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2022-09-30-accounts

(Consolidated Accounts)

(Limited by Guarantee)

Report and Financial Statements for the Year Ended 30 September 2022

Hyelm is a company limited by guarantee, registration No. 00244598, and is registered with the Regulator of Social Housing No. HO312. Hyelm is charitable and is registered with the Charity Commission No. 215575.

HYELM

Report and Financial Statements for the year ended 30 September 2022

Contents

Contents
Page
Members, Senior Staff, Advisors and Bankers 1
Report of the Board 2
Independent Auditor’s Report 14
Statement of Comprehensive Income 18
Statement of Changes in Reserves 19
Statement of Financial Position 20
Statement of Consolidated Cash Flows 21
Notes to the Financial Statements 22

HYELM Report and Financial Statements for the year ended 30 September 2022

Members, Senior Staff, Advisors and Bankers

Board
Chair Vanessa James
Vice Chair Helen Taylor to 19thJune 2022
Ruth Goldfeather from 20thJune 2022
Ordinary Members Graham Briscoe to 7thMay 2022
Joanne Foster
Joel Inbakumar
Rhiannon Meredith
Ruth Goldfeather
Andrew Brainin from 7thMay 2022
Febechi Chukwu from 7thMay 2022
Christopher Forster from 7thMay 2022
Senior Staff
Chief Executive Simon Wright
Director of Finance & Company Secretary Martin Grundy
Auditors Moore Kingston Smith LLP
9 Appold Street
London
EC2A 2AP
Principal Investment Advisors Savills
33 Margaret Street
London
W1G 0JD
Principal Bankers Barclays Bank Allied Irish Bank
28 Hampstead High Street 10 Berkeley Square
Hampstead London W1J 6AA
London NW3 1QB
Registered Office 43-51 New North Road
London
N1 6JB

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HYELM Report and Financial Statements for the year ended 30 September 2022 Report of the Board

Report of the Board

The Board is pleased to present its report and financial statements based on a limited company format and in accordance with accounting requirements by legislation and as set out in the Statement of Recommended Practice ‘Accounting by Registered Social Landlords’ (‘SORP’ – Update 2018).

Review of the Period

The Board reports a surplus of £113,575 for the year to 30 September 2022 (2021: deficit £776,306). The surplus is due to the recovery of monies in relation to the Fire Safety work which is being undertaken to the Old Street building. Without these monies an operating deficit which was slightly higher than budgeted would have been incurred. The shortfall against budget at the operating level was due to lower than anticipated occupancy of the offices rented out to commercial tenants.

The enhanced fire safety measures at the Old Street building have continued to be in place whist arrangements are made for the remediation works to be carried out. The second phase of these works is now underway and the programme of works is likely to last another 3 years until all the works are satisfactorily completed. The cost of the fire safety works and enhanced fire safety measures during the year was £366,270 increasing the total cost incurred to date to £1,638,473.

Towards the end of the financial year the Board agreed that the construction contract for the Colindale site should be terminated. This was a difficult decision for the Board caused largely by the delay in obtaining relief from the Community Infrastructure Relief levied by the London Borough of Barnet. This relief has now been granted but during the delay building costs increased substantially, interest rates increased and our proposed funders withdrew from the project. The combination of these factors made it unviable to continue with the project as planned and consequently the building contract was terminated. The termination of the building contact is still being negotiated but the abortive costs associated with the termination are estimated to be £2,510,398 and these are included in the Statement of Comprehensive Income.

Legal Status

The HYELM Group comprises HYELM, a Company Limited by Guarantee and which does not have share capital, The Ames House Trust, a charity established under Trust Deed, and Arthur West House Limited, a private limited company which is a wholly owned subsidiary of HYELM.

HYELM is a non-profit making concern registered as a Charity and a Registered Provider under the Housing Acts. The Ames House Trust is accounted for as a branch of HYELM due to a uniting direction in place with the Charity Commission.

The consolidated accounts show the financial position of The Group as a whole, and for the Association which includes HYELM and The Ames House Trust.

Principal Activity and Public Benefit

HYELM provides high standards of affordable accommodation, services and facilities in homely environments for London’s key workers, now referred to as priority groups, and for young people on low to moderate incomes who are coming to or are in the capital to work or to study.

The Board confirms that it has referred to the guidance contained in the Charity Commission’s general guidance on public benefit when reviewing Hyelm’s aims and objectives and in formulating plans.

Format of Financial Statements

The Board is pleased to present its report and financial statements based on a limited company format and in accordance with accounting requirements by legislation and as set out in the Statement of Recommended Practice ‘Accounting by Registered Social Landlords’ (‘SORP’ – Update 2018).

Future Plans

In December 2018, the Board adopted a strategic plan – Making a real difference – for the period 20192022. The strategic plan focuses on three key activities:

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HYELM

Report and Financial Statements for the year ended 30 September 2022 Report of the Board

Our Development programme – The Group’s objective is to develop and provide high standards of affordable, rented accommodation, facilities and services for a further 250 young people in two or more new housing schemes in London. The first phase of the development programme was on the Colindale site on which it was planned to provide accommodation for 156 young people. As explained earlier it has been necessary to terminate the construction project on this site and future plans for the site will be considered during 2023.

Our Existing operation – The Group’s objective is to continue to provide high standards of contemporary, affordable rented accommodation at the Old Street Scheme, whilst remaining a financially sound organisation with efficient systems providing effective controls.

Our communities and people – The Group’s objective is to provide positive, stable, safe environments for our housing schemes. During the year we have been working with our residents to involve them in drawing up our plans and in managing our affairs. A number of social events have been organised to further develop a sense of community and have supported residents in securing new accommodation when they feel ready to move on. We have met with all our residents during the year to discuss their individual needs including move on accommodation, maintenance issues, any issues with mould and more recently, the change in our complaints procedure,

Board

The Board has reviewed the recommendations of the National Housing Federations Code of Governance 2020. With the exception that the Board has decided not to establish a separate audit committee and the reporting requirements in relation to equality and diversity the Board complies with the Code. An action plan has been established to strengthen equality and diversity reporting but it is felt that given the size of the organisation, audit issues can be dealt with by the Board and no separate audit committee is required. The Board has also adopted, and is compliant with, the National Housing Federation Code of Conduct issued in 2012. Hyelm is a member of the Federation.

Hyelm has implemented a comprehensive Board and Board members appraisal process and a governance development plan which is reviewed and updated annually.

In accordance with the Articles of Association, the following Board members are required to stand down at the Annual General Meeting:

VALUE FOR MONEY STATEMENT 2022

Introduction

The Value for Money Standard 2018

The 2018 Value For Money Standard published in April 2018 requires that Registered Providers must:

The Standard requires that that Registered Providers must demonstrate:

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HYELM

Report and Financial Statements for the year ended 30 September 2022 Report of the Board

It is also a requirement that Registered Providers must annually publish evidence in the statutory accounts to enable stakeholders to understand the provider’s:

The Hyelm Group is committed to finding ways to provide excellent services whilst at the same time seeking to reduce costs and improve efficiency. To ensure that we can measure efficiency gains and to provide meaningful comparisons with other organisations providing similar services, the Board has adopted the 2018 Value for Money Standard for Registered Providers of Social Housing.

How We Deliver Value For Money

Although The HYELM Group does not provide social housing – the Old Street development provides a mix of accommodation on intermediate and affordable rents for young people on low incomes - the Value For Money standard provides a framework for measuring performance in a consistent manner.

Achieving Value for Money (VFM) is a fundamental element of our objective to become a top quartile performing organisation.

We see VFM as the process of delivering savings and improving quality by simplifying everything that we do and by achieving a balance between costs, quality and results.

This statement outlines our approach to achieving VFM in meeting our objectives with reference to our financial, social and environmental returns, and measures performance using the metrics included within the 2018 Value for Money Standard.

Value For Money is embedded within our business in the following ways:

Governance

Board members’ duties include reviewing the efficiency of our operations and our Value For Money performance as well as ensuring compliance with the regulatory Value For Money standard.

The Board discusses our Value For Money Policy and Statement at least annually and reviews the operational and financial performance of the business quarterly.

Financial Management

We operate a robust budgeting process that sets out the financial parameters within which our organisation is required to work to deliver improvements in the services that we provide to our residents and others who work with us.

The business planning process helps to ensure that our resources and assets are used in the most appropriate ways to deliver our objectives.

Our budget and business plan targets are structured to ensure that effective use is made of our resources each year to strengthen our capacity to develop new homes and enhance our services.

Procurement

We continuously seek to obtain Value For Money from our suppliers and look to rationalise contracts and re-tender when necessary to ensure that the services that we receive from them meet and deliver our business objectives.

Where appropriate, we undertake an options appraisal process to ensure that there is a robust business case for investment/divestment decisions and that returns are optimised.

Managing Performance

We continually review our performance and benchmark ourselves against our peer groups. A key objective of our 2019-2022 Strategic Plan is to achieve top quartile performance for financial strength and quality of services. The Board reviews performance information on a regular basis.

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HYELM Report and Financial Statements for the year ended 30 September 2022 Report of the Board

We have set ourselves the challenge of benchmarking our performance against that of other organisations that provide similar services within the social housing sector and not for profit housing sectors.

Comparative analysis is based on information provided by HouseMark, the BM320 benchmarking group of smaller housing associations in London, Homes England and other publicly available information.

Resident Focus

Improving resident engagement and obtaining regular feedback in relation to our services are key objectives for the life of our Strategic Plan 2019-22.

Following the sale of Arthur West House in 2014 the Resident Panel become less engaged. During 2021/22 we have worked with residents at our Old Street scheme with the aim of engaging them in the management of the scheme.

Our People

Our staff are critical to the organisation for the delivery of services to our residents. Providing training and support to our staff is essential to ensure that we maximise their capability. Salary and benefits packages are reviewed every three years. The review includes a benchmarking exercise to ensure that the salaries and benefits that staff receive are comparable with our peer group. The last review was completed in 2020.

In 2020 as part of our 2019-2022 strategy we reviewed our staffing structure to ensure that the right number of appropriately skilled staff will be in place to manage a growing organisation. The structure will be further reviewed as needs change.

Our Strategic Plan

The Strategic Plan for 2019-2022 focuses on three key activities:

1. Our development programme

Part funded by the sale proceeds of our Hampstead property, we will further develop and expand our accommodation, services and facilities to help meet increasing demand and changing needs.

More specifically, we will

2. Our existing operation

Throughout the delivery of our development programme we will continue to manage our existing operation in an efficient and effective manner.

More specifically we will

3. Our communities and people

We will promote positive stable safe environments in our housing schemes, ensuring that the sense of place and family and the supportive communities that we promote, which are so fundamental to what we do, are kept as we move from old to new.

More specifically we will:

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Report and Financial Statements for the year ended 30 September 2022 Report of the Board

HYELM

During the year we have made substantial progress in achieving the objectives set out in our Strategic plan.

Progress against the objectives within the Strategic Plan

Our development programme

Regarding our development programme, we adopted a strategy in 2013/14 to dispose of one of our existing properties, Arthur West House, with a view of using its capital receipt to develop and manage a further 250 bed-spaces of modern accommodation within Greater London by 2019. The provision of new accommodation is a key objective of the 2019-22 strategy adopted by the Board.

The property, sold on the 10[th] October 2014, generated a receipt of £30.05 million, some £6 million above the maximum forecast sale price. The sale proceeds were apportioned between Hyelm and The Ames House Trust, which had a leasehold interest in Arthur West House. The amount received by Hyelm amounted to £24,115,125, with the balance of £5,934,875 being received by The Ames House Trust.

As we develop our plans for the development programme, a key focus will be ensuring that we deliver a value for money solution and maximise the return on our investment. Whilst the Board recognises that the provision of low cost, but affordable accommodation will not generate a ‘market return’, a number of financial targets have been agreed, which must be achieved before any scheme proceeds ensuring that the scheme is profitable, and the value of the investment is maintained.

In September 2018, we purchased a development site in north London for the provision of 156 bed spaces – good progress towards our target of 250 bed spaces and had started development work on this site. However, delays in obtaining relief from the Community Infrastructure Levy from the London Borough of Barnet meant that this project could not proceed as planned. During the period of the delay construction costs increased significantly, interest rates increased and the proposed funders withdrew from the project and as a consequence the financial targets agreed for the scheme could no longer be met and the construction contract was terminated.

Other options for the development of the Colindale site in partnership with other organisations are under consideration and a decision on the future use of the site to support the HYELM strategic development objectives will be taken during 2023.

During the year the Board has also commissioned a feasibility study into increasing the number of units on the Old Street site. The results of the feasibility study are not yet available but early indications are that there is scope to construct another 26 bed spaces.

Our ongoing operations

Our Old Street scheme is now thirteen years old. It was built to comply with, the then, Eco Homes standards and achieved a Very Good rating in this regard.

During the course of the financial years 2022/23 to 2024/25, we will be carrying out major works at our Old Street scheme to remedy fire safety issues that were identified following investigations carried out following the Grenfell tragedy in June 2017. In addition to fire safety issues, a number of additional defects were identified dating back to the construction of the building, and these defects will be remedied concurrently with the fire safety issues. The costs if this work will be met, at least in part, by monies received from our insurers and the original contractor.

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HYELM Report and Financial Statements for the year ended 30 September 2022 Report of the Board

To ensure best value for money, competitive tenders were sought, and value tested. The works will be undertaken over a three-year period to minimise disruption to our residents and the loss of rent income.

Following the completion of the remedial works our forward plans for our Old Street scheme include provision for the regular maintenance and refurbishment of the property to ensure that it continues to provide high standards of affordable accommodation that meet the expectation of our residents.

To ensure that we achieve best value for money from the goods and services that we procure, Standing Orders are in place that require competitive quotations to be sought for low value goods, and for formal tendering procedures to be enacted for more valuable services.

During the year to 30 September 2022 the following goods and services were tendered:

Where possible, we make use of procurement exercises that have been undertaken by other organisations to ensure that best value has been obtained.

Old Street provides accommodation for young people at the beginning of their careers ensuring that they are accommodated in low cost, quality accommodation in a secure environment. Of the units available 74 bed-spaces provide intermediate rent accommodation for priority group workers. The remaining 51 bed spaces are provided for non-priority group workers. The HYELM Group endeavours to provide rented accommodation to tenants which provides value for money when compared with rent charged for comparable properties. To ensure that the rent represents good value for money, the Board has approved a policy of linking all rents to no more than 80% of the market rate.

The use of the space on the ground floor of the building continues to be reviewed. The office accommodation market declined during the Covid pandemic and lettings have not returned to previous levels so much of the accommodation has been vacant during the financial year. To better use the space the management suite is being converted into temporary accommodation units which will be used to decant existing residents for short periods of time during the fire remediation works.

In the longer term this space in addition to the other vacant office space on the ground floor is being included in the feasibility study for providing additional permanent accommodation units within the building. The results of this feasibility study are not yet available but early indications are that it may be possible to construct an additional 26 bedrooms.

The supply of electricity, gas and insurances are retendered annually to ensure best value is obtained, for both Hyelm and our residents.

Implementation of the Government’s Future Homes Standard is designed to improve energy efficiency within buildings to help to reduce energy consumption. We will review the requirements of the Future Homes standard to see what improvements can be made to reduce our energy costs and provide VFM for our residents by reducing their energy service charges costs.

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HYELM Report and Financial Statements for the year ended 30 September 2022 Report of the Board

Our communities and people

As part of our strategy in relation to Our communities and people the revisions to our staffing structure and job profiles has enabled us to:

The table below shows resident satisfaction with the services provided during the financial year 2020/21 and the preceding two years.

Resident Satisfaction Benchmark:
Peer group
median		 Benchmark:
London
upper
quartile		 Benchmark:
HouseMark
upper
quartile		 Hyelm
2019/20 2020/21 2021/22
% of residents satisfied or very
satisfied with our services		 87% 88% 82% 70% 92% 93%
% of residents satisfied or very
satisfied with repairs and
maintenance		 84% 93% 76% 46% 92% 81%
% of residents satisfied or very
satisfied on Value For Money
for rent		 90% 89% 88% 54% 67% 81%

Resident satisfaction has continued to be high throughout the year, and is moving towards levels previously achieved. The main reason for the low levels of satisfaction achieved in 2019/20 is the fire defect safety work that is being completed around the building which has caused some disruption and noise nuisance to residents, a number of whom were spending more time at home due to the Covid-19 outbreak.

We expect satisfaction in our maintenance and refurbishment programme to remain at normal satisfaction levels as the impact of Covid-19 eases but we do expect the fire defect safety work to impact on our overall satisfaction levels until the completion of these works. Over this period we will work with residents to try and address any individual concerns.

The need to carry out remedial works to the Old Street scheme has resulted in a number of apartments being closed to undertake the necessary works. There were some challenges in re-letting apartments due to the Covid pandemic. However, we now have a virtual viewing system and occupancy of those apartments available to rent remains high. Arrears are managed proactively with residents to ensure minimal losses occur. Demand for the accommodation available remains high and re-let times are reducing.

Other Measures Benchmark:
Peer group
median		 HYELM
2019/20		 HYELM
2020/21		 HYELM
2021/22
% of repairs fixed on first visit 98.8% 86% 82% 58%
Average re-let time (days) 31 42.9 41.5 39.04
Current rent arrears 2.11% 1.7% 0.3% 0.4%
% of void losses 1.3% 9.85% 11.68% 10.95%

We have taken comfort from historically low levels of void loss and arrears, which have compared very favourably with those within the sector. The increase in voids between 2019/20 and 2021/22 is a result of the need to provide vacant accommodation for contractors to carry out the fire safety works referred to above and the impact of the Covid pandemic on occupancy levels.

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HYELM

Report and Financial Statements for the year ended 30 September 2022 Report of the Board

Finance

The accounts for the year ending 30 September 2022 have been prepared in accordance with UK Generally Accepted Accounting Practice (UK GAAP) including Financial Reporting Standard 102 (FRS 102) and the Housing SORP 2018: Statement of Recommended Practice for Registered Social Housing Providers.

Following the sale of Arthur West House in October 2018, Hyelm only provides accommodation at its Old Street property. This is a mix of private rented accommodation and grant supported intermediate rent accommodation that is tenanted by priority group workers.

Following the disposal of the Arthur West House site, management costs per unit increased as central costs previously allocated to the property have been retained but are supporting the development programme, which will provide new accommodation on a number of sites.

Reporting against the 2018 Value for Money Standard

The Hyelm Group has adopted the reporting requirements of the 2018 Value for Money Standard.

Metric 1 – Reinvestment

etric 1 – Reinvestment
2018/19 2019/20 2020/21 2021/22
actual actual actual actual
Reinvestment % 3.48% 0.9% 6.32% 10.12%

Following the sale of the Hampstead property, HYELM has only the Old Street scheme in operation. Delays in gaining planning approval and relief from the Community Infrastructure Levy for the Colindale scheme resulted in delays to the building programme, thus investment was less than planned for 2018/19 and 2019/20. Scheme investment increased in 2020/21 and 2021/22 but as reported earlier this progress on this scheme has now been paused.

Metric 2 – Supply

Unlike many large Registered Providers, Hyelm does not have an annual development programme. Our investment in property relates to a specific scheme and therefore the supply metric is not a relevant measure of performance.

Metric 3 – Gearing

etric 3 – Gearing
2019/20 2020/21 2021/22
actual actual actual
Gearing -46.54% -35.45% -40.16%

Hyelm currently has one loan from Allied Irish Bank. Our investment in the new development will funded at least in part by Hyelm’s cash reserves, thus as the value of housing properties increase as the development programme progresses gearing will decrease. On completion of our new developments Hyelm will have additional capacity for borrowing to support the development of additional accommodation and complete our strategic objective of providing further accommodation.

Metric 4 – Earnings before Interest Tax Depreciation and Amortisation – Major Repairs Included

The EBITDA MRI (Earnings before Interest Tax Depreciation and Amortisation – Major Repairs Included) interest cover measure is a key indicator for liquidity and investment capacity. It seeks to measure the level of surplus that a registered provider generates against interest payments (the measure avoids any distortions stemming from the depreciation charge). The need to provide vacant accommodation for the fire safety and remedial works, has led to a reduction in rent income, which coupled with higher management cost and the impact of the Covid pandemic has led to a decrease in the interest cover in the periods 2019/20 and 2020/21. During 2021/22 the level of interest cover has increased significantly and this is due to the recovery of monies for the fire safety works from our insurers and the original building contractor.

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HYELM

Report and Financial Statements for the year ended 30 September 2022 Report of the Board

2018/19 2019/20 2020/21 2021/22
actual actual actual actual
EBITDA MRI 130.88% 112.48% 100.03% 1037.1%

EBITDA to Debt Service Cost

Our facility agreement with AIB requires Hyelm to achieve a ratio of EBIDTA to Debt Service Costs of a minimum of 1:1. The ratio measures our ability to fund the repayment of capital and interest payable on the outstanding loan from current income generated by Hyelm.

During the year to 30 September 2020 this ratio was not achieved as shown in the table below. As with EBITDA MRI above, reduced rent income and the impact of the Covid pandemic in 2019/20 led to reduction in interest cover reducing the indicator marginally below the level required by the facility agreement. As a result, a revised method of calculating the EBITDA ratio has been agreed with AIB until the completion of the Colindale project. The revised method of calculation permits the balance held in the AIB reserve account to be added to the earnings figure when calculating the ratio. Using the revised method of calculation, the EBITDA ratio for the year ended 30 September 2022 is in excess of the bank requirements.


equirements.
2018/19 2019/20 2020/21 2021/22
actual actual actual actual
EBITDA - AIB 1:1.56 1:0.96 1:4.09 1:12.29

Metric 5 – Headline residential housing cost per unit

The unit cost metric assesses the headline social housing cost per unit as defined by the Regulator. Although The Group is not a provider of social housing, the social housing cost per unit is the benchmark against which Hyelm chooses to measure performance.

2018/19 2019/20 2020/21 2021/22
actual actual actual actual
Costs overall £6,824 £7,271
£5,476
£6,834
per week £130.77 £139.44
£110.20
£131.07

The increase in cost from 2018/19 to 2019/20 reflects the increased expenditure associated with the Covid pandemic. In 2020/21 costs were lower due to reduced staffing levels. In 2021/22 staffing levels were increased to the previous norm.

Metric 6 – Operating Margin

The Operating Margin demonstrates the profitability of operating assets before exceptional expenses are taken into account. Increasing margins are one way to improve the financial efficiency of a business. The operating margin for 2021/22 reflects the recovery of monies to fund the fire safety works at Old Street.

2018/19 2019/20 2020/21 2021/22
Operating Margin actual
actual		 actual actual
Overall 9.01% -0.69% 1.95% 69.58%

Metric 7 – Return on Capital Employed (ROCE)

This metric compares operating surplus to total assets less current liabilities and is a measure assess the efficient investment of capital resources. The 2021/22 return figure shown in the table below again reflects the recovery of monies to fund the fire safety works at Old Street.

2018/19 2019/20 2020/21 2021/22
actual actual actual actual
ROCE 0.30% -0.02% 0.06% 0.44%

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HYELM Report and Financial Statements for the year ended 30 September 2022 Report of the Board

Value For Money for 2021/22

HYELM remains in a period of transition and the Value for Money metrics will reflect this until the new developments come on stream and the fire safety works at the Old Street building are completed. During this period the Value for money metrics will be measured against budgets and business plans and future reports will reflect this approach. When the development programme is complete and the remedial works at Old Street are finished, it is our aim to be in the top quartile for both financial and operational performance, and to see our performance improve each year.

We will be undertaking further work over the next year to support our aim of improving value for money for our existing residents by:

Officer's Insurance

The Group has in place indemnity insurance to safeguard voluntary Board members and senior executive staff.

Key Policies and Strategies

Reserves Policy

The majority of reserves are currently held in the revenue reserve.

Designated reserves are also maintained with funds earmarked for the following specific purposes:

The Development fund represents funds available to meet future development expenditure. Each year, investment and similar income less development expenditure incurred, is transferred to the Development fund.

Any surplus income from the provision of non-accommodation activities is returned to the Activities fund.

Treasury Management

Following the sale of Arthur West House, the Treasury Management Policy was reviewed and updated to include the key recommendations of CIPFA’s “Treasury Management in the Public Services: Code of Practice”. (The Code), as described in Section 4 of that Code.

Rent

Increases take into account the income of our residents, charges levied by competing organisations and are in line with guidance from the Homes and Communities Agency.

Statement on Internal Controls Assurance

The Board acknowledges its 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 assurance against material misstatement or loss.

The process for identifying, evaluating and managing the significant risks faced by the company is ongoing and has been in place throughout the period commencing 1 October 2020 up to the date of approval of the report and financial statements.

Key elements of the control framework include:

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HYELM Report and Financial Statements for the year ended 30 September 2022 Report of the Board

A fraud register is maintained and reviewed by the Board on a regular basis. During the year no frauds were reported.

The Board has received the Chief Executive’s annual review of the effectiveness of the system of internal controls which are designed to provide reasonable, not absolute, assurance. The Board has also received the annual report of the internal auditor which reported that no significant control issues had been identified.

NHF Codes of Governance and Conduct

We are pleased to report that (with the exception of the items noted on page 3)The Group complies with the principal recommendations of the NHF code of governance 2020 and is compliant with the NHF Code of Conduct 2012. Hyelm has published a new Governance Manual which provides a comprehensive manual of policies, procedures and guidance notes for all areas covered by the Code and has published a statement on all its accountability mechanisms. Policies and procedures are reviewed by the management team in accordance with a published timetable (or according to need) and all significant changes are reported to the Board.

Statement of the Board’s Responsibilities

The Board is responsible for preparing the report and financial statements in accordance with applicable law and regulations.

Company Law requires the Board to prepare financial statements for each financial year. Under that law the Board has elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable laws) including Financial Reporting Standard 102 (FRS 102) and the Housing SORP 2018: Statement of Recommended Practice for Registered Social Housing Providers and comply with the Accounting Direction for Private Registered Providers of Social Housing 2019. Under that company law, the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs and profit or loss of the company. In preparing these financial statements, the directors are required to:

The directors are responsible for keeping adequate accounting records which disclose with reasonable accuracy at any time the financial position of the company and enable it to ensure that the financial statements comply with the Companies Acts 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.

It is 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.

Statement of Compliance

The directors have undertaken an assessment of compliance with the governance and financial viability standard as required by the Accounting Direction 2019. The directors can confirm that no evidence of no-compliance has been identified since the last report. In preparing the strategic report the directors have followed the principles set out in the Statement of Recommended Practice for Registered Social Landlords (SORP 2018).

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HYELM Report and Financial Statements for the year ended 30 September 2022

INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS AND TRUSTEES OF HYELM

Opinion

We have audited the financial statements of Hyelm (the ’company’) for the year ended 30 September 2022 which comprise the Group Statement of Comprehensive Income, the Group Statement of Changes in Reserves, the Group Statement of Financial Position, the Group Statement of Consolidated 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 FRS 102 ‘The Financial Reporting Standard Applicable in the UK and Ireland’ (United Kingdom Generally Accepted the UK and Ireland’.

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 financial statements section of our report. We are independent of the charitable company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is enough and appropriate to provide a basis for our opinion.

Conclusions relating to going concern

In auditing the financial statements, we have concluded that the trustees’ use of the going concern basis of accounting in the preparation of the financial statements is appropriate.

Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the charitable company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.

Our responsibilities and the responsibilities of the trustees with respect to going concern are described in the relevant sections of this report.

Other information

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

In connection with our audit of the financial statements, 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 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.

14

HYELM Report and Financial Statements for the year ended 30 September 2022

INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS AND TRUSTEES OF HYELM

Opinions on other matters prescribed by the Companies Act 2006

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

Matters on which we are required to report by exception

In the light of the knowledge and understanding of the group and parent charitable company and its environment obtained in the course of the audit, we have not identified material misstatements in the trustees’ annual report.

We have nothing to report in respect of the following matters where the Companies Act 2006 and the Charities Act 2011 require us to report to you if, in our opinion:

Responsibilities of trustees

As explained more fully in the trustees’ responsibilities statement set out on page 13, the trustees (who are also the directors of the charitable company for the purposes of company law) are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the trustees determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, the trustees are responsible for assessing the group and parent charitable company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the trustees either intend to liquidate the group or parent charitable company or to cease operations, or have no realistic alternative but to do so.

Auditor’s responsibilities for the audit of the financial statements

We have been appointed as auditor under the Companies Act 2006 and section 151 of the Charities Act 2011 and report in accordance with those Acts.

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below.

Explanation as to what extent the audit was considered capable of detecting irregularities, including fraud

The objectives of our audit in respect of fraud, are; to identify and assess the risks of material misstatement of the financial statements due to fraud; to obtain sufficient appropriate audit evidence regarding the assessed risks of material misstatement due to fraud, through designing and implementing appropriate responses to those assessed risks; and to respond appropriately to instances of fraud or suspected fraud

15

HYELM Report and Financial Statements for the year ended 30 September 2022

INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS AND TRUSTEES OF HYELM

identified during the audit. However, the primary responsibility for the prevention and detection of fraud rests with both management and those charged with governance of the charitable company. Our approach was as follows:

As part of an audit in accordance with ISAs (UK) we exercise professional judgement and maintain professional scepticism throughout the audit. We also:

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

There are inherent limitations in the audit procedures described above. We are less likely to become aware of instances of non-compliance with laws and regulations that are not closely related to events and transactions reflected in the financial statements. Also, the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentations, or through collusion.

16

HYELM Report and Financial Statements for the year ended 30 September 2022

INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS AND TRUSTEES OF HYELM

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 and, in respect of the consolidated financial statements, to the charity’s trustees, as a body, in accordance with Chapter 3 of Part 8 of the Charities Act 2011. Our audit work has been undertaken so that we might state to the charitable company’s members and trustees those matters which 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 any party other than the charitable company, the charitable company’s members, as a body, and the charity’s trustees, as a body, for our audit work, for this report, or for the opinion we have formed.

23 March 2023

Luke Holt (Senior Statutory Auditor) for and on behalf of Moore Kingston Smith LLP, Statutory Auditor 9 Appold Street London EC2A 2AP

Moore Kingston Smith LLP is eligible to act as auditor in terms of Section 1212 of the Companies Act 2006.

17

HYELM 20 2022 2021 4,766,710 (1,466,787) (yn,703) 4￿￿419 1,298,¢X)i (L466,787) (1,272,703) Othtr Inr OtrdtlrwJ 9J1rA￿ l (ddldt) 3￿9.925 25J98 ¥55￿2 25,298 (366270) (487,828) [2￿10￿) 49,224 35,951 (358.903) (349,727) (366,270) (487￿28) 510,398) 49,224 35,951 (358,￿) (349,727) Jnter&st recknb Intttest and flnarKJr#J wsts Mo4tnwt In fak vlue rf fforKlal Inly￿ (ddldt) bth arxl aftu trx 169 776 The ncts on pages 21 to 37 form part rf these fknarthl slatell￿. The flnat￿l statenwts haME L￿n In acc(Ydm UK CneJally kceO& Practs (UK GA4P) Indudlng Hnarthl sto￿lar￿ 102 (FRS 102) trkA&ng SORP 2018: sttyn￿t acCWdèn￿ wlth ts pro4kn ar¥AI(able b) to Ihe &nall aywan*s regkne wltrln Part 15 Compantes kt 2006. Slmon w￿jht

Report and Financial Statements for the year ended 30 September 2022

HYELM

Statement of Changes in Reserves for the year ended 30 September 2022

Group

Balance at 1 October 2020

Surplus / (Deficit) for the year
Transfer to designated reserves

Balance at 30 September 2021

Surplus / (Deficit) for the year
Transfer from designated reserves

Balance at 30 September 2022

Association


Balance at 1 October 2020

Surplus / (Deficit) for the year
Transfer to designated reserves

Balance at 30 September 2021

Surplus / (Deficit) for the year
Transfer from designated reserves

Balance at 30 September 2022		 General
Reserve
£
26,130,293
(784,018)
-

25,346,275
111,577
-

25,457,852
General
Reserve
£
26,149,293
(784,018)
-

25,365,275
167,286
-

25,532,561
Designated
Reserves

£

97,937

-

-


97,937

-

-


97,937

Designated
Reserves

£

97,937

-

-


97,937

-

-


97,937
Endowment
Fund

£

6,100,771

7,712

-


6,108,483

1,998

-


6,110,481

Endowment
Fund

£

6,100,771

7,712

-


6,108,483

1,998

-


6,110,481
Total

£

32,329,001

(776,306)

-

31,552,695

113,575

-

31,666,270

Total

£

32,348,001

(776,306)

-

31,571,695

169,284

-

31,740,979

19

HYELM Rem and FIMnd•l Statan the yur 30 ￿ptemb￿ 2022 Ststanent rf FlnJndJl Podtkn as at 30 SePt￿b¥ 2022 Company No: 110244598 2021 2022 2021 pwty, pknt aThJ ulprr£rt Oilw tsrwjlble f￿1 1,483 25￿67,696 265)5￿06 76,286 25,742,928 n,659 2V57,M 2474V55 2438¥891 25￿1￿58? InVe51jn￿ts li I￿,[4)0 J,572 100,(MiO 171,276 16 624 448 IV95,724 97.471 18 126 219 I￿264 12 aNI L75h equbRI 18,279h35 f•lllng due wlthln on• (4￿￿,265) (￿832￿0) (4,913,423) 9)3,200) 13,415.425 14W.756 I3￿66￿12 13,992,524 rrent Il•bllltl 73 193 39 789 111 Credltor•: ¥mounts fJlllng du• after move th•n one ywr 14 (8MkS,924) (8.236h16) (8,(NJ6,924) (8,236h16) 25.457A52 97,937 6,110,481 Is￿6,275 25,532A61 97,937 6,110,481 25￿,275 97,937 6,108,483 Dnated fv 19 6,1￿,483 flnandal Stat￿￿￿ were F￿r￿ ￿ 21 Marth 2023. Sknon Wrfght

HYELM

Report and Financial Statements for the year ended 30 September 2022

Statement of Cash Flows for the year ended 30 September 2022

Group
Note

Net cash generated from operating activities
20

Purchase of tangible fixed assets
Costs of fire safety work
Interest received


Cash flow from financing activities
Interest paid
Repayment of borrowings


Net change in cash and cash equivalents
Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of year		 2022
£
5,554,862
(3,314,164)
(366,270)
49,224
(3,631,210)
(358,903)
(159,542)
(518,445)
1,405,207
16,721,012
18,126,219		 2021
£
305,076
(1,805,773)
(487,828)
35,951
(2,257,650)
(349,727)
(123,714)
(473,441)
(2,426,015)
19,147,027
16,721,012

21

HYELM

Notes to the Financial Statements for the year ended 30 September 2022

1. Accounting Policies

Company Information

Hyelm is a limited company domiciled and incorporated in England and Wales. The registered office is 43-51 New North Road, London, N1 6JB.

Accounting Basis

The financial statements have been prepared in accordance with UK Generally Accepted Accounting Practice (UK GAAP) including Financial Reporting Standard 102 (FRS 102) and the Housing SORP 2018: Statement of Recommended Practice for Registered Social Housing Providers and comply with the Accounting Direction for Private Registered Providers of Social Housing 2019.

The charitable company is a public benefit entity for the purposes of FRS 102.

Arthur West House Limited is a wholly owned subsidiary of Hyelm, the company having been incorporated on 16 July 2015. The principal activity of the company is to carry out development activities on behalf of The Hyelm Group.

Hyelm is the sole corporate trustee of The Ames House Trust (“Ames House”) which was an unincorporated charitable trust operating in London and is accounted for as a branch of Hyelm in accordance with the policy guidance “E14 – Preparing limited charities’ accounts”.

The company is required to prepare group accounts under section 248 of the Companies Act 2006 and these financial statements present information relating to the company and group.

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

Accounting Policies

The Board has reviewed The Group’s accounting policies and is satisfied that they are appropriate.

Going concern

After making enquiries, the Board has a reasonable expectation that The Group has adequate resources to continue in operational existence for the foreseeable future, being a period of twelve months after the date on which the report and financial statements are signed.

Turnover and revenue recognition

Turnover comprises rental income from residents’ receivable in the year and income from the provision of sporting, recreational or social facilities.

Rental income is recognised on the execution of tenancy agreements. Other income is recognised as receivable on the delivery of services provided.

Housing Properties

Housing properties are principally properties 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.

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 in the business. Only the direct overhead costs associated with new developments or improvements are capitalised.

22

HYELM

Notes to the Financial Statements for the year ended 30 September 2022

Depreciation of Housing Properties

Hyelm separately identifies the major components which comprise its housing properties, and charges depreciation so as to write down the cost of each component to its estimated residual value on a straight-line basis, over its estimated useful economic lives in the business.

The Group depreciates the major components of its housing properties over the following periods:

Main structure 50 years Roofs 30 years Lifts 30 years Windows & External Doors 15 years Internal Doors 15 years Electrical and mechanical equipment 10-15 years

Freehold land is not depreciated.

Other Tangible Fixed Assets and Depreciation

Depreciation is provided evenly on the cost of other tangible fixed assets to write them down to their estimated residual values over their expected useful lives. The principal annual rates for other assets are:

Fixtures and fittings 10% - 25% Computer Equipment 20% - 33%

Gains or losses arising on the disposal of other tangible 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 of the year.

Impairment

Assets are reviewed for impairment on an annual basis. Where there is evidence of impairment, fixed assets are written down to the recoverable amount, or to depreciated replacement cost. Any such write down is charged to the operating surplus.

Social Housing Grant

Social housing grant (SHG) is receivable from the Homes and Communities Agency (the HCA), local authorities, and other government organisations. Government grants received for housing are recognised in income and expenditure over the useful life of the housing property structure and, where applicable, its individual components (excluding land) under the accruals model.

Government grants received in respect of revenue expenditure is credited to the income and expenditure account over the same period as the expenditure to which they relate once reasonable assurance has been gained that the entity will comply with the conditions and that the funds will be received.

Grants due from government agencies or received in advance are included as current assets or liabilities.

Government grants received for housing purposes are subordinated to the repayment of loans by agreement with the Homes and Communities Agency. SHG released on sale of a property may be repayable but is normally available to be recycled and are credited to a Recycled Capital Grant Fund and included in the statement of financial position in Creditors.

If there is no requirement to recycle or repay the grant on disposal of the asset, any unamortised grant remaining within creditors is released and recognised as income in the income and expenditure account.

Where individual components are disposed of and this does not create a relevant event for recycling purposes, any grant that has been allocated to the component is released to the income and expenditure account. Upon disposal of the associated property, The Group is required to recycle these proceeds and recognise them as a liability.

Employees Benefits

Short term employee benefits and contributions to defined contribution plans are recognised as an expense in the period in which they are incurred.

23

HYELM

Notes to the Financial Statements for the year ended 30 September 2022

Debtors

Short term debtors are measured at transaction price, less any impairment.

Cash and Cash Equivalents

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

Creditors

Short term trade creditors are measured at the transaction price. The loan from Allied Irish Bank is considered to be a basic financial instrument and has therefore been included within the accounts at amortised cost.

Current Asset Investments

Where these are held, they are stated at market value.

Investment Income

Interest from Certificates of Deposit and Fixed Interest Bonds is accounted for on a receivable basis.

Dividend income is accounted for on a received rather than receivable basis. The difference is not material to the accounts.

Interest Payable

Interest is capitalised on borrowings to finance developments. Other interest is charged to the income and expenditure account during the year.

Loan Issue Costs

Loan Issue Costs reflect arrangement fees payable in respect of loan facilities. Loan issue costs are amortised over the term of the respective loan facility and offset against loan balances within creditors.

Liquid Resources

Liquid Resources are readily disposable current asset investments.

Pensions

The Group does not provide a defined benefit pension scheme. Employees are, subject to eligibility, automatically enrolled into the NEST pension scheme to which employees contribute a minimum of 5% of basic salary, the Company will make contributions up to a maximum of 7.5% of basic salary (Chief Executive 10%). Hyelm’s contributions to employees’ personal pension schemes are expensed as they occur.

Members’ Capital Subscriptions

Members have historically paid a single subscription of £1, due and payable on the first day of the month after they have been admitted to the membership. This requirement was rescinded at the Annual General Meeting held on 28 April 2012. Balances held will be repaid to members on request.

Stock

Stock is calculated at the lower of cost or net realisable value.

VAT

The Group charges Value Added Tax (VAT) on some its income and is able to recover part of the VAT it incurs on expenditure. The financial statements include VAT to the extent that it is suffered by The Group and not recoverable from HM Revenue and Customs. The balance of VAT payable or recoverable at the year-end is included as a current liability or asset.

Development Fund (designated reserve)

The development fund represents funds available to meet future development expenditure which falls within The Group’s objectives.

Club Activities Fund (designated reserve)

The club activities fund supports expenditure in respect of non-accommodation activities such as the provision of sporting, recreational and social facilities.

Any surplus achieved through the provision of such activities is returned to the fund.

24

HYELM

Notes to the Financial Statements for the year ended 30 September 2022

Financial Instruments

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

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

Basic financial assets

Basic financial assets, which include trade and other debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest.

Classification of financial liabilities

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

Basic financial liabilities

Basic financial liabilities, including trade and other creditors, bank loans, loans from Group companies and preference shares that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest.

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

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

Judgments and key sources of estimation uncertainty

In the application of the charitable company’s accounting policies, the Directors are required to make judgements, estimates and assumptions about the carrying value of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and in future periods where the revision affects both current and future periods.

In preparing these financial statements judgements have been made in respect of the recoverability of the amounts expended on fire safety works as explained in Note26 and the accounting treatment of these works which are not considered enhance the carrying value of the Od Street property and have therefore been written off in the Statement of Comprehensive income.

25

HYELM

Notes to the Financial Statements for the year ended 30 September 2022

2. Particulars of turnover, operating costs and operating surplus

Group


Letting of residential accommodation

Other residential accommodation activities
Other income


Non-residential accommodation activities




Letting of residential accommodation

Other residential accommodation activities
Other income


Non-residential accommodation activities
 The Group 2022
Turnover
Operating
costs
£
£
1,162,645
1,338,067
-
-
-
-
3,604,065
128,720
4,766,710
1,466,787
Association 2022
Turnover
Operating
costs
£
£
1,162,645
1,338,067
-
-
-
-
3,659,774
128,720
4,822,419
1,466,787		 Operating
deficit
£
(175,422)

-
-

3,475,345
3,299,922
Operating
deficit
£
(175,422)

-
-

3,531,054
3,355,631		 The Group 2021

Turnover
Operating
costs

£
£

1,063,660
1,144,645

-
-

-
-

234,341
128,058

1,298,001
1,272,703
Association 2021

Turnover
Operating
costs

£
£

1,063,660
1,144,645

-
-

-
-

234,341
128,058

1,298,001
1,272,703		 Operating
deficit
£
(80,985)

-
-

106,283
25,298
Operating
deficit
£
(80,985)

-
-

106,283
25,298

26

HYELM

Notes to the Financial Statements for the year ended 30 September 2022

2 (ii) Particulars of income and expenditure from the letting of intermediate and sub market rent accommodation

Group and Association
Private
Rented

£

Rent receivable net of identifiable service charges
389,741
Service Charge income
62,644
Other revenue grants - SHG released
-
Turnover from the letting of residential accommodation
452,384

Management
185,520
Service charge costs
79,545
Other service costs
72,231
Routine maintenance
35,107
Planned maintenance
21,452
Major repairs expenditure
-
Bad debts
19,275
Depreciation on housing properties
147,694
Other costs
-
Operating costs on residential lettings
560,825

Operating surplus / (loss) on residential lettings
(108,441)


Void Losses
24,953
Housing accommodation 125 bed spaces (2020: 125 bed spaces)
Intermediate
Rent

£

559,366

90,895

60,000

710,260

266,262

114,165

103,668

50,387

30,788

-

-

211,973

-

777,243

(66,982)


106,801		 2022

Total

£

949,107

153,538

60,000
1,162,645

451,781

193,711

175,899

85,493

52,241

-

19,275

359,667

-
1,338,067
(175,422)

131,754

Private
Rented

£

357,606

54,186

-

411,792

144,054

71,180

65,631

20,679

12,241

-

20,225

147,947

-

481,956

(70,164)


18,982
Intermediate
Rent

£

513,244

78,624

60,000

651,868

206,750

102,159

94,195

29,678

17,569

-

-

212,337

-

662,688

(10,821)


98,281		 2021

Total

£

870,850

132,810

60,000
1,063,660

350,804

173,339

159,826

50,357

29,810

-

20,225

360,284

-
1,144,645

(80,985)

117,263

27

HYELM

Notes to the Financial Statements for the year ended 30 September 2022

3. Operating Surplus/(Deficit)
Group
2022
2021

£
£
Operating surplus/(deficit) for the year is after charging:


Depreciation on housing properties
359,667
360,284
Depreciation on tangible, owned fixed assets
33,036
29,987

392,703
390,270

Auditor’s remuneration (excluding VAT)


- Fees payable for the audit of the financial statements
11,000
11,000
- Fees payable for the audit of the accounts of
subsidiaries
5,000
5,000
Total audit Services
16,000
16,000



- Tax compliance services
1,560
1,560
Total non-audit services
1,560
1,560

4. Interest receivable and other income - Group and Association
2022
2021
£
£

Interest receivable and similar income
49,224
35,951
Less: Notional RCGF interest (note 16)
-
-
49,224
35,951
5. Interest and financing costs - Group and Association

2022
2021
£
£

Loans and bank overdrafts
339,059
345,943
Amortisation of loan issue costs
1,400
1,400
Notional RCGF interest (note 16)
18,444
2,384
358,903
349,727		 3. Operating Surplus/(Deficit)
Group
2022
2021

£
£
Operating surplus/(deficit) for the year is after charging:


Depreciation on housing properties
359,667
360,284
Depreciation on tangible, owned fixed assets
33,036
29,987

392,703
390,270

Auditor’s remuneration (excluding VAT)


- Fees payable for the audit of the financial statements
11,000
11,000
- Fees payable for the audit of the accounts of
subsidiaries
5,000
5,000
Total audit Services
16,000
16,000



- Tax compliance services
1,560
1,560
Total non-audit services
1,560
1,560

4. Interest receivable and other income - Group and Association
2022
2021
£
£

Interest receivable and similar income
49,224
35,951
Less: Notional RCGF interest (note 16)
-
-
49,224
35,951
5. Interest and financing costs - Group and Association

2022
2021
£
£

Loans and bank overdrafts
339,059
345,943
Amortisation of loan issue costs
1,400
1,400
Notional RCGF interest (note 16)
18,444
2,384
358,903
349,727		 3. Operating Surplus/(Deficit)
Group
2022
2021

£
£
Operating surplus/(deficit) for the year is after charging:


Depreciation on housing properties
359,667
360,284
Depreciation on tangible, owned fixed assets
33,036
29,987

392,703
390,270

Auditor’s remuneration (excluding VAT)


- Fees payable for the audit of the financial statements
11,000
11,000
- Fees payable for the audit of the accounts of
subsidiaries
5,000
5,000
Total audit Services
16,000
16,000



- Tax compliance services
1,560
1,560
Total non-audit services
1,560
1,560

4. Interest receivable and other income - Group and Association
2022
2021
£
£

Interest receivable and similar income
49,224
35,951
Less: Notional RCGF interest (note 16)
-
-
49,224
35,951
5. Interest and financing costs - Group and Association

2022
2021
£
£

Loans and bank overdrafts
339,059
345,943
Amortisation of loan issue costs
1,400
1,400
Notional RCGF interest (note 16)
18,444
2,384
358,903
349,727		 Association
2022
2021
£
£

359,667
360,284
33,036
29,987		 Association
2022
2021
£
£

359,667
360,284
33,036
29,987
392,703
390,270		 392,703
390,270
11,000
5,000


11,000

5,000
11,000
5,000

11,000

5,000
16,000
16,000		 16,000
16,000
1,560


1,560
810

810
1,560
1,560		 810
810

2021

£

35,951

-









49,224
35,951


2021

£

345,943

1,400

2,384
358,903
349,727

28

HYELM

Notes to the Financial Statements for the year ended 30 September 2022

6. Employees – Group and Association

2022
2022
Number
FTE
Average monthly employees (including the Chief Executive) and expressed as
on 35 hour week
6.5
6.1
Administration
4
3.6
Housing
2.5
2.5
6.5
6.1
Hyelm
2022
2021
Employee Costs:
£
£
Wages and salaries
174,988
149,590
Social security costs
20,847
15,648
Other pension costs
13,497
11,034
209,332
176,272
The Group
2022
2021
Employee Costs:
£
£
Wages and salaries
273,227
233,812
Social security costs
30,985
25,324
Other pension costs
19,650
17,113
323,862
276,249		 2021
2021
Number
FTE's
full-time equivalents based
6.2
5.8
4
3.6
2.2
2.2
6.2
5.8











 2021
2021
Number
FTE's
full-time equivalents based
6.2
5.8
4
3.6
2.2
2.2
6.2
5.8
3.6
2.2
5.8

7. Board members and executive directors – Group and Association


Emoluments of the Company’s Chief Executive, Director of Finance
& Director of Operations including pension contributions.

Emoluments of the Chief Executive, who was the highest paid
“Director”, excluding pension contributions.

Contributions to the Chief Executive’s personal pension plan.		 2022
£
148,053
70,745
5,293		 2021
£
166,727
88,477
5,359

No members of staff were paid more than £60,000 in the current or previous year other than the Chief Executive (as disclosed above) and the Director of Finance. No emoluments were paid to members of the Board during the year.

Expenses paid during the year to members of the Board amounted to £504 (2021: £981).

29

HYELM

Notes to the Financial Statements for the year ended 30 September 2022

8. Fixed Assets – housing properties – Group

Housing
properties
held for
letting
Cost
£
At 1 October 2021
16,119,271
Work in progress
-
Abortive development costs written off
-
Component replacement
-
Enhancements
15,377
At 30 September 2022
16,134,648
Depreciation
At 1 October 2021
3,645,743
Depreciation charged during year
359,667
At 30 September 2022
4,005,410
Net book value
At 30 September 2022
12,129,238

At 30 September 2021
12,473,528

Fixed assets - housing properties - The Association
Housing
properties
held for
letting
Cost
£
At 1 October 2021
16,119,271
Work in progress
-
Abortive development costs written off
-
Component replacement
-
Enhancements
15,377
At 30 September 2022
16,134,648

Depreciation and Impairment
At 1 October 2021
3,645,743
Depreciation charged during year
359,667
At 30 September 2022
4,005,410
Net book value
At 30 September 2022
12,129,238

At 30 September 2021
12,473,528		 Housing
properties for
letting under
construction
£
13,194,168
3,262,125
(2,404,048)
-
-
14,052,245
-
-
-
14,052,245
13,194,168
Housing
properties for
letting under
construction
£
13,269,400
3,311,016
(2,404,048)
-
-
14,176,368
-
-
-
14,176,368
13,269,400		 Total housing
properties
£
29,313,439
3,262,125
(2,404,048)
-
15,377
30,186,893
3,645,743
359,667
4,005,410
26,181,483
25,667,696
Total housing
properties
£
29,388,671
3,311,016
(2,404,048)
-
15,377
30,311,016
3,645,743
359,667
4,005,410
26,305,606
25,742,928

30

HYELM

Notes to the Financial Statements for the year ended 30 September 2022

8. Fixed Assets – housing properties continued

Expenditure on works to existing properties - The Group and Hyelm

2022 2021

£ £

Improvement works capitalised		 15,377 27,233
Components capitalised - -
Amounts charged to income and expenditure - -
15,377 27,233


Social housing assistance - The
 Group and Hyelm

2022 2021
£ £
Total accumulated social housing grant received or receivable at 30 September:
Capital Grant 3,000,000 3,000,000
3,000,000 3,000,000
Housing properties book value net of depreciation
Group Association Group Association
2022 2021 2021 2021
£ £ £ £
Freehold land and buildings 26,181,483 26,305,606 25,667,696 25,742,928

31

HYELM

Notes to the Financial Statements for the year ended 30 September 2022

9. Tangible fixed assets - other - The Group and Hyelm

Furniture &
equipment
Computer
equipment
£
£
Cost at 1 October 2021
667,078
55,169
Additions
11,067
25,596
Cost at 30 September 2022
678,145
80,765
Depreciation at 1 October 2021
604,723
44,865
Charged during year
22,232
10,804
Eliminated on Disposal
-
-
Depreciation at 30 September 2022
626,955
55,668
Net book value:

At 30 September 2022
51,189
25,096
At 1 October 2021
62,355
10,305
10. Costs associated with Fire Safety works
2022
2021
£
£
Work in Progress - abortive costs
366,270
487,828
Loss in respect of Fire Safety Works
366,270
487,828
11. Investments

Group
2022
2021

£
£

Investment in subsidiary
-
-

-
-		 Total

£

722,247
36,663
758,909

649,588
33,036
-
682,624

76,286

72,659





Association
2022
2021
£
£
100,000
100,000
100,000
100,000		 Total

£

722,247
36,663
758,909

649,588
33,036
-
682,624

76,286

72,659





Association
2022
2021
£
£
100,000
100,000
100,000
100,000
100,000

Arthur West House Limited is a wholly owned subsidiary of Hyelm. At the 30 September 2022 Hyelm held 100,000 ordinary shares of £1 each (2020: £100,000).

32

HYELM

Notes to the Financial Statements for the year ended 30 September 2022

12. Debtors

12 Debtors
.
Due within one year
Rent and service charge receivable
Provision for bad and doubtful debts
Other debtors
Due from subsidiary
Prepayments
VAT due
Accrued income
Total debtors		 Group
2022
2021
£
£
54,088
49,277
(45,860)
(45,860)
8,228
3,417
47,217
125,549
-
-
29,462
12,266
6,136
15,364
6,428
3,768
97,471
160,364		 Association
2022
2021
£
£
54,088
49,277
(45,860)
(45,860)
8,228
3,417
3,917
125,549
32,537
26,276
29,462
12,266
-
-
6,428
3,768
80,572
171,276
3,417
125,549
26,276
12,266
-
3,768
171,276

13. Creditors amounts falling due within one year - The Group and Hyelm

Recycled capital grant fund (note 16)
Debt (note 17)
Loan issue costs
Trade creditors
Rent and service charges paid in
advance
Due to subsidiary (note 24)
Deferred capital grant (note 15)
Other taxation and social security
Other creditors
Accruals and deferred income		 Group
2022
2021
£
£
2,405,054
2,386,610
170,891
160,940
-
-
57,254
120,975
37,864
32,145
-
-
60,000
60,000
16,267
13,770
6,130
8,146
2,054,805
50,034
4,808,265
2,832,620		 Association
2022
2021
£
£
2,405,054
2,386,610
170,891
160,940
-
-
57,254
37,349
37,864
32,145
112,801
161,206
60,000
60,000
16,267
13,770
6,130
8,146
2,047,162
43,034
4,913,423
2,903,200		 Association
2022
2021
£
£
2,405,054
2,386,610
170,891
160,940
-
-
57,254
37,349
37,864
32,145
112,801
161,206
60,000
60,000
16,267
13,770
6,130
8,146
2,047,162
43,034
4,913,423
2,903,200
2,903,200

14. Creditors falling due after more than one year - The Group and Hyelm

Debt (note 17)
Loan issue costs (note 17)
Deferred capital grant (note 15)		 2022
£
5,892,716
(18,258)
2,132,466
8,006,924		 2021
£
6,063,607
(19,657)
2,192,466
8,236,416

33

HYELM

Notes to the Financial Statements for the year ended 30 September 2022

15. Deferred capital grant – Group and Association


At 1 October 2021
Released to income in year
At 30 September 2022



Amounts to be released within one year
Amounts to be released in more than one year
 2022
£
2,252,466
(60,000)
2,192,466
2022
£
60,000
2,132,466
2,192,466		 2021
£
2,312,466
(60,000)
2,252,466
2021
£
60,000
2,192,466
2,252,466

The deferred capital grant relates to the New North Road property and may be repayable in full should the property be sold.

16. Recycled capital grant fund – Group and Association


At 1 October 2021
Interest accrued (note 4)


Repayment of grant

At 30 September 2022		 2022
£
2,386,609
18,444
2,405,053
-
2,405,053		 2021
£
2,384,225
2,384
2,386,609
-
2,386,609

The recycled capital grant arose in the year ended 30 September 2015 on the sale of Arthur West House.

34

HYELM

Notes to the Financial Statements for the year ended 30 September 2022

17. Debt analysis – Group and Association


Due within one year
Bank loans
Less: issue costs


Due after more than one year
Bank loans
Less: issue costs
 2022
£
170,891
-
170,891
5,892,716
(18,258)
5,874,457		 2021
£
160,940
-
160,940
6,063,607
(19,657)
6,043,950

The loan from Allied Irish Bank (GB) is secured by a legal charge over the Old Street Development and is repayable within 30 years. The loan bears a fixed interest rate of 5.5% over the whole term, with capital repayments having commenced during the year to 15 October 2013.


Within one year or on demand
One year or more but less than two years
Two years or more but less than five years
Five years or more
 2022
£
170,891
177,874
924,965
4,771,618
6,045,348		 2021
£
160,940
170,890
777,530
5,095,530
6,204,890

18. Designated fund – Group and Association

The Group holds funds designated for development expenditure and for supporting non-accommodation activities for residents such as recreational and social activities. Any surpluses generated are returned to the fund.

Balance at 1 October 2020
Transfers in year
Balance at 30 September 2021
Transfers in year
Balance at 30 September 2022		 £
97,939
-
97,939
-
97,939

35

HYELM

Notes to the Financial Statements for the year ended 30 September 2022

19. Endowment fund – Group and Association

The endowment fund held by The Group is the original endowment to The Ames House Trust to which trading surpluses/deficits and investment gains/losses have been added over the years, together with the proceeds from properties sold.

Balance at 1 October 2020
Surplus for the year
Balance at 30 September 2021

Surplus for the year
Balance at 30 September 2022		 £
6,100,771
7,712
6,108,483
1,998
6,110,481

20. Consolidated cash flow from operating activities


(Deficit)/Surplus for the year
Adjustments for non-cash items
Depreciation/impairment of tangible fixed assets
Abortive development costs
(Increase)/decrease in debtors
(Decrease) / increase in creditors
Government grants utilised in the year
Net cash generated from operating activities		 2022
£
3,299,923
392,703
(106,350)
62,893
1,965,693
(60,000)
5,554,862		 2021
£
25,298
390,270
-
(52,099)
1,607
(60,000)
305,076

21. Capital commitments

The Board have agreed to a programme of remedial fire safety and refurbishment works for the Old Street building. This work is being done on a floor by floor basis and at the year end capital commitments totalling £291,409 had been entered into in respect of these works.

The company had no operating lease commitments at 30 September 2022 (2021: £NIL).

22. Post balance sheet events

There are no post balance sheet events to report.

36

HYELM

Notes to the Financial Statements for the year ended 30 September 2022

23. Legislative provisions

Hyelm is incorporated under the Companies Act.

24. Related parties

Arthur West House limited is a wholly owned subsidiary of Hyelm, a charitable company registered in England and Wales. Hyelm is considered to be the ultimate controlling party. The sum of £161,206 excluding VAT (2020: £37,439) was due to Arthur West House Limited at the end of the financial year in respect of

development services provided during the year. The sum of £26,276 was due from Arthur West House Limited in relation to services provided by HYELM to Arthur West House Limited.

25. Financial instruments

Carrying amount of financial assets
measured at amortised cost

Carrying amount of financial liabilities
measured at amortised cost		 Group

2022
£
148,098
6,445,953		 2021
£
148,098
6,445,953		 Association
2022
2021
£
£
159,010
159,010
6,516,533
6,516,533

26. Contingent liability

As part of the contract to develop the Colindale site there was an obligation to complete a number of commercial units to be returned to the vendors of the site, Regent Land Limited. The contract provides for liquidated damages to be paid for the late completion of these units commencing in January 2023 but does not provide for contract termination. As the building contract has now been terminated we discussed with Regent Land Limited the purchase of their interest in the site. Subsequent to the year end this interest was purchased for an agreed price of £2m and this has been included in the accounts as an adjusting post balance sheet event.

27. Operating leases

Residents in Hyelm’s properties enter into assured shorthold tenancy agreements with a minimum length of six months. In addition to the residential accommodation provided, Hyelm has leased office accommodation to third parties.

Not later than 1 year Group
2022
£
67,716
67,716		 2021
£
73,595
73,595		 Association
2022
2021
£
£
67,716
73,595
67,716
73,595

This note shows the committed income under operating lease contracts expected to be earned post year end by Hyelm.

37