension Scheme (LGPS). The deficit associated with the scheme is recognised in the financial statements in line with the actuarial valuation and the requirements of FRS 102 Section 28 (Employee Benefits).

During the audit we have reviewed the LGPS information provided by the actuary to the Group and considered the disclosure implications. We reviewed the LGPS actuarial valuation and the assumptions made by the actuary to ensure assumptions are reasonable. The asset split between the various employers within the scheme has also been considered in our review. We reviewed the accuracy of the LGPS journals processed at the year end. We reviewed the disclosures and the notes to the accounts at the final audit visit to ensure they comply with Section 28 of FRS 102. At 31 March 2023, the LGPS pension scheme has moved into a net asset position for the first time since the introduction of FRS102, the asset currently recognised in the financial statements is £2.97m. At the time of writing, audit firms in the social housing sector, including Beever and Struthers, are working through the implications of recognising pension assets. In order to recognise the pension asset, Selwood must be able to provide evidence to us that the asset is recoverable – for example through reduced future contributions or refunds from the Scheme. We will provide an update on this matter to the Group Audit and Finance Committee at its meeting on 21 June 2023.

Audit Management Letter

4

KEY AUDIT AREAS

Audit issue per audit plan overview

Audit procedures and results

Assessment of Fraud Risk

ISA 240 “The Auditor’s responsibility to consider fraud” requires us to consider the risk of fraud and the impact that this has on our audit approach. In addition, ISA 700 “Forming an Opinion and Reporting on Financial Statements”, means auditors are required to explain in the auditor’s report to what extent the audit was considered capable of detecting irregularities, including fraud. There is a presumed significant risk of fraud in two areas:

Our audit is designed to provide reasonable assurance that the accounts are free from material misstatement whether caused by fraud or error. We reviewed revenue recognition and management control override in detail.

As part of the audit planning:

Revenue Recognition

Material misstatements due to fraudulent reporting often result from an overstatement of revenues, for example through premature revenue recognition or recording fictitious revenues. The auditor therefore presumes that there are risks of fraud in revenue recognition and considers which types of revenue may give rise to fraud risks.

During the audit fieldwork:

For the Group the main income stream is rental income. The processing of rent charges is highly automated and rent changes are restricted. We therefore have initially assessed the risk of fraud in the recognition of rental income as low and expect to rebut the assumption that this area is a significant risk.

Management Override

Under ISA 240 there is a presumed risk of management override of the system of internal controls. Material misstatements can arise from management overriding the controls which are in place or by manipulating the results to achieve targets and the expectations of the stakeholders.

Audit Management Letter

5

OVERVIEW OF FINANCIAL STATEMENTS

STATEMENT OF COMPREHENSIVE INCOME

2023
£’000		 2022
£’000
Turnover 45,967 44,284 Turnover from social housing lettings has
risen by £1.3m due to rent increase year on
year and income from the sale of first
tranche shared ownership has fallen by
£0.7m. Income from other non-social
activities has increased by £1m.
Cost of sales and
operating costs		 (37,602) (36,695) Cost of sales have decreased mainly due
to the fall in first tranche shared ownership
sales noted above. Maintenance costs
increased by £1.5m.
Surplus on disposal of
fixed assets		 1,652 1,208 Surplus on disposal of fixed assets has
increased from the prior year in line with
the increase in the number of disposals of
RTB/ Right to Acquire properties and
staircasing sales.
Other interest receivable
and similar income		 53 6 Immaterial movement.
Interest and financing
costs		 (3,835) (2,594) New funding and rising interest rates have
caused interest costs to increase.
Net interest on pension (126) (175) This is in line with the actuarial valuation.
Change in valuation of
investment properties		 1 23 Movement reflects the year end external
valuation by JLL.
Taxation 2 (13) No material changes in taxable activities
which remain very low.
Actuarial gain on defined
benefit pension scheme		 7,701 4,179 The actuarial gain reported in the financial
statements is in line with the actuarial
valuation provided by Hymans Robertson.
Total Comprehensive
Income		 13,813 10,223

Audit Management Letter

6

OVERVIEW OF FINANCIAL STATEMENTS

STATEMENT OF FINANCIAL POSITION

2023
£’000		 2022
£’000
Tangible fixed assets 475,430 452,068 Fixed assets have increased by £23m
compared to last year, this is due to
development of new housing and capital
works to existing homes, net of the
depreciation charge for the year.
Investment properties 352 351 Immaterial movement.
Investment in companies 125 25 Immaterial movement.
Current assets 16,737 16,088 Current assets have increased by £0.6m.
This is due to higher level of completed
properties held for sale at the year end and
slight fall in cash held at theyear end.
Creditors: amounts falling
due within one year		 (18,023) (14,565) Creditors within one year have increased
by £3.5m mainly due to the increase in
loan funding due within one year and
higher trade creditors.
Creditors: amounts falling
due after more than one
**year **		 (194,559) (180,012) The movement is mainly due to an
increase in borrowings (£20m MORHomes
**new funding). **
Pension provision 2,965 (4,741) This is in line with the actuarial valuation
by Hymans Robertson. The recognition of
the pension asset remains a matter of
discussion-see previous comments.
Other provisions (7) (5) Immaterial movement.
Reserves 283,020 269,205 Increase in reserves relates to the surplus
for the year from the SOCI.

Audit Management Letter

7

INDEPENDENCE

Ethics and Independence

In the UK and Ireland, auditors are subject to the ethical requirements of the Financial Reporting Council’s 2016 Revised Ethical Standards for Auditors.

International Standard on Auditing (UK and Ireland) 260 Communication with those Charged with Governance and good practice require us to confirm the following to those charged with governance:

The Group Audit and Finance Committee should take an active role in considering whether the external auditor’s independence might be impaired by the provision of nonaudit services.

Relationships which may Bear on Objectivity and Independence

We are aware of no such relationships.

Non-Audit Services

There are no separately chargeable non-audit services provided to the Group.

Conclusion

We therefore confirm that we are independent and that we comply with the requirements of the Financial Reporting Council’s Ethical standards in relation to the supply of non-audit services by an audit firm.

Audit Management Letter

8

QUALITATIVE ASPECTS OF ACCOUNTING PRACTICES AND FINANCIAL REPORTING

Accounting Policies

FRS102 requires that entities should review their accounting policies regularly to ensure that they are appropriate to its particular circumstances for the purposes of giving a true and fair view. The Group Audit and Finance Committee plays a key role in this process.

We have reviewed the Group’s accounting policies as stated in the financial statements in detail and confirm that we judge them to be appropriate to provide relevant, reliable, comparable and understandable information.

Going Concern

The financial statements have been prepared on a going concern basis.

We have obtained the information that the Board has reviewed in assessing whether the going concern assumption is appropriate and tested the assumptions underlying this information. We are satisfied that the Board’s use of the going concern assumption is appropriate. We will need to keep this matter under review until the date of signing of the financial statements due to the on-going uncertainty brought about by the current economic climate.

Accounting Estimates

Key accounting estimates in the financial statements concern actuarial assumptions, depreciation rates, the level of bad and doubtful debt provision against tenant arrears and impairment provisions.

We confirm that estimates have been made appropriately in line with our knowledge of the Group and the Sector and are disclosed satisfactorily in the financial statements.

Financial Statement Disclosures

We confirm that we judge the disclosures throughout the financial statements to be neutral, consistent and provide sufficient clarity to the user.

Matters Discussed with Management

There were no significant matters arising from the audit, however the following matters were discussed with management at the clearance meeting held on 23 May 2023, in addition to the matters referred to elsewhere in this report:

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QUALITATIVE ASPECTS OF ACCOUNTING PRACTICES AND FINANCIAL REPORTING

Significant Difficulties Encountered During the Audit

There were no significant difficulties encountered during the audit.

Timing of Transactions

Our audit work confirmed that material transactions were recorded in the correct accounting periods. Accruals and prepayments were made for material items.

Group Strategic and Board Reports

We reviewed other information in the narrative reporting sections of the financial statements. We confirm that there is no material inconsistency between it and the financial statements.

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MANAGEMENT REPRESENTATION LETTER AND AUDIT OPINION

In accordance with ISA 580, we obtain written representation from management that they acknowledge their responsibility for preparing the accounts and have made all information available to us.

We will present our management representation letter for the Group for signing at the same time as the financial statements are signed.

We have provided an unqualified audit opinion on the financial statements for the Group and its subsidiaries for the year ended 31 March 2023, subject to receipt of the following:

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MATERIALITY AND AUDIT ADJUSTMENTS

Materiality

ISA 260 requires us to report to management on all uncorrected misstatements identified during the audit, and to include in this report how we have calculated materiality, and any misstatements identified during the audit which have been corrected.

Materiality may be revised throughout the course of the audit, where we become aware of information during the audit that would have resulted in a different determination of materiality at the outset.

We are not required to report on corrected or uncorrected misstatements we believe are clearly trivial.

Materiality is calculated using 2% of turnover, except for Silcoa and Cottsbury where materiality is based on balance sheet assets. Triviality is the value above which we report errors to you. A summary of the final assessment of materiality is as follows:

Turnover Materiality Triviality
£’000 £’000 £’000
Selwood Housing Society Limited 45,951 689 46
Silcoa Limited (asset based) 3.6 2.7 0.2
Selwood Devco Limited 22 17 1
Cottsbury Homes Limited (asset based) 10 7.5 0.5

Disclosure adjustments

The accounts presented for audit were of high quality and largely compliant with FRS102, SORP 2018 and the Accounting Direction 2022. A small number of presentational adjustments were made to the financial statements over the course of the audit, following discussion with the finance team. These included:

Uncorrected Misstatements

There were no uncorrected misstatements for any entities in the Group.

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ACCOUNTING AND INTERNAL CONTROL SYSTEMS

ISA 265 requires that we report to those charged with governance any significant deficiencies in internal control that we identify in the course of our audit work. Significant deficiencies are those deficiencies that we have identified during the audit and concluded are of sufficient importance to merit being communicated to those charged with governance.

In accordance with Revised ISA 315, we undertook a review of the Group’s selfassessment against the requirements set out in our IT General Controls (ITGCs) audit programme. Our review of the Group’s self-assessment did not identify any areas of significant weakness where we felt that we needed to perform additional testing as part of our audit.

We are pleased to report that overall, we found that the Group’s systems and internal financial controls were operating effectively. There were no significant deficiencies identified as a result of our work.

Audit Findings

There were no recommendations identified during our audit work.

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ACCOUNTING AND INTERNAL CONTROL SYSTEMS

Journals testing

We reviewed a full extract of journals from the Group’s finance system, using our data analytics software (Inflo), for the risks set out below. Our sample testing of journals did not identify any issues.

Risk Testing results
Large values over materiality:
Transactionswhere the grossvalueis over materiality.
Keywords:
Transactions where the description fields contain specific
keywords.
Large values versus average:
Transactions which have an impact on any general ledger
account of 10 times the averagevalue.
Intercompany & Related Party transactions:
Inflo obtains all related individual and related company
transactions which contain any of these individuals or
companies.
Round sum values:
Transactionswhich have around sum value.
Unusual values:
Transactions which have a basic numerical sequence
withintheir value e.g.£123,456.
Seldom used accounts:
Transactions which are posted to accounts used less
frequently than monthly.
New accounts:
Transactions which are posted to accounts with no
transactions postedinthefirst 3months.
Zero balance accounts:
Transactions posted to accounts with a nil value at the
yearend.
Suspense accounts:
Transactionswiththeword suspenseinthe description
Frequent transactions:
Transactionswhichareidentical inthe year.

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GROUP AUDIT MANAGEMENT LETTER

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