REGISTERED NUMBER: 14077294 (England and Wales)

PBM HOLDINGS LIMITED

GROUP STRATEGIC REPORT,

REPORT OF THE DIRECTORS AND

AUDITED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2024

Page

Company Information

1

Group Strategic Report

2

Report of the Directors

4

Report of the Independent Auditors

5

Consolidated Income Statement

8

Consolidated Balance Sheet

9

Company Balance Sheet

10

Consolidated Statement of Changes in Equity

11

Company Statement of Changes in Equity

12

Consolidated Cash Flow Statement

13

Notes to the Consolidated Cash Flow Statement

14

Notes to the Consolidated Financial Statements

15

DIRECTORS:

Mr D M J Howell

Mrs C A Howell

Mrs C A Brennan

SECRETARY:

Mrs C A Brennan

REGISTERED OFFICE:

The Woodlands

Mablethorpe Road

Theddlethorpe

Lincolnshire

LN12 1NQ

REGISTERED NUMBER:

14077294 (England and Wales)

AUDITORS:

Nicholsons Audit

Newland House

The Point

Weaver Road

Lincoln

Lincolnshire

LN6 3QN

The directors present their strategic report of the company and the group for the year ended 31 December 2024.

These accounts include the trading results for PBM Holdings Limited and all of it's subsidiaries for the year ended 31 December 2022. The subsidiaries of the group are listed below:

- DMJ Drainage Limited

- DMJ Civils Limited

- DMJ Farming Limited

- Howell Properties (Lincs) Limited

REVIEW OF BUSINESS

The results for the year and financial position of the group are shown in the annexed financial statements.

2024

2023

£

£

Turnover

15,921,725

18,579,990

Cost of sales

10,283,969

9,731,000

Gross profit

5,637,756

8,848,990

Gross profit margin %

35.41

47.63

Profit / (Loss) on ordinary activities before taxation

(1,091,658

)

4,516,364

% of profit on ordinary activities before taxation

(6.86

)

24.31

This year was a pivotal year for the group with contracts coming to an end and the commencement of new work being delayed resulting in a fall in turnover of £2.66 million for the Drainage and Civils subsidiary. The Directors were reassured by the work gained for 2025 and 2026 which will see activity for the group return to 2023 levels.

The change in trading activity is reflected on the balance sheet with the reduction in net current assets of £3.81 million. The company has used funds to invest in fixed assets which show an increase of £2.65 million.

The group continues to expand its farming operation. Although the lands were rented in 2023 the first crop was not until the 2024 year. A loss was incurred due to the depreciation incurred on the new equipment acquired. The 2024 figures also included a large amount of set up costs which will not be repeated and on that basis the Directors are confident of a positive result in year future years.

PRINCIPAL RISKS AND UNCERTAINTIES

The group operates in a competitive market place of few customers and significant financial contracts. As such it is dependant upon the company to manage costs, quality of service and effective delivery of projects in order to maintain competitive. The group is therefore subject to a number of risks -

- Fuel and power costs

- Competitive pricing within the market

- Geographical location of work sites

These risks are being addressed by -

- The size and growth of the group making it able to purchase products at competitive prices

- The range of equipment and expertise of the team create a good reputation by providing a good service

- The flexibility of the group to move team members and plant around the country is attractive to Nationwide customers and can be assessed as an asset.

The UK economy is still recovering from the pandemic with uncertainty regarding inflation, interest rates and government policy changes. The group finance its operation through equipment finance, overdraft and loans. As with all financial instruments there are risks in respect of interest rates. In comparison to the size of the operation the interest rate risk is considered small and manageable by the group.

Due to the nature and size of contract there is an inherent risk in respect of debts due from customers. The group try to maintain a diversified portfolio of projects to minimise this exposure. The management team monitor economic conditions and their client base closely to allow them to quickly adapt to any adverse changes.

FUTURE DEVELOPMENTS

The group continues to maintain its organic growth model for the drainage and civil work whilst exploring new service openings.

Contracts has been obtained to maintain the level of activity into 2025 and into 2026. The group has secured projects of circa £25,000,000. Agricultural drainage works has remained positive with the higher rain fall securing a healthy order book through to Autumn 2025.

Investment in modern plant and machinery has continued beyond the year end to facilitate the nature of the contracts obtained. The group continues to innovate and explore new opportunities within its sector working in close partnership with suppliers to ensure efficiency into the group's future contracts.

ON BEHALF OF THE BOARD:

Mr D M J Howell - Director

30 September 2025

The directors present their report with the financial statements of the company and the group for the year ended 31 December 2024.

DIVIDENDS

No dividends will be distributed for the year ended 31 December 2024.

DIRECTORS

The directors shown below have held office during the whole of the period from 1 January 2024 to the date of this report.

Mr D M J Howell

Mrs C A Howell

Mrs C A Brennan

EVENTS SINCE THE YEAR END

Investment into new plant, machinery and drainage equipment has continued post year end to facilitate the future contracts won by the company.

Many of the new large scale contracts have started in the next financial year and the Directors remain confident that profitability on the works being completed will be maintained from previous levels set.

STATEMENT OF DIRECTORS' RESPONSIBILITIES

The directors are responsible for preparing the Group Strategic Report, the Report of the Directors 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 United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). 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 the group and of the profit or loss of the group for that period. In preparing these financial statements, the directors are required to:

-	select suitable accounting policies and then apply them consistently;

-	make judgements and accounting estimates that are reasonable and prudent;

-	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 and the group's transactions and disclose with reasonable accuracy at any time the financial position of the company and the group and 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 the group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

STATEMENT AS TO DISCLOSURE OF INFORMATION TO AUDITORS

So far as the directors are aware, there is no relevant audit information (as defined by Section 418 of the Companies Act 2006) of which the group's auditors are unaware, and each director has taken all the steps that he or she ought to have taken as a director in order to make himself or herself aware of any relevant audit information and to establish that the group's auditors are aware of that information.

ON BEHALF OF THE BOARD:

Mr D M J Howell - Director

30 September 2025

Opinion

We have audited the financial statements of PBM Holdings Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 December 2024 which comprise the Consolidated Income Statement, Consolidated Other Comprehensive Income, Consolidated Balance Sheet, Company Balance Sheet, Consolidated Statement of Changes in Equity, Company Statement of Changes in Equity, Consolidated Cash Flow Statement and Notes to the Consolidated Cash Flow Statement, Notes to the Financial Statements, 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).

In our opinion the financial statements:

-	give a true and fair view of the state of the group's and of the parent company affairs as at 31 December 2024 and of the group's loss for the year then ended;

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

-	have been prepared in accordance with the requirements of the Companies Act 2006.

Basis for opinion

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

Conclusions relating to going concern

In auditing the financial statements, we have concluded that the 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 the 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

The directors are responsible for the other information. The other information comprises the information in the Group Strategic Report and the Report of the Directors, but does not include the financial statements and our Report of the Auditors thereon.

Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.

In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether 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. We have nothing to report in this regard.

Opinions on other matters prescribed by the Companies Act 2006

In our opinion, based on the work undertaken in the course of the audit:

-	the information given in the Group Strategic Report and the Report of the Directors for the financial year for which the financial statements are prepared is consistent with the financial statements; and

-	the Group Strategic Report and the Report of the Directors have been prepared in accordance with applicable legal requirements.

Matters on which we are required to report by exception

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

We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion:

-	adequate accounting records have not been kept by the parent company, or returns adequate for our audit have not been received from branches not visited by us; or

-	the parent company financial statements are not in agreement with the accounting records and returns; or

-	certain disclosures of directors' remuneration specified by law are not made; or

-	we have not received all the information and explanations we require for our audit.

Responsibilities of directors

As explained more fully in the Statement of Directors' Responsibilities set out on page four, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

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

Auditors' responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue a Report of the Auditors 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.

The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:

We obtained an understanding of the legal and regulatory frameworks that are applicable to the organisation and determined that the most significant are those that relate to the reporting framework (FRS102), the Companies Act 2006 and the relevant tax compliance.

We understood how the organisation is complying with those frameworks by making enquiries of management and those charged with governance, and we corroborated our enquiries by reviewing board minutes and reviewing third party correspondence, including correspondence with HMRC.

We assessed the susceptibility of the financial statements to material misstatement, including how fraud might occur by meeting with management from various parts of the business to understand where they considered there was susceptibility to fraud. We considered the controls that the organisation has established to address risks identified, or that otherwise prevent, deter and detect fraud and also reviewed how these had operated in the year.

Where the risk was considered to be higher, we performed audit procedures to address each identified fraud risk along with procedures to identify non-compliance with such laws and regulations identified in the paragraphs above along with areas where management override of controls may be relevant. These procedures included assessing the appropriateness of presentation of separately disclosed items with a focus on manual journals and journals indicating large or unusual transactions based on our understanding of the organisation. These procedures were designed to provide reasonable assurance that the financial statements were free from material fraud or error.

We also considered the risk associated with completeness of income and whether this could have a material impact on the financial statements. We also considered the risk associated with completeness of income and work in progress valuation and whether these could have a material impact on the financial statements. Work was targeted in these areas.

We communicated identified laws and regulations throughout our team and remained alert to any indications of non-compliance throughout the audit. The audit was planned to ensure that the more complex areas were performed by more experienced members of the audit team and there were no areas of the audit which were considered to require external experts to be appointed by the audit team.

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 Report of the Auditors.

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 a Report of the Auditors 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.

Joanne Brown (Senior Statutory Auditor)

for and on behalf of Nicholsons Audit

Newland House

The Point

Weaver Road

Lincoln

Lincolnshire

LN6 3QN

30 September 2025

REVENUE

15,921,725

18,579,990

Cost of sales

10,283,969

9,731,000

GROSS PROFIT

5,637,756

8,848,990

Administrative expenses

6,683,998

4,528,199

(1,046,242

)

4,320,791

Other operating income

6,471

52,458

OPERATING (LOSS)/PROFIT

4

(1,039,771

)

4,373,249

Interest receivable and similar income

219

8,425

(1,039,552

)

4,381,674

Gain/loss on revaluation of assets

479,698

409,419

(559,854

)

4,791,093

Interest payable and similar expenses

5

531,804

274,729

(LOSS)/PROFIT BEFORE TAXATION

(1,091,658

)

4,516,364

Tax on (loss)/profit

6

(28,126

)

742,632

(LOSS)/PROFIT FOR THE FINANCIAL YEAR

(1,063,532

)

3,773,732

FIXED ASSETS

Intangible assets

9

-

-

Property, plant and equipment

10

12,794,498

12,276,796

Investments

11

4,716,500

2,587,500

17,510,998

14,864,296

CURRENT ASSETS

Inventories

12

1,893,450

3,102,460

Debtors

13

3,138,648

4,470,758

Cash at bank

28,672

42,864

5,060,770

7,616,082

CREDITORS

Amounts falling due within one year

14

7,414,932

6,158,686

NET CURRENT (LIABILITIES)/ASSETS

(2,354,162

)

1,457,396

TOTAL ASSETS LESS CURRENT LIABILITIES

15,156,836

16,321,692

CREDITORS

Amounts falling due after more than one year

15

(3,226,555

)

(3,299,753

)

PROVISIONS FOR LIABILITIES

19

(2,313,930

)

(2,342,056

)

NET ASSETS

9,616,351

10,679,883

CAPITAL AND RESERVES

Called up share capital

20

80

80

Share premium

21

24,902

24,902

Revaluation reserve

21

1,078,757

805,925

Capital redemption reserve

21

40

40

Retained earnings

21

8,512,572

9,848,936

SHAREHOLDERS' FUNDS

9,616,351

10,679,883

The financial statements were approved by the Board of Directors and authorised for issue on 30 September 2025 and were signed on its behalf by:

Mr D M J Howell - Director

FIXED ASSETS

Intangible assets

9

-

-

Property, plant and equipment

10

-

-

Investments

11

380

380

380

380

CURRENT ASSETS

Debtors

13

3,279

5,000

Cash at bank

323

300

3,602

5,300

CREDITORS

Amounts falling due within one year

14

1,550

1,450

NET CURRENT ASSETS

2,052

3,850

TOTAL ASSETS LESS CURRENT LIABILITIES

2,432

4,230

CAPITAL AND RESERVES

Called up share capital

20

80

80

Retained earnings

21

2,352

4,150

SHAREHOLDERS' FUNDS

2,432

4,230

Company's (loss)/profit for the financial year

(1,798

)

193,950

The financial statements were approved by the Board of Directors and authorised for issue on 30 September 2025 and were signed on its behalf by:

Mr D M J Howell - Director

Called up

share

Retained

Share

capital

earnings

premium

£

£

£

Balance at 1 January 2023

80

6,589,236

24,902

Changes in equity

Dividends

-

(190,000

)

-

Total comprehensive income

-

3,773,732

-

Transfers

-

(324,032

)

-

Balance at 31 December 2023

80

9,848,936

24,902

Changes in equity

Total comprehensive income

-

(1,063,532

)

-

Transfers

-

(272,832

)

-

Balance at 31 December 2024

80

8,512,572

24,902

Capital

Revaluation

redemption

Total

reserve

reserve

equity

£

£

£

Balance at 1 January 2023

475,811

40

7,090,069

Changes in equity

Dividends

-

-

(190,000

)

Total comprehensive income

-

-

3,773,732

Transfers

(54,209

)

-

(378,241

)

Deferred tax movement on

revaluation

6,082

-

6,082

Assets revaluation

378,241

-

378,241

Balance at 31 December 2023

805,925

40

10,679,883

Changes in equity

Total comprehensive income

-

-

(1,063,532

)

Transfers

-

-

(272,832

)

Deferred tax movement on

revaluation

(92,589

)

-

(92,589

)

Assets revaluation

365,421

-

365,421

Balance at 31 December 2024

1,078,757

40

9,616,351

Called up

share

Retained

Total

capital

earnings

equity

£

£

£

Balance at 1 January 2023

80

200

280

Changes in equity

Dividends

-

(190,000

)

(190,000

)

Total comprehensive income

-

193,950

193,950

Balance at 31 December 2023

80

4,150

4,230

Changes in equity

Total comprehensive income

-

(1,798

)

(1,798

)

Balance at 31 December 2024

80

2,352

2,432

Cash flows from operating activities

Cash generated from operations

1

3,096,405

4,265,736

Interest paid

(138,294

)

(44,251

)

Interest element of hire purchase payments paid

(393,510

)

(230,478

)

Tax paid

(21,620

)

(8,425

)

Net cash from operating activities

2,542,981

3,982,582

Cash flows from investing activities

Purchase of tangible fixed assets

(3,869,292

)

(5,321,552

)

Purchase of fixed asset investments

(1,992,758

)

(1,419,690

)

Sale of tangible fixed assets

1,769,337

566,250

Sale of fixed asset investments

225,000

152,000

Interest received

219

8,425

Net cash from investing activities

(3,867,494

)

(6,014,567

)

Cash flows from financing activities

Loan repayments in year

(131,660

)

(181,662

)

Capital repayments in year

224,350

2,888,986

Amount introduced by directors

2,522,861

455,888

Amount withdrawn by directors

(1,800,693

)

(1,066,120

)

Equity dividends paid

-

(190,000

)

Net cash from financing activities

814,858

1,907,092

Decrease in cash and cash equivalents

(509,655

)

(124,893

)

Cash and cash equivalents at beginning of year

2

(137,349

)

(12,456

)

Cash and cash equivalents at end of year

2

(647,004

)

(137,349

)

1.	RECONCILIATION OF (LOSS)/PROFIT BEFORE TAXATION TO CASH GENERATED FROM OPERATIONS

2024

2023

£

£

(Loss)/profit before taxation

(1,091,658

)

4,516,364

Depreciation charges

1,534,240

1,395,790

Loss/(profit) on disposal of fixed assets

166,469

(50,966

)

Gain on revaluation of fixed assets

(479,698

)

(409,419

)

Finance costs

531,804

274,729

Finance income

(219

)

(8,425

)

660,938

5,718,073

Decrease/(increase) in inventories

1,209,010

(2,574,754

)

Decrease/(increase) in trade and other debtors

645,942

(94,252

)

Increase in trade and other creditors

580,515

1,216,669

Cash generated from operations

3,096,405

4,265,736

2.	CASH AND CASH EQUIVALENTS

The amounts disclosed on the Cash Flow Statement in respect of cash and cash equivalents are in respect of these Balance Sheet amounts:

Year ended 31 December 2024

31.12.24

1.1.24

£

£

Cash and cash equivalents

28,672

42,864

Bank overdrafts

(675,676

)

(180,213

)

(647,004

)

(137,349

)

Year ended 31 December 2023

31.12.23

1.1.23

£

£

Cash and cash equivalents

42,864

-

Bank overdrafts

(180,213

)

(12,456

)

(137,349

)

(12,456

)

3.	ANALYSIS OF CHANGES IN NET DEBT

At 1.1.24

Cash flow

At 31.12.24

£

£

£

Net cash

Cash at bank

42,864

(14,192

)

28,672

Bank overdrafts

(180,213

)

(495,463

)

(675,676

)

(137,349

)

(509,655

)

(647,004

)

Debt

Finance leases

(5,843,751

)

(224,350

)

(6,068,101

)

Debts falling due within 1 year

(142,960

)

13,945

(129,015

)

Debts falling due after 1 year

(121,882

)

117,715

(4,167

)

(6,108,593

)

(92,690

)

(6,201,283

)

Total

(6,245,942

)

(602,345

)

(6,848,287

)

1.	STATUTORY INFORMATION

PBM Holdings Limited is a private company, limited by shares , registered in England and Wales. The company's registered number and registered office address can be found on the General Information page.

2.	ACCOUNTING POLICIES

Basis of preparing the financial statements

These financial statements have been prepared in accordance with Financial Reporting Standard 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland" and the Companies Act 2006. The financial statements have been prepared under the historical cost convention as modified by the revaluation of certain assets.

Basis of consolidation

The group financial statements consolidate the financial statements of PBM Holdings Limited and all its subsidiary undertakings drawn up to 31 December each year. Control comprises the power to govern the financial and operating policies of the investee via control of the issued share capital of those companies.

Subsidiaries are consolidated from the date of their acquisition, being the date on which the group obtains control and continue to be consolidated until the date that such control ceases. The financial statements of the subsidiaries are prepared for the same reporting year as the parent company, using consistent accounting policies.

The parent company has taken advantage of section 408 of the companies act 2006 and has not included its own income statements in these financial statements.

Significant judgements and estimates

The directors make estimates and assumptions about the future. These estimates and assumptions impact recognised assets and liabilities, as well as revenue, expenses and other disclosures. These estimates are based on historical experience and on various assumptions considered reasonable under the prevailing conditions. The actual outcome may diverge from these estimates if other assumptions are made, or other conditions arise. The estimates and assumptions that may have a significant effect on the carrying amounts of assets and liabilities within the financial year include:

Tangible fixed assets are measured at cost, less accumulated depreciation and any impairments. Depreciation takes place over the estimated useful life, down to the assessed residual value. The carrying amount of the company's fixed assets is tested as soon as changed conditions show that the need for a revaluation or impairment review has arisen.

Turnover

Revenue is measured at the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes.

In respect of long-term contracts and contracts for on-going services, turnover represents the value of work done in the year, including estimates of amounts not invoiced. Turnover in respect of long-term contracts and contracts for on-going services is recognised by reference to the stage of completion.

Intangible assets

Intangible assets are initially measured at cost. After initial recognition, intangible assets are measured at cost less any accumulated amortisation and any accumulated impairment losses.

Website - amortisation rate - 33% straight line.

Property, plant and equipment

Depreciation is provided at the following annual rates in order to write off each asset over its estimated useful life or, if held under a finance lease, over the lease term, whichever is the shorter.

Freehold property

-

not provided

Tenants improvements

-

1% on cost

Plant and machinery

-

15% on reducing balance

Drainage equipment

-

15% on reducing balance and 5% on cost

Motor vehicles

-

25% on reducing balance

Office equipment

-

33% on cost and 15% on reducing balance

Freehold property contains only land and as such is not depreciated.