Company registration number:
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COMPANY INFORMATION
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CONTENTS
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DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2021
The directors present their report and the financial statements for the year ended 31 December 2021.
The directors who served during the year were:
The directors are responsible for preparing the Directors' report and the
financial statements in accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for each financial year
. Under that law the directors have elected to prepare the financial statements in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland'. Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Company and of the profit or loss of the Company for that period.
In preparing these financial statements, the directors are required to:
∙
select suitable accounting policies for the Company's financial statements and then apply them consistently;
∙
make judgments and accounting estimates that are reasonable and prudent;
∙
state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements;
∙
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Company and to enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
The loss for the year, after taxation, amounted to £
8,504,546
(2020 restated -
loss
£
11,367,360
)
.
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DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
The auditor, Menzies LLP was appointed as auditor for ThamesWey Housing Limited on 7 January 2022 in accordance with section 485 of the Companies Act 2006.
Under section 487(2) of the Companies Act 2006, Menzies LLP will be deemed to have been reappointed as auditor 28 days after these financial statements were sent to members or 28 days after the latest date prescribed for filing the accounts with the registrar, whichever is earlier.
This report was approved by the board and signed on its behalf.
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INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF THAMESWEY HOUSING LIMITED
We have audited the financial statements of ThamesWey Housing Limited (the 'Company') for the year ended 31 December 2021, which comprise the Statement of income and retained earnings, the Statement of financial position, the Statement of cash flows
and the related notes, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards,
including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice).
During the year the company valued its investment properties, which resulted in a downward valuation of £2,715,233. A fair value movement in relation to investment properties has not been recognised in the financial statements since 31 December 2015, so part of this downward valuation may have related to prior periods. However, it was not possible to determine how much related to prior periods, and to which periods it related to, and so the impairment has been recognised in full in the 31 December 2021 year end.
Consequently we were unable to determine whether a material prior period adjustment to this amount was necessary. This impacts the carrying value of investment properties and reserves at 31 December 2020 and fair value movement in the profit or loss in the year to 31 December 2020.
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 Auditors' responsibilities for the audit of the financial statements section of our report. We are independent of the Company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the United Kingdom, including the Financial Reporting Council's Ethical Standard and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our qualified opinion.
We draw your attention to note 25 which outlines a number of significant prior year adjustments. The net impact of all prior year adjustments on retained earnings at 31 December 2020 is £3,816,412. Our opinion is not modified in respect of this matter.
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INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF THAMESWEY HOUSING LIMITED (CONTINUED)
We draw attention to note 2.2 in the financial statements, which indicates that the directors have concluded that material uncertainty in relation to going concern is an inherent feature of the business plans of the group of companies to which ThamesWey Housing Limited belongs. This material uncertainty primarily arises from the ongoing reliance on the revolving loan facilities from a single funder (Woking Borough Council), the long term regeneration focus of the businesses and strengthened company governance arrangements the Council is establishing that will be a constant feature of the relationship between the Company and its ultimate shareholder. As stated in note 2.2, these events or conditions, along with the other matters as set forth in note 2.2, indicate that a material uncertainty exists that may cast significant doubt on the Company's ability to continue as a going concern. Our opinion is not modified in respect of this matter.
In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate. Our evaluation of the directors' assessment of the Company's ability to continue to adopt the going concern basis of accounting included obtaining confirmation from the Ultimate Parent Undertaking that they would continue to support the ThamesWey Limited and its subsidiaries.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
The other information comprises the information included in the Annual Report other than the financial statements and our Auditors' report thereon. The directors are responsible for the other information contained within the Annual Report. 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. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
As described in the basis for qualified opinion section of our report, we were unable to satisfy ourselves concerning how much of the investment property impairment of £2,715,233 related to prior periods. We have concluded that where the other information refers to the investment property impairment or related balances, it may be materially misstated for the same reason.
Except for the possible effects of the matter described in the basis for qualified opinion section of our report, in our opinion,
based on the work undertaken in the course of the audit:
∙
the information given in the Directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
∙
the Directors' report has been prepared in accordance with applicable legal requirements.
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INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF THAMESWEY HOUSING LIMITED (CONTINUED)
Except for the matter described in the basis for qualified opinion section of our report, In the light of the knowledge and understanding of the Company and its environment obtained in the course of the audit, we have not identified material misstatements in the Directors' report.
Arising solely from the limitation on the scope of our work relating to the periods impacted by the valuation of investment properties, referred to above;
∙
we have not obtained all the information and explanations that we consider necessary for the purpose of our audit; and
∙
we were unable to determine whether adequate accounting records have been kept
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INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF THAMESWEY HOUSING LIMITED (CONTINUED)
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 Auditors' report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:
The Company is subject to laws and regulations that directly affect the financial statements including financial reporting legislation. We determined that the following laws and regulations were most significant including:
∙
The Companies Act 2006;
∙
Financial Reporting Standard 102; and
∙
General Data Protection Regulations
We assessed the extent of compliance with these laws and regulations as part of our procedures on the related financial statement items.
∙
We understood how the Company are complying with those legal and regulatory frameworks by making inquiries to management and those responsible for legal and compliance procedures. We corroborated our inquiries through our review of board minutes.
∙
The engagement partner assessed whether the engagement team collectively had the appropriate competence and capabilities to identify or recognise non-compliance with laws and regulations. The assessment did not identify any issues in this area.
∙
We assessed the susceptibility of the Company's financial statements to material misstatement, including how fraud might occur. Audit procedures performed by the engagement team included:
°
Identifying and assessing the design effectiveness of controls that management has in place to prevent and detect fraud;
°
Understanding how those charged with governance considered and addressed the potential for override of controls or other inappropriate influence over the financial reporting process;
°
Challenging assumptions and judgments made by management in its significant accounting estimates; and
°
Identifying and testing journal entries, in particular any journal entries posted with unusual account combinations.
∙
As a result of the above procedures, we considered the opportunities and incentives that may exist within the organisation for fraud and identified the greatest potential for fraud in the following areas:
°
Posting of journals to the accounting software which are of a non-routine nature in terms of timing and amount;
°
Timing of revenue recognition; and
°
The use of management override of controls to manipulate results.
Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation.
A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at:
www.frc.org.uk/auditorsresponsibilities
. This description forms part of our Auditors' report.
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INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF THAMESWEY HOUSING LIMITED (CONTINUED)
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 Auditors' report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the Company's members, as a body, for our audit work, for this report, or for the opinions we have formed.
for and on behalf of
Chartered Accountants
Statutory Auditor
1st Floor
Midas House
62 Goldsworth Road
Surrey
GU21 6LQ
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STATEMENT OF INCOME AND RETAINED EARNINGS
FOR THE YEAR ENDED 31 DECEMBER 2021
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STATEMENT OF FINANCIAL POSITION
AS AT
31 DECEMBER 2021
The financial statements were approved and authorised for issue by the board and were signed on its behalf by
:
The notes on pages 13 to 28 form part of these financial statements.
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STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2021
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STATEMENT OF CASH FLOWS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
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ANALYSIS OF NET DEBT
FOR THE YEAR ENDED 31 DECEMBER 2021
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
ThamesWey Housing Limited is a private company, limited by shares, registered in England and Wales. The company's and registered office address can be found on the Company Information page. The address of the company's principal place of business is The Energy Centre, Poole Road, Woking, Surrey, GU21 6DY.
2.
Accounting policies
The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Financial Reporting Standard 102, the Financial Reporting Standard applicable in
the UK and the Republic of Ireland and the Companies Act 2006
.
The preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires management to exercise judgment in applying the Company's accounting policies (see note 3).
The following principal accounting policies have been applied:
As part of the Directors’ review of the going concern status of the Company, they have carried out a funding commitment review to identify the loans required for the future. The funding identified is included within the Woking Borough Council ("the Council") Medium Term Financial Strategy and all funding has been authorised by the Council. The Directors and the Council are aware that in the coming years the Company needs to be supported by the Council in terms of cashflow funding arising from the revolving loan agreement and providing a loan facility to cover operational losses in line with the approved business plans. The Directors have gained the necessary assurances from the Council that they will support the Company and not demand the repayment of loans and interest to the detriment of the Company and have assessed the Council’s ability to provide the required funding.
The Council is modernising its governance arrangements with respect to its oversight of its wholly or partly owned companies. The ThamesWey Group produce business plans annually for approval by Council. For 2023/24 these plans have been taken through the new governance arrangements and the Shareholder has requested that a number of scenarios are modelled in order to assure the Council that its investments are protected, appropriate returns on investment can be obtained and that the activities of the Company are aligned with the values and strategic objectives of the Council. There is a planned non-statutory review in the early part of 2023 into Woking Borough Council by the Department for Levelling Up, Housing & Communities, which includes the ThamesWey Group and therefore ThamesWey Housing Limited. The directors have concluded that material uncertainty in relation to going concern is an inherent feature of the business plans of the group of Companies. This material uncertainty primarily arises from the ongoing reliance on the revolving loan facilities from a single funder (the Council), the long term regeneration focus of the businesses and strengthened company governance arrangements the Council is establishing that will be a constant feature of the relationship between the Company and its ultimate shareholder. Rental income is recognised on a straight line basis over the lease term on an accruals basis.
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
2.
Accounting policies (continued)
Grants of a revenue nature are recognised in the Statement of income and retained earnings in the same period as the related expenditure.
All intangible assets are considered to have a finite useful life. If a reliable estimate of the useful life cannot be made, the useful life shall not exceed ten years.
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
2.
Accounting policies (continued)
Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, using the straight-line method.
Depreciation is provided on the following basis:
The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date.
Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in profit or loss.
Assets under construction are carried at historical cost and are not depreciated until they come into use.
Provisions are charged as an expense to profit or loss in the year that the Company becomes aware of the obligation, and are measured at the best estimate at the reporting date of the expenditure required to settle the obligation, taking into account relevant risks and uncertainties. When payments are eventually made, they are charged to the provision carried in the Statement of financial position.
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
No employees are directly employed by the Company. The independent director is remunerated by the parent
undertaking in both the current and preceding years. The cost of which is reimbursed.
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
Profit and loss account
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
There were a number of prior year adjustments identified. Each adjustment has been explained below.
A long-term leasehold property with a cost of £5,050,000 and accumulated depreciation of £114,244 was recognised as an investment property. However, this should have been treated as long-term leasehold property within tangible fixed assets, so the comparatives have been restated accordingly. Items of fixtures and fittings with a cost of £975,966 and accumulated depreciation of £181,123 were reclassified from nvestment property to tangible fixed assets. The brought forward figures for fixtures and fittings, in tangible fixed assets have been restated to include the cost and accumulated depreciation of these items. An adjustment has been made, reclassifying costs of £58,802,801 from work in progress to assets under construction, as this is the most appropriate classification for these costs. In the year ended 31 December 2020, investment properties with a cost of £19,101,898 earmarked for future demolition were recognised as work in progress, despite there being no evidence in change of use which would mean transferring the properties to work in progress. As a result, a prior year adjustment has been made to reallocate the £19,101,898 back to investment properties. IAn adjustment was made to the prior year of £949,727 to recognise accrued costs relating to assets under construction, not previously recognised. The effect of the above prior year adjustments to work in progress is to decrease work in progress by a combined £77,906,699 and increase assets under construction by the same amount. Overall, the journals above have increased the net book value of tangible fixed assets as at 1 January 2021 by £65,483,157. The adjustments have not had an impact on the loss for the year ended 31 December 2020 nor retained earnings as at 1 January 2021. An adjustment was made to recognise a grant totalling £9,383,730 receivable from a group company that was previously not recognised. The adjustment made increases amounts receivable from group entities and deferred income as the grant is to be amortised over 50 years. This did not have an impact on the loss for the year ended 31 December 2020 nor retained earnings as at 1 January 2021. Costs totalling £4,846,856 recognised in work in progress were written off as there were indicators of impairment as at 31 December 2020. This increased exceptional costs in the year and increased the loss position for the year ended 31 December 2020 by £4,846,856 and an equal decrease in retained earnings as at 1 January 2021. Two properties included in investment properties were revalued by a surveyor who determined the valuation as at 31 December 2020. This resulted in a downwards revaluation of £346,185 which has been recognised as a prior year adjustment. This adjustment is recognised as an exceptional cost, increasing the loss for the year by £346,185 and decreasing retained earnings as at 1 January 2021 by the same amount. A deferred tax liability of £1,376,629 was incorrectly recognised in the the prior year financial statements. This has been written of to profit or loss in the 31/12/2019 financial statements and the brought forward reserves at the 1 January 2020 restated. The net impact of all prior year adjustments on retained earnings at 31 December 2020 is £3,816,412.
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
The company established an "Earn Your Deposit Scheme" in 2018, whereby tenants have the right to earn a contribution towards the deposit on the purchase of a home.
There are various qualifying criteria to become eligible for the "Earn Your Deposit Scheme", and not all tenants who are eligible will take up the scheme. As such, at the year end date, the company was unable to accurately quantify the deposit scheme in the accounts, and therefore no provision has been made. The company undertook a review of the maximum potential "Earn Your Deposit Scheme" liability at the year end, and found that if all tenants qualifying for the scheme at the year end took up the offer, a potential maximum liability of £2,595,300 would be required. There is not expected to be any reimbursement for the scheme.
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
The company's immediate parent company is ThamesWey Limited, a company incorporated in England and Wales.
The company's ultimate parent undertaking is considered to be Woking Borough Council. The largest group into which the company is consolidated is headed by Woking Borough Council, and the smallest group into which the company is consolidated is ThamesWey Limited. Copies of both sets of group accounts are available from the Company Secretary, Clyde Secretaries Limited, The St Botolph Building, 138 Houndsditch, London, EC3A 7AR.
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