Tower Hamlets Homes Limited

Tower Hamlets Homes Limited

Directors' Report and Financial Statements

31 March 2022

for the year ended 31 March 2022

Company Limited By Guarantee

Registered in England: 06249790

TOWER HAMLETS HOMES LIMITED

Year ended 31 March 2022

TOWER HAMLETS HOMES LIMITED

Year ended 31 March 2022

Board of Directors:

TOWER HAMLETS HOMES LIMITED

Year ended 31 March 2022

Company information continued

Company Secretary

Neil Isaac

Executive Management Team

The members of the Executive Management Team who held office in the year are listed below with their current Directorate responsibilities.

TOWER HAMLETS HOMES LIMITED

Year ended 31 March 2022

Directors' report

The Directors present their report and the audited financial statements for the year ended 31 March 2022.

Legal Status

Tower Hamlets Homes Limited (THH) is a company limited by guarantee, incorporated on 16 May 2007 under the registration number 06249790.

The Company is a controlled Company (by the London Borough of Tower Hamlets “LBTH”), limited by guarantee without any share capital. The Council undertakes, in the event of the Company being wound up, to contribute such amount as may be required for the payment of the debts and liabilities of the Company providing this amount does not exceed £1.

The Company was overseen by a Board which met regularly throughout the year. The composition of the Board reflects the range and mix of skills and experience required for the effective management of the Company.

The day to day running of the Company's business has been delegated by the Board to the Executive Management Team.

Parent Organisation Address:

Tower Hamlets Council Town Hall

Mulberry Place

5 Clove Crescent

E14 2BG

Directors' interests

The directors who held office during the year are detailed on page 3.

London Borough of Tower Hamlets is the sole member (owner) of the company. No director was a member of the company between 1 April 2021 and 31 March 2022 inclusive.

Political and charitable contributions

The Company made no contributions to political or charitable organisations.

Employment of Disabled Persons

THH promotes equality of opportunity in its recruitment, selection, training and development policies and practice.

We welcome applications from applicants with disabilities and evaluate solely on ability to carry out the duties of the job, taking into account any reasonable adjustments required.

Qualifying third party indemnity provision

TOWER HAMLETS HOMES LIMITED

Year ended 31 March 2022

Directors' report (continued)

Communications Policy

The Company communicates all matters of financial or other interest to staff through its monthly electronic in-house newsletter, through team meetings or through other media as appropriate.

Engagement with Employees

THH has a formal staff engagement process with recognised Trade Unions known as the Trade Union Forum. For Health and Safety matters there is a Health and Safety Forum. Each of these forums is chaired by a member of the Executive Management Team. These Forums are used to consult and engage with staff on policy changes and current issues as well as providing an escalation point for Trade Unions should the need arise for example where local resolution has not proved possible.

During the pandemic there has been much greater engagement as THH, and staff had to adjust to the government restrictions and guidelines.

THH is committed to the development of staff through an annual appraisal process and has a learning and development advisor who coordinates the necessary training from the appraisals. In addition, there are dedicated trainee, apprenticeship and kick start roles across the organisation ranging from entry level to professional qualification.

THH is an equal opportunities employer with appointment made on merit selecting the best person for the job against objective job-related criteria, irrespective of race, religion, ethnic or natural origin, gender, sexual orientation, disability, domestic circumstances or social and employments status, HIV status, age, political affiliation or trade union membership. We are also a two ticks employer that guarantees an interview to an applicant with a disability who meets essential criteria.

THH has also recently retained its accreditation from the Housing Diversity network, with 11 areas of distinction.

Going Concern

The company has disclosed its business activities, principal risks and uncertainties in the strategic report on-pages 9 to 17. THH has significant cash reserves and retains a contractual relationship with its only client until 2024. The new management agreement has been signed which demonstrates that long term commitment from the Council. The directors recognise the greater scrutiny over going concern in the light of significant corporate failings in the recent past and the additional risks and uncertainties arising from the Coronavirus pandemic. However, after taking these risks into account the directors consider the company is well placed to continue its business while managing the current risks and uncertainties.

Taxation status

The company is a local authority-controlled company within the meaning of Part V of the Local Government and Housing Act 1989, being a company under the control of London Borough of Tower Hamlets.

TOWER HAMLETS HOMES LIMITED

Year ended 31 March 2022

Directors' report (continued)

Statement of directors' responsibilities in respect of the financial statements

The directors are responsible for preparing the Annual Report and the financial statements in accordance with applicable law and regulations.

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 UK accounting standards and applicable law (UK Generally Accepted Accounting Practice), including FRS 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland and applicable law).

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 these financial statements, the directors are required to:

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.

The directors 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.

The directors are responsible for the maintenance and integrity of the corporate and financial information included on the company's website. Legislation in the UK governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

TOWER HAMLETS HOMES LIMITED

Year ended 31 March 2022

Directors' report (continued)

Statement of disclosure of information to auditors

Strategic report

The company has chosen in accordance with the Companies Act 2006 S.414(c) to set out in the company's strategic report information required by schedule 7. It was done so in accordance with future developments.

Independent auditors

Kirk Rice LLP were appointed as the company's auditors at the annual general meeting held on 9th April 2021.

By order of the Board

The Directors' Report was approved by the Board on 20 December 2022 and signed on its behalf by:

Neil Isaac

Company Secretary

Second Floor

City Reach

5 Greenwich View Place

London E14 9NN

TOWER HAMLETS HOMES LIMITED

Year ended 31 March 2022

Strategic Report

The Directors present their strategic report for the year ended 31 March 2022.

Business Review

THH is an Arm's Length Management Organisation (ALMO) set up by the LBTH to provide housing management services, including the income collection, tenancy management, estate services, day-to-day repairs, major works, planned maintenance, leaseholder services, resident participation, customer services, service development and training to residents of the borough's housing.

The ALMO started on 7th July 2008 under a ten-year term contract with a five-year break clause. Since inception we have achieved the two-star performance threshold required to access Government funding and secured £108m grant for investment in stock. We have a solid track record of improved performance, income collection, and resident satisfaction while reducing the annual management fee. In recognising these achievements, on the 6th December 2016 LBTH's Mayoral decision approved a two-year contract extension to the 7th July 2020.

The Council commissioned an external organisation to undertake a review of THH as part of its consideration of future options for the delivery of Housing Management services. Following the successful outcome of the review, the Council's Cabinet meeting in July 2019 agreed to extend the management agreement with THH for up to eight years to 2028, with an initial four year term up to March 2024. An updated management agreement has been signed by the Board and the Council to ensure that THH continues to deliver for the Council.

The implementation of a five-year saving strategy by the Council starting in 2017/18 with the final year 2021/22 has emphasised the need for THH to focus on efficiency and value-for-money, as a result THH initiated a Company-wide transformational change programme including a review of resources and service delivery models in 2016/17 supported by significant digital investment. This will ensure resources are better focussed on the needs of our residents and meeting the Council's aspirations for the service. This will also prepare THH for its move into the new Town Hall in Whitechapel in 2023. The Council and THH are working together on updating the HRA Business Plan to ensure that there is a shared understanding of priorities for the HRA and how THH can deliver those priorities for the existing stock.

The Company has a new Business Plan April 2020 to March 2026 to Create Great with strategic objectives to focus on the delivery of Great Homes, Great Services and Great Communities.

Create Great will guide the next steps forward in the transformation of services for residents. It directly contributes to achieving the Council's priorities as established in the Strategic Plan and responds to what residents tell us is important to them.

Create Great takes account of the changing context in which we operate. This includes new regulatory requirement heralded by the Social Housing Green Paper, findings from the Grenfell Tower Enquiry and the requirements of the new Building Safety Regulator. These issues are discussed later in this report.

We believe improving how we do things is every bit as important as what we do. This belief underpins our ambitious transformation programme which improves customer experience and responds to feedback from leaseholders by changing fundamentally how we do things. The programme brings together a comprehensive range of actions that focus on building a customer first culture, modernising service delivery and investing in a highly motivated and skilled workforce.

TOWER HAMLETS HOMES LIMITED

Year ended 31 March 2022

Strategic Report (continued)

Section 172 Statement

Section 172 of the Companies Act 2006 (CA 2006) provides that boards must take consideration of stakeholder interests. The section 172 statement requires directors to explain how they considered these interests when performing their duty to promote the success of the company having regard to:

The preceding pages of the annual report set out in some detail the performance of the Company over the last financial year. This statement draws from that detail to demonstrate how THH complies with the requirements of Section 172.

LBTH is both the sole member of the Company and the main stakeholder. Other stakeholders include the tenants and leaseholders of the Borough to whom THH provides services. The Council has the right to appoint and remove directors. Four of the Director positions are reserved for tenants and leaseholders.

The THH Business Plan is the key strategic document for THH. We consult residents on it's preparation and is considered by the Board prior to submission to the Council. The Board consider the Council's comments prior to its formal sign off. Key (Business Critical) performance indicators are monitored by the Board at every meeting and any necessary action taken. The Council also receives the performance monitoring information, and it is scrutinised at various levels within the Council, including by the Executive Mayor of Tower Hamlets.

Residents are at the heart of what we do. We work with residents and their representative associations on key issues such as building safety and compliance as well as on service delivery issues. We also work with the Resident Scrutiny Panel which operates independently with its reports being considered by the Board. Tenant and leasehold satisfaction measures are included in the suite of Business Critical indicators.

Staff engagement has been especially important during the Covid pandemic and the recovery post pandemic. While some staff have been working remotely, a significant cohort of front-line staff have worked throughout. We supported those staff with PPE and Covid secure working environments and adjusted working hours so commuting could be undertaken off peak. We have undertaken regular Pulse surveys of staff and made changes where appropriate including offering assistance with home working equipment.

Staff satisfaction data has actually improved during the pandemic, this has been sustained post pandemic with the second highest rating and highest response rate from the most recent survey.

Working with the Council we are also subject to the oversight of the Social Housing Regulator and the Housing Ombudsman. We have a good working relationship with both organisations. This relationship will continue to evolve given the recent consultation from the Social Housing Regulator on tenant satisfaction measures.

Payments are made to suppliers when they fall due.

TOWER HAMLETS HOMES LIMITED

Year ended 31 March 2022

Strategic Report (continued)

Results & Performance

The Company's principal activity during the year is the provision of housing management services to residents of LBTH. The Company also manages delivery of the planned and responsive repairs and maintenance programme and manages delivery of the housing investment programme for LBTH. In the last 24 months before the pandemic the performance of THH has been recognised by the housing profession by a range of awards and accreditations won by Tower Hamlets Homes. These awards include being declared landlord of the year at the UK Housing Awards and the Caretaking Service winning the front-line team of the year at the Housing Heroes Awards. Post pandemic the ASB team won Team of the Year at Housing Heroes Awards in 2022

Tower Hamlets Homes' performance against the Business Critical Performance Indicators for 2021/22 and the outturn for 2020/21 is shown in the table below.

Like many social housing organisations, the pandemic led to reduced demand for services from THH, especially repairs, provided within residents' homes. Unsurprisingly therefore, as the borough recovered from the pandemic, demand for services increased as residents sought to catch up on repair requests that had not been raised in previous years. At times the repair service and the Housing Service Centre struggled to meet the high level of demand, this explains the slightly lower performance in the qualitative performance measures of satisfaction.

The performance on the quantitative indicators held up well especially major works delivery, void turnaround and income collection.

TOWER HAMLETS HOMES LIMITED

Year ended 31 March 2022

Strategic Report (continued)

Events after the reporting period

The local government elections in May 2022 resulted in a change of political control in Tower Hamlets with the Aspire party winning the mayoralty and taking control of the Council. One of the manifesto pledges was to consult on bringing THH back in house. The timetable on that consultation will run through the autumn of 2022, with a decision on the future likely to be taken in the spring. Should a decision be taken to bring THH inhouse then the implementation of that decision is likely to be in line with the existing contract end date of 31 March 2024. Thus, the manifesto pledge will not have an impact on the preparation of these financial statements.

We continue to work with Council colleagues on updating the Housing Revenue Account Business Plan. This will incorporate the impact of the new Building Safety regime and the government's carbon reduction plans alongside the existing priorities for new homes and investment in the existing stock.

While there is no change to the functions of the Company in providing services to the London Borough of Tower Hamlets, it is likely that THH will devote a greater level of resources to building safety than in the past, while delivering savings that will be necessary to ensure that the HRA is sustainable in the medium term.

Financial Summary

The Company received management fee and other fees from LBTH of £38.4m (2021: £37.5m) to manage and maintain LBTH's HRA stock. Although managed by the Company, the cost of repairs and maintenance and investment programmes are shown in LBTH's financial statements.

The Management fee we receive from LBTH covers all our operational costs. For 2021/22 we realised a total comprehensive loss of £592k (2021: Surplus of £959k) after pension adjustment.

Before taking into account pension adjustments, which relevant organisations are required to make under accounting regulations, our position was an operating loss of £5,973k (2021: loss of £752k).

We are recognising a pension fund surplus of £8,389k as asset on our balance sheet together with a corresponding liability. As any surplus is due to LBTH (As per the management agreement).

Going Concern

Introduction

THH management have considered a range of issues that could affect the Going Concern status of the Company. These include:

TOWER HAMLETS HOMES LIMITED

Year ended 31 March 2022

Strategic Report (continued)

The impact of Covid and the cost of living

Given the contractual arrangements between THH and the Council the income stream is fully insulated from the impact of Covid and the cost of living.

The Company had to revise its working practices to ensure the safety of both staff and residents both during the Covid pandemic and the covid recovery phase.

We have post Covid actions in place to address non urgent repairs and void turnaround rates that were adversely affected by the pandemic. The void turnaround improved significantly during 2021/22, however we are still working on clearing the backlog of non urgent repairs.

The cost of living crisis did not have a significant impact on our performance during 2021/22. However, we expect significant challenges in 2022/23 as the impact of high inflation generally and energy costs in particular have an adverse impact on household finances. We anticipate that the Financial Health centre will be even busier than usual as residents struggle to make ends meet.

For Office based staff we continue to operate a home working arrangement where feasible and use the offices as touch down points for staff who cannot undertake all their duties from home.

As the pandemic has abated, we have moved to a more hybrid form of working to ensure all our services continue to be provided.

The pandemic has had some impact on our performance, but we have been able to maintain our safety compliance performance including on gas safety and high rent collection rates.

Post Covid actions were to address non urgent repairs and void turnaround rates that were adversely affected by the pandemic.

We are confident that we are well positioned to manage any winter surge in 2022/23.

TOWER HAMLETS HOMES LIMITED

Year ended 31 March 2022

Strategic Report (continued)

Relationship with the client as sole Member

THH has a single client, the London Borough of Tower Hamlets. The Council is also the sole Member of the Company so has ultimate control. THH works hard to provide a good service and sustain a good relationship with the Council, both formally and informally.

As reported in our accounts last year we have a management contract that runs until the end of March 2024, with an option for the Council to extend for a further four years.

THH is committed to providing high quality services to its residents and the management agreement reflects this commitment including a robust performance management framework for THH. Although it is anticipated that any performance issues will be resolved informally, there is a clear process for contractual remedy that requires THH to produce an action plan for delivering the necessary improvement and the joint monitoring of that plan. There are no such improvement plans requested or in place at the time of writing this report.

Alongside the formal contract THH have regular meetings with Council colleagues at all levels including the elected Mayor and Cabinet lead Member to address any issues of concern. The Corporate Director of Resources at LBTH has provided assurance that LBTH will continue to support THH in line with its management agreement.

There are no contractual issues at the time of writing given the quality of relationships with Council colleagues, THH are confident that it remains a going concern.

Defined Benefit Pension Scheme

There are full pension fund disclosures in these financial statements (see note 13). The Council undertakes a triennial valuation to assess its long-term funding position and fix employer contribution rates. The fund as a whole is well funded, and the Council is committed in the management agreement to support THH in its membership of the fund.

THH therefore does not consider that the pension scheme represents a significant risk.

Day to day operations

The internal control statement sets out the systems that are in place to safeguard the company and its assets. These controls underpin the day-to-day operations and demonstrate THH's ability to continue its operations on a going concern basis. These include management controls and a programme of internal audits to ensure that those controls are adequate and effective. Risks are also mitigated by insurance where appropriate, for example insurance is in place for public and employer liability and for directors and officers. THH was subject to a HMRC VAT inspection, in the prior year there were no major issues, THH are compliant with requirements of other regulators such as the Social Housing and Pensions Regulators.

The payment of the management fee from the Council is a contractual obligation. Essentially this means that the Council is bearing the initial risks to the HRA Business Plan.

TOWER HAMLETS HOMES LIMITED

Year ended 31 March 2022

Strategic Report (continued)

Day to day operations (continued)

These range from changes in government policy for example on building safety and rent levels and unforeseen events such as the Covid pandemic. This has allowed us to work with the Council on a planned basis to deliver savings of £6m over the five financial years up to 2021/22.

On a day to day basis THH includes a contingency in its annual budget and maintains a level of reserves of the order of 10% of its turnover to enable the Company to meet any unforeseen events in the 12 months following the approval of these financial statements.

Fire and building safety

Fire and building safety are risks that are known and that will be crystallised as the secondary legislation arising from the Fire Safety and Building Safety Acts is published.

THH and the Council are working closely on the implications and following the advice of the government and regulator, that that landlords shouldn't wait for the legislation to be in place. A growth bid was approved by the Council for 2022/23 for resources to enable THH to meet the Council's obligations going forward. Work is also underway to understand the requirements of the Building Safety Regulator and other issues as a result of the secondary legislation arising from the Fire Safety and Building Safety Acts.

Conclusion

Taking these issues into account the Board and Executive Management Team are satisfied that THH remains a going concern.

Engagement with Employees, Suppliers, Customers and Others

Statutory Instrument 2008/410 sch7 requires the directors report to include engagement with Employees, Suppliers, Customers and Others. The engagement with the Council as key stakeholder is included in the going concern section above, in the context of the statutory instrument the Council is also the only customer of THH.

THH has a formal staff engagement process with recognised Trade Unions known as the Trade Union Forum, for Health and Safety matters there is a Health and Safety Forum. Each Forum is chaired by a member of the Executive Management Team.

These Forums are used to consult and engage with staff on policy changes and current issues as well as providing an escalation point for Trade Unions should the need arise, for example where local resolution has not proved possible. During the pandemic recovery period there has been much greater engagement as THH, and staff had to adjust to the ever changing rules and regulations.

TOWER HAMLETS HOMES LIMITED

Year ended 31 March 2022

Strategic Report (continued)

Engagement with Employees, Suppliers, Customers and Others (continued)

THH is committed to the development of staff through an annual appraisal process and has a learning and development advisor who coordinates the necessary training from the appraisals. In addition, there are dedicated trainee, apprenticeship and kick start roles across the organisation ranging from entry level to professional qualification.

THH is an equal opportunities employer with appointment made on merit selecting the best person for the job against objective job-related criteria, irrespective of race, religion, ethnic or natural origin, gender, sexual orientation, disability, domestic circumstances or social and employments status, HIV status, age, political affiliation or trade union membership. We are also a two ticks employer that guarantees an interview to an applicant with a disability who meets essential criteria.

THH has also retained its accreditation from the Housing Diversity network in 2021, with 11 areas of distinction.

Principal Risks and Uncertainties

The Board has overall responsibility for identifying and mitigating the principal risks it is willing to take to achieve the Company's strategic objectives. This is done within the Company's system of internal control including effective risk management and internal audit. The risk management arrangements have been strengthened in 2021/22 to ensure risks are properly managed across the organisation.

Strategic risks are considered by their potential to impact on the delivery of the aims, objectives and the provision of services together with the predicted likelihood of the actual event or occurrence and the score registered on a risk matrix. A member of executive management team is assigned as being the risk owner and assumes the responsibility of ensuring effective mitigation actions are in place.

The key risks faced by the business include a serious breach of Health & Safety compliance, a breach of Data protection, and the potential impact of Covid-19 on the business generally and income collection in particular.

The business has set aside appropriate provisions to meet its liabilities and has accumulated reserves to facilitate service delivery and protect the business against uncertain risk.

TOWER HAMLETS HOMES LIMITED

Year ended 31 March 2022

Strategic Report (continued)

Principal Risks and Uncertainties (continued)

The building and fire safety duties that are placed upon THH and the Council have been highlighted elsewhere in this report as has the enhanced role of the Social Housing Regulator and the Housing Ombudsman. The governance structure of THH has been enhanced by the creation of two new Committees of the Board to ensure the necessary Board oversight.

Neil Isaac

Company Secretary

Second Floor, City Reach

5 Greenwich View Place

London E14 9NN

TOWER HAMLETS HOMES LIMITED

Year ended 31 March 2022

Statement of Internal Control

The Board of Directors acknowledges its ultimate responsibility for ensuring that the Company has in place a system of controls that are appropriate to the various business environments in which it operates. These controls are designed to give reasonable assurance with respect to:

It is the Board of Directors' responsibility to establish and maintain systems of internal financial control. Such systems can only provide reasonable and not absolute assurance against material financial misstatement or loss. The system of financial control includes the following key elements:

TOWER HAMLETS HOMES LIMITED

Year ended 31 March 2022

Statement of Internal Control

During the period management have received regular reports from the internal auditors covering the effectiveness of the systems of operational and financial controls. On behalf of the Board, management has reviewed the effectiveness of systems of internal financial control in existence for the year ended 31 March 2022. No weaknesses were found in the internal controls which could result in material losses, contingencies or uncertainties which require disclosure in the financial statements. The Board of Directors is satisfied that this remains the case up to the signing of these documents.

Ann Lucas

Chair

Second Floor, City Reach, 5 Greenwich View Place

London E14 9NN

Reg. No. 06249790

INDEPENDENT AUDITOR'S REPORT TO THE MEMBER OF TOWER HAMLETS HOMES LIMITED

Opinion

We have audited the financial statements of Tower Hamlets Homes Limited (the 'company') for the year ended 31 March 2022 which comprise the statement of comprehensive income, the statement of financial position, the statement of cash flows, the statement of changes in equity, and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including FRS 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC's Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Conclusions relating to going concern

We are responsible for concluding on the appropriateness of the directors' use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify the auditor's opinion. Our conclusions are based on the audit evidence obtained up to the date of our report. However, future events or conditions may cause the Company to cease to continue as a going concern

In our evaluation of the directors' conclusions, we considered the inherent risks associated with the Company's business model including effects arising from macro-economic uncertainties such as Covid-19, we assessed and challenged the reasonableness of estimates made by the directors and the related disclosures and analysed how those risks might affect the Company's financial resources or ability to continue operations over the going concern period.

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.

INDEPENDENT AUDITOR'S REPORT TO THE MEMBER OF TOWER HAMLETS HOMES LIMITED (continued)

Conclusions relating to going concern (continued)

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.

Our responsibilities and the responsibilities of the directors 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 directors are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other i nformation and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.

Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or to 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.

Opinions on other matters prescribed by the Companies Act 2006

Matters on which we are required to report by exception

INDEPENDENT AUDITOR'S REPORT TO THE MEMBER OF TOWER HAMLETS HOMES LIMITED (continued)

Responsibilities of directors

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

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 misstatement in respect of irregularities, including fraud.

Based on our understanding of the company and its environment, we identified the principal risks of noncompliance with laws and regulations related to the Companies Act 2006, Localism Act 2011 and the Housing Act 2004, and we considered the extent of which non-compliance might have a material effect on the financial statements. We also considered the direct impact of these laws and regulations on the financial statements. We evaluated incentives and opportunities for fraudulent manipulation of the financial statements including the risk of override of controls, by the directors, management and those responsible for, or involved in, the preparation of the underlying accounting records and financial statements, and determined that the principle risks were related to the posting of inappropriate journals to manipulate financial results or conceal the misappropriation of assets and potential management bias in accounting estimates. Audit procedures performed included:

INDEPENDENT AUDITOR'S REPORT TO THE MEMBER OF TOWER HAMLETS HOMES LIMITED (continued)

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

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 misrepresentation, or through collusion.

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. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members, as a body, for our audit work, for this report, or for the opinions we have formed.

TOWER HAMLETS HOMES LIMITED

Year ended 31 March 2022

All amounts relate to continuing operations.

The notes on pages 28 to 48 form part of these financial statements.

TOWER HAMLETS HOMES LIMITED

Year ended 31 March 2022

The notes on pages 28 to 48 form part of these financial statements.

The financial statements were approved by the board on 20 December 2022 and were signed on its behalf by:

Ann Lucas

Chair

Second Floor, City Reach, 5 Greenwich View Place

London E14 9NN

TOWER HAMLETS HOMES LIMITED

Year ended 31 March 2022

The notes on pages 28-48 form part of these statements.

TOWER HAMLETS HOMES LIMITED

Year ended 31 March 2022

Statement of Changes in Equity

The notes on pages 28 to 48 form part of these financial statements.

TOWER HAMLETS HOMES LIMITED

Year ended 31 March 2022

Notes

(forming part of the financial statements)

1.     Accounting policies

The following accounting policies have been applied in dealing with items which are considered material in relation to the Company's financial statements.

Status of Company & Composition of the Board

The Company is a private company incorporated in the United Kingdom and is registered in England and limited by guarantee without share capital. The address of its registered office is Second Floor, City Reach, 5 Greenwich View Place, London, E14 9NN. The London Borough of Tower Hamlets, the ultimate parent organisation, undertakes in the event of the Company being wound up, to contribute such amount as may be required for the payment of the debts and liabilities of the Company providing this amount does not exceed one pound. After the satisfaction of all the debts and liabilities the remaining assets will be transferred to the Council's Housing Revenue Account (as defined in the 1989 Act).

A Board of non-executive directors provides strategic management of the Company and is intended to be comprised as follows:

The composition of the Board reflects the range and mix of skills and experience required for the effective management of the Company. The Board is supported by executive management team which is responsible for the day to day running of the Company.

Basis of preparation

These financial statements have been prepared in accordance with applicable United Kingdom accounting standards including FRS102 - The Financial Reporting Standard applicable in the United Kingdom and Republic of Ireland.

Tower Hamlets Homes Limited undertakes the management and maintenance of the housing stock of The London Borough of Tower Hamlets under a management agreement. Tower Hamlets Homes Limited is a wholly owned subsidiary of The London Borough of Tower Hamlets and in the event of Tower Hamlets Homes Limited winding up, all assets and liabilities will transfer to The London Borough of Tower Hamlets.

Going Concern

TOWER HAMLETS HOMES LIMITED

Year ended 31 March 2022

Notes (continued)

(forming part of the financial statements)

Accounting policies (continued)

Going Concern (continued)

Turnover

Fixed assets and depreciation

Fixed Assets are stated at cost less accumulated depreciation. The cost of minor additions, defined as costing less than £500 each are expensed in the year in which they are incurred.

Depreciation is provided to write off the cost, less the estimated residual value, of tangible fixed assets by equal instalments over their estimated useful economic lives as follows:

TOWER HAMLETS HOMES LIMITED

Year ended 31 March 2022

Notes (continued)

(forming part of the financial statements)

Accounting policies (continued)

Financial Instruments

Cash and cash equivalents

Liabilities

Liabilities are recognised when there is an obligation at the balance sheet date as a result of a past event, it is probable that a transfer of economic benefit will be required in settlement, and the amount of the settlement can be estimated reliably. Liabilities are recognised at the amount that TTH anticipates it will pay to settle the debt or the amounts it has received as advance payment for the goods or services it must provide.

Leased assets and obligations

TOWER HAMLETS HOMES LIMITED

Year ended 31 March 2022

Notes (continued)

(forming part of the financial statements)

Accounting policies (continued)

Holiday pay accrual

A liability is recognised to the extent of any unused holiday pay entitlement which has accrued at the balance sheet date and carried forward to future periods. This is measured at the undiscounted salary cost of the future holiday entitlement so accrued at the balance sheet date. Short term benefits other similar nonmonetary benefits are recognised as an expense in the period in which the service is received.

Post-retirement benefits

Pension reimbursement rights

The Council has provided no specific indemnity in respect of the pension scheme liability. As per the management agreement THH should construct its expenditure plans to fully cover the costs arising from pension liabilities. However, where a surplus arises a liability has been recognised as ultimately the council expects the surplus to be returned to the Housing Revenue Account.

Taxation

Provisions

TOWER HAMLETS HOMES LIMITED

Year ended 31 March 2022

Notes (continued)

(forming part of the financial statements)

Accounting policies (continued)

Accounting Judgements and Estimates

TOWER HAMLETS HOMES LIMITED

Year ended 31 March 2022

Notes (continued)

(forming part of the financial statements)

2.     Analysis of turnover

Analysis of turnover

3.     Loss before taxation

This is stated after charging:

TOWER HAMLETS HOMES LIMITED

Year ended 31 March 2022

Notes (continued)

(forming part of the financial statements)

4.     Employees and directors

Staff numbers and costs

The average number of fulltime equivalents employed by the Company during the period, analysed by service was as follows:

The aggregate payroll costs of these persons were as follows:

TOWER HAMLETS HOMES LIMITED

Year ended 31 March 2022

Notes (continued)

(forming part of the financial statements)

Key Management Compensation

Members of the Board of directors and the Executive Management Team of Tower Hamlets Homes are Considered key management. The compensation paid or payable to key management is shown below:

Directors' emoluments

a) Company board members

Directors' emoluments for the company are as follows:

No Board members receive a salary but are entitled to reimbursement of expenses incurred when attending board and committee meetings. No expenses were paid to board members in 2021/22 (2020/21: nil).

b) Company Managing Director's remuneration

TOWER HAMLETS HOMES LIMITED

Year ended 31 March 2022

Notes (continued)

(forming part of the financial statements)

5.     Interest receivable and similar income

6.     Taxation

A.     Analysis of charge in period

B.     Current tax reconciliation

Factors affecting the tax charge for the current period:

The tax assessed for the year differs from the standard rate of corporation tax. The differences are explained below.

TOWER HAMLETS HOMES LIMITED

Year ended 31 March 2022

Notes (continued)

(forming part of the financial statements)

7.     Tangible fixed assets

Fixtures Fittings & Equipment

Most fixed assets included above are IT equipment with an assumed life of 3 years, or other office equipment with an assumed life of 5 years.

8.     Debtors

TOWER HAMLETS HOMES LIMITED

Year ended 31 March 2022

Notes (continued)

(forming part of the financial statements)

9.     Creditors: amounts falling due within one year

Amounts owed to LBTH are interest free and repayable on demand.

10.     Provisions for Liabilities and Charges

TOWER HAMLETS HOMES LIMITED

Year ended 31 March 2022

Notes (continued)

(forming part of the financial statements)

Provisions for Liabilities and Charges (continued)

11.     Capital Reserves

The company is limited by guarantee and has no share capital.

12.     Pension Asset/(Liability)

TOWER HAMLETS HOMES LIMITED

Year ended 31 March 2022

Notes (continued)

(forming part of the financial statements)

13.     Pension Scheme

TOWER HAMLETS HOMES LIMITED

Year ended 31 March 2022

Notes (continued)

(forming part of the financial statements)

13.     Pension Scheme(continued)

The Actuary estimates the bid value of the Fund's assets as at 31 March 2022 to be £157,510,000 based on information provided by the Administering Authority and allowing for index returns where necessary. Please note the Employer's fair value of plan assets is approximately 8% of the Fund's total

Financial Assumptions

Mortality Assumptions

TOWER HAMLETS HOMES LIMITED

Year ended 31 March 2022

Notes (continued)

(forming part of the financial statements)

13.     Pension Scheme (continued)

Changes in the Fair Value of Plan Assets, defined Benefits Obligation and Net Liability for the year end 31 March 2022

TOWER HAMLETS HOMES LIMITED

Year ended 31 March 2022

Notes (continued)

(forming part of the financial statements)

13.     Pension Scheme (continued)

Changes in the Fair Value of Plan Assets, defined Benefits Obligation and Net Liability for the year end 31 March 2022

TOWER HAMLETS HOMES LIMITED

Year ended 31 March 2022

Notes (continued)

(forming part of the financial statements)

13.     Pension Scheme (continued)

Changes in the Fair Value of Plan Assets, defined Benefits Obligation and Net Liability for the year end 31 March 2021

TOWER HAMLETS HOMES LIMITED

Year ended 31 March 2022

Notes (continued)

(forming part of the financial statements)

13.     Pension Scheme (continued)

Changes in the Fair Value of Plan Assets, defined Benefits Obligation and Net Liability for the year end 31 March 2021