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Registered number: 08847846









LODDON HOMES LIMITED









DIRECTORS REPORT AND FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 MARCH 2023

 
LODDON HOMES LIMITED
 
 
 
COMPANY INFORMATION


 
Directors
D Cash 
S Conway (appointed 23 June 2022)
C R Jones (appointed 23 June 2022)
S Dale (appointed 6 April 2023)
S Bailey (appointed 11 May 2023)




Company secretary
K Howick



Registered number
08847846



Registered office
Council Offices
Shute End

Wokingham

Berkshire

RG40 1BN




Independent auditors
Haslers
Chartered Accountants & Statutory Auditor

Old Station Road

Loughton

Essex

IG10 4PL





 
LODDON HOMES LIMITED
 
 
 
CONTENTS



Page
Directors' Report
 
1 - 6
Directors' Responsibilities Statement
 
7
Independent Auditors' Report
 
8 - 11
Statement of Profit or Loss and Other Comprehensive Income
 
12
Statement of Financial Position
 
13 - 14
Statement of Changes in Equity
 
15
Statement of Cash Flows
 
16 - 17
Notes to the Financial Statements
 
18 - 45
 
 

 
LODDON HOMES LIMITED
 
 
 
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 MARCH 2023

The directors present their report and the financial statements for the year ended 31 March 2023.

Principal activity

The company's principal activity is the provision of affordable and social residential rental accommodation for the people of Wokingham Borough.

Business review

Loddon Homes is a For-Profit Registered Provider (FPRP) regulated by the Regulator of Social Housing (the regulator), which was registered in June 2016, providing both social and affordable rented housing as well as shared ownership housing. 
Loddon Homes sits within a wider group of housing companies (Wokingham Housing Group) that deliver housing products and services to create an income stream through developing and managing different types of housing in the Borough.
Loddon Homes works closely with Wokingham Borough Councils (WBC) Housing Service and their Commercial Property Service who provide housing management & maintenance services and lead on the development of all new homes.   

Page 1

 
LODDON HOMES LIMITED
 
 
 
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
Business Performance

Despite a slowed development pipeline Loddon Homes has performed well in the year whilst meeting the varying challenges of our supported living stock portfolio.    
Value for Money
It is important that Loddon Homes provides ‘Value for Money’ through its strategic plan and services. 
The grid below provides the ‘Value for Money’ performance against indicators provided in line with the Regulator of Social Housing Guidance.


ole2893.png
Comments:
Metric 1 – Reinvestment: Spend decreased from 2021/22
 Metric 2a – New supply delivered (social): 11 new homes completed in 2022/23 compared to 71 in 2021/22
Metric 2b – New supply delivered (non-social): None completed
Metric 3 – Gearing %: Reduction in borrowings 
Metric 4 – EBITDA (MRI): The net operating surplus decreased due to fewer Shared Owner Ship sales in year
Metric 5 – Headline social housing costs per unit: The cost per unit increased in 2022/23 and compares favourably with other local RP partners
Metric 6a – Operating margin (SHL) %: The operating margin from social housing lettings increased during 2022/23
Metric 6b – Operating margin (Overall) %: the overall operating margin increased in 2022/23
Metric 7 – Return on capital employed (ROCE): Value of assets decreased in 2022/23 as well as the operating surplus.

Key Performance Indicators
The Board also regularly review a range of key performance indicators which include:

Page 2

 
LODDON HOMES LIMITED
 
 
 
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
  ole4abd.png
For a second year running Loddon Homes has significantly improved its relet times for supported housing.  It has also maintained a zero record for ASB incidents.

Directors

The directors who served during the year were:

D Cash 
D Hunter (resigned 3 October 2022)
M Ryatt (resigned 23 March 2023)
R D Webber (resigned 31 January 2023)
S N Bailey (resigned 1 April 2022)
S Conway (appointed 23 June 2022)
C R Jones (appointed 23 June 2022)
N Kovaleva (appointed 1 April 2022, resigned 7 April 2023)
N Jorgensen (resigned 9 June 2022)
S Younis (resigned 9 June 2022)

Strategy and Values

Loddon Homes was set up to provide affordable and social residential rental accommodation and low-cost home ownership homes for the people of Wokingham Borough. It currently has a portfolio of 169 housing units consisting of supported housing, shared ownership and social & affordable rents. A recent bi-annual survey of residents shows that 76% of residents are satisfied with Loddon Homes as a landlord.
London Homes' values are as follows:
• We are 
Accessible to our customers
• We are an organisation with 
Integrity who treats our customers fairly
• We strive to be 
Efficient in our service offering and designs
• We are 
Collaborative, working closely with partners and customers
• We deliver
 Quality services, whilst expecting quality services and products from our contractors

Page 3

 
LODDON HOMES LIMITED
 
 
 
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
Environmental Impact

Loddon Homes has a longstanding programme of property repairs and maintenance to ensure we provide high quality, safe and energy efficient homes that is in line with the government Green Agenda. All homes are built to a high specification and standard to ensure they are energy efficient.  The company has also directed resource into enhancing our properties such as redecoration, refurbishment and investing in decarbonisation to ensure homes are as energy efficient as possible and meet the standards set by the Regulator on damp and mould, for example. The company has also been dealing with a number of long term defects which emanate from design, build or technical issues, which now require attention to ensure standards are maintained and costs in future years are contained. 
• 100% of dwellings compliant with the Decent Homes Standard
Health & safety compliance remains a major focus for the Board and the organisation as a whole. At the end of March 2023 performance was as follows: 
• 100% in-date LGSR certificates
• 100% in-date Fire Risk Assessments
• 100% in-date Water Risk Assessments
• 100% in-date Asbestos Containing Material Surveys
• 100% in-date Electrical Installation Condition Reports
• 100% in date Lift Safety Inspections
In line with the Council’s declaration of a climate emergency and the draft policies in the Local Plan Update it is anticipated that all new homes developed for Loddon Homes will be carbon neutral or as close to carbon neutral as possible. Loddon Homes is also investigating opportunities for using modern methods of construction where appropriate including off-site pre-fabrication. Loddon Homes has implemented a set of new employers requirements, demonstrating clear guidance and specification for future construction of our properties.
In line with these clear objectives and agenda Loddon Homes is working with colleagues within the Council to survey any homes with an EPC rating of below C to make recommendations for improvements to energy efficiency systems. In addition to this Loddon Homes undertook a full survey of all properties within our stock portfolio with a view of increasing the number of properties with solar panels within the coming year:
• Average SAP rating for our dwellings remained at 84%. 94% of homes with an EPC rating of C or higher
• 0.65% of homes have an EPC rating of E owing to open market acquisitions. Works will be instructed to    improve the rating of these properties.

Social Impact

Loddon Homes focus remains on the provision of affordable and supported living homes to rent and to buy that meet the identified needs within Wokingham Borough and will work with WBC to reduce homelessness and fight fuel poverty.  
During the course of the last financial year Loddon Homes sponsored a local football team who went on to win their league.
Provision of a hardship fund has been made for the forthcoming financial year to assist residents facing financial difficulties.  

Page 4

 
LODDON HOMES LIMITED
 
 
 
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
Business Environment

The continued financial instability being experienced across the UK has had a marked impact on the business environment in which Loddon Homes operates. The rising cost of development and borrowing has had a sector wide impact on social housing development and requires continual scrutiny to manage the risk to pipelines. 
In the year Loddon Homes retained its preferred registered partners status with WBC and expects to remain as a principal contributor to the ever-rising demands of the housing register in this area. 
During 2022 Loddon Homes worked closely with WBC Adult Social Care commissioning services to meet some of the social care needs within the Borough. Becoming designated landlord acquisition of a further three supported housing sites has provided a total of 10 new tenancies. We have worked closely with care providers and the National Health Service (NHS) to meet the varying housing needs of this client group.

Governance

Loddon Homes is 100% owned by WBC (Holdings) Limited. The ultimate parent of the Company is Wokingham Borough Council.
The Board of Directors are responsible for the overall strategy and policies of the Company. This work which is delegated to the Managing Director who converts this to operational target for her team. The Board of Directors is supported by the Audit and Risk Committee (ARC) who are responsible for managing all business risks including compliance and internal audits. 

Stakeholder Engagement

Loddon Homes' business model identifies its primary stakeholders as, communities containing Loddon Homes dwellings, contractors and suppliers, employees, the Regulator of Social Housing (RSH), residents in Loddon Homes dwellings and WBC. When making key decisions the Board considers the impact on each stakeholder. Such decisions include:
• Approval of significant new policies
• Changes to the Business Strategy
• Investment decisions
• Restructurings
Residents play a particularly important part in setting the service agenda for Loddon Homes and holding us to account. At the end of the financial year Loddon Homes launched a recruitment campaign for a new resident board member, one of our shared owners was successfully appointed ready for FY22. The appointment of a new Service Improvement Officer has enabled Loddon Homes to increase its reach and engagement opportunities with residents. Our bi-annual residents survey ensured that feedback was obtained regarding all core consumer standard metrics. 
The skills of staff are critical in delivering the wide range of work necessary to keep the organisation performing to a high level. Loddon Homes has a small number of direct employees supported SLAs with specific WBC departments. Loddon Homes works in partnership with a range of suppliers and contractors to deliver specific services for which in-house provision would be uneconomic. These contracts are pro-actively managed to ensure value for money with jointly agreed performance and cost targets. In return Loddon Homes has adopted an ethical set of supply chain and payment practices.

Page 5

 
LODDON HOMES LIMITED
 
 
 
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
Risk Management

The Audit and Risk Committee (ARC) meet regularly to monitor all risks and place them on the risk register. The top three risks are reported to the wider Board on a bi-monthly basis. The current top three risks are: 
• Political control change- national and local leadership changes
• Failure to access full support from Wokingham Borough Council for tenant and operational services
• Lack of pipeline for developmental growth as a result of reduced land opportunities and rising cost of borrowing.

Summary

Loddon Homes is a small, dedicated ‘for profit’ RP that is focused on providing good quality housing for its customers. The Board and the supporting staff team are eager for the organisation to grow once market conditions stabilise.  As a result of its organisational structure, Loddon Homes is not only able to offer a range of housing opportunities including  supported housing  but  also to maintain and create long term sustainability and financial viability. It will continue to work closely with WBC to support the council to meet the varying needs of the community to provide good quality, affordable homes      

Disclosure of information to auditors

Each of the persons who are directors at the time when this Directors' Report is approved has confirmed that:
 
so far as the director is aware, there is no relevant audit information of which the Company's auditors are unaware, and

the director has taken all the steps that ought to have been taken as a director in order to be aware of any relevant audit information and to establish that the Company's auditors are aware of that information.

Small companies' exemption note

In preparing this report, the directors have taken advantage of the small companies exemptions provided by section 415A of the Companies Act 2006.

Auditors

The auditorsHaslerswill be considered for reappointment in accordance with section 485 of the Companies Act 2006.

This report was approved by the board on 28 September 2023 and signed on its behalf.
 



S Conway
Director
Page 6

 
LODDON HOMES LIMITED
 
 
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 MARCH 2023

The directors are responsible for preparing the Directors' Report and the financial statements, in accordance with applicable law.

Company law requires the directors to prepare financial statements for each financial year. Under that law they have elected to prepare the financial statements in accordance with International Financial Reporting Standards (IFRS) as adopted by the UK.

Under 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 of the Company and of the profit or loss of the Company for that period. In preparing the financial statements, the directors are required to:

select suitable accounting policies and then apply them consistently;

make judgements and estimates that are reasonable and prudent;

state whether they have been prepared in accordance with IFRS as adopted by the UK, subject to any material departures disclosed and explained in the financial statements;

assess the Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern; and

use the going concern basis of accounting unless they either intend to liquidate the Company or to cease operations, or have no realistic alternative but to do so.

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are responsible for such internal control as they determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error, and have general responsibility for taking such steps as are reasonably open to them to safeguard the assets of the Company and to prevent and detect fraud and other irregularities.

Page 7

 
LODDON HOMES LIMITED
 
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF LODDON HOMES LIMITED
 

Opinion


We have audited the financial statements of Loddon Homes Limited for the year ended 31 March 2023 which comprise the Statement of Profit or Loss and Other Comprehensive Incomethe Statement of Financial Positionthe Statement of Cash Flowsthe Statement of Changes in Equity and the related notes, including a summary of significant accounting policies set out on pages 19 - 26. The financial reporting framework that has been applied in their preparation is applicable law and International Financial Reporting Standards (IFRSs) as adopted by the United Kingdom.

In our opinion the financial statements:

give a true and fair view of the state of the Company's affairs as at 31 March 2023 and of its profit for the year then ended;

have been properly prepared in accordance with IFRSs as adopted by the United Kingdom; 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 (UK) (ISAs (UK)) and applicable law.  responsibilities under those standards are further described in the auditors' responsibilities for the audit of the financial statements section of our report. We are independent of the Company in accordance with the ethical requirements that are relevant to 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 evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Conclusions relating to going concern


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


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

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

Page 8

 
LODDON HOMES LIMITED
 
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF LODDON HOMES LIMITED (CONTINUED)


Other information


The other information comprises the information included in the Annual Report, other than the financial statements and our auditors' report thereon.  The directors are responsible for the other information contained within the Annual Report.  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.  responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. 

We have nothing to report in this regard.

Opinion on other matters prescribed by the Companies Act 2006


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

the information given in the  and the Directors' Report for the financial year for which the financial statements are prepared is consistent with the financial statements; and

the  and the Directors' Report have been prepared in accordance with applicable legal requirements.


In the light of the knowledge and understanding of the Company and its environment obtained in the course of the audit, we have not identified material misstatements in the Directors' Report.



Matters on which we are required to report by exception

In the light of the knowledge and understanding of the Company and its environment obtained in the course of the audit, we have not identified material misstatements in the  or the Directors' Report.

We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:

adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or

the financial statements are not in agreement with the accounting records and returns; or

certain disclosures of directors' remuneration specified by law are not made; or

we have not received all the information and explanations we require for our audit.


Responsibilities of directors

As explained more fully in the directors' responsibilities statement on page 17, the directors 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 directors 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 directors are responsible for assessing the Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the Company or to cease operations, or have no realistic alternative but to do so.
Page 9

 
LODDON HOMES LIMITED
 
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF LODDON HOMES LIMITED (CONTINUED)



Auditors' responsibilities for the audit of the financial statements

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

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:

We obtained an understanding of the legal and regulatory frameworks that the company operates in, and identified the key laws and regulations that: 
• had a direct effect on the determination of material amounts and disclosures in the financial statements. These included the UK Companies Act, Housing SORP 2018, Accounting Direction 2019 and tax legislation etc; and
• do not have a direct effect on the financial statements but compliance with which may be fundamental to the company’s ability to operate or to avoid a material penalty.
We obtained an understanding of the nature of the company’s business and its control environment, and enquired of management about their own identification and assessment of the risks of irregularities and any instances of actual or potential non-compliance. 
We discussed among the audit engagement team  regarding the opportunities and incentives that may exist within the organisation for fraud and how and where fraud might occur in the financial statements.
In common with all audits under ISAs (UK), we are also required to perform specific procedures to respond to the risk of management override. In addressing  this risk we tested the appropriateness of journal entries and other adjustments; assessed whether the judgements made in making accounting estimates are indicative of a potential bias; and evaluated the business rationale of any significant transactions that are unusual or outside the normal course of business.
In addition to the above, our procedures to respond to the risks identified included the following:
• reviewing financial statement disclosures by testing to supporting documentation to assess compliance with provisions of relevant laws and regulations described as having a direct effect on the financial statements;
• performing analytical procedures to identify any unusual or unexpected relationships that may indicate risks of material misstatement due to fraud; 
• reading minutes of meetings of those charged with governance.
 

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

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

Page 10

 
LODDON HOMES LIMITED
 
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF LODDON HOMES LIMITED (CONTINUED)


Use of our report

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




 
 
Christina Georgiou (Senior Statutory Auditor)
  
for and on behalf of
Haslers
 
Chartered Accountants
Statutory Auditor
  
Old Station Road
Loughton
Essex
IG10 4PL

28 September 2023
Page 11

 
LODDON HOMES LIMITED
 
 
 
STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 MARCH 2023


2023
2022
Note
£
£

  

Revenue
 6 
2,586,993
4,572,034

Cost of sales
  
(584,346)
(2,490,840)

Gross profit
  
2,002,647
2,081,194

  

Administrative expenses
  
(1,540,222)
(1,436,299)

Profit from operations
  
462,425
644,895

  

Finance income
  
5,925
-

Finance expense
  
(306,551)
(287,612)

Profit before tax
  
161,799
357,283

  

Tax expense
 13 
(1,190)
(239,637)

Profit for the year
  
160,609
117,646


Total comprehensive income
  
160,609
117,646

The notes on pages 19 to 45 form part of these financial statements.

Page 12

 
LODDON HOMES LIMITED
REGISTERED NUMBER: 08847846
 
 
STATEMENT OF FINANCIAL POSITION
AS AT 31 MARCH 2023


2023
2022
Note
£
£


Assets

Non-current assets
  

Property, plant and equipment
 14 
30,509,245
31,046,859

Trade and other receivables
 15 
1,599,650
1,511,650

Deferred tax assets
 13 
2,106
3,296

  
32,111,001
32,561,805

Current assets
  

Trade and other receivables
 15 
336,943
574,534

Cash and cash equivalents
 25 
1,548,356
3,862,984

  
1,885,299
4,437,518

  

Assets in disposal groups classified as held for sale
 19 
-
567,354

Total assets

  

33,996,300
37,566,677

Liabilities

Non-current liabilities
  

Trade and other liabilities
 16 
30,274,579
31,658,765

Loans and borrowings
 17 
136,202
147,820

  
30,410,781
31,806,585

Current liabilities
  

Trade and other liabilities
 16 
3,997,845
6,333,370

Loans and borrowings
 17 
11,618
11,275

  
4,009,463
6,344,645

  

Total liabilities
  
34,420,244
38,151,230

  

Net liabilities
  
(423,944)
(584,553)
Page 13

 
LODDON HOMES LIMITED
REGISTERED NUMBER: 08847846
 
 
STATEMENT OF FINANCIAL POSITION (CONTINUED)
AS AT 31 MARCH 2023


2023
2022
Note
£
£


Issued capital and reserves
  

Share capital
 20 
1
1

Retained earnings
  
(423,945)
(584,554)

TOTAL EQUITY
  
(423,944)
(584,553)

The financial statements on pages 12 to 45 were approved and authorised for issue by the board of directors on 28 September 2023 and were signed on its behalf by:




S Conway
Director

The notes on pages 19 to 45 form part of these financial statements.

Page 14

 
LODDON HOMES LIMITED

 
 
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MARCH 2023



Share capital
Retained earnings
Total equity


£
£
£

At 1 April 2022
1
(584,554)
(584,553)

Comprehensive income for the year


Profit for the year
-
160,609
160,609

Total comprehensive income for the year
-
160,609
160,609

At 31 March 2023
1
(423,945)
(423,944)



Share capital
Retained earnings
Total equity


£
£
£

At 1 April 2021
1
(702,200)
(702,199)

Comprehensive income for the year


Profit for the year
-
117,646
117,646

Total comprehensive income for the year
-
117,646
117,646

At 31 March 2022
1
(584,554)
(584,553)

The notes on pages 19 to 45 form part of these financial statements.

Page 15

 
LODDON HOMES LIMITED

 
 
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 MARCH 2023


2023
2022
Note
£
£

Cash flows from operating activities
  

Profit for the year
  
160,609
117,646

Adjustments for
  

Depreciation of property, plant and equipment
 14 
600,371
434,868

Amortisation of grants received
  
(522,933)
(298,724)

Finance income
  
(5,925)
-

Finance expense
  
306,551
287,612

(Profit)/loss on sale of property, plant and equipment
  
(242,896)
127,929

Income tax expense
 13 
1,190
237,430

  
296,967
906,761

Movements in working capital:
  

Decrease in trade and other receivables
  
42,770
1,250,324

(Decrease)/increase in trade and other payables
  
(517,713)
513,499

Cash generated from operations
  
(177,976)
2,670,584

  

Net cash (used in)/from operating activities

  
(177,976)
2,670,584
Page 16

 
LODDON HOMES LIMITED

 
 
STATEMENT OF CASH FLOWS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023









2023
2022




£
£



Cash flows from investing activities
  

Purchases of property, plant and equipment
  
(62,758)
(4,471,343)

Sale of property, plant and equipment
  
810,250
155,000

Interest received
  
5,925
-

Net cash from/(used in) investing activities

  
753,417
(4,316,343)

Cash flows from financing activities
  

(Repayments of)/Proceeds from borrowings
  
(2,048,875)
(2,643,303)

Proceeds from grants
  
-
6,688,870

Payments of finance lease creditors
  
(15,892)
(15,892)

Interest paid
  
(825,302)
(13,369)

Net cash (used in)/from financing activities
  
(2,890,069)
4,016,306

Net (decrease)/increase in cash and cash equivalents
  
(2,314,628)
2,370,547

  

Cash and cash equivalents at the beginning of year
  
3,862,984
1,492,437

Cash and cash equivalents at the end of the year
 25 
1,548,356
3,862,984

The notes on pages 19 to 45 form part of these financial statements.

Page 17

 
LODDON HOMES LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023

1.


Reporting entity

Loddon Homes Limited (the 'Company') is a private company, limited by shares and incorporated in England and Wales. The Company's registered office is at Council Offices, Shute End, Wokingham, Berkshire, RG40 1BN. The Company's principal activity is the provision of affordable and social residential rental accommodation for the people of Wokingham Borough.


2.


Basis of preparation

These financial statements have been prepared in accordance with UK adopted International Financial Reporting Standards, International Accounting Standards and Interpretations (collectively IFRSs) and, where it does not conflict with the IFRSs, the Housing SORP 2018: Statement of Recommended Practice for Registered Social Housing Providers and company with the Accounting Direction for Private Registered Providers of Social Housing 2019.
The company is a private limited company and is wholly owned subsidiary of Wokingham Borough Council which is required to prepare accounts in accordance with IFRS adapted for the UK public sector by the CIPFA Code of Practice on Local Authority Accounting in the United Kingdom Guidance Notes for Practitioners 2022/23 (the Code). Where possible the Company has selected accounting policies consistent with the Code, however where there is a conflict with the Code, UK adopted IFRs and IFIC interpretations have been followed.
Details of the Company's accounting policies are included in note 3.
In preparing these financial statements, management has made judgements, estimates and assumptions that affect the application of the Company accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates.
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to estimates are recognised prospectively.
The areas where judgements and estimates have been made in preparing the financial statements and their effects are disclosed in note 5.


2.1 Basis of measurement

The financial statements have been prepared on the historical cost basis.

Page 18

 
LODDON HOMES LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023

2.Basis of preparation (continued)


2.2 Changes in accounting policies

i) New standards, interpretations and amendments effective from 1 April 2022

The following relevant standards and amendments to IFRSs became effective for the annual reporting period beginning on 1 April 2022 and did not have a material impact on the financial statements: 
• Amendment to IAS 37, ‘Provisions, contingent liabilities and contingent assets’. Amendment effective for periods commencing on or after 1 January 2022. The amendment relates to the clarification of costs that an entity should include as the cost of fulfilling a contract when assessing whether a contract is onerous. Management’s review to determine the impact of this amendment is ongoing, however this is not expected to have a material impact. 
• Amendment to IAS 16, ‘Property, plant and equipment’. Amendment effective for periods commencing on or after 1 January 2022. The amendment relates to proceeds from selling items produced while bringing an asset into the location and condition necessary for it to be capable of operating in the manner intended by management.

ii) 

New standards, interpretations and amendments not yet effective

The following new standards, interpretations and amendments, which are not yet effective and have not
been adopted early in these financial statements, will or may have an effect on the Company's future
financial statements:
New standard, interpretation or amendment         Mandatory effective date (period beginning)
Deferred Tax related to Assets and Liabilities arising from a Single Transaction 
Amendments to IAS 12                                                                               1 January 2023
Definition of Accounting Estimates Amendments to IAS 8                         1 January 2023
Disclosure of Accounting Policies Amendments to IAS 1 
and IFRS Practice Statement 2                                                                   1 January 2023
Recognition, measurement and disclosure of leases
Amendments to IAS 16                                                                               1 January 2024   
The directors anticipate that the adoption of these Standards, interpretations and amendments in future periods are unlikely to have a material impact on the results and net assets of the Company.


3.Accounting policies


3.1

Going concern

The company's financial statements have been prepared on a going concern basis which assumes an ability to continue operating for the foreseeable future.
The company receives financial support from group companies and has no reason to believe that this support will not be continued. On this basis the accounts have been prepared on the going concern basis.

Page 19

 
LODDON HOMES LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023

3.Accounting policies (continued)

 
3.2

Revenue & expenditure

Revenue is measured based on the consideration specified in a contract with a customer and excludes amounts collected on behalf of third parties. The Company recognises revenue when it transfers control over a product or service to a customer.

The Company does not expect to have any contracts where the period between the transfer of the promised goods or services to the customer and payment by the customer exceeds one year. As a consequence, the Company does not adjust any of the transaction prices for the time value of money.

Activity is accounted for in the year that it takes place and when a right to consideration exists, not simply when cash payments are made or received. In particular:
a) Income
- Fees, charges and rents due from customers are accounted for as income at the date the Company provides the relevant goods or services;
- Revenue is measured at fair value of the consideration received or receivable and recognised when prescribed conditions are met, which depend on the nature of the revenue.
- Where revenue has been recognised by cash has not been received, a debtor for the relevant amount is recorded in the Statement of Financial Position. Where it is doubtful that debts will be
settled, the balance of debtors is written down and a charge made to revenue for the income that might not be collected;
- Where payments are received in advance of a service being provided a receipt in advance is recognised as a creditor in the Statement of Financial Position;
- Income in credited to the relevant revenue account, unless it properly represents capital receipts.
b) Expenditure
- Supplies and services are recorded as expenditure when they are consumed - where there is a gap between the date supplies are received and their consumption, they are carried as prepayments in the Statement of Financial Position;
- Works are charged as expenditure when they are completed, before which they are carried as works in progress on the Statement of Financial Position;
- Interest payable on borrowings and receivable on investments is accounted for on the basis of the effective interest rate for the relevant financial instrument rather than the cash flows fixed or determined by the contract;
- Where expenditure has been recognised by cash has not been paid, a creditor for the relevant amount is recorded in the Statement of Financial Position;
- Where payments are made in advance of a service being received a payment in advance is recognised as a debtor in the Statement of Financial Position.
- Expenditure is debited to the relevant expense account, unless it properly represents capital expenditure.

Page 20

 
LODDON HOMES LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023

3.Accounting policies (continued)

  
3.3

Leasing

Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee. All other leases are classified as operating leases.


The Company as a lessee

The Company assesses whether a contract is or contains a lease, at inception of a contract. The Company recognises a right-of-use asset and a corresponding lease liability with respect to all lease agreements in which it is the lessee, except for short-term leases (defined as leases with a lease term of 12 months or less) and leases of low-value assets. For these leases, the Company recognises the lease payments as an operating expense on a straight-line basis over the term of the lease unless another systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed.

The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted by using the rate implicit in the lease. If this rate cannot be readily determined, the Company uses its incremental borrowing rate. 

Lease payments included in the measurement of the lease liability comprise:

fixed lease payments (including in-substance fixed payments), less any lease incentives;


The lease liability is included in the 'Loans and borrowings' line in the Statement of Financial Position.

The lease liability is subsequently measured by increasing the carrying amount to reflect interest on the lease liability (using the effective interest method) and by reducing the carrying amount to reflect the lease payments made.

The right-of-use assets comprise the initial measurement of the corresponding lease liability, lease payments made at or before the commencement day and any initial direct costs. They are subsequently measured at cost less accumulated depreciation and impairment losses.

Right-of-use assets are depreciated over the shorter period of lease term and useful life of the underlying asset. If a lease transfers ownership of the underlying asset or the cost of the right-of-use asset reflects that the Company expects to exercise a purchase option, the related right-of-use asset is depreciated over the useful life of the underlying asset. The depreciation starts at the commencement date of the lease.

The right-of-use assets are included in the 'Property, Plant and Equipment' and 'Investment Property' lines, as applicable, in the Statement of Financial Position.

The Company applies IAS 36 to determine whether a right-of-use asset is impaired and accounts for any identified impairment loss as described in note 3.8.

As a practical expedient, IFRS 16 permits a lessee not to separate non-lease components, and instead account for any lease and associated non-lease components as a single arrangement. The Company has used this practical expedient.

Page 21

 
LODDON HOMES LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023

3.Accounting policies (continued)


3.4

Borrowing costs

Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are assets that necessarily take a substantial period of time to get ready for their intended use or sale, are added to the cost of those assets, until such time as the assets are substantially ready for their intended use or sale.

Investment income earned on the temporary investment of specific borrowings pending their expenditure on qualifying assets is deducted from the borrowing costs eligible for capitalisation.

All other borrowing costs are recognised in profit or loss in the period in which they are incurred.

 
3.5

Government grants

Government grants are not recognised until there is reasonable assurance that the Company will comply with the conditions attaching to them and that the grants will be received.

Government grants are recognised in profit or loss on a systematic basis over the periods in which the Company recognises as expenses the related costs for which the grants are intended to compensate. Specifically, government grants whose primary condition is that the Company should purchase, construct or otherwise acquire non-current assets are recognised as deferred revenue in the consolidated statement of financial position and transferred to profit or loss on a systematic and rational basis over the useful lives of the related assets.

Government grants that are receivable as compensation for expenses or losses already incurred or for the purpose of giving immediate financial support to the Company with no future related costs are recognised in profit or loss in the period in which they become receivable.

The benefit of a government loan at a below-market rate of interest is treated as a government grant, measured as the difference between proceeds received and the fair value of the loan based on prevailing market interest rates.

Social Housing Grants (SHG)
Where developments have been financed wholly or partly by social housing or other grants, the amount of the grant received has been included as deferred income and recognised in revenue over the estimated useful life of the associated asset structure, under the accruals model. Social Housing Grants received for items of non-capital cost are written off in the Statement of Comprehensive Income and included in revenue. 
Social Housing Grants must be recycled by the Company under certain conditions, if a property is sold or if another relevant event takes place. In these cases, the Social Housing Grants can be used for projects approved by the original awarding authority and the Homes and Communities Agency. If a grant is not recycled or repair, any unammortised grant is recognised as Revenue or under certain circumstances, may be repayable to the awarding authority

Page 22

 
LODDON HOMES LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023

3.Accounting policies (continued)

  
3.6

Employee benefits


Short-term and other long-term employee benefits

A liability is recognised for benefits accruing to employees in respect of wages and salaries, annual leave and sick leave in the period the related service is rendered at the undiscounted amount of the benefits expected to be paid in exchange for that service.

Liabilities recognised in respect of short-term employee benefits are measured at the undiscounted amount of the benefits expected to be paid in exchange for the related service.

Liabilities recognised in respect of other long-term employee benefits are measured at the present value of the estimated future cash outflows expected to be made by the Company in respect of services provided by employees up to the reporting date.

 
3.7

Taxation

Income tax expense represents the sum of the tax currently payable and deferred tax.


Deferred tax

Deferred tax is recognised on temporary differences between the carrying amounts of assets and liabilities in the consolidated financial statements and the corresponding tax bases used in the computation of taxable profit. Deferred tax liabilities are generally recognised for all taxable temporary differences. Deferred tax assets are generally recognised for all deductible temporary differences to the extent that it is probable that taxable profits will be available against which those deductible temporary differences can be utilised. Such deferred tax assets and liabilities are not recognised if the temporary difference arises from the initial recognition (other than in a business combination) of assets and liabilities in a transaction that affects neither the taxable profit nor the accounting profit.

Deferred tax liabilities are recognised for taxable temporary differences associated with investments in subsidiaries and associates, and interests in joint ventures, except where the Company is able to control the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future. Deferred tax assets arising from deductible temporary differences associated with such investments and interests are only recognised to the extent that it is probable that there will be sufficient taxable profits against which to utilise the benefits of the temporary differences and they are expected to reverse in the foreseeable future.

The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.

Deferred tax liabilities and assets are measured at the tax rates that are expected to apply in the period in which the liability is settled or the asset realised, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period.

The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the manner in which the Company expects, at the end of the reporting period, to recover or settle the carrying amount of its assets and liabilities.

Page 23

 
LODDON HOMES LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023

3.Accounting policies (continued)

 
3.8

Property, plant and equipment

Items of property, plant and equipment are measured at cost less accumulated depreciation and any accumulated impairment losses.

If significant parts of an item of property, plant and equipment have different useful lives, then they are accounted for as separate items (major components) of property, plant and equipment. Any gain or loss on disposal of an item of property, plant and equipment is recognised in profit or loss. Subsequent expenditure is capitalised only if it is probable that the future economic benefits associated with the expenditure will flow to the Company.
Shared ownership properties
The costs of low cost home ownership properties are split between current and fixed assets on the basis of the first tranche portion. The first tranche is accounted for as the current asset and the sales proceeds shown in Revenue. The remaining element of the shared ownership property is accounted for as a fixed asset and subsequent sales treated as a fixed asset disposal. 
Improvements to properties
The company capitalises expenditure on housing properties which adds to the value of the property and extends its useful life. Improvements to property that relate to existing assets and that are separately identifiable are also capitalised but under a category separate from the property. 
 

Depreciation on assets under construction does not commence until they are complete and available for use. Depreciation is provided on all other items of property, plant and equipment so as to write off their carrying value over their expected useful economic lives. It is provided at the following range:

Unadopted Infrastructure
50 years
Structure
100 years
Roof
55 years
Windows & Doors
35 years
Kitchen
20 years
Bathroom
30 years
Heating Boiler
15 years
Other Heating
20 years
Electrics
30 years
Renewable Energy Assets
20 years
Communal
20 years

Page 24

 
LODDON HOMES LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023

3.Accounting policies (continued)

  
3.9

Impairment of tangible and intangible assets other than goodwill

At the end of each reporting period, the Company reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). When it is not possible to estimate the recoverable amount of an individual asset, the Company estimates the recoverable amount of the cash-generating unit to which the asset belongs. When a reasonable and consistent basis of allocation can be identified, corporate assets are also allocated to individual cash-generating units, or otherwise they are allocated to the smallest group of cash-generating units for which a reasonable and consistent allocation basis can be identified.

Intangible assets with indefinite useful lives and intangible assets not yet available for use are tested for impairment at least annually, and whenever there is an indication that the asset may be impaired.

Recoverable amount is the higher of fair value less costs of disposal and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.

If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease (see note 3.8).

When an impairment loss subsequently reverses, the carrying amount of the asset (or a cash generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase (see note 3.8).

Page 25

 
LODDON HOMES LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023

3.Accounting policies (continued)

 
3.10

Financial instruments

Financial assets and financial liabilities are recognised when an entity becomes a party to the contractual provisions of the instruments.

Financial assets and financial liabilities are initially measured at fair value. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at fair value through profit or loss) are added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at fair value through profit or loss are recognised immediately in profit or loss.

 
3.11

Financial assets

All regular way purchases or sales of financial assets are recognised and derecognised on a trade date basis. Regular way purchases or sales are purchases or sales of financial assets that require delivery of assets within the time frame established by regulation or convention in the marketplace.

All recognised financial assets are subsequently measured in their entirety at either amortised cost or fair value, depending on the classification of the financial assets.

 
3.12

Financial liabilities and equity instruments


Financial liabilities

All financial liabilities are subsequently measured at amortised cost using the effective interest method or at FVTPL.

However, financial liabilities that arise when a transfer of a financial asset does not qualify for derecognition or when the continuing involvement approach applies, financial guarantee contracts issued by the Company, and commitments issued by the Company to provide a loan at below-market interest rate are measured in accordance with the specific accounting policies set out below.

Financial liabilities subsequently measured at amortised cost

Financial liabilities that are not (i) contingent consideration of an acquirer in a business combination, (ii) held for trading, or (iii) designated as at FVTPL, are subsequently measured at amortised cost using the effective interest method.

The effective interest method is a method of calculating the amortised cost of a financial liability and of allocating interest expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash payments (including all fees and points paid or received that form an integral part of the effective interest rate, transaction costs and other premiums or discounts) through the expected life of the financial liability, or (where appropriate) a shorter period, to the amortised cost of a financial liability.


4.


Functional and presentation currency

These financial statements are presented in pounds sterling, which is the Company's functional currency. All amounts have been rounded to the nearest pound, unless otherwise indicated.

Page 26

 
LODDON HOMES LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023

5.


Accounting estimates and judgements

5.1 Judgement

The preparation of the financial statements require management, using their judgement, to make adjustments, estimates and assumptions that affect the amounts reported in the financial statements. There were no critical judgements made in the Financial Statements.


5.2 Estimates and assumptions

The Statement of Accounts contains estimated figures that are based on assumptions made by Directors about the future or that are otherwise uncertain. Estimates are made taking into accounts historical experience, current trends and other relevant factors. However, because balances cannot be determined with certainty, actual results could be materially different from the assumptions and estimates. 
There are no items in Loddon Homes Limited's Statement of Financial Position at 31 March 2023 for which there is a significant material adjustment in the forthcoming financial year. 

Property, Plant and Equipment

Tangible fixed assets are depreciated over their useful lives taking into account residual values, where appropriate. In accordance with the guidance under SORP 2018, assets should be disclosed in terms of separable components according to how their life expectancy is predicted. The accounting for assets has assessed existing assets accordingly and an adjustment has been made to separate existing assets into know and quantifiable components. 
The accounting for the actual lives of the assets and their residual value is assessed annually and may vary depending on a number of factors. These factors can include technological innovations, product life cycles and maintenance schedules, and these are assessed to determine the consistence of asset life cycles. Residual value assessments consider issues such as future market conditions and remaining useful life and any projected disposal value and associated costs. 

Impairments
In assessing potential impairments, the Company assesses the position of each scheme rather than at an individual property level.


6.


Revenue


The following is an analysis of the Company's revenue for the year from continuing operations:


2023
2022
£
£


Revenue (See note 7)
2,586,993
4,572,034

2,586,993
4,572,034

Page 27

 
LODDON HOMES LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023

7.

Turnover, Operating Expenditure and Operating Surplus


Turnover
Cost of Sales
Operating Expenditure
Operating Surplus / (Deficit)

2022-23
2022-23
2022-23
2022-23

£
£
£
£


Social Housing Lettings  (see note 8)
1,677,321
-
(1,540,197)
137,124

First Tranche Shared Ownership Sales
831,990
(584,346)
-
247,644

Non Social Housing Lettings
-

Non Support
5,865
-
(25)
5,840

Government grants on final sale of Shared Ownership properties
(1,131)
-
-
(1,131)

Fees Receivable
72,948
-
-
72,948


TOTAL
2,586,993
(584,346)
(1,540,222)
462,425

Other than depreciation on fixtures and fittings, all other administrative expenses of the company have been allocated against social house lettings. 




Turnover
Cost of Sales
Operating Expenditure
Operating Surplus / (Deficit)

2021-22
2021-22
2021-22
2021-22

£
£
£
£


Social Housing Lettings  (see note 8)
1,155,771
-
(1,308,345)
(152,574)

First Tranche Shared Ownership Sales
3,231,625
(2,490,840)
-
740,785

Non Social Housing Lettings
-
-
-
-

Non Support
19,162
-
(25)
19,137

Government grants on final sale of Shared Ownership properties
165,476
-
(127,929)
37,547


TOTAL
4,572,034
(2,490,840)
(1,436,299)
644,895

Page 28

 
LODDON HOMES LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023

8.

Turnover and Operating Expenditure from Social Housing Letting


2023
2022

£
£


Income

Rents
1,027,405
637,537

Service Charges
126,983
219,510

Amortisation of Grant income
522,933
298,724

Turnover from Social Housing Letting (See note 7)
1,677,321
1,155,771

Expenditure

Services
100,656
69,319

Maintenance
72,963
96,347

Property Services
204,689
178,032

Housing Property Dereciation
588,569
423,038

Management Charges
58,800
235,200

Other Costs
514,520
306,409

Operating Expenditure on Social Housing Lettings
(1,540,197)
(1,308,345)


Operating Surplus/(Deficit) on Social Housing Lettings
137,124
(152,574)

Rental and Service Charge Losses from Voids is £48,115 (2022: £27,015).
Other costs include all other administrative expenses of the company excluding depreciation on fixtures and fittings. 
Management charges represent charges from the holding company, WBC (Holdings) Limited, in respect of services provided by Wokingham Borough Council.

Page 29

 
LODDON HOMES LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023

9.
Accommodation Owned, Managed and in Development


2023
2022

£
£


Units in management

1.Social rented accommodation
128
117

2. Low cost home ownership accommodation
41
41

Subtotal Social Housing Accommodation (1+2)
169
158

3. Leasehold Accommodation
0
0

Total Housing Accommodation (1+2+3)
169
158


169
158


10.


Auditors' remuneration

During the year, the Company obtained the following services from the Company's auditors:


2023
2022
£
£

Fees payable to the Company's auditors for the audit of the Company's financial statements
  
10,050
8,100

Fees payable to the company's auditors for non audit services, excluding taxation.
  
19,652
15,352

Fees payable to the company's auditors for taxation services.
  
850
700


Page 30

 
LODDON HOMES LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023

11.


Employee benefit expenses

2023
2022
£
£

Employee benefit expenses (including directors) comprise:

Wages and salaries
196,845
160,864

National insurance
13,592
8,487

Defined contribution pension cost
8,438
8,308

218,875
177,659

During the year salaries recharged to the fellow subsidiaries of the entity equated to £102,559 (2022: £78,078).

Key management personnel compensation

Key management personnel are those persons having authority and responsibility for planning, directing and controlling the activities of the Company, including the directors of the Company listed on page , and the Financial Controller of the Company.


2023
2022
£
£


Salary
49,873
43,918

Defined contribution scheme costs
-
1,229

49,873
45,147

The monthly average number of persons, including the directors, employed by the Company during the year was as follows:


2023
2022
No.
No.

Number of staff
13
9

13
9

Page 31

 
LODDON HOMES LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023

12.


Finance income and expense

Recognised in profit or loss


2023
2022
£
£
Finance income



Other interest receivable
5,925
-

Total finance income

5,925
-

Finance expense

Bank interest payable
211
34

Interest on lease liabilities
4,591
4,950

Other loan interest payable
301,748
282,628

Total finance expense
306,550
287,612


Net finance expense recognised in profit or loss
(300,625)
(287,612)

During the year total interest of £Nil (2022: £154,640) charged on the capital loans was capitalised as part of the housing properties within the property, plant and equipment balance at the year end (see note 15).





Page 32

 
LODDON HOMES LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023

13.


Tax expense

13.1 Income tax recognised in profit or loss



2023
2022
£
£

Current tax

Current tax on profits for the year
-
239,791

Total current tax
-
239,791


Deferred tax expense

Origination and reversal of timing differences
1,190
(154)

Total deferred tax
1,190
(154)


1,190
239,637


Total tax expense

On current profits for the year
1,190
239,637

1,190
239,637

The reasons for the difference between the actual tax charge for the year and the standard rate of corporation tax in the United Kingdom applied to profits for the year are as follows:


2023
2022
£
£


Profit for the year
160,609
117,646

Income tax expense (including income tax on associate, joint venture and discontinued operations)
1,190
239,637

Profit before income taxes
161,799
357,283


Tax using the Company's domestic tax rate of 19% (2022:19%)
30,742
67,884

Expenses not deductible for tax purposes, other than goodwill, amortisation and impairment
(27,762)
(12,887)

Capital gains
46,150
366,649

Group relief
(47,940)
(182,009)

Total tax expense
1,190
239,637

The capital gains element in 2022 above is the tax generated on the sale of the housing properties made within the shared ownership scheme. 

Page 33

 
LODDON HOMES LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023

13.Tax expense (continued)


13.1 Income tax recognised in profit or loss (continued)

Changes in tax rates and factors affecting the future tax charges

During March 2021 the UK chancellor announced an expected change to the UK’s main  corporation tax rates from 19% to 25% which was subsequently enacted into the Finance Act in June 2021. The main rate will increase to 25% from 1 April 2023 and will impact the corporation tax provision of the Company from that date. 





2023
2022
£
£


Current tax liabilities

Corporation tax payable
-
239,791

-
239,791

13.2 Deferred tax balances

The following is the analysis of deferred tax assets/(liabilities) presented in the statement of financial position:


2023
2022
£
£


Deferred tax assets
2,106
3,296

2,106
3,296





Page 34

 
LODDON HOMES LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023

14.


Property, plant and equipment





Housing properties
Fixtures and fittings
Right of use asset
Housing properties under construction
Total

£
£
£
£
£



Cost or valuation







At 1 April 2021
20,644,209
23,691
174,737
5,194,839
26,037,476


Additions
4,730,613
-
-
4,488,615
9,219,228


Disposals
(268,969)
-
-
(1,922,805)
(2,191,774)


Re-classified to non-current assets held for sale
(280,236)
-
-
(280,494)
(560,730)


Transfers between classes
7,480,155
-
-
(7,480,155)
-



At 31 March 2022
32,305,772
23,691
174,737
-
32,504,200


Additions
62,758
-
-
-
62,758



At 31 March 2023
32,368,530
23,691
174,737
-
32,566,958

Page 35

 
LODDON HOMES LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023

14.Property, plant and equipment (continued)


Housing properties
Fixtures and fittings
Right of use asset
Housing properties under construction
Total

£
£
£
£
£



Accumulated depreciation and impairment







At 1 April 2021
984,443
23,591
23,560
-
1,031,594


Charge owned for the year
423,063
25
-
-
423,088


Charged financed for the year
-
-
11,780
-
11,780


Disposals
(9,121)
-
-
-
(9,121)



At 31 March 2022
1,398,385
23,616
35,340
-
1,457,341


Charge owned for the year
588,569
25
-
-
588,594


Charged financed for the year
-
-
11,777
-
11,777



At 31 March 2023
1,986,954
23,641
47,117
-
2,057,712



Net book value


At 1 April 2021
19,659,766
100
151,177
5,194,839
25,005,882


At 31 March 2022
30,907,387
75
139,397
-
31,046,859


At 31 March 2023
30,381,576
50
127,620
-
30,509,246

Included within Housing properties are completed shared ownership properties with a net book value of £5,805,619 (2022: £5,919,616).

Page 36

 
LODDON HOMES LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023

15.


Trade and other receivables


2023
2022
£
£


Trade receivables
252,395
315,094

Trade receivables - net
252,395
315,094

Loans to related parties
37,662
232,482

Amounts recoverable from long-term contracts
1,599,650
1,511,650

Total financial assets other than cash and cash equivalents classified as loans and receivables
1,889,707
2,059,226

Prepayments and accrued income
38,861
18,690

Other receivables
8,025
8,268

Total trade and other receivables
1,936,593
2,086,184

Less: current portion - trade receivables
(252,395)
(315,094)

Less: current portion - prepayments and accrued income
(38,861)
(18,690)

Less: current portion - other receivables
(8,025)
(8,268)

Less: current portion - receivables from related parties
(37,662)
(232,482)

Total current portion
(336,943)
(574,534)

Total non-current portion
1,599,650
1,511,650

In respect of the other loans of £1,599,650 (2022: £1,511,650), which are equity share scheme loans, the company has obtained security by way of mortgages on the properties to which the loans have been used to acquire. 
The loan balance of £1,599,650 does not carry interest and has no fixed repayment date. However, the terms of the loans are such that the repayment of the loan is based on a percentage of the market value of the property at the date of repayment. This percentage is the proportion of the initial loan advanced compared to the market valuation of the property at the date of the initial advance.
These loans are backed by a corresponding loan that was advanced to the entity by Wokingham Borough Council, which have the exact same repayment terms. As the determination of the present value of the loans advanced and received is based on a number of uncertain variables and as both loans advanced and received carry the same terms, the directors consider that the loans should be shown at amortised cost within the financial statements.

Page 37

 
LODDON HOMES LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023

16.


Trade and other payables


2023
2022
£
£


Trade payables
35,466
146,446

Payables to related parties
12,760,516
15,334,777

Other payables
40,822
50,883

Accruals
168,481
425,620

Total financial liabilities, excluding loans and borrowings, classified as financial liabilities measured at amortised cost
13,005,285
15,957,726

Other payables - tax and social security payments
5
244,339

Deferred income
21,267,138
21,790,070

Total trade and other payables
34,272,428
37,992,135

Less: current portion - trade payables
(35,466)
(146,446)

Less: current portion - payables to related parties
(3,335,195)
(5,048,199)

Less: current portion - other payables
(40,822)
(295,222)

Less: current portion - accruals
(168,481)
(425,620)

Less: current portion - deferred income
(417,883)
(417,883)

Total current portion
(3,997,847)
(6,333,370)

Total non-current position
30,274,579
31,658,765


17.


Loans and borrowings

Included in loans and borrowings are amounts relating to amounts due under right of use assets under IFRS 16 as follows: 


2023
2022
£
£

Non-current

Lease liabilities
136,202
147,820

Current

Lease liabilities
11,618
11,275

11,618
11,275

Total loans and borrowings
147,820
159,095

Page 38

 
LODDON HOMES LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023

18.


Loans from related parties

2023
2022
£
£

Secured - at amortised cost


Loans from related parties
8,320,323
8,754,677

8,320,323
8,754,677

Unsecured - at amortised cost


Loans from related parties - Note 24
1,599,650
1,531,900

1,599,650
1,531,900

Secured - at amortised cost:
The loans are secured by assets as disclosed in note 23.  Interest is charged at a fixed rates of 3.5% on these loans.
The carrying value of loans and borrowings classified as financial liabilities measured at amortised cost approximates to their fair value. 
Unsecured - at amortised cost:
The loan balance of £1,599,650 represents loans from Wokingham Borough Council in respect of Equity Share Scheme loans advanced by Loddon Homes Limited. The terms of the loans are the same as the loans advanced by the company in note 15. 
As the determination of the present value of the loans advanced and received is based on a number of uncertain variables and as both loans advanced and received carry the same terms, the directors consider that the loans should be shown at amortised cost within the financial statements.

Page 39

 
LODDON HOMES LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023

19.


Assets and liabilities classified as held for sale


(i) Assets and liabilities held for sale

2023
2022
£
£


Freehold property
-
567,354

Assets held for sale
-
567,354



20.


Share capital

Authorised

2023
2023
2022
2022
Number
£
Number
£

Shares treated as equity
Ordinary shares shares of £1.00 each

1

1

1
 
1
 
1

1

1
 
1
 

Issued and fully paid


2023
2023
2022
2022
Number
£
Number
£

Ordinary shares shares of £1.00 each

At 1 April and 31 March
1

1

1
 
1
 


21.


Reserves


Cumulative amount of share capital issued and retained earnings.

Retained earnings

Cumulative net profit and losses recognised in the Statement of Comprehensive Income net of amounts recognised directly in equity.

Page 40

 
LODDON HOMES LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023

22.


Leases




(i) Leases as a lessee



The company has a property which it leases on a 21 year lease. 


Lease liabilities are due as follows:

2023
2022
£
£

Contractual undiscounted cash flows due

Not later than one year
15,892
15,892

Between one year and five years
63,568
63,568

Later than five years
92,703
108,595

172,163
188,055


Lease liabilities included in the Statement of Financial Position at 31 March
147,820
159,095


Non-current
136,202
147,820

Current
11,618
11,275


The following amounts in respect of leases have been recognised in profit or loss:

2023
2022
£
£

Interest expense on lease liabilities
4,591
4,950

Page 41

 
LODDON HOMES LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023

23.


Financial instruments - fair values and risk management

23.1 Accounting classifications and fair values

The following table shows the carrying amounts and fair values of financial assets and financial liabilities. It does not include fair value information for financial assets and financial liabilities not measured at fair value if the carrying amount is a reasonable approximation of fair value.


31 March 2023
Note
Amortised cost
Total


        £
        £

Financial assets not measured at fair value


  




Trade and other receivables

 15 

1,936,593

1,936,593

Cash and cash equivalents

 25 

1,548,356

1,548,356



  


3,484,949
3,484,949
Financial liabilities not measured at fair value


  




Financial lease liabilities

 17 

(147,820)

(147,820)

Trade and other payables

 16 

(13,005,285)

(13,005,285)


  


(13,153,105)
(13,153,105)

Page 42

 
LODDON HOMES LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023

23.Financial instruments - fair values and risk management (continued)


23.1 Accounting classifications and fair values (continued)


31 March 2022
Note
Amortised cost
Total


        £
        £

Financial assets not measured at fair value


  




Trade and other receivables

 15 

2,086,184

2,086,184

Cash and cash equivalents

 25 

3,862,984

3,862,984



  


5,949,168
5,949,168
Financial liabilities not measured at fair value


  




Financial lease liabilities

 17 

(159,095)

(159,095)

Trade payables

 16 

(15,957,726)

(15,957,726)


  


(16,116,821)
(16,116,821)


23.2 Credit risk management

Credit risks arise from deposits with banks and financial institutions, as well as credit exposures to the Company's customers. 
 



23.3 Liquidity risk management

Wokingham Borough Council as the ultimate parent company has a comprehensive cash flow management system that seeks to ensure that cash is available as needed. If unexpected movements happen, Wokingham Borough Council has ready access to borrowing from Money Markets and the Public Works Loans Board. There is no significant risk that Loddon Homes Limited will be unable to raise finance to meet its commitments under financial instruments. 

The Company's exposure to a liquidity risk at 31 March 2023 arose from loans from WBC (Holdings) Limited. The loans from WBC (Holdings) Limited are long term and are charged interest at a fixed rate of 5.75% for three years from 1 April 2016 and at a fixed rate of 3.5% thereafter.

Page 43

 
LODDON HOMES LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023

24.


Related party transactions

The Directors of the Company regard WBC (Holdings) Limited as the immediate parent of the Company. 
The Directors of the Company regard Wokingham Borough Council, a local authority in England and Wales, as the ultimate parent of the Company. The Company's results are included in the consolidated financial statements of Wokingham Borough Council. Copies of the Consolidated Group Accounts are available from Wokingham Borough Council, Civic Offices, Shute End, Wokingham, RG40 1BN. 
During the year purchases were made from Wokingham Housing Limited of £5,499 (2022: £4,333,975), Berry Brook Homes Limited of £2,370 & Wokingham Borough Council of £533,878 (2022: £226,423).
During the year salary recharges were made to Berry Brook Homes Limited of £111,393 (2022: £80,420).
At 31 March 2023, loans were outstanding (to)/from related parties:

24.1 Loans to related parties


2023
2022
£
£

Long Term Loans

WBC (Holdings) Limited
(7,825,670)
(8,754,677)

Wokingham Borough Council - Note 18
(1,599,650)
(1,531,900)

Short Term Loans

WBC (Holdings) Limited
(463,851)
(2,249,346)

Wokingham Borough Council
(160,319)
(76,150)

Wokingham Housing Limited
(2,676,793)
(2,539,168)

Berry Brook Homes Limited
3,430
48,947

(12,722,853)
(15,102,294)


25.

Notes supporting statement of cash flows

2023
2022
£
£


Cash at bank available on demand
1,548,356
3,862,984

Cash and cash equivalents in the statement of financial position

1,548,356
3,862,984


Cash and cash equivalents in the statement of cash flows
1,548,356
3,862,984

Page 44

 
LODDON HOMES LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023

26.


Assets pledged as security

The carrying amounts of assets pledged as security for current and non-current borrowings are:


2023
2022
£
£

Floating charge

Cash and cash equivalents
1,548,356
3,862,984

Receivables
1,981,707
2,059,226

Total current assets pledged as security
3,530,063
5,922,210


Non-current

First mortgage

Freehold land and property
30,381,626
30,907,387

30,381,626
30,907,387

Total non-current assets
30,381,626
30,907,387

Total assets pledged as security
33,911,689
36,829,597


27.

Events after the reporting date

No adjusting or significant non-adjusting events have occurred between the 31 March reporting date and the date of authorisation. 


28.


Capital management

The Company's capital management objective is to ensure that the appropriate level of capital is available to fulfil the strategic objectives of the company. This is carried out by actively managing their cash reserves as well as obtaining long-term debt finance from its ultimate parent entity, Wokingham Borough Council.

The Company is not subject to any externally imposed capital requirements.

Page 45