Annual Financial Report

Contents

Overview

• Introduction and highlights
  2 Financial overview
  3 Portfolio and operating overview

Strategic report

• Chair's statement
  15 Management report
  25 ESG report
  28 Key performance indicators
  29 Strategic overview
  34 Principal risks and uncertainties
  42 Going concern and viability statement

Governance

45 The Board

47 Directors' report

1. Corporate governance statement

1. Report of the Audit Committee

1. Report of the Management Engagement Committee

1. Report of the Nomination Committee

1. Directors' remuneration report

1. Statement of Directors' responsibilities
2. Independent Auditor's report

Financial statements

1. Consolidated Statement of Comprehensive Income
2. Consolidated Statement of Financial Position
3. Consolidated Statement of Changes in Shareholders' Equity
4. Consolidated Statement of Cash Flow
5. Notes to the Consolidated Financial Statements

1. Company Statement of Financial Position
2. Company Statement of Changes in Shareholders' Equity
3. Notes to the Company Financial Statements

Additional information

146 Appendix 1 - Key Regulatory News Services Announcements 1 September 2021 to 10 October 2024

1. Appendix 2 - Governance and Internal Control

1. Glossary

1. Company information

Home REIT plc ("the Company") and its subsidiaries (together the "Group")

The board of non-executive directors of Home REIT plc (ticker: HOME) (the "Board" or the "Directors") reports its annual results for the year ended 31 August 2022 ("FY22").

The Group had the investment objective in the period to seek to contribute responsibly to the alleviation of homelessness in the UK, deliver tangible social impact. This was to be achieved through targeting inflation-protected income and capital returns, by funding the acquisition and creation of a diversified portfolio of high-quality,well-located accommodation across the UK. On 21 August 2023, the Amended Investment Policy (defined as the investment policy approved by shareholders on 21 August 2023) was approved by shareholder resolution, which is summarised on page 12. On 16 September 2024, shareholders approved the New Investment Policy for the Managed Wind-Down of the Group.

The Group, a real estate investment trust ("REIT"), is listed on the Official List of the Financial Conduct Authority and was admitted to trading on the premium segment of the main market of the London Stock Exchange on 12 October 2020. As the Group did not publish its annual financial report within four months of the end of its financial year (as required by the Financial Conduct Authority's Disclosure Guidance and Transparency Rule 4.1.3) the listing of the Company's ordinary shares (each a "Share" and together, the "Shares") was suspended on 3 January 2023.

As non-executive directors, the Board relies upon information reported to it by the investment adviser, alternative investment fund manager ("AIFM") and other external parties including information regarding the quality of the Group's assets and tenants. Subsequent to the period end, material information has come to light which is in contradiction to the reporting provided to the Board during the period. The Directors have provided as much detail as they are able to within this Annual Report in order to provide a true and fair view of the financial statements, however in preparing the financial statements a number of judgements/assumptions have had to be made by the Directors, the details of which are included in Note 3 to the Group's consolidated financial statements (the "Consolidated Financial Statements").

The Company intends to bring legal proceedings against those parties it considers are responsible for wrongdoing. The Company has issued a pre-action letter of claim to Alvarium Home REIT Advisors Limited ("AHRA") (in liquidation), its former Investment Adviser. Shortly before issuance of the pre-action letter of claim, the Company was made aware that AHRA had appointed joint liquidators for the purpose of winding up the company. Notwithstanding this event, it remains important that all means of potential financial recovery are fully considered and that any wrongdoing is thoroughly investigated. The Company has also issued pre-action letters of claim to Alvarium Fund Managers (UK) Limited (its former AIFM) ("Alvarium FM") and AlTi RE Limited ("AlTi RE"), AHRA's former principal by virtue of an Authorised Representative Agreement. The Board cannot comment any further at this stage, as to do so may prejudice the Company's position in any potential proceedings. Any relevant announcements in this regard will be made to the market at the appropriate time.

• 2,239 properties as at 31 August 2022
  (31 August 2021: 711 properties).
• The condition of the properties held as at
  31 August 2022 have been assessed by JLL or by other parties engaged by the Group such as Vibrant Energy Matters Ltd ("Vibrant") whose reports were made available to JLL. Of the 2,239 properties
  82.3% were internally inspected (from August 2023 to May 2024) and these have been assessed as 0.1% very good, 9.0% good, 64.0% fair, 20.0% poor and 6.9% very poor. Of those properties not inspected, 68% have been sold subsequent to 31 August 2022.
• 7.7% of properties were deemed unhabitable as at
  31 August 2022 (31 August 2021: 7.3%) which includes the properties deemed as very poor by third party inspections as well as information provided by tenants and AEW's asset management team.
• The Group's portfolio was let to 29 different registered charities, community interest companies and other regulated organisations. As at 31 August 2022, the Directors consider that 17 of these tenants are considered to be of weak covenant strength, with one tenant in administration.
• 100% of the income was index-linked and subject to an annual collar and cap of 1% and 4%, respectively.
• The majority of the trade debtors outstanding at 31 August 2022 were subsequently settled, some in a non-traditional manner which is described more fully in Notes 3, 5 and 11 of the Consolidated Financial Statements. The remaining £1.9 million was fully provided as at 31 August 2022.

Post year end events

Investment Adviser and AIFM

On 4 January 2023, the Company announced that Alvarium RE Limited (now called AlTi RE Limited) had sold its wholly-owned subsidiary, AHRA, to AHRA's management in exchange for a promissory note which was effective on 30 December 2022.

On 15 March 2023, the Company agreed with AHRA to terminate the Investment Advisory Agreement dated 22 September 2020 (the "IAA") (which governed the relationship between the Company and AHRA) with effect from 30 June 2023. On 22 May 2023, the Company appointed AEW to provide property advisory services and announced its intent to engage AEW as Investment Manager and AIFM after receipt of Financial Conduct Authority ("FCA") and shareholder approval for an amended investment policy.

On 21 August 2023, the Company terminated the Investment Management Agreement (the "IMA") (which governed the relationship between the Company

and Alvarium FM) and Alvarium FM ceased to act as AIFM following shareholder approval of the Amended Investment Policy. The same day the Company formally appointed AEW as Investment Manager and AIFM. Director Changes

On 18 January 2024, the Company announced the appointment of Michael O'Donnell as an independent non-executive director succeeding Lynne

Fennah as independent non-executive chair with immediate effect.

On 2 April 2024, the Company announced the appointment of Peter Williams as senior independent non-executive director with immediate effect and Management Engagement Committee Chair elect. On 7 June 2024, the Company announced the appointment of Rod Day as an independent non- executive director with immediate effect and Audit Committee Chair elect.

Dividends

On 12 December 2022, the Company declared an interim dividend of 1.38 pence per share in respect of the period from 1 June 2022 to 31 August 2022, which was paid on 20 January 2023 to shareholders on the register as at 22 December 2022. This dividend was paid as a property income distribution ("PID").

On 16 February 2023, the Board announced that except for any distributions that would be required to maintain REIT status, that it has ceased paying any further dividends until further notice.

Acquisitions and disposals

From 1 September 2022 to 30 November 2022, the Group acquired 232 new assets totalling £104.1 million (including purchase costs) of which £5.9 million related to certain works due to be completed by the vendor ("Seller's Works").

From 4 August 2023 to 10 October 2024, the Group exchanged on the sale of 1,491 properties for gross sales proceeds of £216.5 million, of which 1,228 properties had completed with gross sales proceeds of £169.7 million. Investment properties which were valued at £220.1 million in the 31 August 2022 Consolidated Statement of Financial Position were exchanged for £195.2 million. Of the proceeds received on completions, £120.1 million was applied against the outstanding loan balances. As of 10 October 2024, 263 properties have exchanged but not completed with a total gross sales value of £46.8 million.

Property Valuation

The investment properties held at 31 August 2023 have been valued as at 31 August 2023 by JLL with a fair value of £412.7 million.

Restricted cash

Of the cash held in lockbox accounts as at

31 August 2022, £34.2 million of cash was released to the Group after Home Holdings 2 Limited (a subsidiary of the Company) provided approved security to

the Lender. The balance of £38.9 million was never released (appropriate collateral was never provided) with £30.0 million applied against the outstanding borrowings in April 2023 and the remaining balance of £8.9 million applied against outstanding borrowings in December 2023.

Cash held by solicitors as at 31 August 2022 of

£18.3 million was used to fund a portion of the purchase price of the assets acquired as discussed above.

Of the retentions held by solicitors, £5.2 million has been released to the Company since 31 August 2022. Viceroy Research Report and Subsequent Appointment of A&M

On 23 November 2022, the Company acknowledged that Viceroy Research LLP ("Viceroy Research") had issued a short-seller report dated 23 November 2022 (the "Viceroy Research Report"). On 30 November 2022, the Company published a detailed rebuttal, which was supported by a full verification process conducted

by Stephenson Harwood LLP, the Company's primary legal advisers at the time, based on formal representations from AHRA and Alvarium FM. Also on 30 November 2022, Viceroy Research issued a response to the rebuttal.

In late December 2022, the Board received information which resulted in the Board considering it appropriate to instruct A&M to conduct an investigation into allegations of wrongdoing, including matters raised in the Viceroy Research Report and the response thereto issued by the Company. On 5 May 2023, A&M delivered to the Company a detailed report. Without waiver of privilege, the key findings of the report were:

• arrangements with the Group's corporate tenants and vendors relating to the cost of refurbishment of properties were not brought to the attention of the Board by AHRA, so that the Board was unable to consider whether a release of a vendor's liabilities for refurbishment of properties was appropriate. These arrangements included a representative
  of AHRA, without the knowledge or authority of the Board, entering into a settlement agreement on 8 December 2022 between the Group and various property vendors (the "Aggregators") whereby the Company would pay £0.7 million and purportedly waive any refurbishment claims against the Aggregators in relation to 488 properties held by the Group.

• the Board had not approved or been provided with information regarding alternative arrangements to settle outstanding rent arrears (as discussed in Notes 3, 5 and 11 to the Consolidated Financial Statements).
• there was limited evidence of detailed ongoing monitoring of tenants being undertaken by AHRA;
• AHRA provided inaccurate information about occupancy rates to The Good Economy Partnership Limited ("The Good Economy"), who had been commissioned by the Company to produce an independent report on the Group's performance and social impact on an annual basis;
• certain connections between tenants existed that were not disclosed to the Board; and
• there existed certain undisclosed potential outside business interests and undeclared potential conflicts of interest between certain persons associated with AHRA and third parties.

Tenant matters and lease amendments

On 29 September 2022, AHRA entered into deeds of variation on behalf of the Group with N-Trust Homes CIC and Select Social Housing CIC (without Board knowledge) such that all leases with both tenants received a rent-free period with retroactive effect from 1 March 2022 and extending eighteen months to 31 August 2023 in exchange for changing the lease extension agreement from five years to ten years. On 4 October 2022, AHRA entered into a deed of variation on behalf of the Group with ICDE Homes CIC (without Board knowledge) such that all leases with ICDE Homes CIC received a rent-free period with retroactive effect from 1 March 2022 and extending eighteen months to 31 August 2023 in exchange for changing the lease extension agreement from five years to ten years.

Since 31 August 2022, a number of tenants have surrendered leases or gone into creditors voluntary liquidation. Of leases associated with the tenants in place on the 2,239 properties owned by the Group on 31 August 2022, as at the date of these accounts, 369 are still in in place, 452 properties have been turned over to a property manager resulting in the Group having direct leases with the occupants, 349 are re- tenanted, and 1,069 have been sold.

Other Adviser Updates

On 29 October 2022, the Company appointed Jefferies International Limited as joint broker. The agreement with Jefferies International Limited was terminated on 1 February 2023. As described more fully in Note 19

to the Consolidated Financial Statements, Alvarium Securities resigned on 8 February 2023.

On 5 July 2023, the Company appointed Liberum Capital Limited ("Liberum") (now Panmure Liberum Capital Limited) as Capital Markets Adviser during the period in which the Company's shares are suspended from trading and will act as the Corporate Broker

to the Company commencing on the date at which the Company's Shares are re-admitted to listing on the premium listing segment of the Official List and to trading on the main market of the London Stock Exchange.

On 13 February 2023, the Company appointed Smith Square Partners LLP ("SSP") as financial adviser and the relationship was terminated on 24 August 2023 with effect from 24 November 2023.

On 18 January 2023, the Company announced that AHRA had engaged sector specialist, Simpact Group, to perform a detailed review of the Group's portfolio and to monitor and assist with managing the Group's tenants, including rent collection and recovery of arrears. The contract was subsequently assigned to the Company from 1 July 2023 and the engagement was terminated with effect from 31 October 2023.

Lender Discussions

As a result of the property sales discussed above and application of lockbox amounts against the loan balance, as of the latest payment on

25 September 2024, the outstanding loan balances totalled £72.0 million.

On 19 June 2023 Scottish Widows imposed a Deferred Fee of 0.5% of the aggregate amounts outstanding on the two loans at each of 31 August 2023 and

30 November 2023, payable on the full and final repayment of the loan. On 4 December 2023 Scottish Widows imposed a further Deferred Fee effective from 30 November 2023 being the equivalent of 5.0% per annum on the aggregate amounts outstanding on the two loans as computed on a daily basis, payable at the earlier of 28 June 2024 or the full and final repayment of the loans. On 2 July 2024, the Deferred Fee was increased from 5% to 7% with effect from 1 July 2024 until the full repayment of the loan. The Lender expects the two loans and all contractual interest and Deferred Fees (which are estimated to be £9.1 million in December 2024) to be fully repaid no later than

31 December 2024.

Potential Litigation/FCA Investigation

A pre-action letter of claim has been sent to the Company by Harcus Parker Limited ("Harcus Parker") on behalf of certain shareholders of the Company. On 5 March 2024, the Company announced that it

intends to bring legal proceedings against those parties it considers are responsible for wrongdoing. On 12 April 2024, the Company issued pre-action letters of claim to Alvarium FM and AlTi RE. On

29 May 2024, the Company issued a pre-action letter of claim to AHRA.

On 13 February 2024, the Company announced that it had been notified by the FCA of its commencement of an investigation into the Company covering the period from 22 September 2020 to 3 January 2023.

Alternative performance measures

The Group presented various European Public Real Estate Association ("EPRA") Performance Measures and other Key Performance Indicators in the Management Report for the period ended

31 August 2021. Given the significant number and quantum of non-recurring adjustments recorded in these 2022 financial statements, the Board does not consider that such performance measurements will benefit the user of these financial statements and accordingly, we are not presenting any EPRA Performance Measures in these Report and Accounts. The Board will, however, continue to keep the presentation of EPRA measurements under review.

ensuring that the Company complied with its Original Investment Policy. The Company and Alvarium FM appointed the Investment Adviser, AHRA, by way of the IAA to provide certain services in relation to the Group, including sourcing and advising on investments for acquisition, due diligence in relation to proposed investments and on-going tenant and property monitoring.

In January 2023, the Board instructed A&M to conduct an investigation into allegations of wrongdoing, including matters raised in the Viceroy Research Report. On 5 May 2023, A&M delivered to the Company a detailed report. Without waiver of privilege, the key findings of this report were:

• arrangements with the Group's corporate tenants and vendors relating to the cost of refurbishment of properties were not brought to the attention of the Board by AHRA, so that the Board was unable to consider whether a release of a vendor's liabilities for refurbishment of properties was appropriate. This included a representative of AHRA, without the knowledge or authority of the Board, entering into a settlement agreement on 8 December 2022 between the Group and the Aggregators whereby the Group would pay £0.7 million and purportedly waive any refurbishment claims against the Aggregators in relation to 488 properties.
• the Board had not approved, or been provided with information regarding alternative arrangements to settle outstanding rent arrears;
• there was limited evidence of detailed ongoing monitoring of tenants being undertaken by AHRA;
• AHRA provided inaccurate information about occupancy rates to The Good Economy;
• certain connections between tenants existed that were not disclosed to the Board; and
• undisclosed potential outside business interests, and undeclared potential conflicts of interest as between certain persons associated with AHRA and third parties.

Due to information that came to light which was in contradiction to reporting previously provided to the Board by AHRA and Alvarium FM during the period, together with low rent collection and further evidence of material information being withheld from the Board, on 15 March 2023, the Board agreed with AHRA by way of letter of agreement that the Company was entitled to terminate the IAA on or before 30 June 2023. On

30 June 2023, the IAA was terminated. On 25 May 2023,

the Company and Alvarium FM agreed by way of variation agreement, as further varied on 18 July 2023, that the IMA would be varied to allow for termination immediately upon the Company giving notice in writing to Alvarium FM, provided such notice was given by not later than 31 August 2023, or upon either party giving not less than six months' notice in writing. On 21 August 2023, the Company terminated the IMA. Contrary to AHRA's reporting to the Board, post period end investigations by AEW have determined the following:

• most of the properties acquired were not high- quality accommodation and most were acquired subject to Seller's Works obligations. Post period end, JLL, based on its own inspections and the work of Vibrant and others, has assessed the condition of 90.9% of properties as fair or worse (of those properties which were internally inspected);
• no reliable data existed for monitoring underlying occupancy. As at the date of inspection by Vibrant (from August 2023 onwards), of the 2,239 properties owned at 31 August 2022, 50.6% were considered occupied, 13.3% were considered unoccupied, 36.1% were inspected by a firm other than Vibrant (who made no comment on occupation) and 17.7% remain uninspected (of which 68.2% have been sold subsequent to year-end).
• no data existed for determining the monitoring of accommodation backed by exempt rent from local authorities; and
• the majority of tenants were poorly capitalised and lacked long-term operating track records, or the benefit of local authority support. In some instances, for example, single family homes, the rent burden under the original lease was considered unsustainable based on the location, lay-out, use and condition of the property.

The Company has now issued a pre-action letter of claim to its former Investment Adviser, AHRA. Shortly before issuance of the pre-action letter of claim, the Company was made aware that AHRA had appointed joint liquidators for the purpose of winding up the company. Notwithstanding this event, it remains important that all means of potential financial recovery are fully considered and that any wrongdoing is thoroughly investigated. The Company has also issued pre-action letters of claim to Alvarium FM (its former AIFM) and AlTi RE. The Board cannot comment any further at this stage, as to do so may prejudice the Company's position in any potential proceedings.