Registered number: 08140750 Charity number: 1149922 STUDENT UNION LETTINGS LIMITED (A company limited by guarantee) TRUSTEES. REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2023
STUDENT UNION LETTINGS LIMITED IA company limited by guarantee) CONTENTS Page Reference and admlnlstratlve detalls of the Company, Its Trustees and advlsers Trustees. report Independent auditor's report on the flnanclal statements ststement of financial activitlOS 3-12 13-16 Balance sheet 18 ststement of cash flows Notes to the financial statements 20-33
STUDENT UNION LETTINGS LIMITED IA company limited by guarantee) REFERENCE AND ADMINISTRATIVE DETAILS OF THE COMPANY, ITS TRUSTEES AND ADVISERS FOR THE YEAR ENDED 30 JUNE 2023 Trustees Dr Paul Groves, Chair Mr Ceri Davies Mr Gath Oughlon (resigned 27 April 20231 Mr Richard Osborn Mr Martin Miller (resigned 22 September 20231 Ms Debbie Muddimer Miss Karla Wagener Is1gned 12 July 20221 Miss Gemma Lomas Mr Martin Chuter Miss Sarah Bradley Miss Hoor Pathan lappoinled 2 August 2022, resigned 29 September 20231 Mr Liam Davis lappoinled 12 October 20231 Company registered number 08140750 Charity registered number 1149922 Registered office First Floor Campus Centre Building Mill Lane Leicester Leicestershire LE2 7DR Chief Executive Officer Mr Irving Hill Independent auditor Crowe U.K. LLP Black Country House Rounds Green Road Oldbury West Midlands B69 2DG Page 1
STUDENT UNION LETTINGS LIMITED IA company limited by guarantee) REFERENCE AND ADMINISTRATIVE DETAILS OF THE COMPANY, ITS TRUSTEES AND ADVISERS ICONTINUEDI FOR THE YEAR ENDED 30 JUNE 2023 Solicitors Shakespeare Martineau LLP Leicester LE1 1QH Hatch Legal Seascale CA20 1QU Bankers RBS 5 Market Street Leicester LE1 6DN Page 2
STUDENT UNION LETTINGS LIMITED IA company limited by guarantee) TRUSTEES. REPORT FOR THE YEAR ENDED 30 JUNE 2023 The Trustees Iwho are also directors of the charity for the purposes of the Companies Act) present their annual report together with the audited financial statements of Student Union Lettings Limited (the company) for the period ended 30 June 2023. The Trustees confirm that the annual report and financial statements of the company comply with the current statutory requirements, the requirements of the company's governing document and the provisions of the Statement of Recommended Practice ISORP 20191, applicable to charities preparing their awounts in awordance with the Financial Reporting Standard applicable in the UK and Republic of Ireland IFRS 1021 leffeclive 1 January 20191. The company trades under the name Sulels. STRUCTURE. GOVERNANCE AND MANAGEMENT CONSTITUTION The company is registered as a charitable company limited by guarantee and was set up by a Memorandum of Association on g July 2012. The company is also a registered charity, number 1149922. ORGANISATIONAL STRUCTURE AND DECISION MAKING The oversight of the company is the responsibility of the unpaid Trustees. The company consists of a Board comprising up to 12 Trustees. Currently, there are 10 Trustees in post. There is a mixture of extemal trustees who are recruited and those who are co-opted onlo the Board. The University of Leicester Students, Union and De Montfort University Students, Union are members of the charity and each appoint up to 3 trustees lo the Board. The charity has purchased indemnity insurance in favour of the trustees of the charity. The Senior Management Team of Sulels comprises a Head of Operations, a Finance Manager, a Digital Marketing Manager along with the Chief Executive Officer who Is responsible for the day-to-day operation of Sulets and is directly responsible lo the Trustee Board. The Board meets regularly to receive reports from the Chief Executive Officer, to review the charity's performance and administration and to decide policy issues arising. The company operates from Ils base al De Montfort Students, Union, although we have a significant presence at University of Leicester Student Union both online and al key student events throughout the year. Page 3
STUDENT UNION LETTINGS LIMITED IA company limited by guarantee) TRUSTEES. REPORT {CONTINUED) FOR THE YEAR ENDED 30 JUNE 2023 Icontinuedl MISSION, VALUES AND PUBLIC BENEFIT The objects for which the company Is established are the advancement of education by providing and managing accommodation and related services for educational institutions, their students and other persons associated with educational instilub"ons. Our Mission Is.. To raise standards in accommodation for the students of Leicesler. To be honest, transparent and fair in our actions and lo enhance the sludenl experience. Our Values are.. To raise standards in student housing in Leicester To be transparent & fair To offer value for money To be student friendly In setting our objectives and planning our activities the Trustees have given carefvjl consideration to the Charity Commission's general guidance on public benefit. The Trustees believe that there is a clear and continued public benefit from the operation of Sulets. This includes.. A not for profit, ethical operating model. Private rented sector properties that are of a high standard and have been assessed against our own code of standards. Clear eviden that we continue lo have a posib.ve impact on the stsndards of the Leicester HMO market. No 'summer rent, periods for students Ihalf rent charged but with no right to live in the property). Page 4
STUDENT UNION LETTINGS LIMITED IA company limited by guarantee) TRUSTEES. REPORT {CONTINUED) FOR THE YEAR ENDED 30 JUNE 2023 Icontinuedl REVIEW OF ACTIVITIES We are pleased lo announce that the overall Leicester market continues to improve after a couple of difficult years post-covid. Sulets has had another successful year where we have delivered a healthy surplus, in exce5S of plan as well as purchasing our second propety- The business continues to operate a major contract with Sludenl R0051 where we have an exclusive agreement lo let all of their Leicester accommodation. This contract is due to end in 2025 and remains a key focus of the charity. We operate 124 properties in a mix of our own houses, Let Only, Managed and leased properties, which we call Head Tenancy IHTSI. In addition, we manage two small blocks of flats lotalling 20 rooms. The HTS houses are let to us on short leases and then we sublet these to students with other additional services. The on-going cost of living crisis is difficult for students to navigate with student loan amounts virtually unchanged after an increase of just 2.3°kn. However due to a very competitive local market, prices have changed very little although we have witnessed some of the major PBSA providers adopting a dynamic pricing model as the next academic year approaches and more of the accommodation is starting to fill up. Whilst the increase in rental prices have been contained, the impact of higher energy bills has had a real impact on students and have been difficult lo contain for the charity. Last year we took the decision lo slop offering Inclusive bills in our managed houses after bills had increased by over fourfold. Prices have fallen sharply but remain around twice the pre-ukraine invasion price. This year, all our properties have either been rented on a bills-exclusive basis or with a bills package included from UniHomes who offer inclusive utility packages. This is expensive bul does come with the benefit of a guaranteed cost and unlimited utilities. We will monitor prices closely and hope lo reintroduce a bills inclusive package for the next rentsl year assuming world energy prices remain stable or preferably decrease. This year we have increased the staff in Finance by 0.75 FTE after the return of our colleague after long temi maternity leave. This has boosted the capability of finance and we have moved deposit collection, reconciliation and return to this team from Operations. In addition, we have appointed a new sales manager from within the team and reallocated one of the team to a full lime propety manager post. This Continues a pattern of establishing discrete Operation5, Finance, and Sales teams to focus the right people on the relevant tssk. We rarely report misses, bul unfortunately thi5 year, we took the decision to close our landlord rating site, Rate Your Student Landlord, as Il had received only around 100 reviews over the last 2 years and was a continuing drain on resources. Whilst we still believe in the power of review siles, we have concluded that the very Infrequent nature of feedback on property sites makes it very difficult to gather a significant number of reviews. The lack of any high-profile sile in the UK, suggests lo us that it is the lack of use that is the problem rather than the principle itself. Page 5
STUDENT UNION LETTINGS LIMITED IA company limited by guarantee) TRUSTEES. REPORT {CONTINUED) FOR THE YEAR ENDED 30 JUNE 2023 Icontinuedl OPERATIONS Developing our own properties This year we completed on the purchase of our second property al Cambridge Street Leicesler, and al the time of writing, have agreed terms for a third propety al Whealsheaf Way, Leicester. Due to the existence of Article 4 planning restrictions, which have been further expanded in Leicester, the only way to grow a housing portfolio Is by acquiring existing assets. Inevitsbly, this means that the process is slower than we would wish. This Is a nationwide problem and most university cities have some fomi of control mechanism to restrict HMO housing which inevitably restricts student choice and pushes up prices. However, Sulels will continue lo purchase properties that are well located and reasonably priced and we are actively looking to expand our portfolio. Student Survey Every year we survey students in all our PRS housing to measure overall satisfaction and lo drive improvements. This year we sent our survey lo 427 tenants and 101 responded, a response rate of 23.6°. This is an increase on last year's figures which had a response rale of 20 /9 Highlights include.. 85,/0 of students staled that they would recommend Sulels to other students. 83,/0 of students agreed that their rent provided good value for money. This was 86,/0 in 2018. 83'k of students agreed that we are 'easily a¢ssible and responsive, when they needed lo contact us. Our survey results are further supported by the extemal reviews we receive on Trustpilot and Google My Business. The rankings for both independent sites rate at 4.5 out of 5. These have Improved over the year, up from a previous score of 4.4. These results are a powerful example of Sulets values in action. Our honest and ethical approach along with supported and well-trained staff means that we deliver high quality homes to the key beneficiaries of our charity, students. We intend to expand our feedback processes to include a landlord survey, late in 2023, to gauge satisfaction from our landlord community. Page 6
STUDENT UNION LETTINGS LIMITED IA company limited by guarantee) TRUSTEES. REPORT {CONTINUED) FOR THE YEAR ENDED 30 JUNE 2023 Icontinuedl Stsffing Every year we run an independent, anonymous staff survey measuring area5 such as happiness in the role, support from their manager. how valued they feel by the business and training and development. This year we achieved an employee engagement score of 97°kn. This Is a slight increase on the previous score of 94°k which is very positive. This was based on the following key stslements.. I feel happy al work. I'm proud to be a member ofthe Sulets, team. I feel l am supported by my immediate line manager. I can count on my peers when I need support and aSsistsn. We believe that engagement, management support, as well as training and development are a key reason for our Impressive staff engagement score. Whilst many companies (particularly in this seclorl appear to view training and development as a cost, we view this as a benefit that supports staff retention which in tum results in our enviable Trustpilol and Google reviews. We have excellent stsff retention with the average In post across the business of 4.1 years with 3 members of staff having worked for over 10 years In the business. When we do lose stsff. Il is usually as a result of them moving lo a higher role which has been made possible as we have helped develop their career through extensive training and support. This year we also IntrodUd a new staff coaching and mentoring program and we are pleased to announce that some of the team have already signed up to help develop themselves and further their career. Finally, following our annual reappraisal, we are pleased to announce that Sulets has retained ils Investors in People Gold status. IIP has been awarded to over 50,000 business which collectively employ 11 million people across the world. Next year our IIP accreditation is due lo be renewed and an initial review by the IIP assessor has suggested that we may be able to obtsin the highest level, platinum award. Only 3010 of companies achieve this level so we are excited about the reassessment and are hopeful that we will join the top tier of companies in the UK. Marketing Effective marketing remains a key focus of the business given that the nature of student accommodation is that a customer will normally only purchase from you over a 3-year period. This is particularly important in difficult markets. Sulets has continued to invest and optimise marketing campaigns and has enhanced and simplified the customer journey on our website. It remains the highest ranked site for organic search amongst students seeking accommodation in Leicester. Our key links with the Student Unions and the Universities remain crucial lo our success as well as our location in the heart of the DMU campus. This direct access to students on campus and strong partnership links help position Sulels as the 'go lo, student accommodation provider in the city. During the year, there were over 119,000 users to the site which is a subslanlial number for an operation based in a single city. The total number of visits was down 1.80/0 YOY. This does not however reflect the markelpla and sales figures which are ahead YOY. Viewing requests from the website for the 23124 letting season are currently ahead by 229 rooms comparing to the same period last year suggesting that even though the slight fall in traffic, we are now acquiring more valuable & engaged users lo the site who are more likely to convert and submit a viewing request or book a room. Page 7
STUDENT UNION LETTINGS LIMITED IA company limited by guarantee) TRUSTEES. REPORT {CONTINUED) FOR THE YEAR ENDED 30 JUNE 2023 Icontinuedl From an organic search perspective, for the key term 'student accommodation Leicesler,, we consislenlly rank in the lop three results in both organic search results and local map results. We also rank consislenuy in the top 3 results for the relevant keywords with the highest search volumes. The effective review collection on both Google & Truslpilot with now over 560 reviews al 4.5 star ratings help support our search presen and promote the brand as a trustworthy provider. These consistent results mean that we rank higher than all local competitors as well as outranking the major national operators In local organic results. Governance Currently there are 10 members who make up the board of Sulets. The board is chaired by an external Trustee. Upon joining the board, new trustees are given a comprehensive induction which includes meeting the 51aff and senior team, the chance to view a selection of Sulels properties and advice from our solicitors on Board responsibilities and legal requirements. This year, there were no new additions to the board membership, The Board met on 4 occasions to discuss regular board related business. In addition. one meeting was to discuss strategic planning as well as 8 separate strategic away day. Two of the meetings were in person with the remainder online. There was a maximum number of 6 allendances possible throughout the year. Board attendance is as follows.. Name Maxlmum number of attendances Actual number of attendances Paul Groves Debbie Muddimer Richard Osborn Hoor Pathan Gareth Oughton 5 (resigned from Board) Sarah Bradley Marti n Chuter Marbn Miller Ceri Davie5 Gemma Lomas Page 8
STUDENT UNION LETTINGS LIMITED IA company limited by guarantee) TRUSTEES. REPORT {CONTINUED) FOR THE YEAR ENDED 30 JUNE 2023 Icontinuedl This year we said goodbye to Garelh Oughton as he left his position of CEO at University of Leicester Sludenl Union. We wish him success in his future career and thank him for his support. LOOKING AHEAD Changes to the market and the Renter Reform 8111 There has been a significant amount of new legislation, regulations and tsx changes over the last few years as well as an increasingly hostile environment towards landlords. Whilst there is some very poor accommodation and landlords, there is also plenty of good accommodation and investors that want to make a dent return by offering a reasonable service. There have been multiple tsx changes, an increase in licensing schemes, Article 4 planning restrictions and most recenuy, the Government has annoUnd the Renter Reform Bill. This proposed new bill will be the biggest change in the residential accommodation market in 35 years. Amongst the major headline changes, the new bill will remove S21 possession grounds, remove fixed term agreements and allow tenants to give 2 months, notice at any point. The student HMO market will be very badly affected and there is considerable resistsnce from some of the larger operators. Virtually all the legislation and licensing changes have been aimed at the HMO market and there is a clear perception that the Government wants a much smaller residential letting market and far more, large scale operators. Anecdotally, we have seen a steady stream of landlords in Leicester exiting the market and selling up. Noticeably, PBSA and University accommodation will be exempted from the proposed changes and as such, will still be able to offer fixed term tenancies with no break clause. This will further reinfor a 0-ller market for student accommodation However, we believe that Sulets will be in a very good position irrespective of whatever legislative changes do occur and we remain positive about the future. Sulets plans For over 10 years, Sulels has been a successful not for profil operator serving the students of Leicester. We are proud of how the charity has developed and the positive impact we have had on student housing in the city and we feel that we have made a demonstrable improvement to the student housing experience via our code of standards and ethical business practices. Whilst we believe there is still growth to be achieved in Leicester, we are mindful of the impending change in one of our major lettings contracts and the changes that are proposed in the Renters Reform Bill. Sulets is developing a 5-year plan with an aim lo expand the operation outside of Leicester and look at ways we can help others develop an ethical, values led operation either via training from Sulets or in collaboration. The Board's ambition is for Sulels to continue to be a success and to expand ils offering to pursue growth opportunities. Page 9
STUDENT UNION LETTINGS LIMITED IA company limited by guarantee) TRUSTEES. REPORT {CONTINUED) FOR THE YEAR ENDED 30 JUNE 2023 FINANCIAL REVIEW Reserves Policy The general reserve policy as detailed below is lo cover trading activity and to cover redundancy costs in the event that we needed to wind the business down. The Board have reviewed the risks lo the business and decided Sulets should hold 4 months operating costs plus the cost of redundancy payments for staff as a general operating reserve. Where there are insufficient sums lo cover this amount, Sulels will detail Il's plans lo reach this base level of reserves in the shortest possible lime. Where funds are held in excess of this, The amount will be separately held to build an investment fund which Is being developed to support Sulels long term goals which are being developed in ils forthcoming 2023- 2026 strategic plan. All free cash sums in eX$S of the operating reserves are held In short-temi Interesl-bearing bank accounts to provide an additional return to the operation. The reserves policy covers.. 4 months operating costs + an additional fund lo cover redundancy costs for all staff Igeneral reservel + a designated fund for investment. Operating costs being defined as payroll costs plus direct purchases. Redundancy costs being the slatulory level for all staff employed. Our designated reserves policy sum is.. £261,045 Our current level of reserves is.. £1,337,373 Going Concern After making appropriate enquiries, the trustees have a reasonable expectation that the company has adequate resources lo continue in operational existence for the foreseeable future. For this reason, they continue to adopt the going concern basis in preparing the financial statements. Further details regarding the adoption of the going COnM basis can be found In the Accounting Policies. MATERIAL INVESTMENTS POLICY Sulets has purchased Ils second propety during the current financial year and al the time of writing this report, Is progressing the purchase of a third property. The Trustee Board have adopted an Investment policy lo ensure that our investment fund is used to further the aims of the charity by purchasing additional student properties for rent. Page 10
STUDENT UNION LETTINGS LIMITED IA company limited by guarantee) TRUSTEES. REPORT {CONTINUED) FOR THE YEAR ENDED 30 JUNE 2023 RISK MANAGEMENT The Trustees have assessed the major risks to which the company Is exposed, in particular those related lo the operations and finances of the company and are satisfied that systems and procedures are in place to mitigate our exposure lo the major risks. A risk register has been established and it Is formally reviewed once every 12 months by the Trustee Board. The sk register was last reviewed and updated by the Board in June 2023. The principal risks and uncertainties we face are considered regularfy and in line with good governance. We consider that the top two risks that the charity faces are.. Lettings risk. A significant decline on lettings could Impact the charity. Renters Reform Bill. Proposed changes lo the legislative landscape could have a considerable impact on the student PRS. The Board has considered these risks and has a range of mitigabng strategies and controls in place which are reviewed and tested on a regular basis STAFF REMUNERATION The CEO'S role is reviewed by a Remuneration Committee. This committee was established In October 2016 10 set the pay and conditions of the CEO. The Committee reports to the Trustee Board on an annual basis and this Information is used lo set the terms and conditions of the post. The CEO and the entire staff team at Sulels were subject lo an external pay review which re-evaluated the roles against the sector to ensure we remain Competitive. This was conducted by Hays in 2020. All stsff also benefit from a cost of living pay rise that is approved by the Board during the annual budget meeting in June. Page11
STUDENT UNION LETTINGS LIMITED IA company limited by guarantee) TRUSTEES. REPORT {CONTINUED) FOR THE YEAR ENDED 30 JUNE 2023 ststement of Trustees. responsibilities The Trustees (who are also the directors of the Company for the purposes of company lawl are responsible for preparing the Trustees. report and the financial statements In accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounb"ng Practice). Company law requires the Trustees to prepare financial statements for each financial . Under company law, the Trustees must not approve the financial statements unless they are satisfied that they give a true and fair view of the stale of affairs of the Company and of ils incoming resources and application of resources, Including Ils Income and expenditure, for that period. In preparing these financial stslemenls, the Trustees are required to.. select suitable accounting policies and then apply them consistently., observe the methods and principle5 of the Charities SORP IFRS 1021 make judgements and accounting estimates that are reasonable and prudent., state whether applicable UK Accounting Standards IFRS 1021 have been foll()wed, subject to any materi81 departures disclosed and explained in the financial statements", prepare the financial ststements on the going concern basis unless it is inappropriate to presume that the Company will continue in business. The Trustees are responsible for keeping adequate accounting records that are sufficient lo show and explain the Company's transactions and disclose with reasonable accuracy al any time the financial position of the Company and enable them lo ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. The Trustees are responsible for the maintenance and integrity of the corporate and financial information included on the charitable company's website. Legislation in the United Kingdom goveming the preparation and disseminab'on of financial ststemenls may differ from legislation in other jurisdictions. Dlsclosure of Infomiatlon to audltor The Trustees al the time when this Trustees, report is approved has confirmed that.. so far as that Trustee is aware, there is no relevant audit information of which the charitable company's auditor is unaware, and that Trustees have taken all the steps that ought lo have been taken as Trustees in order lo be aware of any information needed by the charitable company's auditors in connection with preparing their report and lo establish that the charitable company's auditors are aware of that information. Auditor The auditors, Crowe U.K. LLP, have indicated their willingness to continue in offi. In preparing this report, the Trustees have taken advantage of the small companies exemptions provided by section 415A of the Companies Act 2006. Approved by order of the members of the board of Trustees on Oct 23, 2023 and signed on their behalf by.. Dr Paul Groves Chair Page 12
STUDENT UNION LETTINGS LIMITED IA company limited by guarantee) INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF STUDENT UNION LETTINGS LIMITED Oplnlon We have audited the financial statements of Student Union Lettings Limited (the 'charitable company'l for the year ended 30 June 2023 which comprise the Statement of financial activities, the Balance sheet, the Statement of cash flows and the related notes, 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 Practi1. In our opinion the financial statements.. give a true and fair view of the state of the charitable company's affairs as at 30 June 2023 and of its incoming resources and application of resources, including its income and expenditure for the year then ended., have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice., and have been prepared in accordance with the requirements of the Companies Act 2006. Basis for opinion We conducted our audit in accordance with International Standards on Auditing IUKI IISAS IUKII and applicable law. Our responsibilities under those standards are further described in the Audilorfs responsibilities for the audit of the financial statements section of our report. We are independent of the charitable company in accordan with the ethical requirements that are relevant lo our audit of the financial statements in the United Kingdom, including the Financial Reporting Council's Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit eviden we have obtained is sufficient and appropriate lo provide a basis for our opinion. Conclusions relating to going concern In auditing the financial slatemenls, we have concluded that the Trustees. use of the going conrn 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 signilicanl doubt on the charitable company's ability to continue as a going conrn for a period of at least e1ve months from when the financial statements are aulhorised for issue. Our responsibilities and the responsibilities of the Trustees with respect to going concern are described in the relevant sections of this report. Page 13
STUDENT UNION LETTINGS LIMITED IA company limited by guarantee) INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF STUDENT UNION LETTINGS LIMITED ICONTINUEDI Other Informatlon The other information comprises the information included in the Annual report other than the financial statements and our Audilovs report Ihereon. The Trustees are responsible for the other information contained within the Annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise expliciuy staled in our report, we do not express any form of assurance conclusion Ihereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears lo be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have perfomied, 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. Oplnlon on other matters prescrlbed by the Companles Act 2006 In our opinion, based on the work undertaken in the course of the audit.. the information given in the Trustees, report for the financial year for which the financial statements are prepared is consistent with the financial ststements. the Trustees, report has been prepared in accordan with applicable legal requirements. Matters on whlch we are requlred to report by exceptlon In the light of our knowledge and understanding of the charitable company and its environment obtained in the course of the audit, we have not identified material misstatements in the Trustees, report. We have nothing to report in respect of the following matters in relation lo which Companies Act 2006 requires us to report to you if, in our opinion". adequate accounting records have not been kept, or returns adequate for our audit have not been ceived from branches not visited by us", or the financial statements are not in agreement with the accounting records and returns,. or certain disclosures of Trustees, remuneration specified by law are not made., or we have not received all the information and explanations we require for our audit., or the Trustees were not entitled lo prepare the financial statements in accordance with the small companies regime and take advantage of the small companies, exemptions in preparing the Trustees, report and from the requirement to prepare a Strategic report. Page 14
STUDENT UNION LETTINGS LIMITED IA company limited by guarantee) INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF STUDENT UNION LETTINGS LIMITED ICONTINUEDI Responslbllltles of trustees As explained more fully in the Trustees, responsibilities statement, the Trustees (who are also the directors of the charitable company for the purposes of company lawl are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the Trustees determine is necessary lo enable the preparation of financial statements that are free from material misstatement, whether due lo fraud or error. In preparing the financial statements, the Trustees are responsible for assessing the charitable company's ability lo continue as a going COnrn, disclosing, as applicable, matters related to going concern and using the going cOnM basis of accounting unless the Trustees either intend lo liquidate the charitable company or to cease operations, or have no realistic alternative but lo do so. Audltorfs responslbllltles for the audlt of the flnanclal statements Our objectives are lo obtain reasonable assuran about whether the financial statements as a whole are free from material misstalemenl, whether due to fraud or error. and to issue an Auditorfs report that includes our opinion. Reasonable assurance is a high level of assuran, but is not a guarantee that an audit conducted in accordance with ISAS IUKI will aayS detect a material misstatement when il exists. Misstalemenls can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected lo influence the economic decisions of users taken on the basis of these financial ststemenls. Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design prOdureS in line with our responsibilities, outlined above, lo delect material misstatements in respect of irregularities, including fraud. The exlenl to which our procedures are capable of detecting irregularities, including fraud is detailed below.. We obtained an understsnding of the legal and regulatory frameworks within which the charitable company operates, focusing on those laws and regulations that have a direct effect on the determination of material amounts and disclosures in the financial ststements. The laws and regulations we considered in this context were the Companies Act 2006, Charities Act 2011 together with the Charities SORP IFRS 1021. We assessed the required compliance with these laws and regulations as part of our audit procedures on the related financial stslement items. In addition, we considered provisions of other laws and regulations that do not have a direct effect on the financial statements bul compliance with which might be fundamental to the charitable company's ability to operate or to avoid a material penalty. We also considered the opportunities and incentives that may exist within the charitable company for fraud. The key laws and regulations we considered in this context were General Data Protection Regulation, health and safety legislation and employee legislation. Auditing standards limit the required audit procedures to identify non-compliance with these laws and regulations lo enquiry of the Trustees and other management and inspection of regulatory and legal correspondence, if any. We identified the greatest risk of material impact on the fi'nancial statements from irregularities, including fraud, lo be within the timing and completeness of income recognition and the override of controls by management. Our audit procedures to respond lo these risks included enquiries of management and those charged with governance about their own identification and assessment of the risks of irregularities, sample lesling on the posting of journals, sample testing on income recognition, reviewing accounting eslimales for biases, reviewing regulatory Corresponden with the Charity Commission, and reading Minutes of meetings of those charged with governance. Page 15
STUDENT UNION LETTINGS LIMITED IA company limited by guarantee) INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF STUDENT UNION LETTINGS LIMITED ICONTINUEDI Owing to the inherent limitations of an audit, there is an unavoidable risk that we may not have detected some material misstatements in the financial slatemenls, even though we have properly planned and performed our audit in accordance with auditing standards. For example, the further removed non-compliance with laws and regulations lirregularitiesl is from the events and transactions reflected in the financial statements, the less likely the inherendy limited prOdureS required by auditing stsndards would identify it. In addition, as with any audit, there remained a higher risk of non-detection of irregularities, as these may involve collusion, foryery, intentional omissions, misrepresentations, or the override of internal controls. We are not responsible for preventing non- compliance and cannot be expected to delect non-compliance with all laws and regulations. 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.or .uklauditorsres onsibililies. This description forms part of our Auditor's report. Use of our report This report is made solely to the charitable company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might slate to the charitsble company's members those matters we are required to slate lo them in an Audilo¢s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility lo anyone other than the charitsble company and ils members, as a body, for our audit work, for this report, or for the opinions we have formed. Helen Blundell FCA FCIE DChA {Senlor statutory audltor) for and on behalf of Crowe U.K. LLP Statutory Auditor Black Country House Rounds Green Road Oldbury West Midlands B69 2DG Dale.. 7 November 2023 Page 16
STUDENT UNION LETTINGS LIMITED IA company limited by guarantee) STATEMENT OF FINANCIAL ACTIVITIES (INCORPORATING INCOME AND EXPENDITURE ACCOUNT) FOR THE YEAR ENDED 30 JUNE 2023 Unrestricted funds 2023 Total funds 2023 Total funds 2022 Note Income from: Donations and grants Charitsble activities Other income 1,780 1,446,279 11,433 1,444,607 40,982 1,444,607 40,982 Total income 1.485,589 1.485,589 7,459,492 Expenditure on: Charitsble activities 1,306,033 1,306,033 1,328,056 Total expenditure 1,306,033 1,306,033 1,328,056 Net movement In funds 179,556 179,556 131,436 Reconclllatlon of funds: Tot81 funds brought forward Nel movement in funds 1,641,341 179.556 1,641,341 179.556 1,509,905 131,436 Total funds carrled forward 1,820,897 1,820,897 1,641,341 The notes on pages 20 to 33 form part of these financial statements. Page 17
STUDENT UNION LETTINGS LIMITED IA company limited by guarantee) REGISTERED NUMBER: 08140750 BALANCE SHEET AS AT 30 JUNE 2023 2023 2022 Note Fixed assets Intangible assets Tangible assets Investment property 12 13 14 2,384 3,991 477,149 7,584 8,475 249,245 483,524 285,304 Current assets Debtors Cash al bank and in hand 15 19,728 1,407,318 7,529 1,484,413 1.427.046 1,491,942 Creditors." amounts falling due within one year 16 189,673) (115,905) Net current assets 1,337,373 1,376,037 Total net assets 1.820,897 7,641,341 Charity fund$ Unrestricted funds 17 1.820.897 7,641,341 Total funds 1.820,897 1,641,341 The Trustees acknowledge their responsibilities for complying with the requirements of the Act with respect to accounting records and preparation of financial statements. The financial statements have been prepared in accordance with the provisions applicable to entities subject to the small companies regime. The financial statements were approved and authorised for issue by the Trustees and signed on their behalf by.. Dr Paul Groves Dale. Oct 23. 2023 The notes on pages 20 to 33 form part of these financial statements. Page 18
STUDENT UNION LETTINGS LIMITED IA company limited by guarantee) STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 30 JUNE 2023 2023 2022 Note Cash flows from operating activities Nel cash used in operating activities 18 150.809 90,678 Purchase of tangible fixed assets Purchase of investment propety (794) (249,245) 1227.904} Net cash used in investing activities 1227,904} {250,0391 Change in cash and cash equivalents in the year Cash and cash equivalents at the beginning of the year 177,095) {159,3611 1.484.413 1,643, 774 Cash and cash equlvalents at the end ofthe year 19 1,407,318 1,484,413 The notes on pages 20 to 33 form part of these financial statements Page 19
STUDENT UNION LETTINGS LIMITED IA company limited by guarantee) NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2023 General Infomiatlon The charitable company is incorporated and registered with the Charity Commission in England and Wales, registered number 1149922. The company registration number is 08140750. The principal Offi is First Floor Campus Centre Building, Mill Lane, Leicesler, Leicestershire, LE2 7DR. The company is limited by guarantee. The members of the company are De Montfort University Students, Union Limited and University of Leister Students, Union Trading Limited. In the event of the company being wound up, the liability in respect of the guarantee is limited to £1 per member of the company. Sulets principal activity is the provision of accommodation for students based at De Montfort University and the University of LeISter. Accountlng pollcles 2.1 Basis of preparation of financial statements The financial slalements have been prepared in accordan with the Charities SORP IFRS 1021 Accounting and Reporting by Charities.. Slalement of Recommended Practice applicable lo charities preparing their accounts In accordance with the Financial Reporting Standard applicable in the UK and Republic of Ireland IFRS 1021 leffeclive 1 January 20191, the Financial Reporting Standard applicable in the UK and Republic of Ireland IFRS 1021 and the Companies Act 2006. Sludenl Union Lellings Limited meets the definition of a public benefit entity under FRS 102. Assets and liabilities are initially recognised at historical cost or transaction value unless otherwise slated in the relevant accounting policy. 2.2 Going concern As slated In the Trustee's Report, the Trustees believe there are no material uncertainties that call into doubl the charitable companls ability to continue as a going concern and the accounts have therefore been prepared on the basis that the charitable company is a going concern. 2.3 Fund accounting General fvnds are unreslricled fvjnds which are available for use at the discretion of the Trustees in furtherance of the general objectives of the Company and which have not been designated for other purposes. 2.4 Income All income is recognised once the Company has enlillemenl lo the income, il is probable that the income will be received and the amount of income receivable can be measured reliably. Grants are included in the Statement of financial activities on a receivable basis. The balance of income reiVed for specific purposes bul not expended during the period is shown in the relevant funds on the Balan sheet. Where income is reiVed in advan of entitlement of receipt, ils recognition is deferred and included in creditors as deferred income. Where entitlement occurs before income is reived, the income is accrued. Other income is recognised in the period in which il is receivable and to the extent the goods have been provided or on completion of the servi. Page 20
STUDENT UNION LETTINGS LIMITED IA company limited by guarantee) NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2023 Accountlng pollcles Icontlnuedl 2.5 Expenditure Expenditure is recognised once there is a legal or constructive obligation to transfer economic benefit to a third paty, it is probable that a transfer of economic benefits will be required in settlement and the amount of the obligation can be measured reliably. Expenditure is classified by aclivily. The costs of each activity are made up of the total of direct costs and shared costs, including support costs involved in undertaking each activity. Direct costs attributable lo a single activity are allocated directly to that aclivily. Shared costs which contribute to more than one activity and support costs which are not attributable lo a single activity are apportioned between those activities on a basis consistent with the use of resources. Central staff costs are allocated on the basis of time spent, and depreciation charges allocated on the portion of the asset's use. Support costs are those costs incurred directly in support of expenditure on the objects of the company and include project management carried out at Headquarters. Governance costs are those incurred in connection with administration of the company and compliance with constitutional and ststulory requirements. Expenditure on charitsble activities is incurred on direcuy undertaking the activities which further the Company's objectives, as well as any associated support costs. 2.6 Intanglble assets and amortlsatlon Intangible assets relate lo website development costs and computer SOare, which are capitalised and recognised when future economic benefits are probable and the cost or value of the asset can be measured reliably. Intangible assets are initially recognised al cost and are subsequently measured al cost net of amortisalion and any provision for impaimient. Amortisalion is provided on intangible assets at rates calculated to write off the cost of each asset on a straight-line basis over its expected useful life. Amortisalion is provided on the following bases.. Website Computer SOare 33010 straight line 250/0 straight line 2.7 Tangible fixed assets and depreciation Tangible fixed assets costing £2,000 or more are capitalised and recognised when future economic benefits are probable and the cost or value of the asset can be measured reliably. Tangible fixed assets are initially recognised at cost. After recognition, under the cost model, tangible fixed assets are measured al cost less accumulated depreciation and any accumulated impairment losses. All costs incurred lo bring a tsngible fixed asset into its intended working condition should be included in the measurement of cost. Page 21
STUDENT UNION LETTINGS LIMITED IA company limited by guarantee) NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2023 Accountlng pollcles Icontlnuedl 2.7 Tangible fixed assets and depreciation Icontinuedl Depreciation is charged so as to allocate the cost of tangible fixed assets less their residual value over their estimated useful lives, using the straighl-line method. Depreciation is provided on the following bases.. Fixtures and fittings Computer equipment 250/0 straight line 250/0 straight line 2.8 Investment property Investment property is carried at fair value determined annually by management and external valuers as necessary and derived from the current market rents and investment property yields for comparable real estate, adjusted if necessary for any difference in the nature, location or condition of the specific asset. Changes in fair value are recognised in the Statement of Financial Aclivilies. All investment propety is let for students. 2.9 Flnanclal Instruments The company only enters into basic financial instruments that result in the recognition of financial assets and liabilities such as trade and other debtors and creditors. Debtors Short temi debtors are measured al transaction price, less any impairment. Creditors Short temi creditors are measured at the transaction price. Other financial liabilities are measured initially at fair value, net of transaction costs, and are measured subsequently al amortised cost using the effective interest method. 2.10 Penslons The Company operates a defined contribution pension scheme and the pension charge represents the amounts payable by the Company lo the fund in respect of the year. Crltlcal accountlng estlmates and areas of judgement Preparation of the financial ststemenls requires management to make significant judgments and estimates. The items in the financial ststements where these judgements and estimates have been made include the following.. Critical accounting estimates and assumptions.. Investment property valuation The investment propety is revalued annually to the estimated open market value as at the year-end. Page 22
STUDENT UNION LETTINGS LIMITED IA company limited by guarantee) NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2023 Income from donatlons and grants Unrestricted funds 2023 Total funds 2023 Total funds 2022 Government grants 1,780 Total 2022 1,780 1, 780 In prior years the Company w8s eligible to claim additional funding from the fudough support scheme provided by the government. Income from Charitable activities Unrestrieted funds 2023 Total funds 2023 Total funds 2022 Commissions receivable Rentals receivable 650,219 794,388 650.219 794.388 581,375 864,904 1,444,607 1,444,607 7,446,279 Total 2022 1,446,279 1,446,279 Other incoming resources Unrestricted funds 2023 Total funds 2023 Total funds 2022 Other income 40,982 40,982 11,433 Total 2022 11.433 11,433 Page 23
STUDENT UNION LETTINGS LIMITED IA company limited by guarantee) NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2023 Analysls of expendlture on charltable actlvltles Summary by fund type Unrestrlcted funds 2023 Total 2023 Total 2022 Rental and commissions 1,306,033 1,306,033 1,328,056 Total 2022 1,328,056 1,328,056 Summary by expendituro type Stsff costs Depreciation Othgr costs 2023 2023 2023 Totsl 2023 Total 2022 Rental and commissions 427,346 9,684 869,003 1.306.033 1,328,056 Total 2022 403,570 11,864 972,622 1,328,056 Anatysls of expendlture by actlvltles Actlvltles undertaken directly 2023 Support costs 2023 Total funds 2023 Total funds 2022 Rental and commissions 1,117,906 188,127 1,306,033 1,328,056 Total 2022 1, 154, 781 173,275 1,328,056 Analysis of direct costs Page 24
STUDENT UNION LETTINGS LIMITED IA company limited by guarantee) NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2023 Analysls of expendlture by actlvltles Icontlnuedl Analysls of dlrect costs {contlnued} Total funds 2023 Total funds 2022 Staff costs 427,346 690.560 403,570 751,211 Letting costs 1,117,906 1, 154, 781 Anatysis of support costs Total funds 2023 Total funds 2022 Depreciation and amortisation Rent Printing, postage and stationery Travel Advertising and marketing Legal and professional Software subscription Repairs and renewals Bank charges Credit card charges Sundry expenses Finance, Human Resources and Marketing Governance costs 9.684 20.000 316 71,864 20,000 1,194 1,004 31,491 12,760 29,887 10,617 3,869 11,816 12,677 20,000 6,096 1,974 36.600 10.457 36,732 12,513 6.272 144 18,892 23,633 10.910 188,127 173,275 Auditorfs remuneration The auditor's remuneration amounts to an auditor fee of £12,000 (2022- £6,050J, and other servi$ amounting to of £50012022- £6501. Page 25
STUDENT UNION LETTINGS LIMITED IA company limited by guarantee) NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2023 10. Staff costs 2023 2022 Wages and salaries Social security costs Contribution lo defined contribution pension schemes 379.562 32,396 15,388 358,378 30,484 14,708 427.346 403,570 The average number of persons employed by the Company during the year was as follows.. 2023 No. 2022 No. Administration 12 12 The number of employees whose employee benefits (excluding employer pension costs) exceeded £60,000 was.. 2023 2022 In the band £90,001- £100,000 Key management personnel are considered lo be anyone who has authority and responsibility for planning, directing and controlling the activities of the company. During the year, key management personnel received remuneration of £106,51012022.' £105,304), including employers. National Insuran and employers. pension contributions. 11. Trustees. remuneration and expenses During the year, no Trustees reiVed any remuneration or other benefits (2022- £NIL). During the year ended 30 June 2023, no Trustee expenses have been incurred (2022 - £NIL). Page 26
STUDENT UNION LETTINGS LIMITED IA company limited by guarantee) NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2023 12. Intanglble assets Webslte and software Cost At 1 July 2022 39,268 At 30 June 2023 39,268 Amortisation At 1 July 2022 Charge for the year 31,684 5,200 At 30 June 2023 36,884 Net book value At 30 June 2023 2,384 At 30 June 2022 7,584 Page 27
STUDENT UNION LETTINGS LIMITED IA company limited by guarantee) NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2023 13. Tanglble flxed assets Fixtures and fittings Cost or valuation At 1 July 2022 32.917 At 30 June 2023 32.917 Depreciation At 1 July 2022 Charge for the year 24,442 4,484 At 30 June 2023 28.926 Net book value At 30 June 2023 3,991 At 30 June 2022 8,475 Page 28
STUDENT UNION LETTINGS LIMITED IA company limited by guarantee) NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2023 14. Investment property Freehold investment property Valuation At 1 July 2022 Additions 249,245 227,904 At 30 June 2023 477,149 The investment property held at 1 July 2022 was purchased in October 2021 and valued at cost. On 29 September 2022, an investment property was purchased for a total cost, including legal and other associated acquisition costs of £202,500. The valuation of the properties at the year-end was deemed to be in line with it's purchase price plus improvements made in the year. Page 29
STUDENT UNION LETTINGS LIMITED IA company limited by guarantee) NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2023 15. Debtors 2023 2022 Trade debtors Prepayments and accrued income 16,306 3,422 2,531 4,998 19.728 7,529 16. Creditors: Amounts falling due within one year 2023 2022 Trade creditors other laxalion and social security Other creditors Awruals and deferred income 7.017 27.875 1,763 53,018 5,281 25,045 85,579 89.673 115,905 2023 2022 Deferred income Deferred income at 1 July 2022 Resour5 deferred during the year Amounts released from previous periods 29.027 28.777 {29,027) 19,756 29,02T (19, 756) 28,777 29,027 Deferred income represents rent and associated income received in advance. The Company holds funds as intermediary on behalf of landlords and tenants. These amount to £175,871 12022.. £232, 5051 al the year end dale and are not included as assets or liabilities of the Company in line with the SORP recommended treatment. Page 30
STUDENT UNION LETTINGS LIMITED IA company limited by guarantee) NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2023 17. Statement of funds Statement of funds - current year Balance at 30 June 2023 Balance at 1 July 2022 Income Expendlture Unrestricted funds General Funds 1,641,341 1,485,589 11,306,033) 1,820,897 statomont of funds - prior year Balan at 30 June 2022 Salance al l July 2021 Income Expenditu Unrestrlcted funds General Funds 1,509,905 1,459,492 (1,328,056) 1,641,341 18. Reconclllatlon of net movement In funds to net cash flow from operatlng actlvltles 2023 2022 Nel income for the year las per Statement of Financial Acliviliesl 179.556 131,436 Adjustments for: Depreciation charge$ Amortisation charges Decreasellincreasel in debtors Decrease in creditors 4,484 5.200 {12,199} 126,232) 6,664 5,200 3,597 (56,219) Net cash provided by operating activities 150,809 90,678 Page 31
STUDENT UNION LETTINGS LIMITED IA company limited by guarantee) NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2023 19. Analysls of Cash and cash equlvalents 2023 2022 Cash in hand 1.407.318 1,484,413 20. Analysis of changes in net debt At 1 July 2022 Cash flows At 30 June 2023 Cash al bank and in hand 1.484.413 {77.095} 1.407.318 1,484,413 177,095) 1,407,318 21. Capitsl commitments 2023 2022 Contracted for but not provided in these financial statements Repairs, maintenance or enhancements to investment property 3,976 22. Pension commitments The company operates a defined contribution pension scheme. The assets of the scheme are held separately from those of the company in an Independently administered fund. Contributions totalling £1,763 were payable to the scheme at the balance sheet date12022.' £ni4. Page 32
STUDENT UNION LETTINGS LIMITED IA company limited by guarantee) NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2023 23. Operatlng lease commltments At 30 June 2023 the Company had commitments lo make future minimum lease payments under non- CanlIable operating leases as follows.. 2023 2022 Not later than 1 year 512.477 497,045 During the year lease payments have been recognised as an expense in the Statement of financial activities for £498,22112022.' £574,054). The properties above are sub-let to students. At 30 June 2021 the total of the Company's future minimum lease receipts under nOn-CanlIable operating leases were.. 2023 2022 Within 1 year 644.968 T28,1 24. Related party transactlons The Company has rented office space from De Montfort Students Union during the year at a cost of £20,00012022. £20,0001 The Company also paid £10,00012022. £10, 0001 in advertising lo De Montfort Students Union. Al the year end £Nil12022.' £Ni4 remained outstanding. The Company also paid £13,63312022.' £10,000) for advertising expenses to The University of Leicester Students, Union. At the year end £Nil12022.' £Ni4 remained outstanding. Page 33