Interchange Homes LLP is a limited liability partnership incorporated in England and Wales. The registered office is 1a The Mailbox, 1 Exchange Street, Stockport, Cheshire, SK3 0GA.
The limited liability partnership's principal activities are disclosed in the Members' Report.
These financial statements have been prepared in accordance with the Statement of Recommended Practice "Accounting by Limited Liability Partnerships" issued in December 2021, together 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 as applicable to companies subject to the small companies regime. The disclosure requirements of section 1A of FRS 102 have been applied other than where additional disclosure is required to show a true and fair view.
The financial statements are prepared in sterling, which is the functional currency of the limited liability partnership. Monetary amounts in these financial statements are rounded to the nearest £.
The financial statements have been prepared under the historical cost convention, modified to include investment properties at fair value. The principal accounting policies adopted are set out below.
Turnover is recognised net of value added tax in the profit and loss. Rental income and other property income receivable from operating leases, net of lease incentives, is recognised evenly over the lease term, except where an alternative basis represents the timing of economic benefits to be derived from leases.
Members' participation rights are the rights of a member against the LLP that arise under the members' agreement (for example, in respect of amounts subscribed or otherwise contributed remuneration and profits).
Members' participation rights in the earnings or assets of the LLP are analysed between those that are, from the LLP's perspective, either a financial liability or equity, in accordance with section 22 of FRS 102. A member's participation rights including amounts subscribed or otherwise contributed by members, for example members' capital, are classed as liabilities unless the LLP has an unconditional right to refuse payment to members, in which case they are classified as equity.
All amounts due to members that are classified as liabilities are presented within 'Loans and other debts due to members' and, where such an amount relates to current year profits, they are recognised within ‘Members' remuneration charged as an expense’ in arriving at the relevant year’s result. Undivided amounts that are classified as equity are shown within ‘Members' other interests’. Amounts recoverable from members are presented as debtors and shown as amounts due from members within members’ interests.
Where there exists an asset and liability component in respect of an individual member’s participation rights, they are presented on a gross basis unless the LLP has both a legally enforceable right to set off the recognised amounts, and it intends either to settle on a net basis or to settle and realise these amounts simultaneously, in which case they are presented net.
Once an unavoidable obligation has been created in favour of members through allocation of profits or other means, any undrawn profits remaining at the reporting date are shown as ‘Loans and other debts due to members’ to the extent they exceed debts due from a specific member.
Assets in the course of construction are not depreciated.
Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are assets that necessarily take substantial period of time to get ready for their intended use or sale, are added to the cost of those assets until such time as the assets are substantially ready for their intended use or sale.
Investment property, which is property held to earn rentals and/or for capital appreciation, is initially recognised at cost, which includes the purchase cost and any directly attributable expenditure. Independent external valuations are carried out at each reporting date to measure the properties at fair value. Any gain or loss is calculated by reference to the fair value at the last reporting date and is recognised in the profit or loss. Subsequent expenditure is included in the investment properties' carrying amount only when it is probable that future economic benefits associated with the item will flow to the limited liability partnership and the cost of the item can be measured reliably.
Interests in subsidiaries, associates and jointly controlled entities are initially measured at cost and subsequently measured at cost less any accumulated impairment losses. The investments are assessed for impairment at each reporting date and any impairment losses or reversals of impairment losses are recognised immediately in profit or loss.
A subsidiary is an entity controlled by the limited liability partnership. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.
At each reporting period end date, the limited liability partnership 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 limited liability partnership 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.
Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.
The limited liability partnership 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 limited liability partnership's statement of financial position when the limited liability partnership 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.
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 limited liability partnership 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 limited liability partnership 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.
Derivatives, including interest rate swaps and forward foreign exchange contracts, are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.
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 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 limited liability partnership’s obligations expire or are discharged or cancelled.
Government grants are recognised at the fair value of the asset received or receivable when there is reasonable assurance that the grant conditions will be met and the grants will be received.
Government grants relating to turnover are recognised as income over the periods when the related costs are incurred. Grants relating to an asset are recognised in income systematically over the asset's expected useful life. If part of such a grant is deferred it is recognised as deferred income rather than being deducted from the asset's carrying amount.
There are not considered to be any key judgements in applying accounting policies or key sources of estimation uncertainty that need to be adopted by management and key management personnel.
The average number of persons (excluding members) employed by the partnership during the year was nil (2023: nil).
During the year £256,693 (2023: £145,307) of interest costs directly attributable to the financing of freehold property developments were capitalised. The total capitalised interest at 31 December 2024 was £402,000(2023: £145,307).
The asset under construction was completed during the year to 31 December 2024 and subsequently transferred to investment property.
Investment property comprises the Stockport Interchange. The fair value of the investment property has been arrived at on the basis of a valuation carried out 31st December 2024 by CBRE. The valuation was made on an open market value basis by reference to market evidence of transaction prices for similar properties.
Details of the limited liability partnership's subsidiaries at 31 December 2024 are as follows:
Registered office is 1a The Mailbox, 1 Exchange Street ,Stockport , United Kingdom , SK3 OGA
Deferred income is included in the financial statements as follows:
In the event of a winding up the amounts included in "Loans and other debts due to members" will rank equally with unsecured creditors.
As the income statement has been omitted from the filing copy of the financial statements, the following information in relation to the audit report on the statutory financial statements is provided in accordance with s444(5B) of the Companies Act 2006.
The auditor's report is unqualified and includes the following:
At 31 December 2024 the limited liability partnership had capital commitments as follows:
During the year the following transactions were entered into with related parties:
Included within other creditors less than one year there are grants from The Metropolitan Borough Council of Stockport (LLP Member) totalling £76,000 (2023: £nil) and Greater Manchester Combined Authority (LLP Member) totalling £60,000 (2023: £nil).
Included within other creditors more than one year there are grants from The Metropolitan Borough Council of Stockport (LLP Member) totalling £3,379,667 (2023: £3,800,000) and Greater Manchester Combined Authority (LLP Member) totalling £2,905,000 (2023: £3,000,000).
Included within other debtors are amounts due from Greater Manchester Combined Authority (LLP Member) totalling £nil (2023: £1,580,700) and Interchange Apartments Limited totalling £22,467 (2023: £nil).
Included within equity under member's capital classified as a liability is £30,600,000 (2023: £30,600,000 ) This is made up of £9,300,000 (2023: £9,300,000) from The Metropolitan Borough Council of Stockport (LLP Member); £9,300,000 (2023: £9,300,000) from The Metropolitan Borough Council of Stockport (LLP Member) and £12,000,000 (2023: £12,000,000) from Gresham House Investment Management (Guernsey) Limited (LLP Designated Member).
Included within other creditors less than one year is an amount of £17,625,657 (2023: £12,430,005) owed to Greater Manchester Combined Authority (LLP Member).
Included within amounts owed to group undertakings less than one year is an amount of £937,102 (2023: £145,307) owed to Greater Manchester Combined Authority (LLP Member).
Included within trade creditors is a balance totalling £9,000 (2023: £89,077) to CityRISE Interchange Homes LLP and £nil (2023: £4,800) to Greater Manchester Combined Authority (LLP Member).
Included within accruals is a balance to Greater Manchester Combined Authority of £nil (2023: £145,306)
Included within other creditors are amounts owed to Interchange Apartments Limited (subsidiary) of £100 (2023: £100) and £5,002 (2023: £5,002) owed to CityRISE Interchange Homes LLP.
Included within management accounting services in the profit and loss account is £45,000 (2023: £30,000) from CityRISE Interchange Homes LLP.
Assets under construction had £173,077 (2023: £415,384) of development fees with CityRISE Interchange Homes LLP and capitalised interest of £377,887 (2023: £145,306) with Greater Manchester Combined Authority. The asset under construction was transferred to investment property and has been revalued during the year.
Income recorded in the profit and loss account during the year totalled £470,425 recharged from Interchange Apartments (OPCO) LLP.