2024-03-31-accounts

Financial Statements 2023-24

www.eastendhomes.net

Registered Company number 4516155

EAST END HOMES LIMITED

FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 MARCH 2024

EAST END HOMES LIMITED

Financial Statements for the Year ended 31 March 2024

CONTENTS

	Page
BOARD MEMBERS	4
EXECUTIVE MANAGEMENT TEAM	4
REGISTERED OFFICE AND ADVISORS	5
STRATEGIC REPORT OF THE BOARD OF MANAGEMENT FOR THE YEAR ENDED 31 MARCH 2024	6
FINANCIAL PERFORMANCE	10
VALUE FOR MONEY (VFM)	13
FINANCIAL AND BUSINESS PERFORMANCE	14
ANALYSIS OF TURNOVER AND OPERATING COSTS	17
OPERATING COSTS PERFORMANCE AND COMPARISON	18
VALUE FOR MONEY SELF-ASSESSMENT CONCLUSION	19
RISK MANAGEMENT	21
PENSION COMMITMENTS AND ASSOCIATED ISSUES	22
REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF EAST END HOMES LIMITED	27
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 31 March 2024	31
ASSOCIATION STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 31 March 2024	32
CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 31 March 2024	33
ASSOCIATION STATEMENT OF FINANCIAL POSITION AS AT 31 March 2024	34
CONSOLIDATED STATEMENT OF CHANGES IN RESERVES	35
ASSOCIATION STATEMENT OF CHANGES IN RESERVES	35
CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 31 March 2024	36
ASSOCIATION STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 31 March 2024	37
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 March 2024	38

BOARD MEMBERS

The Board Members who served from 1 April 2023 up to the date of approval of these financial statements were as follows:

Kevin Moore Chair Neil McAree Vice Chair until resigned 14 June 2023 John Kettlewell Resigned 21 September 2023 Forhana Begum Helen Goody Resigned 21 September 2023 Carol Hinvest Emdadul Haque Jahangir Mannan Kevin Whittle Resigned 21 September 2023 Marek Wiluszynski Emma Palmer From 14 June 2023 Jacqui Bateson From 14 June 2023 John Wu From 21 September 2023 Ken Beech From 21 September 2023 Tracey Gray From 23 November 2023 Simon Turek From 10 November 2023

EXECUTIVE MANAGEMENT TEAM

John Henderson Chief Executive Stephen Elliott Deputy Chief Executive Steven Inkpen Director of Special Projects and New Business David Opoku Head of Finance Roger Thompson Head of Asset Management Stuart Veysey Head of Housing Services - Retired 31 December 2023

SECRETARY

Alexander Bailey

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EAST END HOMES LTD REGISTERED OFFICE AND ADVISORS

Registered office

3 Resolution Plaza London E1 6PS

Auditors

Beever and Struthers 150 Minories London EC3N 1LS

Solicitors

Trowers & Hamlins Sceptre Court 40 Tower Hill London EC3N 4DX

Bankers

Barclays Bank plc 1 Churchill Place London E14 5HP

Legal status

Registered Company number 4516155 Registered Charity number 1107691 A Registered Provider of Social Housing with the Regulator of Social Housing number L4434

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EAST END HOMES LIMITED STRATEGIC REPORT OF THE BOARD OF MANAGEMENT FOR THE YEAR ENDED 31 MARCH 2024

The Board is pleased to present its report and the audited financial statements for East End Homes Limited (East End Homes) for the year ended 31 March 2024.

The Association

East End Homes was established in 2002 as a community-focussed housing association to accept the transfer of homes from the London Borough of Tower Hamlets as part of their Housing Choice programme. The first transfer, Mile End East, took place on 11 April 2005, followed by St George’s and Island Gardens on 16 January 2006. Further transfers took place for Holland estate on 13 November 2006 and for Glamis estate on 8 October 2007.

Our stakeholders all have an interest in the financial performance of East End Homes:

• residents, who want good quality housing and environments

• London Borough of Tower Hamlets, who seek to optimise housing opportunities in the area and meet the needs of local people

• our funders, who want to be assured that their investment is secure

• our staff, who need to understand what we aim to deliver and how we are going to achieve it

• the regulatory body, the Regulator of Social Housing (RSH), who have an oversight role to ensure that we are taking a strategic overview of how we invest our resources to achieve our corporate objectives.

Structure, governance, and management

East End Homes is a company limited by guarantee, governed by its Memorandum and Articles of Association, and a registered charity, administered by a Board of Management. It is also registered with the Regulator of Social Housing as a Registered Provider of Social Housing.

East End Homes has adopted the National Housing Federation’s (NHF) Code of Governance (2020). The East End Homes Board carries out an annual self-assessment review of compliance, most recently completed in July 2024. The self-assessment indicated general compliance with the Code, and identified areas where measures to strengthen governance were to be implemented. In particular, the Board identified a need to demonstrate that the new risk management framework had been embedded and reviewed for effectiveness, and for the amended governance structure to be reviewed after one year of operation as part of ongoing governance review. They also noted that more work was planned as part of the Governance Recovery Improvement Plan on strengthening Board training and development and setting out a more comprehensive approach to considering potential partnerships.

At the Annual General Meeting of the Company in September 2023, the members approved the adoption of new Articles of Association to modernise the governance of East End Homes Ltd. This involves removing the clauses which described categories of Board Member. Under the revised Articles, all members are appointed as per the terms of a Board Membership Policy. The abolition of categories of member means that there are no longer places on the Board reserved for residents, and that the role of the London Borough of Tower Hamlets in nominating up to two members has been ended. With all appointments being made based on the skills required, the Board has agreed practices to ensure diversity of its membership. For example, the Board Skills & Competencies Matrix was adjusted so that some lived experience of EEH neighbourhoods is an expectation to be found within the collective membership, in recognition of the input which resident perspectives can make to collective decision-making.

Following the adoption of the revised Articles the Board also agreed from September 2023 to introduce Board Member remuneration. This was linked to the desire to modernise the Board and in support of recruitment on a skills basis. The levels of remuneration were agreed following comparison to peer organisations and set broadly at median levels. Details of all remuneration paid to Board Members within each financial year will be reported within the financial statements and thus publicly available. All required processes were followed in line with the requirements of the Code of Governance prior to the introduction of Board Member remuneration.

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EAST END HOMES LIMITED STRATEGIC REPORT OF THE BOARD OF MANAGEMENT FOR THE YEAR ENDED 31 MARCH 2024

The Board has noted the expectation under 3.7 (5) of the Code of Governance that membership of subsidiary committees would count towards overall tenure on the Board. However, the Board’s position is that where appropriate it may co-opt potential Board Members to sub-committees as part of its succession strategy and does not believe it is in the best interests of the effective operation of the Board’s activities to restrict potential members’ overall service by including time spent as a co-optee within their overall maximum tenure. The Board has also used its discretion in limited circumstances to extend Board Member terms by an additional year beyond six years. This is because a significant proportion of the existing Board was due to reach six or nine years of service at the same time, and it was not considered in the best interests of East End Homes to replace multiple members, including those in key roles, at the same time. This was a time-limited decision and following the AGM in September 2024, there will be no Board Members with total tenure of more than the maximum expected six years. The Board understands and is committed to managing its membership such that there is flexibility to ensure that the Board can adapt and evolve where the requirements and expectations on its membership change. Thus, there is no expectation that all members will automatically serve up to the full six years, as in some cases it may be necessary to make a change even where the outgoing member has made the contribution expected of them.

The non-executive directors are responsible for the overall strategic direction of East End Homes. At the Annual General Meeting in September 2023 the Board agreed revised Articles of Association which abolished categories of membership and instituted that all members are appointed based on their skills and ability to contribute to effective decision-making. More detail of the current composition of the Board is provided in the section headed ‘Directors’ later in this Strategic Report.

East End Homes has promoted and developed extensive resident involvement in the management of its estates and in the overall governance arrangements of East End Homes. The East End Homes Board believes that accountability to the local community and resident involvement in decision-making contributes strongly to the delivery of improvements in service provision and the achievement of corporate objectives. During the summer/autumn of 2024 EastendHomes is carrying out a wide-ranging review of its engagement framework with support from industry experts Tpas, assessing the ongoing optimisation of structures and initiatives in the wake of the publication of the new Transparency, Influence and Accountability Standard by the Regulator of Social Housing.

As an organisation which was set up following extensive stakeholder consultation leading to stock transfers, East End Homes’ business priorities have always been shaped by the needs and priorities of our residents. This has included maintaining local housing centres as the frontline of service provision and delivering substantial block and estate improvements while working to address the financial concerns of long-standing resident homeowners.

The Board has the authority to appoint or remove the Executive Management Team as required and has responsibility for agreeing their pay and remuneration. The Board also retains responsibility to appoint the directors of the Board of the subsidiary organisation East End Homes (Community Development) Limited and receives minutes of all meetings of the subsidiary Board.

East End Homes analyses its pay records annually to identify key ratios related to the governance of the organisation. If calculated using the mean salary, male employees were paid 4.3% less on average than female employees. Analysed using the median salaries, male employees received 18.2% less than female employees. The pay gap data is influenced by an uneven gender distribution across pay bands, with a significant proportion of the lowest earners being male.

The ratio of remuneration for the highest earner (the Chief Executive) to the lowest earner was 5.47:1. The ratio of the Chief Executive earnings to the median earner was 3.94:1.

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EAST END HOMES LIMITED STRATEGIC REPORT OF THE BOARD OF MANAGEMENT FOR THE YEAR ENDED 31 MARCH 2024

Principal activities

East End Homes is in business to provide local people with quality and affordable homes, sustainable estates, and effective and efficient local housing services. East End Homes’ principal activities are to effectively manage, maintain, and develop homes, and to improve and regenerate its estates. Currently it manages 3,912 homes within the London Borough of Tower Hamlets and 8 homes within the London Borough of Newham.

As of 31 March 2024, East End Homes held a 100% share (1 share of £1) in East End Homes (Community Development) Limited. The principal activity of this subsidiary is to generate funds from non-social housing activities to support East End Homes’ core activities.

Public Benefit

East End Homes is a Registered Charity, and the Board are required under Charity Law and the Charity Commission’s guidance to consider the public benefit delivered by the Charity. The Charity meets its public benefit obligations through its social housing activities which are explained in the rest of the report. As a public benefit entity, East End Homes has applied the public benefit entity (‘PBE’) prefixed paragraphs of FRS 102.

Our Mission

To provide a local housing service which is efficient, gives value for money and meets the needs, priorities, and aspirations of all residents.

Our Vision

To achieve the comprehensive regeneration of our estates and bring about a sustained improvement in the homes and quality of life for residents.

Investment Programme

In 2023/24 East End Homes continued to work on improving the quality and safety of its housing properties and estates, and the acquisition of new homes, spending £15.50million (2022/23: £19.83 million) on new build properties and refurbishment and fire safety remediation works to existing stock. To date East End Homes has invested £251.52 million into our Major Works and New Build programme analysed in the table below.

	2023/24	2022/23	2021/22	2020/21
Capital Investment (Major works and new properties) (cumulative)	£251.52m	£236.02m	£216.2m	£197.7m
Investment in refurbishment to existing properties (cumulative)	£139.55m	£133.04m	£129.5m	£123.4m
Social rented homes meetingthe Decent Homes Standard(%)	95.23	94.63	91.32	100
Investment in new build properties (cumulative)	£111.97m	£102.98m	£86.7m	£74.3m
New homes added	-	117	7	-
New homes added (net of property sales)	(2)	113	7	-
Value of stock (EUV-SH)	£170.03m	£153.92m	£141.23m	£133.01m

As set out in the Corporate Plan 2019 -2024, East End Homes’ vision is to achieve the comprehensive regeneration of our estates. East End Homes total capital investment since 2005 to date is £251.52 million. The investment has been funded through £70.7 million of overage and land sale receipts, generated through East End Homes’ development partnership with Telford Homes; £95 million in loans; £18 million of grant and gap funding; and £67.82 million, through the group’s internally generated surpluses.

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EAST END HOMES LIMITED STRATEGIC REPORT OF THE BOARD OF MANAGEMENT FOR THE YEAR ENDED 31 MARCH 2024

To date £139.55 million has been invested in the refurbishment of our existing properties, ensuring that most of East End Homes’ social rented units are up to at least the Decent Homes Standard. In February 2024, as part of the business plan update process, the Board agreed an updated 5-year capital investment programme of £34.79 million running from 2024/25 to 2028/29. The works included in the agreed capital investment programme have been determined by our existing stock condition data and with reference to the outcomes of recent Stock Condition Surveys completed by Savills, which confirmed that any internal component replacement could be accommodated within the elemental works budget already in the programme. All components currently causing a property to not meet the Decent Homes Standard plus all components that would cause a property to become non-compliant with the Decent Homes Standard have been included in the agreed five-year programme. Based on current data, the programme would result in no properties failing to meet the Decent Homes Standard at the end of the 5-year period. The proposed programme includes all scheduled non-decent homes works and a provision to commence EPC energy efficiency works, towards the 2030 target, in the latter three years.

The investment programme includes a £12.03million budget for the schemes identified for fire safety remediation works following the updated Building Safety reforms and legislation on fire safety by the Government. Seven schemes have been identified to date and these have budget estimated costs included in the programme. Further remediation works may be identified with ongoing inspections.

A number of purpose-built community facilities have been created or refurbished as part of the regeneration works to the estates. East End Homes aims to facilitate the availability of a wide range of activities for our communities from these facilities, with some remaining directly managed and others operated in partnership with local organisations.

In 2023/24, East End Homes invested a further £8.99million in the acquisition of new homes, bringing the total investment to date to £111.97million. This investment has already brought into management a total of 430 brand new homes for rent and shared ownership under our capital investment programme, including several large family-sized homes and adapted properties. Our partnership working with developers has also led to the creation of around 820 homes for private sales on estates managed by East End Homes, supporting the overall availability of housing within Tower Hamlets. The private properties on East End Homes estates contribute around £199,000 annually in ground rents to the East End Homes business plan.

East End Homes owns a small portfolio of 60 privately rented residential units, including 8 units in LB Newham. The private rented properties generated £1.147 million of income in 2023/24 and produced a surplus of £743,000.

East End Homes has continued to invest in the acquisition of new homes. In May 2022, East End Homes took ownership of 102 new homes at the Orchard Wharf development in E14, with 59 let on Tower Hamlets Living Rent tenancies. The remaining 43 units were marketed for shared ownership. There were 24 first tranche sales from this stock in 2023/24, generating £3.1 million in receipts. The Toynbee Street scheme which was completed in November 2022 provided an additional 5 new homes including 2 shared ownership units, both sold in this financial year. The Violet Road scheme is expected to be completed in 2024/25 and will provide an additional 23 new homes for rent and shared ownership. The major scheme on Eric Street in Mile End is now projected to deliver105 new homes, following the Board’s decision to purchase additional 21 units at Coniston House for social rent. This purchase is supported by a £4.2 million GLA grant. There have already been 11 homes taken into management from this scheme, all for rent. East End Homes’ financial investment in these schemes has been supported by the £45 million funding facility provided by M&G Investments.

In 2021/22 the Board took the decision to diversify its development programme to include the first schemes of shared ownership units for sale. It was recognised that this could help to meet the corporate objective to meet a range of local housing needs, as well as providing significant capital receipts to the Business Plan. As a relatively new area of activity and given the contribution to the business plan, the Board has sought to closely monitor the sales programme and associated risks, including receiving regular updates on sales and projected income. As part of its oversight, the Board has engaged external expertise to oversee the marketing and sales programme.

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EAST END HOMES LIMITED STRATEGIC REPORT OF THE BOARD OF MANAGEMENT FOR THE YEAR ENDED 31 MARCH 2024

The original programme of sales for the first tranche of units was for sales to complete in 2022/23 and 2023/24. Given the rapid change in the economic climate during 2022/23, sales in the early period of 2022/23 were significantly slower than previous expectation and the Board took the decision to reprofile sales over a longer period than originally planned, up to and including 2025/26. The Business Plan has been updated to reflect the revised programme of sales and stress tested to ensure that the plan remained robust and projected compliance with all our financial covenants. The Board has also taken a prudent decision not to include within the Business Plan any assumptions on income from staircasing of shared ownership properties (further to first tranche sales).

In line with planning consents East End Homes has taken into management units with different affordable or intermediate housing products. These include London Living Rent, which seeks to support tenants to gradually become shared owners; and London Affordable Rent, which is another form of sub-market rented tenancy. Where necessary, external expertise has been sought on managing novel tenures.

East End Homes inherited a portfolio of commercial units as part of the stock transfers from LB Tower Hamlets and this portfolio has been increased and enhanced as part of the estate-wide regeneration programme. In 2023/24 East End Homes had 82 commercial units in management which generated £1.623 million income and contributed around £680,000 to the business plan.

Financial Performance

Statement of Comprehensive Income

In the year to 31 March 2024, the group achieved a surplus of £0.890 million compared to a £3.691 surplus in the previous financial year. The surplus in the previous financial year was impacted by a significant £2.627 million increase in the value of the group’s investment properties. In comparison, the year to 31 March 2024 has seen a £0.475 million reduction in the value of investment properties.

The key areas of income and expenditure contributing to the results for East End Homes are as follows:

Turnover : £28.863 million, £4.692 million higher than the £24.172 million achieved in 2022/23. The income in 2023/24 was impacted by the following:

• £2.871 million additional first tranche sales receipts and rent from 26 (2023:6) shared ownership properties at the Orchard Wharf and Toynbee Street development.

• £1.821 million additional rental income receivable from existing social, intermediate and market rented properties, related service charges income from the provision of services to residents on East End Homes’ estates and other miscellaneous income.

Operating costs: £22.763 million, up £2.446 million from £20.317 million in 2022/23. The increase in operating costs is mainly due to the following additional revenue expenditures:

• £1.352 million service and maintenance costs on existing properties and estates, arising from high inflation and energy costs. The increased costs are in part offset by an increase in income receivable in the form of service charges from residents.

• £1.094 million staffing costs, arising from costs of living increases and increased contributions during the year to existing pension schemes.

Costs of sales: In 2023/24 there were first tranche sales receipts from 26 shared ownership properties (2022/23: 6 sales). The Statement of Comprehensive Income identifies costs associated with these sales of £2.035 million (2022/23: £0.402 million).

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EAST END HOMES LIMITED STRATEGIC REPORT OF THE BOARD OF MANAGEMENT FOR THE YEAR ENDED 31 MARCH 2024

Loan interest costs: increased by £0.433 million to £3.912 million in 2023/24. This is the result of the full year impact of £15 million net additional loan borrowings made during the latter part of 2022/23. East End Homes’ total loan debt at the yearend was £95.0 million (2022/23: £95.0 million).

Movement in valuation of Pension Schemes: In 2023/24, the net surplus in East End Homes’ pension schemes recognised in the statement of comprehensive income was £1.055 million. East End Homes commissioned an asset ceiling report on the Local Government Pension Scheme (LGPS) which had the largest accumulated net asset value. Based on the asset ceiling approach, the recoverability of the LGPS pension asset has been considered and the conclusion is that it should be prudently capped at nil. The movement from the net asset this year to nil is described in the statement of comprehensive income as ‘Pension surplus not recoverable’.

Statement of Financial Position

East End Homes’ reserves has decreased by £7.160 million to £79.996 million; arising from £0.890 million surplus archived in 2023/24, offset by the net charge of £8.050 million recognised against the Local Government Pension Scheme and Social Housing Pension Scheme.

Cash Flow

East End Homes’ cash balance as of 31 March 2024 was £4.684 million (2022/23: £8.977 million), a cash reduction of £4.293 million from 1 April 2023. The cash reduction during the year is the result of £15.080 million cash spend mainly on the acquisition of new homes and refurbishment and fire safety remediation works to existing housing properties, £2.572 million net interest costs and £0.176 million spend on other fixed assets. The payments were offset by cash receipts of £11.639 million cash inflow from operating revenue activities, £0.636 million cash receipts from the sale of properties and £1.260 million grants received.

Treasury Management

At 31 March 2024, East End Homes had agreed £116.0 million loan and overdraft facilities, comprising £50.0 million with NatWest Bank, £45.0 million with M&G Investments and £21.0 million with Barclays Bank. Of the agreed facilities £95 million has been drawn, consisting of £40 million from the NatWest facility, £45 million from the M&G facility, and £10 million from the Barclays facility. These loans are secured against the group’s assets.

The Board has approved a Treasury Management Policy to control the risks associated with its treasury activities. The policy sets out a clear framework of policies, procedures, and delegated authorities, which require reporting on the operations of the treasury function to the Board on a annual basis.

Borrowings and Loan Profile

At 31 March 2024, East End Homes had a total loan debt balance of £95.0million comprising £85.0 million on a forward fixed interest rate arrangement and £10.0 million on a variable SONIA-linked rate.

The Board has an agreed Treasury Management Strategy which underpins how East End Homes supports its Business Plan, and a Risk Appetite Statement which summarises the strategic appetite and approach to risk, setting ‘golden rules’ for the Board to assess performance. In keeping with the Board’s approach to risk, the debt profile has been managed such that forward fixed rate loans consistently form a majority of the loan portfolio. The group currently has a healthy amount of fixed rate debt (89.5%) thus providing a good hedge against interest rate risk and a relatively low weighted average cost of debt (WACD) of 3.9%, demonstrating the Board’s relatively low risk approach to pursuing its corporate objectives.

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EAST END HOMES LIMITED STRATEGIC REPORT OF THE BOARD OF MANAGEMENT FOR THE YEAR ENDED 31 MARCH 2024

The East End Homes Board approved loan debt profile within the Business Plan is set out below.

==> picture [500 x 269] intentionally omitted <==

----- Start of picture text -----
120,000 Fixed Rate Debt
Variable Rate Debt
100,000
80,000
60,000
40,000
20,000
0
77%
79% 79% 79% 79% 79% 79% 79% 79% 79%
79%
78%
89% 77%
76%
75% 75% 75% 75% 75% 75% 75%
74%
85%
85%
84% 84%
85%
92%
( £' 000s) 100% 100%
2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 2041 2042 2043 2044 2045 2046 2047 2048 2049 2050 2051 2052 2053 2054
----- End of picture text -----

Homes in Management

East End Homes has an asset management strategy which aims to deliver homes and facilities which are in good condition, of suitable design, and in the right locations, to meet the aspirations of our communities.

The number of homes in management at the yearend was:

2023/24	№ at start (1 April 2023)	Additions	Disposals	№ at Year End (31 March 2024)
Social Rented	2,239	-	(2)	2,237
Intermediate Rent	88	-	-	88
Private Rented	60	-	-	60
Shared Ownership (first tranche sales)	45	-	-	45
Leasehold	1,488	2	-	1,490
Total	3,920	2	(2)	3,920

During the year 2 properties were sold under the preserved right to buy or right to acquire schemes.

Strategic Asset Management

In March 2023 the Board of East End Homes approved an Asset Management Strategy 2023-28, which updated and expanded the strategic approach to management and investment in our key assets. The strategy sought to address emerging and evolving challenges including delivery against targets for environmental performance and ‘net zero’ emissions, as well as strengthening our approach to collecting and managing data relating to the condition of our stock. The Board receives periodic updates on progress against the action plan associated with the five-year Strategy.

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EAST END HOMES LIMITED STRATEGIC REPORT OF THE BOARD OF MANAGEMENT FOR THE YEAR ENDED 31 MARCH 2024

East End Homes has introduced an asset management system to support comprehensive and active asset management and to develop our understanding of asset performance. The quality of data held is of critical importance in developing the business plan and understanding medium and long-term investment needs. During 2023/24 the proportion of properties which had received an internal components survey in the past two years increased to 80%. Inspection of the remaining 20% will be completed on a rolling basis using in-house expertise. Updating our information on stock condition provides assurance to the Board that the resources allocated for investment in property condition across the 30-year Business Plan are adequate for the needs of the organisation, both in maintaining properties to an appropriate level (with the anticipation on amendments to the Decent Homes Standard) and investing in environmental enhancements. Active asset management also includes carrying out options appraisals for units where it may be uneconomic to bring the property up to the habitable standard, including environmental performance. East End Homes will assess units on a Net Present Value (NPV) basis for their contribution to the business plan but will also consider social performance and the contribution that such homes may make to delivering social value. For example, a large family-sized home may be more ‘valuable’ to local overcrowded households in terms of fulfilling unmet local needs. The options appraisal process will be a comprehensive process which considers all inputs and outcomes, in considering the relative merits of approaches such as renewal or disposal.

The current five-year programme (as of February 2024), informed by stock condition data held, includes £22.79million of investment in asset renewal works. This is in addition to budgeted investment of £12.03million in improvement fire safety performance. The asset renewal programme includes replacement or renewal of all component failures which would cause non-decency under the current Decent Homes Standard, and investment in improving environmental performance for all units to reach ‘C’ grade under the EPC system by 2030.

East End Homes has developed a comprehensive Assets & Liabilities Register which compiles all the group’s assets and liabilities, providing up to date information for stakeholders including the Board. The Board continues to keep the register under review.

The Board’s Development and Asset Growth Strategy sets out the key principles and priorities for East End Homes in pursuing new business opportunities and the delivery of new affordable housing. The inclusion of any prospective development scheme into the Business Plan will initially involve a financial appraisal of the scheme to assess the scheme’s ability to repay any potential borrowing and deliver a net contribution over the 30-year life of the Business Plan, as set out in the golden rules of the Risk Appetite Statement. Approval of the scheme must be supported by an independent appraisal of the scheme to further assure the Board that the scheme provides value for money in terms of the assumptions around valuations and the price offered. As part of the process for Board approval for inclusion of a new scheme into the Business Plan, the plan is updated, and stress-tested to provide assurance to the Board that the inclusion of the new scheme would improve the plan and is not forecast to lead to any breaches of the agreed golden rules or financial covenants.

The current approved plan includes a 40-unit shared ownership sales programme, including 13 units remaining to be sold within the Orchard Wharf scheme, Violet Road scheme (5 units) and Eric Street scheme (22 units). Collectively these are projected to contribute circa £4.65 million gross sales receipts to the plan across 2024/25 and 2025/26. The Board receives a quarterly report summarising the latest position regarding development or acquisition schemes agreed by the Board, identifying any amendments to anticipated completion or handover dates, or adjustments to details of the scheme e.g., tenure composition or rent levels. The Board is given updates of shared ownership sales, and/or applications in the pipeline which are being evaluated.

Value for Money (VFM)

Defining and Delivering VFM

East End Homes’ approach to VFM remains as set out in its VFM Strategy, agreed by the Board in December 2020. This strategy describes how EEH seeks to deliver efficiency in pursuing its corporate objectives; the role of the Board; and EEH’s strategic framework for monitoring VFM activity and delivering compliance with regulatory requirements. The strategy for 2020-25 was updated to reflect the revised regulatory framework

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EAST END HOMES LIMITED STRATEGIC REPORT OF THE BOARD OF MANAGEMENT FOR THE YEAR ENDED 31 MARCH 2024

and code of practice; the increased emphasis on performance metric reporting; and developing challenges for the financial performance of the organisation such as expenditure on building safety. It also built upon the strategic objectives set out in the Corporate Plan for 2019-24.

This VFM Strategy continues with the same summary definition of VFM for EEH as:

“ The provision of homes and services, at the right cost, that are fit for purpose and of the right quality for the needs and aspirations of our residents and stakeholders.”

The VFM Strategy sets out the key responsibilities of the Board and where these are delegated to Committees, maintaining an ongoing process of monitoring and review. These are categorised into three main strands:

• Value for Money monitoring – delivering the Vision, Mission and corporate objectives, matching the priorities set out and the commitments made in the Business Plan

• Return on Assets – processes for reviewing how physical and human resources are used; and ensuring that EEH’s activities do not compromise its financial sustainability whilst delivering the resources to pursue its ambitions

• Social Value – identifying and reporting the additional benefits generated by EEH through its activities including the social, wider economic and environmental outputs.

VFM performance will be monitored through the reporting against the adopted strategic metrics – including those specified by the regulator and sector collaboration, and those specifically identified by the EEH Board to reflect its strategic priorities. Reporting of this performance also allows for comparison against appropriate sector peer groups, allowing the Board to assess the effectiveness of its approach and to understand differences, in the context of operational structures and decisions. In the wider context of performance, the Board will also consider satisfaction data which communicates the perspectives of stakeholders on the services and outcomes being delivered.

Financial and Business Performance

The Board has identified its own key metrics for measuring performance in Value for Money, corresponding to key strategic objectives. These currently include tenant satisfaction with overall services; value for money satisfaction; and key indicators for the Integrated Asset Management Contract covering responsive repairs and void works. The table on the next page summarises East End Homes’ performance against these metrics and compares this performance against other landlords mainly operating in London, and to the national median. The cost metrics are calculated using the number of affordable rented homes (but excluding the leasehold and market rented properties in management).

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EAST END HOMES LIMITED

STRATEGIC REPORT OF THE BOARD OF MANAGEMENT FOR THE YEAR ENDED 31 MARCH 2024

		East End	**Adjusted ***	East End
					London	All
		Homes		Homes
	YEAR	2024	2024	2023	2023	2023
	Homes in management at the year end	2,370	2,370	2,372	882,064	2,869,617
	Reinvestment %: (Properties acquired + development of new homes + work to existing homes + capitalised interest + schemes completed)/GBV (Cost)	7.33%	7.33%	9.93%	4.36%	7.16%
Metric
1
	New supply delivered %: Total social housing units delivered ornewly builtunits acquired/total housing unitsownedat period end(FVA will show the split between owned and managed)	0%	0%	4.93%	0.81	1.83%
Metric
2a
	New supply delivered %: Total non-social housing unitsdelivered or newly built units acquired(Total non-social rental units owned, non- social leasehold units owned, new outright sale units developed or acquired)/Total social and non-social housing unitsownedat period end	0%	0%	0%	0%	0.09%
Metric
2b
Metric	Gearing %: (LT+ST Loans + Finance Leases- cash and cash equivalents)/Tangible fixed assets: Housing properties at cost	41.88%	41.88%	42.17%	45.74%	45.95%
3
	EBITDA-MRI %: Operating surplus less amortised gov’t grant less grant taken to income plus interest receivable less capitalised major repairs plus total depreciation/interest payable and financing costs less capitalised interest in housing properties	37.27%	168.56%	100.14%	82.9%	103.26%
Metric
4
Metric	Headline social housing cost per unit- Inc. owned and managed butexc. leaseholdand fully staircased shared ownership homes	£7,991	£5,824	£5,840	£6,899	£5,251
5
	Management CPU	£1,057	£1,057	£897	£1,592	£1,202
	Service charge CPU	£2,044	£1,807	£1,451	£1,156	£792
	Maintenance CPU	£1,927	£1,927	£1,825	£1,672	£1,492
	Major repairs CPU	£2,963	£1,033	£1,667	£1,297	£1,207
	Other social housing CPU	£0	£0	£0	£348	£558
Metric	Alternative 6(a) Operating margin %: (Operating surplus from social housing lettings / Turnover from social lettings	15.63%	18.56%	18.69%	18.34%	21.37%
6a
Metric	Alternative 6 (b) Operating margin %: (Operating surplus (overall) / Turnover (overall))	14.08%	16.03%	14.28%	14.55%	16.60%
6b
	Return on capital employed %: Operating surplus overall plus gain/loss of disposal of fixed assets plus share of operating surplus from JVs or associates/Total assets less current liabilities	2.04%	2.29%	1.87%	2.19%	2.59%
Metric
7
EEH Strategic Metrics
	(Effectiveness)Tenant satisfaction with overall services: (Asper Tenant Satisfaction Measures Technical Requirements)	69.0%		76.99%	59.9% (2024)	70.9% (2024)
EEH 1
	(Effectiveness)Satisfaction with the quality of a repair: Transactional survey on job completion	93.65%		94.15%	80.2%	86.3% (2024)
EEH 2
	(Efficiency)Number of repairs completed per property:Both in- dwelling and communal repairs, including repairs reported by leasehold units	4.23		4.38	N/A	3.4
EEH 3
	(Efficiency)Void performance:average re-let time (days)	27.3		30.2	42 (2022 LBTH)	64.0
EEH 4a
	(Economy)Void performance:rent loss due to void properties as a percentage of annual rent debit	0.28%		0.42%	1.43%	N/A
EEH 4b
	(Effectiveness)Value for Money Satisfaction:Tenants believing that rents represent value for money	65.97%		73.93%	66.3% (2024)	82.3% (2024)
EEH 5a
	(Effectiveness)Value for Money Satisfaction:Leaseholders believing that service charges represent value for money (STAR) (every twoyears)	29.84% (2023)		29.84%	N/A	38%
EEH 5b

*Adjusted to exclude fire safety expenditure

15

EAST END HOMES LIMITED STRATEGIC REPORT OF THE BOARD OF MANAGEMENT FOR THE YEAR ENDED 31 MARCH 2024

East End Homes has continued to invest significant amounts in the existing housing stock and acquisition of new homes. In 2023/24, the value of investment compared to the asset base was 7.33% (2023: 9.93%). This compares to the 2023 median for London RPs of 4.36% and the national median of 7.16%. This demonstrates the organisation’s ongoing commitment to investing in the refurbishment of homes in management and in providing new homes. Although there was no new supply introduced in the year, part of this investment reflects new homes which are due to be available for letting or shared ownership sale during 2024/25 and 2025/26.

East End Homes’ gearing ratio (which measures the proportion of its borrowing in relation to the value of the asset base) has decreased slightly from 42.17% to 41.88%. This reflects the stock investment made during the year from existing internal resources without recourse to additional borrowing during the year. East End Homes’ gearing ratio remains comparatively low relative to those of other Registered Providers of 45.95%; and 45.74% for London RPs.

The interest cover ratio without adjustments for fire safety remediation expenditure has reduced from 100.14% in 2022/23 to 37.27% in 2023/24. The reduction in the year reflects significant amount of expenditure on fire safety remediation works and this is reflected in the adjusted figure (excluding fire safety expenditure) of 168.56%. Recognising the impact of this expenditure, EEH has agreed variations to existing loan agreements with our lenders to exclude these costs from covenant calculations for a fixed period (to 2026/27).

The headline social housing cost per unit has increased from £5,840 in 2022/23 to £7,991 in 2023/24. This is higher than the 2023 London median costs of £6,899 and the National median of £5,251. The costs include major repairs costs per unit of £2,963 (2022: £1,667) reflecting year on year significant capital investments in the refurbishment of stock and on fire safety remediation works to existing blocks, in accordance with the Board’s identified objectives. Excluding expenditure relating to fire safety remediation, the overall cost per unit was £5,824.

East End Homes’ operating expenditure has increased in 2024, fuelled by rising inflation and high energy costs and the impacts on cost-of-living increases and pension contributions. This has led to a reduction in the overall operating margin (a measure of profitability of operating assets) from 14.28% in 2023 to 14.08%, below the 14.55% for London RPs and the National median of 16.60%.

In addition to reporting against the nationwide sector metrics, the Board of East End Homes has identified a suite of performance measures to capture resident satisfaction and broader indicators of performance. These are shown above as the EeH Strategic metrics. Similarly, to the financial metrics, performance is given for the past two years and compared to the London and national median performance where available.

The strategic metrics which relate to resident satisfaction have been adjusted to match the Tenant Satisfaction Measures methodology as prescribed by the Regulator of Social Housing and comparative data obtained where available in the public domain. In keeping with the predominant trend within the social housing sector, East End Homes experienced a fall in resident satisfaction compared to the previous survey exercise but remains above median performance compared to local peers. The Resident Services Committee leads on scrutiny of performance in this area on behalf of the Board.

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STRATEGIC REPORT OF THE BOARD OF MANAGEMENT FOR THE YEAR ENDED 31 MARCH 2024

EAST END HOMES LIMITED

Analysis of turnover and costs

Activity	Turnover and costs	Turnover and costs	Turnover and costs	Turnover and costs	Turnover and costs	Turnover and costs	Turnover and costs	Turnover and costs	Turnover and costs	Turnover and costs	Turnover and costs	Turnover and costs
	2024/25 (projected)			2023/24			2022/23			2021/22
	Units	Turnover	Costs	Units	Turnover	Costs	Units	Turnover	Costs	Units	Turnover	Costs
		£000	£000		£000	£000		£000	£000		£000	£000
GN properties (tenant rents and service charges)	2367	19,700	(16,308)	2325	18,179	(15,824)	2327	16,527	(14,118)	2259	15,339	(12,559)
Shared Ownership (first tranche sales & rent)	45	1,850	(1,126)	32	3,608	(2,215)	6	737	(402)	-	-	-
Leaseholder service Charges	1491	3,472	(5,400)	1490	2,880	(5,009)	1488	2,771	(4,608)	1484	2,167	(3,583)
Miscellaneous Lets	-	305	(203)	-	308	(202)	-	489	(198)	-	276	(198)
Private rented properties	60	1,259	(444)	60	1,147	(404)	60	1,018	(342)	60	981	(289)
Commercial properties	82	1,651	(959)	82	1,623	(943)	82	1,606	(863)	82	1,545	(855)
Amortised grants	-	590	-	-	590	-	-	590	-	-	588	-
Government Grant	-			-	-	-	-	-	-	-	-	-
Overage receipts and other miscellaneous income	-	527	(205)	-	528	(201)	-	433	(188)	-	451	(193)
Total	-	29,354	(24,645)		28,863	(24,798)		24,171	(20,719)		21,347	(17,677)

The above analysis of turnover and costs shows the turnover in 2023/24 was £28.863 million, £4.692 million higher than £214.171 million achieved in 2023/24, The income in 2023/24 was impacted by receipts from the following sources, £2.871 million additional first tranche sales receipts and rent from 26 (2023:6) shared ownership properties at the Orchard Wharf and Toynbee Street development and £1.821 million additional rental income receivable from existing social, intermediate and market rented properties, related service charges income from the provision of services to residents on East End Homes’ estates and other miscellaneous income. The associated costs increased by £4.079 million from £20.719 million to £24.798 million, mainly from £2.035 million costs associated with first tranche sale of 26 shared ownership properties. There were also additional £1.352 million service and maintenance costs on existing properties and estates, arising

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EAST END HOMES LIMITED STRATEGIC REPORT OF THE BOARD OF MANAGEMENT FOR THE YEAR ENDED 31 MARCH 2024

from high inflation and energy costs, £1.094 million staffing costs, arising from costs of living increases and increased contributions during the year to existing pension schemes.

Operating Costs Performance and Comparison

==> picture [501 x 216] intentionally omitted <==

----- Start of picture text -----
2024/25 2023/24 2023/24 2022/23 2022/23 2021/22 2021/22 2020/21
Cost per unit
Actual (£) Actual (£) Projected (£) Actual (£) Projected (£) Actual (£) Projected (£) Actual (£)
Management 1,017 1,057 928 897 801 789 765 773
Services 1,873 1,807 1,502 1,451 1,549 1,523 1,547 911
Routine maintenance 1,823 1,732 1,710 1,652 1,474 1,448 1,546 1,571
Planned maintenance 203 195 179 173 148 147 147 142
Operating Costs (exc.
4,916 4,791 4,319 4,173 3,972 3,907 4,005 3,397
Major repairs)
Major repairs 152 217 180 174 115 113 156 157
Capitalised Major
1,806 817 1,637 687 1,331 1,422 2,314 2,536
Works expenditure
Exceptional Fire Safety
2,275 2,167 2,682 806 1,668 1,266 110 -
Works
Total Operating Costs
9,149 7,991 8,817 5,840 7,086 6,708 6,584 6,090
per unit
Bad debts 14 32 73 129 21 100 18 212
Depreciation of costs of
1,684 1,562 1,595 1,559 1,428 1,499 1,645 1,448
Housing properties
Total 10,847 9,584 10,485 7,528 8,535 8,307 8,248 7,750
----- End of picture text -----

Operating CPU - Performance & Projections

==> picture [492 x 240] intentionally omitted <==

----- Start of picture text -----
£10,000
£9,149
£8,817
£9,000
£7,991
£8,000 2,275
2,682
£6,708
£7,000 2,166
£6,090
£5,840
£6,000 £1,958 1,266
£1,034 £1,816 806
£5,000
£203 £195 £861 £1,535 £2,693
£4,000 £1,823 £1,732 £179 £173 £147
£3,000 £1,710 £1,652 £1,448 £142
£1,571
£2,000 £1,873 £1,807
£1,502 £1,451 £1,523
£911
£1,000
£1,017 £1,057 £928 £897 £789 £773
£0
2024/25 proj. 2023/24 actual. 2023/24 proj. 2022/23 actual. 2021/22 actual 2020/21 actual
Fire Safety Works Major Repairs Planned Maintenance Routine Maintenance Services Management
----- End of picture text -----

Sources: East End Homes Financial Statements / Budget. Consolidated (group) figures. The data above relates to East End Homes’ operating costs in relation to its affordable rented properties only.

The Board regularly reviews East End Homes’ costs per unit and has identified the main cost drivers behind these. Some cost drivers such as being based in London are a consequence of our operating environment. Benchmarking of costs takes place including in the table within this report. Other factors reflect the Board’s corporate objectives, including continuing to make substantial investments in maintaining and improving the condition of the existing stock through a capital investment programme and , delivering fire safety remediations works and the commitment to operating a local office-based delivery structure which differentiates East End Homes from other, centralised RPs.

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STRATEGIC REPORT OF THE BOARD OF MANAGEMENT FOR THE YEAR ENDED 31 MARCH 2024

Value for Money Self-Assessment Conclusion

Completion of this review supports the Board in assessing its capacity to meet its funders’ covenants, regulatory requirements, and business plan targets, while maintaining a focus on delivering the identified corporate objectives. The Board aims to maintain its commitment to localised service delivery and high-quality service provision, and to investment in maintaining and improving the quality of its stock, whilst keeping careful control of costs to optimise outcomes. The assessment provides some comparative context for East End Homes looking at relative performance for London-based peers and national averages.

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EAST END HOMES LIMITED STRATEGIC REPORT OF THE BOARD OF MANAGEMENT FOR THE YEAR ENDED 31 MARCH 2024

The following table summarises our actions against the specific expectations of the Value for Money Standard:

Specific expectations of the RSH	Summary of how East End Homes is meeting these
	expectations
Registered providers must: a. clearly articulate their strategic objectives b. have an approach agreed by their Board to achieving value for money in meeting these objectives and demonstrate their delivery of value for money to stakeholders c. through their strategic objectives, articulate their strategy for delivering homes that meet a range of needs d. ensure that optimal benefit is derived from resources and assets and optimise economy, efficiency and effectiveness in the delivery of their strategic objectives	The Board sets out its strategic objectives in its Corporate Plan, currently covering the period of 2019-24. The Board has begun to consider the development of its plan for the next cycle. The plan sets out the scope of the organisation’s ambitions including for the provision of new homes. The approach to achieving value for money is set out in the Board’s agreed Value for Money Strategy, which covers the period 2020-25. The Board seeks to pursue the most efficient use of its resources and this is being embedded within operational practice, such as the use of options appraisals for units with potentially high refurbishment costs.
Registeredproviders must demonstrate:
a. a robust approach to achieving value for money – this must include a robust approach to decision making and a rigorous appraisal of potential options for improving performance	The Board has agreed an approach to achieving VFM through its Value for Money Strategy 2020/25, which includes a focus on considering and assessing options for service delivery. All Board reports contain a standard section assessing VFM implications of the report and the recommended decision, and the Board appoints a VFM champion from among its membership to provide focussed challenge.
b. regular and appropriate consideration by the Board of potential value for money gains – this must include full consideration of costs and benefits of alternative commercial, organisational and delivery structures	Each report considered by the Board is required to identify value for money considerations. The Board also looks at possible alternative models of service delivery when considering proposals. This included the review of the report previously commissioned from the LSE which looked at the effectiveness and efficiency of EEH’s service deliverymodel.
c. consideration of value for money across their whole business and where they invest in non-social housing activity, they should consider whether this generates returns commensurate to the risk involved and justification where this is not the case	The Board receives as part of its performance information distinct data on collection and arrears for non-core parts of the business, such as non-social rented properties, the commercial property portfolio, and updated on shared ownership sales. The management accounts identify the surplus generated by each part of the business.
d. that they have appropriate targets in place for measuring performance in achieving value for money in delivering their strategic objectives, and that they regularly monitor and report their performance against these targets	The performance information includes a range of agreed targets against KPIs, covering both income recovery and service delivery. The Board and its committees receive quarterly updates against the key performance indicators, in addition to financial reporting.
Registered providers must annually publish evidence in the statutory accounts to enable stakeholders to understand theprovider’s:
a. performance against its own value for money targets and any metrics set out by the regulator, and how that performance compares to peers	East End Homes calculates and reports its performance against the Value for Money metrics specified by the RSH, and in addition reports against a small number of strategic VFM indicators which it has chosen to reflect its core objectives.

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EAST END HOMES LIMITED

STRATEGIC REPORT OF THE BOARD OF MANAGEMENT FOR THE YEAR ENDED 31 MARCH 2024

Specific expectations of the RSH	Summary of how East End Homes is meeting these
	expectations
b. measurable plans to address any areas of underperformance, including clearly stating any areas where improvements would not be appropriate and the rationale for this	In identifying its strategic objectives, the Board also identifies desired outcomes. Performance monitoring includes identifying plans of action where the required outputs are not being achieved. In limited circumstances the Board may accept that EEH performances is ‘inferior’ to the median of a benchmarked peer group. For example, investment in stock improvement works is likely to mean that EEH’s operating cost per unit will be higher than some other organisations.

Risk Management

In November 2023 the East End Homes Board agreed a new Risk Management Framework which instituted a refreshed structure for the identification, management, and mitigation of risks. East End Homes now operates a Strategic Risk Register, which contains the key cross-cutting risks which the Board has identified as requiring monitoring and management due to their impact on the organisation and/or the likelihood of the risk occurring. This is supported by an Operational Risk Register which monitors risks which are less consequential at present but are recognised as having the potential to become strategic risks or have a notable impact on the management of the organisation and delivery of services.

The Board has oversight of the Strategic Risk Register at each of its meetings. Under the revised governance structure, there is also the capacity for more forensic review by the Audit & Risk Committee. The Board can request that the ARC conduct a ‘deep dive’ on a risk and provide its feedback to the Board. The committee also takes the lead on review of the Operational Register and can propose the movement of a risk onto the strategic register.

In support of its regular risk monitoring, the Board conduct stress testing of the Business Plan against a range of individual and multi-variate scenarios which are largely identified by reference to key identified risk areas. This allows the Board to fully understand the scope of a risk and what the implications for the organisation of the risk event materialising. The Board agrees tailored mitigation plans for risk scenarios which are shown to lead to a significant impact on the organisation’s viability, such as projecting a breach of agreed covenants under funding agreements, or a shortfall in available cashflow. This exercise supports the Board in determining whether the agreed mitigation controls are adequate to control the risk, and to understand the impact which the mitigations themselves have on the organisation. The Board also considers the non-financial impacts of the application of mitigating controls, such as the impact on service delivery if expenditure in an area is reduced, and what that could mean for resident satisfaction. The Board must balance the requirement for maintaining financial viability with its wider responsibilities such as ensuring that EEH maintains safe and decent homes.

The EEH Risk Management Framework dictates that the Board will assess and agree its risk appetite at least annually. This involves agreeing their overall risk appetite and an appetite for each risk category. The adopted risk appetite(s) inform the decisions taken by the Board to mitigate identified risks to a tolerable level. Currently, the EEH Board has agreed an overall risk appetite at the second lowest ‘Minimalist’ level, and all categories have an appetite of either ‘Minimalist’ or ‘Cautious’. The Board also assesses via the regular reviews of the Risk Register the level of assurance which is has in monitoring the risk and the application of mitigating controls. For each strategic risk, there is a resulting risk level which indicates the degree of success of the controls in place in mitigating the risk to a level which is tolerable per the agreed risk appetite.

Strategic Risk	Appetite	Assurance Level	Risk Level
Insufficient capacity in the Business Plan to support planned investment	Cautious	Balanced	Medium
Board skills, expertise and governance arrangements insufficient to meet objectives	Minimalist	Balanced	High
Eric Street development scheme – counter-partyrisk	Minimalist	Balanced	High

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EAST END HOMES LIMITED

STRATEGIC REPORT OF THE BOARD OF MANAGEMENT FOR THE YEAR ENDED 31 MARCH 2024

Strategic Risk	Appetite	Assurance Level	Risk Level
Buildingsafetyobligations	Minimalist	Balanced	High
Ensuring homes are of suitable quality and promote quality of life for residents	Minimalist	Strong	High
Shared ownership sales programme	Minimalist	Balanced	Medium
Cyber and data security	Minimalist	Strong	High
Reputational Risk	Minimalist	Strong	Medium

Pension commitments and associated issues

East End Homes participates in two defined benefit (DB) final salary schemes, the Local Government Pension Scheme through the London Borough of Tower Hamlets, and the Social Housing Pension Scheme (SHPS). Entry to both schemes is now closed. East End Homes also participates in a defined contribution (DC) scheme under the SHPS. Since the introduction of auto enrolment in May 2014, all new entrants are now automatically enrolled into the SHPS (DC) scheme unless they specifically opt out. From 2012 to date, the number of East End Homes staff enrolled in a pension scheme has grown from 62 to 99 (92% of staff).

Since 2018/19 information became available to enable the Group to account for the Social Housing Pension Scheme as a defined benefit scheme. At 31 March 2024 £0.678 million (2022: £0.652 million) has been provided or recognised through the statement of comprehensive income and Provision for liabilities and Charges as the Groups share of deficit on the Social Housing Pension Scheme.

At 31[st] March 2024 East End Homes were notified of a pension scheme surplus of £9.105 million on the LGPS scheme, compared to the 2022/23 surplus of £6.799 million. East End Homes commissioned an asset ceiling report on the Local Government Pension Scheme (LGPS). Based on the asset ceiling approach, the recoverability of the LGPS pension asset has been considered and the conclusion is that it should be prudently capped at nil. The movement from the net asset this year to nil is described in the statement of comprehensive income as ‘Pension surplus not recoverable’.

The changes in the fair values of plan assets, defined benefit obligation and Net Liability in the LGP scheme for yearend has been fully provided against the income and expenditure reserves under the heading of Provision for liabilities and Charges.

The table below shows East End Homes’ pension liabilities at the in each of the last three financial years, together with the levels of staff membership of the schemes in relation to the overall workforce.

	2023/24	2023/24	2022/23	2022/23	2021/22	2021/22
	№ of members	(Deficit)/ Surplus £’000	№ of members	(Deficit)/ Surplus £’000	№ of members	(Deficit)/ Surplus £’000
LGPS	14	2,306	16	3,264	18	3,535
SHPS(DB)	30	(208)	34	(26)	34	(652)
SHPS(DC)	64	-	49	-	46	-
Total	108	2,098	99	3,238	98	2,883
Workforce	112		108		107
LGPS pension surplus not recoverable		(9,105)
Cumulative Provision for liabilities & charges		(886)		6,121		2883

22

EAST END HOMES LIMITED STRATEGIC REPORT OF THE BOARD OF MANAGEMENT FOR THE YEAR ENDED 31 MARCH 2024

Directors

The directors who have served during the year are disclosed in page 4.

During the year there were four resignations from the Board, all of whom were members who had reached the end of their maximum tenure under the adopted Code of Governance. There were six new appointments. All appointments to the Board are made in accordance with agreed processes with emphasis on ensuring that the Board holds and retains a breadth of skills, including input from members with lived experience in Tower Hamlets. With a mind to modernising governance practices, at the Annual General Meeting in September 2023 the company agreed revised Articles of Association which removed classifications of membership, including a hypothecated number of Resident Board Members, and members who could be nominated by the London Borough of Tower Hamlets. It is through the agreed skills matrix that the Board ensures the breadth of experiences and knowledge to drive effective decision-making.

The Board is mindful of the benefits of developing a diverse membership with a range of life experiences, who can contribute towards the skills and expertise the Board has identified in its adopted skills matrix. Board Members have been asked to complete audits of the diversity profile against protected characteristics. At the time of writing the reported composition of the Board was that there were:

• 6 male Members and 5 female Members

• 4 Members who were BAME (any ethnicity other than White British)

• 2 Board Members who disclosed a disability

• 2 Members who identified as LGBTQ+

• 2 Members who were currently resident in an East End Homes property

The Board has agreed a Board Succession Strategy and continues to keep its Skills and Competencies Matrix under review. A recruitment exercise is being conducted with a view to making five appointments at the Annual General Meeting in September 2024 to replace members due to stand down at the end of their tenure, to further strengthen the collective skillset of the Board, and to ensure that the Board has the correct profile of skills, expertise and experience to drive improvements and achieve the Board’s strategic objectives.

Internal controls

The Board is responsible for East End Homes’ system of internal control and for its review. The system of internal control is designed to manage rather than eliminate the risk of failure to meet corporate objectives. It can provide reasonable, but not absolute assurance against the possibility of material misstatement or loss.

In meeting its responsibilities, East End Homes has operated an ongoing process of risk management that enables it to identify, evaluate and manage the significant risks it faces. The Board is responsible for overseeing the process. The Board has adopted a process to review and provide assurance on the effectiveness of the system of internal control by the following means:

• An annual review by the Board of sector risks and updating of EeH Risk Register.

• An update of current risks and the Risk Register is considered at each meeting of the Audit and Risk Committee and Board meeting.

• Regular meetings held by the Executive Management Team (EMT) which review existing risks and new risks which may be emerging.

• A programme of risk management activity overseen by the Audit and Risk Committee and the Board including deep dives.

• Regular reports from the EMT covering performance and financial matters including key performance indicators.

• An internal audit and external audit programme and end of year audit.

• External review and regular financial returns made to the Regulator of Social Housing (RSH).

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EAST END HOMES LIMITED STRATEGIC REPORT OF THE BOARD OF MANAGEMENT FOR THE YEAR ENDED 31 MARCH 2024

The system of internal controls established by the Board consists of:

• Sound corporate governance arrangements including the adoption of the updated National Housing Federation’s Code of Governance;

• Long term corporate and strategic planning with specific targets and objectives; this includes reviewing the risk environment when developing and or updating the Corporate Plan;

• A system of controls over financial operations and budgetary control;

• Policies and procedures that are commensurate with East End Homes' Standing Orders;

• Contingency planning arrangements to ensure the security of data, the ability to recover computer systems and maintain services in the event of major interruption.

The Board of East End Homes annually reviews the organisation’s compliance with the Regulatory Standards published by the Regulator of Social Housing. The self-assessment was reported and agreed by the East End Homes Board on 18 June 2024. In completing this self-assessment, the Board agreed the aspects of the standards for which it was working towards compliance and set out the actions being taken to ensure compliance would be achieved. The Board also identified the actions to be taken to achieve compliance with the proposed Tenant Satisfaction Measures Standard.

Regulator of Social Housing

The RSH on 25th May 2023 published a Regulatory Judgement following an In-Depth Assessment which downgraded EeH previous assessment of the governance grade from G1 to G3 and confirmed its existing V2 grade for viability. This means that the RSH identified serious regulatory concerns and lacked assurance that adequate governance, risk management and control frameworks were in place.

During this period and prior to the start of the IDA the EeH Board had commissioned an external governance review. The outcome of this review has fed into the Governance Review Improvement Plan (GRIP) which is overseen by the Governance Recovery Working Party reporting to the Board.

During this period significant progress was made in completing the actions identified in the GRIP with a view to address the Regulatory concerns identified.

There are no other significant internal control issues that require disclosure in the annual financial statements.

Fraud

East End Homes complies with the Regulator of Social Housing’s requirements on fraud. We have an Anti-Fraud Policy which was approved by the Board in June 2018.

The policy requires a register to be maintained of all actual and attempted fraud. All such cases are reported to the Finance & Audit Committee and the Board. Currently, any fraud more than £5,000 must be reported to the Regulator of Social Housing, in the absence of which a ‘nil’ return will be submitted.

In the year to 31 March 2024, there were no actual or attempted fraud cases.

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EAST END HOMES LIMITED

STRATEGIC REPORT OF THE BOARD OF MANAGEMENT FOR THE YEAR ENDED 31 MARCH 2024

Statement of the Board’s responsibilities

The Board is responsible for preparing the Strategic Report of the Board of Management and financial statements in accordance with applicable law and regulations.

The Companies Act 2006 and registered social housing legislation require the Board to prepare financial statements for each financial year which give a true and fair view of the state of affairs of the Group and Company and of the income and expenditure of the Group and Association for that period. In preparing these financial statements the Board is required to:

• select suitable accounting policies and then apply them consistently;

• make judgments and estimates that are reasonable and prudent;

• state whether applicable accounting standards have been followed, subject to any material departures disclosed and explained in the financial statements; and

• prepare the accounts on the going concern basis unless it is inappropriate to presume that the Group and Company will continue in business.

The Board is responsible for keeping proper accounting records, which disclose with reasonable accuracy at any time the financial position of the Group and Company and enable it to ensure that the financial statements comply with the Companies Act 2006, the Housing and Regeneration Act 2008 and the Accounting Direction for Private Registered Providers of Social Housing 2022. It has general responsibility for taking reasonable steps to safeguard the assets of the Group and Company and to prevent and detect fraud and other irregularities.

We, the Board members, who are also the directors of the Company, who held office at the date of approval of these Financial Statements set out above, each confirm, so far as we are aware, that:

• there is no relevant audit of which the Group’s and Company’s auditors are unaware; and

• • we have taken all the steps that ought to have been taken as directors in order to make ourselves aware of any relevant audit information and to establish that the Group’s and Company’s auditors are aware of that information.

This confirmation is given and should be interpreted in accordance with the provisions of Section 418 of the Companies Act 2006. In approving the Strategic Report of the Board of Management, we also approve the Strategic Report included therein, in our capacity as company directors.

Going concern

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

In considering the financial position of the group the Board has reviewed the short-term cash flow forecast, available bank facilities and 30-year business plan.

25

STRATEGIC REPORT OF THE BOARD OF MANAGEMENT FOR THE YEAR ENDED 31 MARCH 2024

EAST END HOMES LIMITED

Annual general meeting

The annual general meeting will be held on 23 September 2024.

Auditors

Beever and Struthers Chartered Accountants have expressed their willingness to continue as external auditors and a resolution to re-appoint them shall be proposed at the annual general meeting.

Approved by the Board on 23 September 2024 and signed on its behalf by:

FP OUMQ SL

Kevin Moore Chair

Emma Palmer Member

Simon Turek Member

26

EAST END HOMES LIMITED REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF EAST END HOMES LIMITED

Opinion

We have audited the financial statements of East End Homes Limited “the parent Company” and its subsidiary (“the Group”) for the year ended 31 March 2024 which comprise the Consolidated Statement of Comprehensive Income, the Association Statement of Comprehensive Income, the Consolidated Statement of Financial Position, the Association Statement of Financial Position, the Consolidated Statement of Changes in Reserves, the Association Statement of Changes in Reserves, the Consolidated Statement of Cash Flows, the Association Statement of Cash Flows and the related notes, including a summary of significant accounting policies in Note 1. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice) including FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland”.

In our opinion the financial statements:

• give a true and fair view of the state of the Group’s and the Company’s affairs as at 31 March 2024 and of the Group’s and Company’s profit for the year then ended;

• have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and

• have been prepared in accordance with the requirements of the Companies Act 2006, the Charities Act 2011, the Housing and Regeneration Act 2008 and the Accounting Direction for Private Registered Providers of Social Housing 2022.

Basis for opinion

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

Conclusions relating to going concern

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

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

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

27

EAST END HOMES LIMITED REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF EAST END HOMES LIMITED (continued)

Other information

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

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

We have nothing to report in this regard.

Opinions 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 Strategic Report of the Board of Management for the financial year for which the financial statements are prepared is consistent with the financial statements; and

• the Strategic Report of the Board of Management has been prepared in accordance with applicable legal requirements.

Matters on which we are required to report by exception

In the light of the knowledge and understanding of the Group and the parent company and its environment obtained in the course of the audit, we have not identified material misstatements in the Strategic Report of the Board of Management.

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 by the parent, or returns adequate for our audit have not been received from branches not visited by us; or

• the parent 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.

In addition, we have nothing to report in respect of the following matter where the Housing and Regeneration Act 2008 requires us to report to you if, in our opinion:

• a satisfactory system of control over transactions has not been maintained.

28

Responsibilities of the Board

As explained more fully in the Statement of the Board’s responsibilities set out on page 26, the Board is responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the Board determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

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

Auditor’s responsibilities for the audit of the financial statements

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

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.

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

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

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

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

• We obtained an understanding of laws and regulations that affect the Group and Association, focusing on those that had a direct effect on the financial statements or that had a fundamental effect on its operations. Key laws and regulations that we identified included the Companies Act 2006, the Charities Act 2011, the Statement of Recommended Practice for registered housing providers: Housing SORP 2018, the Housing and Regeneration Act 2008, the Accounting Direction for Private Registered Providers of Social Housing 2022, tax legislation, health and safety legislations, and employment legislation.

• We enquired of the Board and reviewed correspondence and Board meeting minutes for evidence of non-compliance with relevant laws and regulations. We also reviewed controls the Board have in place, where necessary, to ensure compliance.

• We gained an understanding of the controls that the Board have in place to prevent and detect fraud. We enquired of the trustees Board about any incidences of fraud that had taken place during the accounting period.

• The risk of fraud and non-compliance with laws and regulations and fraud was discussed within the audit team and tests were planned and performed to address these risks. We identified the potential for fraud in the following areas: laws related to the construction and provision of social housing recognising the nature of the Group’s activities and the regulated nature of the Group’s activities.

29

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

• We reviewed financial statements disclosures and tested to supporting documentation to assess compliance with relevant laws and regulations discussed above.

• We enquired of the Board about actual and potential litigation and claims.

• We performed analytical procedures to identify any unusual or unexpected relationships that might indicate risks of material misstatement due to fraud.

• In addressing the risk of fraud due to management override of internal controls we tested the appropriateness of journal entries and assessed whether the judgements made in making accounting estimates were indicative of a potential bias.

Due to the inherent limitations of an audit, there is an unavoidable risk that we m ay not have detected some material misstatements in the financial statements, even though we have properly planned and performed our audit in accordance with auditing standards. For example, as with any audit, there remained a higher risk of non-detection of irregularities, as these may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal controls. We are not responsible for preventing fraud or noncompliance with laws and regulations and cannot be expected to detect all fraud and non-compliance with laws and regulations.

Use of our report

This report is made solely to the 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.

Peener and. Strthes

Michael Tourville FCA Date: (Senior Statutory Auditor)

For and on behalf of Beever and Struthers Chartered Accountants and Statutory Auditor 150 Minories London EC3N 1LS

30

EAST END HOMES LIMITED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 31 MARCH 2024

	Notes	2024 £’000	2023 £’000
Turnover	2	28,863	24,171
Cost of sales	2	(2,035) (402)	(402)
Operating expenditure	2	(22,763)	(20,317)
Increase / (decrease) in valuation of investment properties	11	(475)	2,627
Gain / (loss) on disposal of property, plant and equipment (fixed assets)	5	506	728
Operating surplus / (deficit)	2	4,096	6,807
Interest receivable and similar income	6	706	363
Interest and financing costs	7	(3,912)	(3,479)
Surplus / (deficit) for the year before taxation	8	890	3,691
Taxation	9	-	-
Surplus / (deficit) for the year		890	3,691
Actuarial loss/gain in respect of pension schemes	21	1,055 2,872	1,055 2,872
Pension surplus not recoverable		(9,105)	-
Total comprehensive income for the year		(7,160)	6,563
The results relate wholly to continuing activities.

The financial statements were approved and authorised for issue by the Board on 23 September 2024 and were signed on its behalf by:

The notes on pages 38 to 69 form an integral part of these financial statements.

Kevin Moore Emma Palmer Simon Turek Chair Member Member

31

EAST END HOMES LIMITED ASSOCIATION STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 31 MARCH 2024

	Notes	2024 2023	2023
		£’000 £’000	£’000
Turnover	2	28,588	23,905
Cost of sales	2	(2,035)	(402)
Operating expenditure	2	(22,710)	(20,297)
Increase / (decrease) in valuation of investment properties	11	(475)	2,627
Gain / (loss) on disposal of property, plant and equipment (fixed assets)	5	506	728
Operating surplus / (deficit)	2	3,874	6,561
Gift aid received from subsidiary		253	247
Interest receivable and similar income	6	696	356
Interest and financing costs	7	(3,912)	(3,479)
Surplus / (deficit) for the year before taxation	8	911	3,685
Taxation	9	-
			-
Surplus / (deficit) for the year after taxation		911	3,685
Actuarial (loss) / gain in respect of pension schemes	21	1,055	2,872
Pension surplus not recoverable		(9,105)	-
Total comprehensive Income for the year		(7,139)	6,557

The results relate wholly to continuing activities

The financial statements were approved and authorised for issue by the Board on 23 September 2024 and were signed on its behalf by:

The notes on pages 38 to 69 form an integral part of these financial statements.

Kevin Moore Chair

Emma Palmer Member

Simon Turek Member

32

EAST END HOMES LIMITED CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 31 March 2024 Company number 4516155

.

		2024	2023
	Notes
		£’000	£’000
Fixed assets
Tangible fixed assets: housing properties	10	211,367	199,591
Investment properties	11	19,729	20,204
Tangible fixed assets: other fixed assets	12	1,156	1,064
		232,252	220,859
Current assets
Stock	13	596	2,471
Trade and other debtors
- due within one year	14	4,338	7,547
- due after one year	14	503	503
Cash and cash equivalents		4,685	8,977
		10,122	19,498
Less creditors:
Amounts falling due within one year	15	(18,153)	(16,713)
Net current assets / (liabilities)		(8,031)	2,785
Total assets less current liabilities		224,221	223,644
Creditors:
Amounts falling due after more than one year	16	(143,339)	(142,609)
Provision for liabilities and charges	21	(886)	6,121
Total net assets		79,996	87,156
Capital and reserves
Revaluation reserve		3,946	4,421
Income and expenditure reserve		76,050	82,735
Total Reserves		79,996	87,156

The notes on pages 38 to 69 form an integral part of these financial statements

The financial statements were approved and authorised for issue by the Board on 23 September 2024 and signed on its behalf by:

Kevin Moore Emma Palmer Simon Turek Chair Member Member

33

EAST END HOMES LIMITED ASSOCIATION STATEMENT OF FINANCIAL POSITION AS AT 31 March 2024 Company number 4516155

Company number 4516155
		2024	2023
	Notes	£’000	£’000
Fixed assets
Tangible fixed assets: housing properties	10	211,367	199,591
Investment properties	11	19,729	20,204
Tangible fixed assets: other fixed assets	12	1,156	1,064
		232,252	220,859
Current assets
Stock	13	596	2,471
Trade and other debtors
- due within one year	14	4,348	7,533
- due after one year	14	503	503
Cash and cash equivalents		4,358	8,702
		9,805	19,209
Less creditors:
Amounts falling due within one year	15	(18,068)	(16,677)
Net current assets / (liabilities)		(8,263)	2,532
Total assets less current liabilities		223,989	223,391
Creditors:
Amounts falling due after more than one year	16	(143,339)	(142,609)
Provision for liabilities and charges	21	(886)	6,121
Total net assets		79,764	86,903
Capital and reserves
Revaluation reserve		3,946	4,421
Income and expenditure reserve		75,818	82,482
Total reserves		79,764	86,903

The notes on pages 38 to 69 form an integral part of these financial statements The financial statements were approved and authorised for issue by the Board on 23 September 2024 and signed on its behalf by:

SS

Kevin Moore Chair

Emma Palmer Member

Simon Turek Member

34

EAST END HOMES LIMITED CONSOLIDATED STATEMENT OF CHANGES IN RESERVES

Balance at 1 April 2023 Surplus / (deficit) from Statement of Comprehensive Income Transfer to/from revaluation reserve Balance at 31 March 2023 Surplus / (deficit) from Statement of Comprehensive Income Transfer to/from revaluation reserve Balance at 31 March 2024 ASSOCIATION STATEMENT OF CHANGES IN RESERVES Balance at 1 April 2022 Surplus / (deficit) from Statement of Comprehensive Income Transfer to/from revaluation reserve Balance at 31 March 2023 Surplus / (deficit) from Statement of Comprehensive Income Transfer to/from revaluation reserve Balance at 31 March 2024

Group Group Group Income and expenditure reserve £’000 Revaluation reserve £’000 Total reserves £’000 78,799 1,794 80,593 6,563 - 6,563 (2,627) 2,627 - 82,735 4,421 87,156 (7,160) - (7,160) 475 (475) - 76,050 3,946 79,996 Income and expenditure reserve £’000 Revaluation reserve £’000 Total reserves £’000 78,552 1,794 80,346 6,557 - 6,557 (2,627) 2,627 - 82,482 4,421 86,903 (7,139) - (7,139) 475 (475) - 75,818 3,946 79,764

The notes on pages 38 to 69 form an integral part of these financial statements.

35

EAST END HOMES LIMITED CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 31 MARCH 2024

Net cash generated from operating activities (Note i)	2024 £’000 £’000 11,639 - (176) (15,080) 636 562 1,260 (12,798) (3,134) - - (3,134) (4,293) 8,977 4,684 4,684 (7,160) 3,786 5,227 304 7,007 20 (636) 3,912 (706) (590) 475 11,639	2024 £’000 £’000 11,639 - (176) (15,080) 636 562 1,260 (12,798) (3,134) - - (3,134) (4,293) 8,977 4,684 4,684 (7,160) 3,786 5,227 304 7,007 20 (636) 3,912 (706) (590) 475 11,639	2023 £’000 £’000 4,652 - (41) (20,848) 1,121 205 2,185 (17,378) (3,426) 20,000 (5,000) 11,574 (1,152) 10,129 8,977 8,977 6,563 3,801 (2,081) 437 (3,238) 392 (1,121) 3,479 (363) (590) (2,627) 4,652	2023 £’000 £’000 4,652 - (41) (20,848) 1,121 205 2,185 (17,378) (3,426) 20,000 (5,000) 11,574 (1,152) 10,129 8,977 8,977 6,563 3,801 (2,081) 437 (3,238) 392 (1,121) 3,479 (363) (590) (2,627) 4,652
Cash flow from investing activities Purchase of investment properties Purchase of tangible fixed assets Acquisition and construction of housing properties Proceeds from sale of tangible fixed assets Interest Received Grant Received Cash flow from financing activities Interest Paid New loans secured Repayment of borrowings Net change in cash and cash equivalents Cash and cash equivalents at beginning of the year Cash and cash equivalents at end of the year Cash and cash equivalents comprise: Cash at bank Note i Cash flow from operating activities Surplus for the year Adjustments for non-cash items: Depreciation of tangible fixed assets (Increase)/ decrease in trade and other debtors (Decrease)/ increase in trade and other creditors Increase/ (decrease) in provisions Carrying amount of tangible fixed asset disposals Adjustments for investing or financing activities: Proceeds from the sale of tangible fixed assets Interest payable Interest received Government grants amortised Changes in value of Investment Properties Net cash generated from operating activities
	(3,134) - -		(3,426) 20,000 (5,000)
		4,684		8,977
		4,684		8,977
		(7,160) 3,786 5,227 304 7,007 20 (636) 3,912 (706) (590) 475		6,563 3,801 (2,081) 437 (3,238) 392 (1,121) 3,479 (363) (590) (2,627)
		11,639		4,652

The notes on pages 38 to 69 form an integral part of these financial statements.

36

EAST END HOMES LIMITED ASSOCIATION STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 31 MARCH 2024

	2024		2023	2023
	£’000	£’000	£’000	£’000
Net cash generated from operating activities (Note i)		11,597		4,680
Cash flow from investing activities
Purchase of investment properties	-		-
Purchase of tangible fixed assets	(176)		(41)
Acquisition and construction of housing properties	(15,080)		(20,848)
Proceeds from sale of tangible fixed assets	636		1,121
Interest Received	553		195
Grant Received	1,260		2,185
		(12,807)		(17,388)
Cash flow from financing activities
Interest Paid	(3,134)		(3,426)
New loans secured	-		20,000
Repayment of borrowings	-		(5,000)
		(3,134)		11,574
Net change in cash and cash equivalents		(4,344)		(1,134)
Cash and cash equivalents at beginning of the year		8,702		9,836
Cash and cash equivalents at end of the year		4,358		8,702
Cash and cash equivalents comprise:
Cash at bank		4,358		8,702
Note i
Cash flow from operating activities
Surplus for the year		(7,139)		6,557
Adjustments for non-cash
items:
Depreciation of tangible fixed assets		3,786		3,801
(Increase)/ decrease in trade and other debtors		5,202		(2,091)
(Decrease)/ increase in trade and other creditors		256		474
Increase/ (decrease) in provisions		7,007		(3,238)
Carrying amount of tangible fixed asset disposals		20		392
Adjustments for investing or financing activities:
Proceeds from the sale of tangible fixed assets		(636)		(1,121)
Interest payable		3,912		3,479
Interest received		(696)		(356)
Government grants amortised		(590)		(590)
Changes in value of Investment Properties		475		(2,627)
Net cash generated from operating activities		11,597		4.680

The notes on pages 38 to 69 form an integral part of these financial statements.

37

EAST END HOMES LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2024

1. PRINCIPAL ACCOUNTING POLICIES

East End Homes Limited is a registered company limited by guarantee under the provisions of the Companies Act 2006 registered in England with registration number 4516155 and is registered as a charity in accordance with the Charities Act 2011 registration number 1107691. It is also registered with the Regulator of Social Housing as a Registered Provider of Social Housing under the provisions of the Housing and Regeneration Act 2008 registration number L4434. The registered office is 3 Resolution Plaza, London, E1 6PS.

The group comprises the following entities:

Name	Incorporation	Registered/Non-registered
East End Homes Limited	Companies Act 2006	Registered
East End Homes (Community	Companies Act 2006	Non-registered
Development) Limited

Basis of Accounting

The Group and Association’s financial statements have been prepared in accordance with applicable United Kingdom Accounting Generally Accepted Accounting Practice (UK GAAP), the Housing SORP 2018: Statement of Recommended Practice for Registered Social Housing Providers, the Companies Act 2006, the Charities Act 2011, the Housing and Regeneration Act 2008 and the Accounting Direction for Private Registered Providers of Social Housing 2022.

The financial statements are prepared on the historical cost basis of accounting as modified by investment properties and pension fund assets and liabilities held at fair value and are presented in sterling £’000.

The Group and Association’s financial statements have been prepared in compliance with FRS 102. As a public benefit entity, East End Homes Limited has applied the public benefit entity ‘PBE’ prefixed paragraphs of FRS 102.

Parent company disclosure exemptions

In preparing the separate financial statements of the parent company, advantage has been taken of the following disclosure exemptions available in FRS 102:

• Disclosures in respect of the parent company’s financial instruments have not been presented as equivalent disclosures have been provided in respect of the group as a whole

• The accounting relating to the Social Housing Pension Fund has not been consistently applied. The accounting policy is set out on page 40. The consolidated financial statements have applied Financial Reporting Exposure Draft 71 ‘Draft amendments to FRS 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland – Multi-employer defined benefit plans.

Basis of Consolidation

The consolidated financial statements incorporate the results of East End Homes Limited and its subsidiary undertaking East End Homes (Community Development) Limited, registered company number 05838745, as at 31 March 2024 using the acquisition method of accounting as required. Where the acquisition method is used, the results of subsidiary undertakings are included from the date of acquisition, being the date the Group obtains control. Intra-group transactions are eliminated on consolidation.

38

EAST END HOMES LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2024 (continued)

Turnover

Turnover represents rental income receivable, amortised capital grant, service charges, revenue grants from local authorities, the Greater London Authority and Homes England, management fees receivable and other income and are recognised in relation to the period when the goods and services have been supplied.

Rental income is recognised when the property is available for let, net of voids. Income from property sales is recognised on legal completion. All income is recognised on a receivable basis and sales of property are recognised at completion. Income is recognised on delivery of service. Intra-group charges are on an arm’s length basis and are eliminated on consolidation.

Sale of properties developed for outright sale are included in Turnover and Cost of Sales

Housing properties

Housing properties are properties used in the provision of social benefit purposes or for wider community benefits. They include socially rented units.

East End Homes account for housing properties using the historical cost model. Housing properties are initially recognised at the cost of bringing them to their present condition. Such costs include the cost of acquiring land and the buildings, cost of construction, directly attributable administration costs and expenditure incurred in improving or reinvesting in existing properties.

Social housing properties during development are carried at their development costs to date less impairment.

Housing properties are stated in the Statement of Financial Position at cost less depreciation less impairment. Depreciation is charged on completed social housing properties, excluding freehold land on a straight-line basis over the useful economic life of the component from the date of practical completion.

Under SORP 2018, the costs of housing properties is split between their land and structure costs and a specific set of major components which require periodic refurbishment or replacement. The costs of refurbishment of or replacement of such components is capitalised and depreciated over the expected useful economic lives of the components as follows:

Component	Useful economic life(years)
Land	Not depreciated
Structure	100
Roof	30
Lift	50
Bathroom	30
Kitchen	25
Electrical	30
Heating Systems	20
Windows	30
Doors	30

Major repairs expenditure is capitalised where the works undertaken increase the future economic benefit to be derived from the property. An increase in the future economic benefit can arise through either an increase in the rental income or a reduction in future maintenance costs or a significant extension in the life of the property. Where the works are either routine repairs or replacements with no incremental benefit then the costs are charged to the statement of comprehensive income in the period in which they are incurred.

39

EAST END HOMES LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2024 (continued)

Land and properties that are donated from local authorities or acquired at a discount to their fair values as a result of planning requirement under Section 106 Town and Country Planning Act 1990 are carried in the Statement of Financial Position at their fair value subject to the restrictions attached to those assets and not at the consideration paid by East End Homes. Donated land is also carried at the fair value at the time of the donation rather than at £nil value.

Sales of housing properties

Property sales are attributable to preserved Right to Buy or Right to Acquire sales. The gain or loss on disposal of housing properties is recognised in the Statement of Comprehensive Income at the date of transfer of title.

Other tangible fixed assets

Other tangible fixed assets are stated at cost less accumulated depreciation. Depreciation is provided to write the assets down to their residual values over their estimated useful economic lives, which are as follows:

Motor vehicles	-	3 years
Office furniture and equipment	-	5 years
Computer equipment	-	3 years
Office buildings	-	50 years

Stock and properties held for sale

Stocks of materials are stated at the lower of cost and net realisable value being the estimated selling price less costs to complete and sell. Cost is based on the cost of purchase on a first in, first out basis. Work in progress and finished goods include labour and attributable overheads.

Properties developed for outright sale are included in current assets as they are intended to be sold at the lower of cost or estimated selling price less costs to complete and sell.

At each reporting date, stock and properties held for sale are assessed for impairment. If there is evidence of impairment, the carrying amount is reduced to its selling price less costs to complete and sell. The impairment loss is recognised immediately in the Statement of Comprehensive Income.

Low cost home ownership properties

The costs of low cost home ownership properties are split between current and tangible fixed assets on the basis of the first tranche portion. The first tranche portion is accounted for as a current asset and the sale proceeds shown in turnover. The remaining element of the shared ownership property is accounted for as a tangible fixed asset and subsequent sales treated as sales of fixed assets/property sales in operating profit.

Loan interest costs

Loan interest costs are calculated using the effective interest method of the difference between the loan amounts at initial recognition and amount of maturity of the related loan.

Loan finance issue costs

These are amortised over the life of the related loan. Loans are stated in the Statement of Financial Position at the amount of the net proceeds after issue, plus increases to account for any subsequent amounts amortised. Where loans are redeemed during the year, any redemption penalty and any connected loan finance issue costs are recognised in the Statement of Comprehensive Income account in the year in which the redemption took place.

40

EAST END HOMES LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2024 (continued) VAT

East End Homes Limited and East End Homes (Community Development) Limited are registered as a VAT group. A large proportion of East End Homes’ income comprises rental income, which is exempt for VAT purposes and gives rise to a partial exemption calculation. Expenditure is therefore shown inclusive of VAT. Recoverable VAT arising from partially exempt activities is credited to the Statement of Comprehensive Income.

Taxation

The Association has charitable status and therefore is not subject to Corporation Tax on surpluses derived from charitable activities.

Operating leases

Rental paid under operating leases is charged to the Statement of Comprehensive Income as incurred.

Provisions

East End Homes only provides for contractual liabilities and pension commitments which exist at the Statement of Financial Position date.

Treasury management

East End Homes has adopted CIPFA’s Code of Practice for Treasury Management in the Public Services (2017) and the accompanying Guidance Notes for Registered Providers.

Rent Setting

East End Homes complies with the Regulator of Social Housing’s Rent Standard as a key component of the Regulatory Framework.

Going Concern

The Board has reviewed the group’s budget for the year to March 2024 and Business Plan for 2025 onwards and have also considered the continuing impact of ongoing economic crisis, including high inflation and high interest rates on its operations and the principal risks identified, increased rent arrears, the availability of cash resources and the impact of economic downturn. Having taken steps to mitigate where possible the impact of these risks, the Board have concluded that there is a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future. Therefore, the financial statements have been prepared on a going concern basis.

41

EAST END HOMES LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2024 (continued)

Judgements and key sources of estimation uncertainty

The preparation of the financial statements requires management to make judgements, estimates and assumptions that affect the amounts reported for assets and liabilities as at the Statement of Financial Position date and the amounts reported for revenues and expenses during the year. However, the nature of estimation means that actual outcomes could differ from those estimates. The following judgements (apart from those involving estimates) have had the most significant effect on amounts recognised in the financial statements:

a. Development expenditure

The Group capitalises development expenditure in accordance with the accounting policy described on page 50. Initial capitalisation of costs is based on management’s judgement that development scheme is confirmed, usually when Board approval has taken place including access to the appropriate funding. In determining whether a project is likely to cease, management monitors the development and considers if changes have occurred that result in impairment.

b. Categorisation of housing properties

The Group has undertaken a detailed review of the intending use of all housing properties. In determining the intending use, the Group has considered if the asset is held for social benefit or to earn commercial rentals. The Group has determined that commercial properties are investment properties.

c. Impairment

The Group has undertaken an Impairment Review of non-financial assets.

Other key sources of estimation and assumptions:

a. Tangible fixed assets

Other than investment properties, tangible fixed assets are depreciated over their useful lives taking into account residual values, where appropriate. The actual lives of the assets and residual values are assessed annually and may vary depending on a number of factors. In re-assessing asset lives, factors such as technological innovation, product life cycles and maintenance programmes are taken into account. Residual value assessments consider issues such as future market conditions, the remaining life of the asset and projected disposal values.

b. Revaluation of investment properties

The Group and Association carries its investment properties at fair value, with changes in fair value being recognised in the Statement of Comprehensive Income. The Group and Association engaged independent valuation specialists to determine fair value at 31 March 2024. The valuer used a fair value technique as an estimate for which the asset should exchange on the valuation date between a willing buyer and a willing seller in an arm’s length transaction. The key assumptions used to determine the fair value of investment property are further explained in note 11.

42

EAST END HOMES LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2024 (continued) c. Pension and other post-employment benefits

East End Homes participates in two pension schemes namely; Social Housing Pension Scheme (SHPS) and LGPS with London Borough of Tower Hamlets (LBTH).

The full pension deficit liability for the Social Housing Pension Scheme (SHPS) is disclosed as a liability. The operating costs of providing retirement benefits to participating employees are recognised in the accounting periods in which the benefits are earned. The related finance costs, expected return on assets and any other changes in fair value of the assets and liabilities, are recognised in the accounting period in which they arise.

The full pension deficit liability for the London Borough of Tower Hamlets (LBTH) LGPS is disclosed as a liability. The operating costs of providing retirement benefits to participating employees are recognised in the accounting periods in which the benefits are earned. The related finance costs, expected return on assets and any other changes in fair value of the assets and liabilities, are recognised in the accounting period in which they arise.

The cost of providing retirement pensions and related benefits is charged to management expenses over the periods benefiting from the employees’ services. The disclosures in the financial statements follow the requirements of Section 28 of FRS 102 in relation to multi-employer funded schemes in which the Group has a participating interest.

The cost of defined benefit pension plans and other post-employment benefits are determined using actuarial valuations. The actuarial valuation involves making assumptions about discount rates, future salary increases, mortality rates and future pension increases. Due to the complexity of the valuation, the underlying assumptions and the long-term nature of these plans, such estimates are subject to significant uncertainty. In determining the appropriate discount rate, management considers the interest rates of corporate bonds in the respective currency with at least AA rating, with extrapolated maturities corresponding to the expected duration of the defined benefit obligation. The underlying bonds are further reviewed for quality, and those having excessive credit spreads are removed from the population bonds on which the discount rate is based, on the basis that they do not represent high quality bonds.

The mortality rate is based on publicly available mortality tables for the specific sector. Future salary increases and pension increases are based on expected future inflation rates for the respective sector.

Impairment of non-financial assets

Reviews for impairment of housing properties are carried out when a trigger has occurred and any impairment loss in a cash generating unit is recognised by a charge to the Statement of Comprehensive Income.

Impairment is recognised where the carrying value of a cash generating unit exceeds the higher of its net realisable value or its value in use. A cash generating unit is normally a group of properties at scheme level whose cash income can be separately identified.

Following a trigger for impairment, the Group and Association perform impairment tests based on fair value less costs to sell or a value in use calculation. The fair value less costs to sell calculation is based on available data from sales transactions in an arm’s length transaction on similar cash generating units (properties) or observable market prices less incremental costs for disposing of the properties. The value in use calculation is based on either a depreciated replacement cost or a discounted cash flow model. The depreciated replacement cost is based on available data of the cost of constructing or acquiring replacement properties to provide the same level of service potential to the Association as the existing property. The cash flows are derived from the business plan for the next 30 years and do not include significant future investments that will enhance the asset’s performance of the cash generating unit being tested. The recoverable amount is most sensitive to the discount rate used for the discounted cash flow model as well as the expected future cash flows and the growth rate used for extrapolation purposes.

43

EAST END HOMES LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2024 (continued)

Following the assessment of impairment, no impairment losses were identified in the reporting period.

Non exchange transactions

Non exchange transactions such as donations, grants from non-government sources and legacies are recognised in the comprehensive income statement when received or receivable and do not impose future performance related conditions. Where there are performance conditions the non-exchange transactions are recognised as liabilities until the performed conditions have been discharged.

Service Charge

Service charges are set at a level which should recover the cost of providing services at the schemes. Where costs have either been under or over recovered, the resulting surplus of deficit is recovered or repaid in future years. The Group operates variable service charges on a scheme-by-scheme basis in full consultation with the residents. Where variable service charges are used, the charges will include an allowance for the surplus or deficit from prior years, with the surplus being returned to residents by a reduced charge and a deficit recovered by a higher charge. Until these are returned or recovered, they are held as creditors or debtors in the Statement of Financial Position.

Capitalisation of interest and administration costs

Interest on loans financing development is capitalised up to the date of the completion of the scheme and only when development activity is in progress.

Administration costs relating to development activities are capitalised only to the extent that they are incremental to the development process and directly attributable to bringing the property into their intended use.

Investment properties

Investment property includes commercial and other properties not held for the social benefit of the Group and are measured at cost on initial recognition, which includes purchase cost and any directly attributable expenditure. Investment properties are included in the Statement of Financial Position at their fair value; where, fair value is the amount that willing and informed parties are able to transact. The fair value is determined in accordance with the guidance notes on the valuation of assets issued by the Royal Institute of Chartered Surveyors. Movements in the fair values of investment properties are recognised in the Statement of Comprehensive Income. No depreciation is provided.

Short-term debtors and creditors

Debtors and creditors with no stated interest rate and receivable or payable within one year are recorded at transaction price. Any losses arising from impairment are recognised in the income statement in other operating expenses.

Social Housing and other government grants

Government grants are grants from government sources such as local authorities and Homes England and they are accounted for under the accruals model. Government grants relating to assets are amortised over 100 years, or if the grant is allocated to a component or a building with a lease then it is amortised over the corresponding life. The unamortised element is treated in the Statement of Financial Position as deferred income.

When Social Housing Grant (SHG) in respect of housing properties in the course of construction exceeds the total cost to date of those housing properties, the excess is shown as a current liability.

Grants relating to revenue are be recognised in income on a systematic basis over the period in which the social landlord recognises the related costs for which the grant is intended to compensate. Grants that becomes receivable as compensation for expenses or losses already incurred or for the purpose of giving immediate financial support to the entity with no future related costs are recognised as revenue in the period in which they become receivable.

44

EAST END HOMES LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2024 (continued)

SHG must be recycled by the Group under certain conditions, if a property is sold, or if another relevant event takes place. In these cases, the SHG can be used for projects approved by the Homes England and Greater London Authority. However, SHG may have to be repaid if certain conditions are not met. If grant is not required to be recycled or repaid, any unamortised grant is recognised as Turnover. In certain circumstances, SHG may be repayable, and, in that event, is a subordinated unsecured repayable debt.

Other grants

Other grants are any grants other than government grants. They are held as deferred income and released to the Statement of Comprehensive Income in line with the revenue recognition criteria using the performance model. Revenue is recognised when the performance conditions attached to the other grants have been fully met.

Financial Instruments

Financial assets and financial liabilities are measured at transaction price initially, plus, in the case of a financial asset or financial liability not at fair value through the Statement of Comprehensive Income, transaction costs that are directly attributable to the acquisition or issue of the financial asset or financial liability.

Financial instruments held by the Group are classified as follows:

• Financial assets such as current asset investments and receivables are classified as loans and receivables and held at amortised cost using the effective interest method. Cash is held at cost.

• Financial liabilities such as bonds and loans are held at amortised cost using the effective interest method.

• Loans to or from subsidiaries including those that are due on demand are held at amortised cost using the effective interest method.

All loans held by the Group are classified as basic financial instruments in accordance with FRS 102. They are measured at transaction price plus transaction costs initially, and subsequently at amortised cost using the effective interest rate method. Loans repayable within one year are not discounted.

Financial assets and financial liabilities at fair value are classified using the following fair value hierarchy:

• The best evidence of fair value is a quoted price in an active market.

• When quoted prices are unavailable, the price of a recent transaction for an identical asset, adjusted to reflect any circumstances specific to the sale, such as a distress sale, if appropriate.

• Where there is no active market or recent transactions then a valuation technique is used to estimate what the transaction price would have been on the measurement date in an arm’s length exchange motivated by normal business considerations

45

EAST END HOMES LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2024 (continued)

2. GROUP –TURNOVER, OPERATING COSTS AND OPERATING SURPLUS

Income from social housing lettings General Needs & Intermediate Rent Low-cost home ownership First tranche low-cost home ownership sales Income from non-social housing activities Leasehold Commercial lettings Overage receipts and other income Private rented properties Increase /(decrease) in fair value of investment properties Surplus on disposal of fixed assets Income from social housing lettings General Needs & Intermediate Rent First tranche low-cost home ownership sales Income from non-social housing activities Leasehold Commercial lettings Overage receipts and other income Private rented properties Increase /(decrease) in fair value of investment properties Surplus on disposal of fixed assets	2024 Turnover Cost of Operating Operating Sales Costs Surplus £’000 £’000 £’000 £’000 19,077 - (16,026) 3,051 131 (180) (49) 3,477 (2,035) - 1,442 2,880 - (5,009) (2,129) 1,623 - (943) 680 528 - (201) 327 1,147 - (404) 743 (475) 506
	28,863 (2,035) (22,763) 4,096
	2023 Turnover Cost of Operating Operating Sales Costs Surplus £’000 £’000 £’000 17,606 - (14,315) 3,291 737 (402) - 335 2,771 - (4,609) (1,838) 1,606 - (863) 743 433 - (188) 245 1,018 - (342) 676 2,627 728 24,171 (402) (20,317) 6,807

46

EAST END HOMES LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2024 (continued)

Turnover Income from social housing lettings Rent receivable net of identifiable service charge Service charge income Other income from social housing lettings Government grants taken to income Amortised government grants Total turnover from social housing lettings Operating expenditure on social housing lettings Management Service charge costs Routine maintenance Planned maintenance Major repairs expenditure Bad debts Depreciation of housing Properties Total operating expenditure on social housing lettings Operating surplus on social housing lettings –General Needs Void losses	2024 2023 General Low Costs Total Total Needs Home Ownership £’000 £’000 £’000 £’000 17,329 78 17,407 15,896 1,128 53 1,181 1,046 30 - 30 74 0 - 0 - 590 - 590 590
	19,077 131 19,208 17,606
	(2,330) (175) (2,505) (2,128) (4,840) (4) (4,844) (3,442) (4,105) - (4,105) (3,919) (461) - (461) (410) (514) - (514) (412) (74) (1) (75) (305) (3,702) - (3,702) (3,699)
	(16,026) (180) (16,206) (14,315)
	3051 (49) 3,002 3,291
	171 - 171 153

47

EAST END HOMES LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2024 (continued)

2. ASSOCIATION -TURNOVER, OPERATING COSTS AND OPERATING SURPLUS

Income from social housing lettings General Needs & Intermediate Rent Low-cost home ownership First tranche low-cost home ownership sales Income from non-social housing activities Leaseholders Commercial lettings Overage receipts and other income Private rented properties Increase /(decrease) in fair value of investment properties Surplus on disposal of fixed assets Income from social housing lettings General Needs & Intermediate Rent First tranche low-cost home ownership sales Income from non-social housing activities Leaseholders Commercial lettings Overage receipts and other income Private rented properties Increase /(decrease) in fair value of investment properties Surplus on disposal of fixed assets	2024 Turnover Cost of Operating Operating Sales Costs Surplus £’000 £’000 £’000 £’000 19,077 - (16,026) 3,051 131 - (180) (49) 3,477 (2,035) 0 1,442 2,880 - (5,009) (2,129) 1,500 - (913) 587 376 - (178) 198 1,147 - (404) 743 (475) 506
	28,588 (2,035) (22,710) 3,874
	2023 Turnover Cost of Operating Operating Sales Costs Surplus £’000 £’000 £’000 £’000 17,606 - (14,315) 3,291 737 (402) - 335 2,771 - (4,608) (1,837) 1,495 - (864) 631 278 - (168) 110 1,018 - (342) 676 2,627 728
	23,905 (402) (20,297) 6,561

48

EAST END HOMES LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2024 (continued)

2. ASSOCIATION -TURNOVER, OPERATING COSTS AND OPERATING SURPLUS

Rent receivable net of identifiable service charge Service charge income Other income from social housing lettings Government grants taken to income Amortised government grants Total turnover from social housing lettings Operating expenditure on social housing lettings Management Service charge costs Routine maintenance Planned maintenance Major repairs expenditure Bad debts Depreciation of housing properties Total operating expenditure on social housing lettings Operating surplus on social housing lettings – General Needs Void losses	General Low Costs Total Total Needs Home Ownership £’000 £’000 £’000 £’000 17,329 78 17,407 15,896 1,128 53 1,181 1,046 30 - 30 74 0 - 0 - 590 - 590 590
	19,077 131 19,208 17,606
	(2,330) (175) (2,505) (2,128) (4,840) (4) (4,844) (3,442) (4,105) - (4,105) (3,919) (461) - (461) (410) (514) - (514) (412) (74) (1) (75) (305) (3,702) - (3,702) (3,699)
	(16,026) (180) (16,206) (14,315)
	3051 (49) 3,002 3,291
	171 - 171 153

49

EAST END HOMES LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2024 (continued)

3. DIRECTORS’ EMOLUMENTS – GROUP AND ASSOCIATION

The emoluments of the Chief Executive and Executive Management Team were, £760,158 (2023: £697,101) of which the emoluments (excluding pension contributions) of the Chief Executive were £137,737 (2023: £130,803).

The Chief Executive is an ordinary member of London Borough of Tower Hamlets pension scheme. No enhanced or special terms apply.

Board Members

From September 2023 the Board has determined, following appropriate advice and benchmarking, that it is appropriate, and continues to be appropriate, that Board and Committee members should be paid for their services. The remuneration paid to Board members in position at 31 March 2024 are set out below.

	2024	2023
	£	£
Carol Hinvest	2,800	-
Emma Palmer	2,420	-
John Wu	2,058	-
Jacqui Bateson	2,425	-
Emdadul Haque Jahangir Mannan	2,805	-
Ken Beech	2,058	-
Kevin Moore	5,574	-
Marek Wiluszynski	2,058	-
Simon Turek	2,239	-
Tracey Gray	1,748	-
Forhana Begum	2,058	-

In addition, Board members are reimbursed for any expenses incurred in carrying out their duties and in attending Board and Committee meetings. Board expenses of £1,742 (2023: £2,606) were incurred in the year.

4. EMPLOYEE INFORMATION

The average number of persons employed during the year expressed in full time equivalents (35 hours per week) was:

Full time Part time	2024 90 12 102	2023 82 11
		93

50

EAST END HOMES LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2024 (continued)

Staff costs (for the above persons)

Staff costs (for the above persons)
Wages and salaries Social security costs Other pension costs Aggregate number of full-time equivalent staff whose remuneration exceeded £60,000 in the period: £60,000 - £69,999 £70,000 - £79,999 £80,000 - £89,999 £90,000 - £99,999 £100,000 - £109,999 £110,000 - £119,999 £120,000 - £129,999 £130,000 - £139,999 £140,000 - £149,999 £150,000 - £159,999 £160,000- £169,999 £170,000- £179,999 £180,000- £189,999 £190,000- £199,999 £200,000- £209,999 £210,000- £219,999 £220,000- £229,999	GROUP 2024 £’000 4,699 708 1,165 6,572 2024 18 10 4 3 - 1 - 1 - - - - - - - - 1	GROUP 2023 £’000 4,141 462 927
		5,530
		2023 14 1 2 1 2 - 1 - - - - 1 - - - - -

51

EAST END HOMES LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2024 (continued)

5. GAIN ON DISPOSAL OF PROPERTY, PLANT AND EQUIPMENT (FIXED ASSETS)

Proceeds of sales Less: Costs of sales Surplus	GROUP ASSOCIATION 2024 2023 2024 2023 £’000 £’000 £’000 £’000 636 1,121 636 1,121 (130) (393) (130) (393) 506 728 506 728

6. INTEREST RECEIVABLE AND SIMILAR INCOME

On loan to subsidiary company – East End Homes (Community Development) Ltd Deposit interest receivable from short-term investment of surplus cash balances	GROUP ASSOCIATION 2024 2023 2024 2023 £’000 £’000 £’000 £’000 - - - -
	706 363 696 356
	706 363 696 356

7. INTEREST PAYABLE AND SIMILAR CHARGES

		GROUP	GROUP	ASSOCIATION	ASSOCIATION
	2024		2023	2024	2023
	£’000		£’000	£’000	£’000
Interest Payable		3,788	3,358	3,788	3,358
Loan Amortisation		124	121	124	121
		3,912	3,479	3,912	3,479
	GROUP			ASSOCIATION
	2024	2023		2024	2023
	£’000	£’000		£’000	£’000
8.Surplus on ordinary activities is stated
after charging:
Auditors remuneration excluding VAT
- in their capacity as auditors	42		30	40	28
- in respect of other services	4		3	3	3
Operating lease rentals:
- Land and Building	-		-	-	-
- Office Equipment	11		15	11	15
Depreciation
Depreciation of housing properties	3,702		3,699	3,702	3,699
Depreciation of other tangible fixed assets	84		103	84	103

52

EAST END HOMES LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2024 (continued)

9. TAXATION

The Association has charitable status on income and gains falling within section 478 of the Corporation Tax Act 2010 to the extent that these are applied to its charitable objects and therefore has no liability to corporation tax for the year. Taxable profits of the subsidiary company are gift aided to the charitable parent to minimise the corporation tax liability for the group.

		GROUP			ASSOCIATION	ASSOCIATION
	2024		2023		2024	2023
	£’000		£’000		£’000	£’000
UK corporation tax		-		-		-	-

53

EAST END HOMES LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2024 (continued)

10. TANGIBLE FIXED ASSETS – HOUSING PROPERTIES – GROUP & ASSOCIATION

	Housing properties completed Housing properties Under development Housing Property Refurbishment programme uncompleted Shared ownership properties under development Shared ownership properties Completed Total £’000 £’000 £’000 £000 £’000 £’000 Cost At 1 April 2023 193,917 26,770 5,473 1,770 8,359 236,289 Additions – Refurbishment 1,936 1,936 Additions – New Build 8,988 8,988 Fire Safety Works 4,573 4,573 Disposals (600) (600) Completed inyear 1,133 (1,133) - At 31 March 2024 194,450 35,758 10,849 1,770 8,359 251,186 Depreciation At 1 April 2023 (36,623) - - - (75) (36,698) Charged in year (3,627) (75) (3,702) Released on disposals 581 581 At 31 March 2024 (39,669) 0 0 0 (150) (39,819) Net Book Value At 1 April 2023 157,294 26,770 5,473 1,770 8,284 199,591 At 31 March 2024 154,781 35,758 10,849 1,770 8,209 211,367

54

EAST END HOMES LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2024 (continued)

10. TANGIBLE FIXED ASSETS – HOUSING PROPERTIES – GROUP & ASSOCIATION (CONTD)

	2024	2023
	£’000	£’000
Housing properties at cost comprise:
Freeholds	251,186	236,289

The cost of housing properties completed includes £2.8 million transfer value of properties on the Island Gardens estate

Additions to housing properties during the year of £19.8 million (2022: £18.4 million) relate to the capitalised costs towards acquisition of new affordable social housing units, and refurbishment works on existing stock including fees, capitalised salaries and incremental overheads

At 31 March 2024 the Board estimated the vacant possession open market value of East End Homes housing properties to be £709.8 million (2022: £709.8 million).

11. INVESTMENT PROPERTIES

At start of year Additions Gain (Loss) from adjustment in Value At end of year	Group Association 2024 2023 2024 2023 £’000 £’000 £’000 £’000 20,204 17,577 20,204 17,577 - - (475) 2,627 (475) 2,627
	19,729 20,204 19,729 20,204

East End Homes has to date invested in 60 (2023: 60) properties for private rent, which generate additional surpluses for reinvestment into the core business activities. These properties are treated as investment properties and recognised at their market values. Investment properties were valued at 31 March 2024 by McDowalls Surveyors Ltd, a firm of professionally qualified surveyors. The valuation of properties was undertaken in accordance with the Royal Institute of Chartered Surveyors Valuation Standards.

At 31 March 2024 there were no contractual obligations in respect of the investment properties (2023: none).

55

EAST END HOMES LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2024 (continued)

12. OTHER TANGIBLE FIXED ASSETS – ASSOCIATION & GROUP

Cost At 1 April 2023 Additions Disposals At 31 March 2024 Depreciation At 1 April 2023 Charge for the year Disposals At 31 March 2024 Net book value At 1 April 2023 At 31 March 2024	Office Computer Office Furniture & Motor Total Association Buildings Equipment Equipment Vehicles and Group £’000 £’000 £’000 £’000 £’000 1,367 1,239 718 178 3,502 44 131 4 - 179 - - - - -
	1,411 1,370 722 178 3,681
	(384) (1,211) (688) (155) (2,438) (28) (32) (14) (13) (87) - - - - -
	(412) (1,243) (702) (168) (2,525)
	983 28 30 23 1,064
	999 127 20 10 1,156

56

EAST END HOMES LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2024 (continued)

13. STOCK

Stock Shared Ownership Properties - Work in Progress 14. DEBTORS Amounts falling due within one year: Rental debtors Provision for bad and doubtful debts Shop rental debtors Provision for bad and doubtful debts Leasehold debtors Provision for bad and doubtful debts Other debtors Prepayments and accrued income Amounts due from other group entities Amounts due within one year Amounts falling due after more than one year: LBTH pension debtor	2024 2023 £’000 £’000 596 2,471 GROUP 2024 2023 £’000 £’000 1,105 1,040 (564) (487) 541 553 200 275 (53) (80) 147 195 2,771 2,667 (353) (328) 2,418 2,339 687 3,705 545 755 - - 1,232 4,460 4,338 7,547 503 503 4,841 8,050	2024 2023 £’000 £’000 596 2,471 ASSOCIATION 2024 2023 £’000 £’000 1,105 1,040 (564) (487)
		541 553 200 275 (53) (80)
		147 195 2,771 2,667 (353) (328)
		2,418 2,339 687 3,705 500 707 55 34
		1,242 4,446 4,348 7,533
		503 503
		4,851 8,036

57

EAST END HOMES LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2024 (continued) 15. CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR

Housing Loans Trade creditors Other creditors including other taxes social security and pensions Rents and service charges received in advance Accruals and deferred income Deferred capital grant Amount owed to group entity	GROUP ASSOCIATION 2024 2023 2024 2023 £’000 £’000 £’000 £’000 10,000 10,000 10,000 10,000 1,336 161 1,336 161 507 1,413 502 1,413 935 953 935 953 4,785 3,596 4,705 3,560 590 590 590 590 - - - - 18,153 16,713 18,068 16,677

16. CREDITORS: AMOUNTS FALLING DUE AFTER MORE THAN ONE YEAR

Pension creditor Deferred Capital Grant Housing Loans Loan Arrangement Fees	GROUP ASSOCIATION 2024 2023 2024 2023 £’000 £’000 £’000 £’000 - - - - 60,131 59,462 60,131 59,462 85,000 85,000 85,000 85,000 (1,792) (1,853) (1,792) (1,853)
	143,339 142,609 143,339 142,609

To date East End Homes has received £13.0 million DLUHC gap funding to finance refurbishment works to the Glamis stock (£2.1 million), Holland & Denning stock (£1.2 million), and the St George’s stock (£9.7 million). All gap funding received are recognised under deferred capital grant and released as income over the lives of the housing properties structures that the funds were used to refurbish.

58

EAST END HOMES LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2024 (continued) 17. DEFERRED CAPITAL GRANT AND FINANCIAL ASSISTANCE – GROUP & ASSOCIATION

		2024		2023
		£’000		£’000
Balance at 1 April		60,052	58,459
Grant received in the year		1,259		2,183
Released to income in the year		(590)		(590)
Balance at 31 March		60,721	60,052
Amount due to be released < 1 year (Note 14)		590		590
Amount due to be released > 1 year (Note 15)		60,131	59,462
The total accumulated government grant and financial
assistance received or receivable at 31 March including		60,721	60,052
through the transfer of assets:
18. HOUSING LOANS
	GROUP		ASSOCIATION
	2024	2023	2024	2023
	£’000	£’000	£’000	£’000
Repayable;
Within one year or on demand	10,000	10,000	10,000	10,000
Between one and two years	-	-	-	-
Between two and three years	-		-
		-		-
Between three and four years	-		-
		-		-
Between four and five years	-		-
		-		-
After more than five years	85,000	85,000	85,000	85,000
	95,000	95,000	95,000	95,000
Loan Arrangement Fees	(1,792)	(1,852)	(1,792)	(1,852)

18. HOUSING LOANS

The Association has an existing £115.0 million loan facility, comprising £50.0 million with NatWest Bank, 45.0 million with M&G Investments and £20 million with Barclays bank plc. At 31 March 2024, £95.0 million (2023: £95.0 million) loans has been drawn down at an average rate of interest (plus margin) of 3.899% (2023:3.899%). The facility includes revolving credit facilities for £30.0 million. All loans are secured against the group’s assets.

59

EAST END HOMES LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2024 (continued)

19. CAPITAL COMMITMENTS – GROUP & ASSOCIATION

	2024	2023
	£’000	£’000
Capital expenditure contracted for but not provided in the financial statements	12,661	16,245
Capital expenditure authorised by the Board but not yet contracted for	33,204	34,211

Capital expenditure authorised by the Board relates to the acquisition of new build properties and the 5- year capital investment programme (2024-2029) including fire safety works and development agreements with London Borough of Tower Hamlets for refurbishment works to be carried out on properties transferred to East End Homes.

Capital commitments are projected to be funded from mainly from loan borrowings and internally generated resources.

20. OTHER FINANCIAL COMMITMENTS – GROUP & ASSOCIATION

At 31 March 2024 the group and association had an annual commitment under the lease of office equipment of £10,882 (2022: £14,863) expiring within the next 12 months.

60

EAST END HOMES LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2024 (continued)

21. PENSION OBLIGATIONS – GROUP & ASSOCIATION

East End Homes participates in two defined benefit final salary schemes, the London Borough of Tower Hamlets Pension Scheme and the Social Housing Pension Scheme (SHPS) and a defined contribution scheme within the Social Housing Pension Scheme. The pension contributions, as shown in note 4, represent contributions payable by East End Homes to these schemes.

The disclosures required by the accounting requirements of FRS 102 relating to retirement benefits are as follows:

London Borough of Tower Hamlets Pension Scheme (LGPS)

The LGPS is a defined benefit statutory scheme, administered by the London Borough of Tower Hamlets in accordance with the Local Government Pension Scheme regulations 1997, as amended. It is contracted out of the state second pension.

Valuation Method Contributions to the scheme are determined by a qualified actuary on the basis of valuations, using the projected unit credit method. The last formal valuation of the Fund for the purpose of setting employers’ actual contributions was at 31 March 2019.

Financial Assumptions

The financial assumptions used for the purposes of the FRS 102 calculations as at 31 March 2024 and 31 March 2023 are shown in the table below.

Assumption as at	31 March 2024	31 March 2023
	% p.a.	% p.a.
Pension Increase Rate (CPI)	2.80	3.00
Salary Increases	2.80	3.00
Discount Rate	4.80	4.75

Expected Return on Assets

The expected return on assets is based on the long-term future expected investment return for each asset class as at the beginning of the period (i.e. as at 31 March 2023 for the year to 31 March 2024). The assets of the scheme as a whole and the expected returns at 31 March 2024 and 31 March 2023 are shown in the table below:

Assets Main Fund Equities Bonds Property Cash Total value of scheme assets	Value at 31 March 2024 £(000) Value at 31 March 2023 £(000) 16,005 20,325 7,347 1,196 2,624 1,913 262 478
	26,238 23,912

There is no provision for unitising the assets of a fund under the LGPS. The above assets as a whole are allocated to participating bodies on a consistent and reasonable basis.

The present value of the above assets and liabilities attributable to East End Homes at 31 March 2024 and

61

EAST END HOMES LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2024 (continued) 31 March 2023 was:

Net Pension Liability as at Fair Value of Employer Assets Present Value of Funded Liabilities Net Underfunding in Funded Plans	31 March 2024 £(000) 31 March 2023 £(000) 26,238 23,912 (17,133) (17,113)
	9,105 6,799

In accordance with the accounting requirements of FRS 102 relating to retirement benefits, the following items have been recognised in the financial statements of East End Homes :

Impact on Statement of Financial Position

Fair Value of Employer Assets Present Value of Funded Liabilities Net Liability provided for in the Financial Statements	31 March 2024 £(000) 31 March 2023 £(000) 26,238 23,912 (17,133) (17,113)
	9,105 6,799

The movement in the deficit in the scheme during the year is as follows:

Surplus at beginning of the year Actuarial gains(Losses) during the year Surplus at end of year	Year to 31 March 2024 £(000) Year to 31 March 2023 £(000) 6,799 3,535 2,306 3,264
	9,105 6,799

The surplus has been adjusted to the asset ceiling as follows:

Net Asset (unadjusted) Effect of the asset ceiling on net asset / liability Net Asset / (Liability	Year to 31 March 2024 £(000) Year to 31 March 2023 £(000) 9,105 - (9,105) - - -

Pensions Obligations Note - Social Housing Pension Scheme (SHPS)

East End Homes participates in the Social Housing Pension Scheme (the Scheme), a multi-employer scheme which provides benefits to some 500 non-associated employers. The Scheme is a defined benefit scheme in the UK.

The Scheme is subject to the funding legislation outlined in the Pensions Act 2004 which came into force on 30 December 2005. This, together with documents issued by the Pensions Regulator and Technical Actuarial Standards issued by the Financial Reporting Council, set out the framework for funding defined benefit occupational pension schemes in the UK.

The last triennial valuation of the scheme for funding purposes was carried out as at 30 September 2017. This valuation revealed a deficit of £1,522m. A Recovery Plan has been put in place with the aim of removing this deficit by 30 September 2026.

62

EAST END HOMES LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2024 (continued)

The Scheme is classified as a 'last-man standing arrangement'. Therefore, the company is potentially liable for other participating employers' obligations if those employers are unable to meet their share of the scheme deficit following withdrawal from the Scheme. Participating employers are legally required to meet their share of the Scheme deficit on an annuity purchase basis on withdrawal from the Scheme.

For accounting purposes, two actuarial valuations for the scheme were carried out with effective dates of 31 March 2018 and 30 September 2018. The liability figures from each valuation are rolled forward to the relevant accounting dates, if applicable, and are used in conjunction with the company’s fair share of the Scheme’s total assets to calculate the company’s net deficit or surplus at the accounting period start and end.

PRESENT VALUES OF DEFINED BENEFIT OBLIGATION, FAIR VALUE OF ASSETS AND DEFINED BENEFIT ASSET (LIABILITY)

	31 March 2024 31 March 2023	31 March 2024 31 March 2023
	(£000s)	(£000s)
Fair value of plan assets	3,612	3,391
Present value of defined benefit obligation	4,498	4,069
Surplus (deficit) in plan	(886)	(678)
Unrecognised surplus	-	-
Defined benefit asset (liability) to be recognised	(886)	(678)
Deferred tax	-	-
Net defined benefit asset (liability) to be recognised	(886)	(678)

RECONCILIATION OF THE IMPACT OF THE ASSET CEILING

	Year ended	Year ended
	31 March 2024	31 March 2023
	(£000s)	(£000s)
Impact of asset ceiling at start of period	-	-
Effect of the asset ceiling included in net interest cost	-	-
Actuarial losses (gains) on asset ceiling	-	-
Impact of asset ceiling at end of period	-	-

63

EAST END HOMES LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2024 (continued)

RECONCILIATION OF OPENING AND CLOSING BALANCES OF THE DEFINED BENEFIT OBLIGATION

RECONCILIATION OF OPENING AND CLOSING BALANCES OF THE DEFINED BENEFIT	OBLIGATION
	Year ended
	31 March 2024
	(£000s)
Defined benefit obligation at start of period	4,069
Current service cost	188
Expenses	6
Interest expense	200
Contributions by plan participants	68
Actuarial losses (gains) due to scheme experience	249
Actuarial losses (gains) due to changes in demographic assumptions	(38)
Actuarial losses (gains) due to changes in financial assumptions	(97)
Benefits paid and expenses	(147)
Liabilities acquired in a business combination	-
Liabilities extinguished on settlements	-
Losses (gains) on curtailments	-
Losses (gains) due to benefit changes	-
Exchange rate changes	-
Defined benefit obligation at end of period	4,498

64

EAST END HOMES LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2024 (continued)

RECONCILIATION OF OPENING AND CLOSING BALANCES OF THE FAIR VALUE OF PLAN ASSETS

RECONCILIATION OF OPENING AND CLOSING BALANCES OF THE FAIR VALUE OF PLAN ASSETS
	Year ended
	31 March 2024
	(£000s)
Fair value of plan assets at start of period	3,391
Interest income	178
Experience on plan assets (excluding amounts included in interest income) - gain (loss)	(557)
Contributions by the employer	679
Contributions by plan participants	68
Benefits paid and expenses	(147)
Assets acquired in a business combination	-
Assets distributed on settlements	-
Exchange rate changes	-
Fair value of plan assets at end of period	3,612

The actual return on plan assets (including any changes in share of assets) over the period from 31 March 2023 to 31 March 2024 was (£3,144,000).

DEFINED BENEFIT COSTS RECOGNISED IN STATEMENT OF COMPREHENSIVE INCOME (SOCI)

	Period from
	31 March 2022	to
	31 March 2024
	(£000s)
Current service cost	188
Expenses		6
Net interest expense	22
Losses (gains) on business combinations		-
Losses (gains) on settlements		-
Losses (gains) on curtailments		-
Losses (gains) due to benefit changes		-
Defined benefit costs recognised in statement of comprehensive income (SoCI)	216

65

EAST END HOMES LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2024 (continued)

DEFINED BENEFIT COSTS RECOGNISED IN OTHER COMPREHENSIVE INCOME

					Year ended
					31 March 2024
					(£000s)
	Experience on plan assets (excluding amounts included in net interest gain (loss)		cost) -		(557)
	Experience gains and losses arising on the plan liabilities - gain (loss)				(249)
	Effects of changes in the demographic assumptions underlying the present value of the defined benefit obligation - gain (loss)				38
	Effects of changes in the financial assumptions underlying the present the defined benefit obligation - gain (loss)		value of		97
	Total actuarial gains and losses (before restriction due to some of not being recognisable) - gain (loss)	the surplus			(671)
	Effects of changes in the amount of surplus that is not recoverable (excluding
	amounts included in net interest cost) - gain (loss)				-
	Total amount recognised in other comprehensive income -gain(loss)				(671)
	ASSETS
		31 March		2024	31 March 2023
			(£000s)		(£000s)
	Global Equity			360	63
	Absolute Return			141	37
	Distressed Opportunities			127	103
	Credit Relative Value			118	128
	Alternative Risk Premia			115	6
	Emerging Markets Debt			47	18
	Risk Sharing			211	250
	Insurance-Linked Securities			19	86
	Property			145	146
	Infrastructure			365	387
	Private Equity			3
	Private Debt			142	151
	Opportunistic Illiquid Credit			141	145
	High Yield			1	12
	Opportunistic Credit			-	-
	Cash			71	24
	Corporate Bond Fund			-	-
	Liquid Credit			-	-
	Long Lease Property			23	102
	Secured Income			108	156
	Liability Driven Investment			1,470	1,561

66

EAST END HOMES LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31	MARCH 2024 (continued)
Currency Hedging	(1) 7
Net Current Assets	6 9
Total assets	3,612 3,391

None of the fair values of the assets shown above include any direct investments in the employer’s own financial instruments or any property occupied by, or other assets used by, the employer.

KEY ASSUMPTIONS

	31 March 2024	31 March 2023
	% per annum	% per annum
Discount Rate	4.93%	4.83%
Inflation (RPI)	3.08%	3.16%
Inflation (CPI)	2.79%	2.82%
Salary Growth	3.79%	3.82%
Allowance for commutation of pension for cash at retirement	75% of maximum allowance	75% of maximum allowance

The mortality assumptions adopted at 31 March 2024 imply the following life expectancies:

	Life expectancy at age 65
	(Years)
Male retiring in 2023	20.5
Female retiring in 2023	23.0
Male retiring in 2043	21.8
Female retiring in 2043	24.4

22. NUMBER OF HOMES IN MANAGEMENT – GROUP & ASSOCIATION

The number of homes in management at the yearend was:

	At 31 March	At 31 March
	2024	2023
Rented general needs accommodation	2,237	2,239
Intermediate Rented Properties	88	88
Leasehold properties	1,490	1,488
Low cost home ownership	45	45
Private rented properties	60	60
	3,920	3,920

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EAST END HOMES LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2024 (continued) 23. RELATED PARTY TRANSACTIONS – GROUP & ASSOCIATION

As at 31 March 2024, two members were tenants or leaseholders of the association. Their tenancy agreements or leases have been granted on the same terms as for all other tenants and housing management procedures, including those relating to management of arrears, have been applied consistently to these tenants and leaseholders Board members. Rents, Service Charges and Major Works charged to the tenant or leasehold Board members was £3,660 (2023: £17,709 ). There were arrears on the charges raised at 31 March 2024 of £0 (2023: £77). The level of tenant or leaseholder Board member arrears is not materially different from other tenants and leaseholders.

Some services were purchased from LBTH during the period. All agency services are covered by an arm’s length contract, which was negotiated to ensure neither party subordinated its own separate interests; the Board members concerned are not able to use their position to their advantage. LBTH pays tenant Housing Benefit under the terms of current legislation and this is generally paid directly to East End Homes. There are no other related party transactions requiring disclosure.

24. SUBSIDIARY UNDERTAKING

As at 31 March 2024 East End Homes held 100% share (1 share of £1) in East End Homes (Community Development) Limited. Its principal activity is to generate funds from development opportunities in order to support East End Homes’ core activities of regenerating neighbourhoods.

Transactions with registered and non-registered elements of the business

The Association provides management services and other services to its subsidiary. There is a cost sharing agreement between East End Homes Limited and East End Homes (Community Development) Limited.

Transactions with non-registered entities

During the year East End Homes Limited had intra-group transactions with East End Homes (Community Development) Limited, a non-regulated entity, of £0.1 million (2023: £0.1 million) relating to management services on behalf of East End Homes (Community Development) Limited.

The balance outstanding at 31 March 2024 was £0.1 million. This balance was unsecured. During the year East End Homes (Community Development) Limited gifted £253k (2023: £247k).

25. CONTROLLING PARTY

East End Homes is controlled by members in general meeting who elect the Board of Management.

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EAST END HOMES LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2024 (continued)

26. FINANCIAL INSTRUMENTS – GROUP

Financial Assets Financial assets at cost of transaction amount Financial assets at amortised cost of transaction Amount Financial Liabilities Financial liabilities at amortised cost	GROUP ASSOCIATION 2024 2023 2024 2023 £’000 £’000 £’000 £’000 4,685 8,977 4,358 8,702 4,843 8,051 4,853 8,037
	9,528 17,028 9,211 16,739 91,212 90,962 91,126 90,923

Financial assets measured at cost comprise cash at bank and in hand.

Financial assets measured at amortised cost comprise trade debtors, other debtors, amounts owed by the association’s undertakings, and the LBTH pension debtor.

Financial liabilities measured at amortised cost comprise bank loans, trade creditors, and other creditors.

27. NET DEBT

Analysis of changes in net debt:

GROUP Cash and cash equivalents Housing loans due in one year Housing loans due after one year ASSOCIATION Cash and cash equivalents Housing loans due in one year Housing loans due after one year	At 31 March 2023 £000 Cashflow £000 At 31 March 2024 £000 8,977 (4,292) 4,685 (10,000) - (10,000) (85,000) - (85,000)
	(86,023) (4,292) (90,315)
	At 31 March 2023 £000 Cashflow £000 At 31 March 2024 £000 8,702 (4,334) 4,358 (10,000) - (10,000) (85,000) - (85,000)
	(86,298) (4,334) (90,642)

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EastendHomes 3 Resolution Plaza London E1 6PS

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