The directors present the strategic report for the year ended 29 February 2024.
The Group's principal activities are that of estates management, property development, land ownership and letting of property.
The year ended 29 February 2024 has continued to be a year of consolidation for the O&H Group. The continuing focus has been to add value across the Group and the results show a strong net asset value of £215m (2023: £204m).
The most significant element of the group's turnover in the year is represented by the sale of residential and commercial sites within the Hampton development in Peterborough for £22m. The long term development of Hampton is continuing and the directors are encouraged by positive signs coming from the house building industry which will ensure the continued success of Hampton development.
On the 22 May 2023, the group entered into a buy-in policy with Just Group for the defined benefit pension scheme. At this point, the group made a one-off contribution to the scheme of £2.1m. The Scheme assets were disinvested and the required funds transferred to Just Group. The assets of the Scheme are now invested in an insurance policy matching the benefit payments due to the Scheme members.
It is the intention of the group to complete the buy-out stage of the process post year end.
The directors have responsibility for the management of the risks facing the Group and in the assessment of those risks and in ensuring that those risks are monitored and reacted to. The directors allocate responsibility for risk within the Group's management structure.
The directors are kept up to date through regular reviews of the impact of economic scenarios. The directors monitor the financial performance of the Group at regular Executive meetings where comparisons against budgets and forecasts are made together with a review of key performance indicators and key projects being undertaken by the Group.
Employment policies are controlled by senior management and IT policies and internal control systems are regularly reviewed. The directors are not aware of any events of fraud or major external events affecting the Group's business.
The Group's operations are funded from operational cash flow which the directors regularly review. The management of cash is monitored daily with short and medium-term cash flows prepared daily and long-term cash flows discussed regularly in Executive meetings. The Group is not exposed to financial derivatives or currency fluctuations.
As part of Liquidity risk management, the financial stability of tenants, potential tenants and contractors is monitored as part of the Group's daily operations. The Group's portfolio is widely spread and is not dominated by any single tenant or any single market.
The Group's major construction project programmes are reviewed regularly to ensure they meet the Group's obligations under any planning consents, sale contracts and finance agreements.
The directors believe that the Group's procurement methods, which include competitive tendering, ensure good control over build costs and, wherever possible, fixed price contracts are awarded. The directors monitor progress of each contract on a regular basis to ensure that the delivery of the project is being achieved efficiently and meets the obligations under the building contracts. In order to minimise the construction risk, full building contracts are entered into with contractors and all warranties and other contractual matters are included in the contract packages and vigorously monitored.
As far as possible, the financial status or "credit rating" of all major tenants, suppliers and contractors is monitored on an ongoing basis.
Our executives and staff have worked hard to achieve the results shown in these financial statements and the board offers its thanks to them all.
The board considers the following KPI's to be important in its management of the Group's business:
Development properties and land
The group derives its principal revenue from purchasing land and buildings, enhancing its value through obtaining planning permission and its subsequent sale. The KPI is therefore the price generated per acre of land sold.
Rental and other income
The group monitors and seeks to maximise rental income generated whilst properties are held.
The directors have considered the group's financial position and prospects and believe that the group continues to remain a going concern. Further details of this are included in the notes to the financial statements.
Section 172(1) statement
The board considers that they have adhered to the requirements of section 172 of the Companies Act 2006 (the “Act”) and have, in good faith, acted in a way that they consider could be most likely to promote the success of the group for the benefit of its shareholders and, in doing so, have had regard to and recognised the importance of considering all stakeholders and other matters (as set out in s.172(1)(a-f) of the Act) in its decision making.
The board acknowledges that the business can only grow and prosper over the long-term if it understands and respects the views and needs of the Group’s customers, employees, suppliers, lenders and other stakeholders to whom we are accountable, as well as the environment we operate within.
Key stakeholders
The directors ensure that the requirements or section 172 are always met and considered through a combination of the following:
Employees
The group and parent company have continued to maintain the commitment to employee involvement throughout the business. Employees are kept well informed of the performance and objectives of the group through personal briefings, regular meetings and e-mail.
Customers
The Group’s customers are tenants or property purchasers of development land. The group and parent company have continued to work to ensure customers’ needs are met properly with robust continuity plans. This includes regular meetings with managing agents and developers to ensure issues are known. The impact of decisions made by the board on customers are considered to ensure continued good relationships.
Suppliers
The directors have increased their consideration of the financial health of suppliers to ensure business continuity and support the long-term success of the business. This includes more robust analysis of financial statements to ensure risks of failure are limited.
For the year ending 29 February 2024, the board consider that the following examples of principal decisions that it made in the year.
The board has continued to maintain its social media and internet presence so it can communicate better with customers, suppliers and the wider community.
On behalf of the board
The directors present their annual report and financial statements for the year ended 29 February 2024.
The results for the year are set out on page 10.
Interim ordinary dividends were not paid during the year (2023: £Nil). The directors do not recommend payment of a final dividend.
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
During the year the group made political and charitable contributions of £30,000 (2023: £16,500).
In accordance of the company's articles, a resolution proposing that Goodman Jones LLP be reappointed as auditor of the company will be put at a General Meeting.
As the company has not consumed more than 40,000 kWh of energy in this reporting period, it qualifies as a low energy user under these regulations and is not required to report on its emissions, energy consumption or energy efficiency activities. All subsidiary companies within the group fall below the reporting limits.
We have audited the financial statements of O & H Holdings No.2 Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 29 February 2024 which comprise the group profit and loss account, the group statement of comprehensive income, the group balance sheet, the company balance sheet, the group statement of changes in equity, the company statement of changes in equity, the group statement of cash flows and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).
Basis for opinion
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the group's and parent company’s ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
Other information
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of our audit:
the information given in the strategic report and the directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the strategic report and the directors' report have been prepared in accordance with applicable legal requirements.
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.
Based on our understanding of the group and industry, we identified that the principal risks of non-compliance with laws and regulations related to industry sector regulations and unethical and prohibited business practices, and we considered the extent to which non-compliance might have a material effect on the financial statements. We also considered those laws and regulations that have a direct impact on the preparation of the financial statements such as the Companies Act 2006 and UK Tax Legislation. We evaluated management’s incentives and opportunities for fraudulent manipulation of the financial statements (including the risk of override of controls). Appropriate audit procedures in response to these risks were carried out. These procedures included:
Discussions with management, including consideration of known or suspected instances of non-compliance with laws and regulation and fraud;
Reading minutes of meetings of those charged with governance;
Obtaining and reading correspondence from legal and regulatory bodies including HMRC;
Identifying and testing journal entries;
Challenging assumptions and judgements made by management in their significant accounting estimates.
We also communicated relevant identified laws and regulations and potential fraud risks to all engagement team members; and remained alert to any indications of fraud or non-compliance with laws and regulations throughout the audit.
There are inherent limitations in the audit procedures described above. The further removed instances of non-compliance with laws and regulations are from the events and transactions reflected in the financial statements, the less likely we are to become aware of it. Also, the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentations, or through collusion.
A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.
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.
As permitted by s408 Companies Act 2006, the company has not presented its own profit and loss account and related notes. The company’s loss for the year was £7,065,799 (2023 - £171,611 loss).
O & H Holdings No.2 Limited (“the company”) is a private limited company domiciled and incorporated in England and Wales. The registered office is Ground Floor Trinity Court, Trinity Street, Peterborough, Cambridgeshire, PE1 1DA.
The group consists of O & H Holdings No.2 Limited and all of its subsidiaries.
These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.
The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £000.
The financial statements have been prepared under the historical cost convention, modified to include the revaluation of freehold properties and to include investment properties and certain financial instruments at fair value.
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:
Only one reconciliation of the number of shares outstanding at the beginning and end of the period has been presented as the reconciliations for the group and the parent company would be identical;
No cash flow statement has been presented for the parent company;
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; and
No disclosure has been given for the aggregate remuneration of the key management personnel of the parent company as their remuneration is included in the totals for the group as a whole.
The principal accounting policies adopted are set out below.
The consolidated statement of comprehensive income and balance sheet include the financial statements of the company and it's subsidiary undertakings as at 29 February 2024 using the acquisition method of accounting. The results of subsidiary undertakings are included from the date on which control in the subsidiary passes to the group.
In making their assessment of the ability of the group and company to continue as a going concern, the directors have prepared detailed cash flow projections for the group and company. The parent undertaking, O&H Strategic Land Limited, has prepared the same on a consolidated basis. These projections have been prepared to February 2027 and include sensitivities in cash inflows for potential reductions in activities. These projections show, in all scenarios, that the group remains liquid, however each individual company (including O & H Holdings No.2 Limited) has limited or no cash.
The company has received a letter from the parent company (O&H Strategic Land Limited) confirming that the parent company operates a cash management treasury function for the O&H Strategic Land Limited group. The cash is pooled and held within O&H Strategic Land Limited. The letter confirms that they are holding that cash and that the directors of this group continue to have full and unfettered access to it.
On this basis, the directors consider that both the group and the company will be able to discharge their obligations in the ordinary course of business for a period of at least twelve months from the date when the financial statements are authorised for issue and consider it appropriate to continue to prepare these financial statements on a going concern basis.
Turnover, which is stated net of VAT, is derived from sale proceeds of development properties, the value of development properties completed during the period, together with rental and other property related income on an accruals basis. Sales of stock and development properties are typically recognised at the time of legal completion of the transaction as this represents the point when the risks and rewards are transferred from the group. Turnover arises within the United Kingdom.
Interest income is recognised in the profit or loss using the effective interest method.
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is recognised in the profit and loss account.
Investments in subsidiaries are measured at cost less any accumulated impairment . Where merger relief is applicable, the cost of the investment in a subsidiary undertaking is measured at the nominal value of the shares issues together with the fair value of any additional consideration paid.
At each reporting period end date, the group reviews the carrying amounts of its tangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the group estimates the recoverable amount of the cash-generating unit to which the asset belongs.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.
Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.
The group has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the group's balance sheet when the group becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset and the net amounts presented in the financial statements when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.
Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.
Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.
Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.
If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the group transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the group after deducting all of its liabilities.
Basic financial liabilities, including creditors, bank loans, loans from fellow group companies and preference shares that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.
Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.
Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as being measured at fair value through profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.
Financial liabilities are derecognised when the group's contractual obligations expire or are discharged or cancelled.
Equity instruments issued by the group are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the group.
The tax expense represents the sum of the tax currently payable and deferred tax.
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The group’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset if, and only if, there is a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.
Contributions to the group's defined contribution pension scheme are charged to profit or loss in the year in which they became payable.
One of the subsidiaries of the group operates a group defined benefit pension plan hence the defined benefit scheme assets, liabilities, income and costs are recognsied by the individual group company.
The difference between the fair value of the assets held in the group's defined benefit pension scheme and the scheme's liabilities measured on an actuarial basis using the projected unit method are recognised in the group's balance sheet as a pension asset or liability as appropriate. The carrying value of any resulting pension scheme asset is restricted to the extent that the group is able to recover the surplus either through reduced contributions in the future or through refunds from the scheme.
Leased assets: Lessor
Where assets leased to a third party give rights approximating to ownership (finance leases), the assets are treated as if they had been sold outright. The amount removed from the fixed assets is the net book value on disposal of the asset. The profit on disposal, being the excess of the present value of the minimum leases payments over net book value is credited to profit or loss.
Lease payments are analysed between capital and interest components so that the interest element of the payment is credited to profit or loss over the term of the lease and represents a constant proportion of the balance of capital repayments outstanding. The capital part reduces the amounts owed by the lessee.
All other leases are treated as operating leases. Their annual rentals are charged to profit or loss on a straight-line basis over the term of the lease.
Leased assets: Lessee
Where assets are financed by leasing agreements that give rights approximating to ownership (finance leases), the assets are treated as if they had been purchased outright. The amount capitalised is the present value of the minimum lease payments payable over the term of the lease. The corresponding leasing commitments are shown as amounts payable to the lessor.
Lease payments are analysed between capital and interest components so that the interest element of the payment is charged to profit or loss over the term of the lease and is calculated so that it represents a constant proportion of the balance of capital repayments outstanding. The capital reduces the amounts payable to the lessor.
Debtors
Short term debtors are measured at transaction price, less any impairment. Other assets including deferred consideration are measured at fair value, net of any transaction costs, and are measured subsequently at amortised cost using the effective interest method.
Creditors
Short term creditors are measured at the transaction price. Other financial liabilities, including bank loans, are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method.
Dividends
Equity dividends are recognised when they become legally payable. Interim equity dividends are recognised when paid. Final equity dividends are recognised when approved by the shareholders at an annual general meeting.
In the application of the group’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
Impairment review
Determine whether there are indicators of impairment of the group's tangible assets and fixed asset investments. Factors taken into consideration in reaching such a determination include the economic viability and expected future financial performance of the asset and whether it is a component of larger cash-generating unit, the viability and expected future performance of that unit.
Stock
The carrying value of stocks requires management judgement in determining the profitability of each project at the point of sale. The group gives consideration to the status of each project, stage of development, current tenants and revenues and market conditions, to ensure stocks are valued at the lower of cost and net realisable value.
Accrued income on land sales
Where the risks and rewards of land sales have been transferred, the group recognises the sale but the consideration receivable may be based on contractual arrangements with house developers such that the value is dependent on final completion values of such developments. Where this is the case the group assesses the expected sales value outcome over the contract term based on the contractual arrangements, uncertainties of value and receipt, market value data available and discounts these sales using discount rates reflective of what such contracts would be subject to in an arms length market transaction scenario.
Provisions
Provisions recognised in the accounts are calculated based on the forecast overall profitability of each site within the development. This takes into account the time scales of development and the contractual requirements such as S106 commitments and other onerous arrangements.
Defined benefit scheme assumptions
The costs, assets and liabilities of the defined benefit scheme operated by the group are determined using methods relying on actuarial estimates and assumptions. Details of the key assumptions are set out in note 22. The group takes advice from independent actuaries relating to the appropriateness of the assumptions. Changes in the assumptions used may have a significant effect of the Statement of Comprehensive Income and the Balance Sheet.
Defined benefit scheme - buy-in
At the time of entering into the buy-in transaction, the intention of the directors was to proceed to buy-out and as there are no barriers, the settlement will be expensed through the Statement of Comprehensive Income.
Deferred taxation
Deferred tax balances are recognised in respect of all timing differences that have originated but not reversed by the reporting date, except:
The recognition of deferred tax assets is limited to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits;
Any deferred tax balances are reversed if and when all conditions for retaining associated tax allowances have been met; and
where timing differences relate to interests in subsidiaries, associates, branches and joint ventures and the group can control their reversal and such reversal is not considered probable in the foreseeable future.
Deferred tax balances are not recognised in respect of permanent differences except in respect of business combinations, when deferred tax is recognised on the differences between the fair values of assets acquired and the future tax deductions available for them and the differences between the fair values of liabilities acquired and the amount that will be assessed for tax. Deferred income tax is determined using tax rates and laws that have been enacted or substantively enacted by the reporting date.
The average monthly number of persons (including directors) employed by the group and company during the year was:
Their aggregate remuneration comprised:
No remuneration was paid to the directors for the year ended 29 February 2024 or the prior year.
Investment income includes the following:
The actual charge for the year can be reconciled to the expected charge for the year based on the profit or loss and the standard rate of tax as follows:
Factors that may affect future tax charges
The Finance Bill 2021, published on 11 March 2021, increased the main rate of Corporation tax to 25% for the year commencing 1 April 2023.
The deferred taxation liability has therefore been calculated at 25%, being the rate substantively enacted at the Balance Sheet date.
More information on impairment movements in the year is given in note .
Details of the company's subsidiaries at 29 February 2024 are as follows:
(a) Incorporated in England and Wales.
The registered office address of all the above is Ground Floor Trinity Court, Trinity Street, Peterborough, Cambridgeshire, PE1 1DA
Stock of £2,725,173 (2023 - £1,367,930) was recognised as an expense in the year.
The company holds no stock.
There are no formal arrangements in place for the repayment of amounts owed by related parties and interest is not charged on these balances.
Amounts owed to related parties are interest free and repayable on demand.
Financial instruments measured at amortised cost comprise trade debtors, accrued income, other loans, sundry debtors, amounts owing from related parties and cash at bank.
Financial liabilities measured at amortised cost comprise borrowings, accruals, trade creditors, amounts owing to related parties and other creditors.
Information regarding the Group’s exposure to and management of credit risk, liquidity risk, market risk, cash flow interest rate risk, and foreign exchange risk is included in the strategic report.
The environmental provisions represent ongoing rectification liabilities at the Groups sites.
The development provision accruals relates to S106 and other onerous arrangements in place on the Group as a result of property development activities of the Group. The timing of settlement is uncertain but will fall within the next 10 years.
The company has no provisions for liabilities.
The following are the major deferred tax liabilities and assets recognised by the group and company, and movements thereon:
Revaluation reserve
Revaluation reserve represents cumulative revaluation movements in the fair value of previously held investment properties which have been appropriated to stock, gross of any deferred tax impact.
On disposal of a property any cumulative revaluation movements relating to the disposed property which are realised will be transferred to the profit and loss reserve.
Profit and loss account
Profit and loss account represents cumulative profits or losses, net of dividends paid and other adjustments discussed above in relation to the revaluation reserve.
Share capital
Called up share capital reserve represents the nominal value of the shares issued.
The group operates a Defined Benefit Pension Scheme.
Several pension schemes are operated by the group. The major scheme is a defined benefit scheme and was established under an irrevocable Deed of Trust by O&H Properties Limited for its employees. The Deed determines the appointment of trustees to the fund. The scheme is managed by a corporate trustee accountable to the pension scheme members. The trustees of the fund are required to act in the best interests of the beneficiaries.
Pension benefits generally depend upon age, length of service and salary level. The company provides retirees with at least five years of service and who are at least age 55 with post retirement benefits.
A full actuarial valuation of the defined benefit scheme was carried out at 31 December 2019 and updated at 28 February 2023 by a qualified independent actuary on an FRS 102 basis.
During the year, the scheme entered into a buy-in policy with Just Group on 22 May 2023. Further details of this are disclosed below.
Reconciliation of present value of plan liabilities:
Overall expected rate of return on plan assets is based upon historical returns of the investment performance adjusted to reflect expectations of future long-term returns by asset class.
Bond guarantees and indemnities in the sum of £2,164,402 (2023: £2,164,402) have been issued by the Group in favour of Anglian Water Services Limited £21,400 (2022: £73,778), Essex County Council £96,034 (2023: £96,034) and Peterborough City Council £1,221,495 (2023: £1,994,590).
The group leases out its properties held within stock under non-cancellable operating leases for the following future minimum lease payments. There are no contingent rents.
During the year, O&H Properties Limited received management charge income of £2,060,538 (2023: £2,218,642) from companies under common control.
At the year end, the company owed £6,202,000 (2023: £6,252,000) to O&H Estate Limited, £587,000 (2023: £593,000) to O&H Q6 Limited and £12,273,000 (2023: £Nil) to O&H Q7 Limited which are all entities under common control. These amounts are repayable on demand and do not bear interest.
The company has taken advantage of the exemption in FRS 102 Section 33 from the requirement to disclose transactions with wholly owned group companies on the grounds that consolidated financial statements are prepared.