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Registered number: 00761425









CONNOLLY HOMES LIMITED









ANNUAL REPORT AND FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 MAY 2025

 
CONNOLLY HOMES LIMITED
 
 
COMPANY INFORMATION


DIRECTORS
The Connolly Foundation (UK) Limited 
D J Oldham 




COMPANY SECRETARY
D J Oldham



REGISTERED NUMBER
00761425



REGISTERED OFFICE
Manor Farm Court
Lower Sundon

Luton

Bedfordshire

LU3 3NZ




INDEPENDENT AUDITOR
Peters Elworthy & Moore
Chartered Accountants & Statutory Auditors

Salisbury House

Station Road

Cambridge

CB1 2LA





 
CONNOLLY HOMES LIMITED
 

CONTENTS



Page
Strategic report
 
1 - 2
Directors' report
 
3 - 4
Independent auditor's report
 
5 - 8
Statement of comprehensive income
 
9
Balance sheet
 
10
Statement of changes in equity
 
11
Statement of cash flows
 
12
Notes to the financial statements
 
13 - 29


 
CONNOLLY HOMES LIMITED
 
 
STRATEGIC REPORT
FOR THE YEAR ENDED 31 MAY 2025

INTRODUCTION
 
The directors presents their strategic report together with the audited financial statements for the year ended 31 May 2025. 

BUSINESS REVIEW
 
During the year the level of sales achieved was £10,766,623 (2024 - £170,940). The emphasis continues on profit margins and positive cash flows. The construction activity in Northern Ireland was licenced to a Belfast housebuilder during 2018, as part of the exit strategy from Northern Ireland construction. Continued effort has been put into planning on a number of substantial option sites in England.

PRINCIPAL RISKS AND UNCERTAINTIES
 
The directors regularly reviews the financial requirements of the Company and the associated risks. Company operations are financed from cash at bank and retained earnings. The Company does not use complicated financial instruments.

The Company's financial and operational performance is subject to a significant number of risks, which are subject to continual assessment by management in order to mitigate and minimise them. Some of these risks are outside of the directors' control, of which the principal risks are considered to be:
 
Economic conditions - the industry is sensitive to changes in employment, interest rates and consumer
confidence. Sales of land are timed to maximise returns.
Competitive markets - sales prices are constantly reviewed in an attempt to maintain the best possible
returns.
Regulatory compliance - construction is subject to extensive and complex laws and regulations, principally
relating to planning, the environment and health and safety. Specialist advice is sought in all areas.

The directors are pleased to report that the Company has continued to trade profitably.

FINANCIAL KEY PERFORMANCE INDICATORS
 
The key performance indicators of the Company are revenues, forward sales, gross profit margins, operating profits and net profit before tax. These are monitored by the directors and compared against budgets and the prior year.
 

Page 1

 
CONNOLLY HOMES LIMITED
 

STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2025

DIRECTORS' STATEMENT OF COMPLIANCE WITH DUTY TO PROMOTE THE SUCCESS OF THE COMPANY
 
The directors consider that they have acted in the way they consider, in good faith, would be most likely to promote the success of the Company for the benefit of the shareholders and, in doing so have regard (amongst other matters) to:
 
the likely consequences of any decisions in the long term;
the interests of the Company’s employees;
the need to foster the Company’s business relationships with customers, suppliers and others;
the impact of the Company’s operations on the community and the environment; and
the desirability of the Company maintaining a reputation for high standards of business conduct

The directors are committed to being a responsible business. Their intention is to behave responsibly and ensure that management operate the business in a responsible manner within the high standards of business conduct and good governance expected for such a business.

The Company holds land which is suitable for house building. This will be sold or developed to achieve a profit.

All customers are treated to the same high level of service.

The details of the Company’s principal risks and uncertainties are detailed above.

The Company’s staff are central to the business’ success. The Company has long had a reputation as a good employer. As a result, many employees have spent a large proportion of their working lives with the Company. The Company aims to be a responsible employer in its approach to pay and benefits. The health, safety and well
being of the employees is a primary consideration.

This report was approved by the board and signed on its behalf by:





D J Oldham
Director

Date: 23 December 2025

Page 2

 
CONNOLLY HOMES LIMITED
 
 
 
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 MAY 2025

The directors present their report and the financial statements for the year ended 31 May 2025.

PRINCIPAL ACTIVITY

The principal activity of the Company is land development.

RESULTS AND DIVIDENDS

The profit for the year, after taxation, amounted to £5,257,936 (2024 - £350,360).

No dividends have been paid or recommended in the current year (2024 - £NIL).

In accordance with the deed of covenant, the Company's taxable profits for the year of £5,251,488 (2024 - £309,802) have been distributed in favour of The Connolly Foundation (UK) Limited. 

DIRECTORS

The directors who served during the year were:

The Connolly Foundation (UK) Limited 
M A Callanan (resigned 26 November 2024)
D J Oldham (appointed 26 November 2024)

DIRECTORS' RESPONSIBILITIES STATEMENT

The directors are responsible for preparing the strategic report, the directors' report and the financial statements in accordance with applicable law and regulations.
 
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland'. Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Company and of the profit or loss of the Company for that period.

 In preparing these financial statements, the directors are required to:


select suitable accounting policies for the Company's financial statements and then apply them consistently;

make 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 transactions and disclose with reasonable accuracy at any time the financial position of the Company and to enable them to ensure that the financial statements comply with the Companies Act 2006They are also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

FUTURE DEVELOPMENTS

The directors are pleased with the performance of the Company over the past year and intend to continue operating in a manner that will enable continued progress on the option sites.

Page 3

 
CONNOLLY HOMES LIMITED
 
 
 
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2025

DISCLOSURE OF INFORMATION TO AUDITOR

Each of the persons who are directors at the time when this directors' report is approved has confirmed that:
 
so far as the director is aware, there is no relevant audit information of which the Company's auditor is unaware, and

the director has taken all the steps that ought to have been taken as a director in order to be aware of any relevant audit information and to establish that the Company's auditor is aware of that information.

POST BALANCE SHEET EVENTS

There have been no significant events affecting the Company since the year end.

AUDITOR

Under section 487(2) of the Companies Act 2006Peters Elworthy & Moore will be deemed to have been reappointed as auditor 28 days after these financial statements were sent to members or 28 days after the latest date prescribed for filing the accounts with the registrar, whichever is earlier.

This report was approved by the board and signed on its behalf by:
 





D J Oldham
Director

Date: 23 December 2025

Page 4

 
CONNOLLY HOMES LIMITED
 
 
 
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF CONNOLLY HOMES LIMITED
 

OPINION


We have audited the financial statements of Connolly Homes Limited (the 'Company') for the year ended 31 May 2025, which comprise the statement of comprehensive income, the balance sheet, the statement of cash flows, the statement of changes in equity and the related notes, including a summary of significant accounting policiesThe 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 Company's affairs as at 31 May 2025 and of its profit 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 Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the Company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the United Kingdom, including the Financial Reporting Council's Ethical Standard and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our 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 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.


Page 5

 
CONNOLLY HOMES LIMITED
 
 
 
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF CONNOLLY HOMES LIMITED (CONTINUED)


OTHER INFORMATION


The other information comprises the information included in the Annual Report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the Annual ReportOur opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.


We have nothing to report in this regard.


OPINION 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 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.


MATTERS ON WHICH WE ARE REQUIRED TO REPORT BY EXCEPTION
 

In the light of the knowledge and understanding of the Company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors' report.


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


adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
the 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 directors' responsibilities statement set out on page 3, 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 is 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 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 Company or to cease operations, or have no realistic alternative but to do so.


Page 6

 
CONNOLLY HOMES LIMITED
 
 
 
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF CONNOLLY HOMES LIMITED (CONTINUED)


AUDITOR'S 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 an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.


Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:

Our approach to identifying and assessing the risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, was as follows:
 
the engagement partner ensured that the engagement team collectively had the appropriate competence, capabilities and skills to identify or recognise non-compliance with applicable laws and regulations;
we identified the laws and regulations applicable to the Company through discussions with the Directors and other management, and from our commercial knowledge and experience of the property sector;
we focused on specific laws and regulations which we considered may have a direct material effect on the financial statements or the operations of the Company, including Financial Reporting Standard 102, the Companies Act 2006 and taxation legislation;
in addition, we considered provisions of other laws and regulations which do not have a direct effect on the financial statements but compliance with which might be fundamental to the Company's ability to operate or to avoid material penalties; and
we obtained an understanding of the entity’s policies and procedures on compliance with laws and regulations, including documentation of any instances of non-compliance.

We assessed the susceptibility of the Company’s financial statements to material misstatement, including obtaining an understanding of how fraud might occur, by:
 
making enquiries of management as to where they considered there was susceptibility to fraud, their knowledge of actual, suspected and alleged fraud; and
considering the internal controls in place to mitigate risks of fraud and non-compliance with laws and regulations.

To address the risk of fraud through management bias and override of controls, we;
 
performed analytical procedures to identify any unusual or unexpected relationships;
tested journal entries to identify unusual transactions;
assessed whether judgements and assumptions made in determining the accounting estimates set out in Note 3 were indicative of potential bias;
designed procedures to identify unexpected and unusual journal entries and performed testing to confirm the validity of such postings;
used Audit Data Analytics to review the client data for unusual trends and anomalies; and
performed audit work over the risk of management override of controls, including testing of journal entries and other adjustments for appropriateness, evaluating the business rationale of significant transactions outside the normal course of business and reviewing accounting estimates for bias.
 
Page 7

 
CONNOLLY HOMES LIMITED
 
 
 
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF CONNOLLY HOMES LIMITED (CONTINUED)


AUDITOR'S RESPONSIBILITIES FOR THE AUDIT OF THE FINANCIAL STATEMENTS (CONTINUED)

In response to the risk of irregularities and non-compliance with laws and regulations, we designed procedures
which included, but were not limited to:
 
agreeing financial statement disclosures to underlying supporting documentation; and
enquiring of management as to actual and potential litigation and claims.

There are inherent limitations in our audit procedures described above. The more removed that laws and regulations are from financial transactions, the less likely it is that we would become aware of non-compliance. Auditing standards also limit the audit procedures required to identify non-compliance with laws and regulations to enquiry of the Directors and other management and the inspection of regulatory and legal correspondence, if any.

Material misstatements that arise due to fraud can be harder to detect than those that arise from error as they
may involve deliberate concealment or collusion.


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 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 2006Our 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.





Edward Napper (senior statutory auditor)
  
for and on behalf of
Peters Elworthy & Moore
 
Chartered Accountants
Statutory Auditors
  
Salisbury House
Station Road
Cambridge
CB1 2LA

 
Date: 
23 December 2025
Page 8

 
CONNOLLY HOMES LIMITED
 
 
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 MAY 2025

2025
2024
Note
£
£

  

Turnover
 4 
10,766,623
170,940

Cost of sales
  
(5,850,398)
(141,920)

GROSS PROFIT
  
4,916,225
29,020

Administrative expenses
  
(557,156)
(634,007)

Other operating income
 5 
60,811
34,813

OPERATING PROFIT/(LOSS)
 6 
4,419,880
(570,174)

Interest receivable and similar income
 10 
840,306
922,738

Interest payable and similar expenses
 11 
(2,250)
(2,204)

PROFIT BEFORE TAX
  
5,257,936
350,360

Tax on profit
 12 
-
-

PROFIT FOR THE FINANCIAL YEAR
  
5,257,936
350,360

OTHER COMPREHENSIVE INCOME FOR THE YEAR
  

Actuarial gains on defined benefit pension scheme
  
(559,000)
51,000

Pension surplus not recognised
  
545,000
(95,000)

OTHER COMPREHENSIVE INCOME FOR THE YEAR
  
(14,000)
(44,000)

TOTAL COMPREHENSIVE INCOME FOR THE YEAR
  
5,243,936
306,360

The notes on pages 13 to 29 form part of these financial statements.

Page 9

 
CONNOLLY HOMES LIMITED
REGISTERED NUMBER: 00761425

BALANCE SHEET
AS AT 31 MAY 2025

2025
2024
Note
£
£

FIXED ASSETS
  

Tangible assets
 13 
5,110
6,897

Investments
 14 
100
102

  
5,210
6,999

CURRENT ASSETS
  

Stocks
 15 
17,278,964
14,002,138

Debtors
 16 
9,487,998
13,082,272

Cash at bank and in hand
 17 
15,992,407
17,973,349

  
42,759,369
45,057,759

Creditors: amounts falling due within one year
 18 
(1,845,527)
(4,138,154)

NET CURRENT ASSETS
  
 
 
40,913,842
 
 
40,919,605

TOTAL ASSETS LESS CURRENT LIABILITIES
  
40,919,052
40,926,604

Creditors: amounts falling due after more than one year
 19 
(24,930)
(24,930)

NET ASSETS
  
40,894,122
40,901,674


CAPITAL AND RESERVES
  

Called up share capital 
 20 
25,070
25,070

Capital redemption reserve
 21 
1,393
1,393

Profit and loss account
 21 
40,867,659
40,875,211

  
40,894,122
40,901,674


The financial statements were approved and authorised for issue by the board and were signed on its behalf by: 




D J Oldham
Director

Date: 23 December 2025

The notes on pages 13 to 29 form part of these financial statements.

Page 10

 
CONNOLLY HOMES LIMITED
 

STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MAY 2025


Called up share capital
Capital redemption reserve
Profit and loss account
Total equity

£
£
£
£


AT 1 JUNE 2023
25,070
1,393
40,878,653
40,905,116



Profit for the year
-
-
350,360
350,360

Actuarial losses on pension scheme
-
-
(44,000)
(44,000)

Deed of covenant
-
-
(309,802)
(309,802)



AT 1 JUNE 2024
25,070
1,393
40,875,211
40,901,674



Profit for the year
-
-
5,257,936
5,257,936


Actuarial losses on pension scheme
-
-
(14,000)
(14,000)

Deed of covenant
-
-
(5,251,488)
(5,251,488)


AT 31 MAY 2025
25,070
1,393
40,867,659
40,894,122


The notes on pages 13 to 29 form part of these financial statements.

Page 11

 
CONNOLLY HOMES LIMITED
 

STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 MAY 2025

2025
2024
£
£

CASH FLOWS FROM OPERATING ACTIVITIES

Profit for the financial year
5,257,936
350,360

ADJUSTMENTS FOR:

Depreciation of tangible assets
1,787
1,487

Profit on disposal of tangible fixed assets
(4,800)
-

Interest receivable and similar income
(840,306)
(922,738)

Interest payable and similar expenses
2,250
2,204

(Increase) in stocks
(3,276,826)
(394,535)

(Increase)/decrease in debtors
(3,340,000)
1,378,183

Decrease in amounts owed by groups
6,934,275
2,220,536

Increase/(decrease) in creditors
1,940
(117,456)

(Decrease)/increase in amounts owed to groups
(2,294,567)
1,146,801

Net contributions to defined benefit pension scheme
(14,000)
(44,000)

Deed of covenant
(5,251,489)
(309,802)

NET CASH GENERATED FROM OPERATING ACTIVITIES

(2,823,800)
3,311,040


CASH FLOWS FROM INVESTING ACTIVITIES

Purchase of tangible fixed assets
-
(3,417)

Sale of tangible fixed assets
4,800
-

Proceeds from disposal of fixed asset investments
2
-

Interest received
840,306
922,738

NET CASH FROM INVESTING ACTIVITIES

845,108
919,321

CASH FLOWS FROM FINANCING ACTIVITIES

Interest paid
(2,250)
(2,204)

NET CASH USED IN FINANCING ACTIVITIES
(2,250)
(2,204)

(DECREASE)/INCREASE IN CASH AND CASH EQUIVALENTS
(1,980,942)
4,228,157

Cash and cash equivalents at beginning of year
17,973,349
13,745,192

CASH AND CASH EQUIVALENTS AT THE END OF YEAR
15,992,407
17,973,349


CASH AND CASH EQUIVALENTS AT THE END OF YEAR COMPRISE:

Cash at bank and in hand
15,992,407
17,973,349


The notes on pages 13 to 29 form part of these financial statements.

Page 12

 
CONNOLLY HOMES LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2025

1.


GENERAL INFORMATION

Connolly Homes Limited is a company limited by shares, incorporated in England and Wales. Its registered office is Manor Farm Court, Lower Sundon, Luton, Bedfordshire, LU3 3NZ.

The Company's functional and presentational currency is GBP.

2.ACCOUNTING POLICIES

 
2.1

BASIS OF PREPARATION OF FINANCIAL STATEMENTS

The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UK and the Republic of Ireland and the Companies Act 2006.

The preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires management to exercise judgement in applying the Company's accounting policies (see note 3).

The following principal accounting policies have been applied:

 
2.2

EXEMPTION FROM PREPARING CONSOLIDATED FINANCIAL STATEMENTS

The Company is a parent company that is also a subsidiary included in the consolidated financial statements of a larger group by a parent undertaking established under the law of any part of the United Kingdom and is therefore exempt from the requirement to prepare consolidated financial statements under section 400 of the Companies Act 2006.

 
2.3

TURNOVER

Turnover is recognised to the extent that it is probable that the economic benefits will flow to the Company and the turnover can be reliably measured. Turnover is measured as the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes.

Turnover from house sales is recognised when the sale is legally complete.

Turnover in respect of work performed for local housing associations, when it is reasonably certain that a profit is foreseen, is recognised as work is carried out by reference to the stage of completion of the contract at the balance sheet date. Where there is uncertainty concerning the overall profitability of such contracts, payments on account remain on the balance sheet.

Turnover from the sale of land represents amounts receivable when the sale is legally complete.

 
2.4

OPERATING LEASES

Rentals paid under operating leases are charged to profit or loss on a straight-line basis over the lease term.

 
2.5

INTEREST INCOME

Interest income is recognised in profit or loss using the effective interest method.

Page 13

 
CONNOLLY HOMES LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2025

2.ACCOUNTING POLICIES (CONTINUED)

 
2.6

FINANCE COSTS

Finance costs are charged to profit or loss over the term of the debt using the effective interest method so that the amount charged is at a constant rate on the carrying amount. Issue costs are initially recognised as a reduction in the proceeds of the associated capital instrument.

 
2.7

PENSIONS

DEFINED CONTRIBUTION PENSION PLAN

The Company operates a defined contribution plan for its employees. A defined contribution plan is a pension plan under which the Company pays fixed contributions into a separate entity. Once the contributions have been paid the Company has no further payment obligations.

The contributions are recognised as an expense in profit or loss when they fall due. Amounts not paid are shown in accruals as a liability in the balance sheet. The assets of the plan are held separately from the Company in independently administered funds.

DEFINED BENEFIT PENSION PLAN

The Company operates a defined benefit plan for certain employees. A defined benefit plan defines the pension benefit that the employee will receive on retirement, usually dependent upon several factors including but not limited to age, length of service and remuneration. A defined benefit plan is a pension plan that is not a defined contribution plan.

The liability recognised in the balance sheet in respect of the defined benefit plan is the present value of the defined benefit obligation at the end of the balance sheet date less the fair value of plan assets at the balance sheet date (if any) out of which the obligations are to be settled.

The defined benefit obligation is calculated using the projected unit credit method. Annually the company engages independent actuaries to calculate the obligation. The present value is determined by discounting the estimated future payments using market yields on high quality corporate bonds that are denominated in sterling and that have terms approximating to the estimated period of the future payments ('discount rate').

The fair value of plan assets is measured in accordance with the FRS 102 fair value hierarchy and in accordance with the company's policy for similarly held assets. This includes the use of appropriate valuation techniques.

Actuarial gains and losses arising from experience adjustments and changes in actuarial assumptions are charged or credited to other comprehensive income. These amounts together with the return on plan assets, less amounts included in net interest, are disclosed as 'Remeasurement of net defined benefit liability'.

The cost of the defined benefit plan, recognised in profit or loss as employee costs, except where included in the cost of an asset, comprises:
a) the increase in net pension benefit liability arising from employee service during the period; and
b) the cost of plan introductions, benefit changes, curtailments and settlements.

The net interest cost is calculated by applying the discount rate to the net balance of the defined benefit obligation and the fair value of plan assets. This cost is recognised in profit or loss as a 'finance expense'.

Page 14

 
CONNOLLY HOMES LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2025

2.ACCOUNTING POLICIES (CONTINUED)

 
2.8

TAXATION

Tax is recognised in profit or loss except that a charge attributable to an item of income and expense recognised as other comprehensive income or to an item recognised directly in equity is also recognised in other comprehensive income or directly in equity respectively.

The current income tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the balance sheet date in the countries where the Company operates and generates income.

Deferred tax balances are recognised in respect of all timing differences that have originated but not reversed by the balance sheet date, except that:
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; and
Any deferred tax balances are reversed if and when all conditions for retaining associated tax allowances have been met.

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 tax is determined using tax rates and laws that have been enacted or substantively enacted by the balance sheet date.


 
2.9

TANGIBLE FIXED ASSETS

Tangible fixed assets under the cost model are stated at historical cost less accumulated depreciation and any accumulated impairment losses. Historical cost includes expenditure that is directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management.

Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, using the straight-line method.

The estimated useful lives range as follows:

Plant and machinery
-
25 - 33.3% straight line
Office equipment
-
20% straight line

The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date.

Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in profit or loss.

 
2.10

VALUATION OF INVESTMENTS

Investments in subsidiaries are measured at cost less accumulated impairment.

Page 15

 
CONNOLLY HOMES LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2025

2.ACCOUNTING POLICIES (CONTINUED)

 
2.11

STOCK AND WORK IN PROGRESS

Stocks are stated at the lower of cost and net realisable value. Net realisable value is calculated as the estimated selling price less costs to complete and sell. Work in progress includes labour and attributable overheads.

At each balance sheet date, stocks are assessed for impairment. If stock is impaired, the carrying amount is reduced to its selling price less costs to complete and sell. The impairment loss is recognised immediately in the statement of comprehensive income.

 
2.12

DEBTORS

Short-term debtors are measured at transaction price, less any impairment. Loans receivable are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method, less any impairment.

 
2.13

CASH AND CASH EQUIVALENTS

Cash is represented by cash in hand and deposits with financial institutions repayable without penalty on notice of not more than 24 hours. Cash equivalents are highly liquid investments that mature in no more than three months from the date of acquisition and that are readily convertible to known amounts of cash with insignificant risk of change in value.

In the statement of cash flows, cash and cash equivalents are shown net of bank overdrafts that are repayable on demand and form an integral part of the Company's cash management.

 
2.14

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.

Page 16

 
CONNOLLY HOMES LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2025

2.ACCOUNTING POLICIES (CONTINUED)

 
2.15

FINANCIAL INSTRUMENTS

Financial instruments are recognised in the Company's balance sheet when the Company becomes party to the contractual provisions of the instrument.

Basic financial assets

Basic financial assets, which include trade and other debtors, cash and bank balances, are initially measured at their transaction price (adjusted for transaction costs except in the initial measurement of financial assets that are subsequently measured at fair value through profit and loss) and are subsequently carried at their amortised cost using the effective interest method, less any provision for impairment, 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.

Discounting is omitted where the effect of discounting is immaterial. The Company's cash and cash equivalents, trade and most other debtors due with the operating cycle fall into this category of financial instruments.

Impairment of financial assets

At the end of each reporting period financial assets measured at amortised cost are assessed for objective evidence of impairment. 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. 

Financial assets are impaired when events, subsequent to their initial recognition, indicate the estimated future cash flows derived from the financial asset(s) have been adversely impacted. The impairment loss will be the difference between the current carrying amount and the present value of the future cash flows at the asset(s) original effective interest rate.

If there is a favourable change in relation to the events surrounding the impairment loss then the impairment can be reviewed for possible reversal. The reversal will not cause the current carrying amount to exceed the original carrying amount had the impairment not been recognised. The impairment reversal is recognised in the profit or loss.

Basic financial liabilities

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 Company after the deduction of all its liabilities.

Basic financial liabilities, which include trade and other creditors, bank loans and other loans are initially measured at their transaction price (adjusting for transaction costs except in the initial measurement of financial liabilities that are subsequently measured at fair value through profit and loss). When this constitutes a financing transaction, whereby the debt instrument is measured at the present value of the future payments discounted at a market rate of interest, discounting is omitted where the effect of discounting is immaterial.

Debt instruments are subsequently carried at their amortised cost using the effective interest rate method.

Trade creditors are obligations to pay for goods and services that have been acquired in the ordinary course of business from suppliers. Trade creditors are classified as current liabilities if the payment is
Page 17

 
CONNOLLY HOMES LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2025

2.ACCOUNTING POLICIES (CONTINUED)


2.15
FINANCIAL INSTRUMENTS (CONTINUED)

due within one year. If not, they represent non-current liabilities. Trade creditors are initially recognised at their transaction price and subsequently are measured at amortised cost using the effective interest method. Discounting is omitted where the effect of discounting is immaterial.

Derecognition of financial assets

Financial assets are derecognised when their contractual right to future cash flow expire, or are settled, or when the Company transfers the asset and substantially all the risks and rewards of ownership to another party. If significant risks and rewards of ownership are retained after the transfer to another party, then the Company will continue to recognise the value of the portion of the risks and rewards retained.

Derecognition of financial liabilities

Financial liabilities are derecognised when the Company's contractual obligations expire or are discharged or cancelled.

 
2.16

DISTRIBUTION OF PROFITS

In accordance with the deed of covenant, the Company's taxable profits for the year of £5,251,488 (2024 - £309,802) have been distributed in favour of The Connolly Foundation (UK) Limited.


3.



JUDGEMENTS IN APPLYING ACCOUNTING POLICIES AND KEY SOURCES OF ESTIMATION UNCERTAINTY

Preparation of the financial statements requires management to make significant judgements and estimates. The items in the financial statements where these judgements and estimates have been made include:

Stock and work in progress - management makes judgements and estimates as to the stage of completion of each building contract, which in turn has an effect on the valuation of work in progress at the balance sheet date.


4.


TURNOVER

An analysis of turnover by class of business is as follows:


2025
2024
£
£

Property and land sales
10,766,623
170,940


All turnover arose within the United Kingdom.

Page 18

 
CONNOLLY HOMES LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2025

5.


OTHER OPERATING INCOME

2025
2024
£
£

Profit on disposal of fixed assets
4,800
-

Net rents receivable
56,011
34,813

60,811
34,813



6.


OPERATING PROFIT/(LOSS)

The operating profit/(loss) is stated after charging:

2025
2024
£
£

Other operating lease rentals
22,390
64,385


7.


AUDITOR'S REMUNERATION

During the year, the Company obtained the following services from the Company's auditor:


2025
2024
£
£

Fees payable to the Company's auditor for the audit of the Company's financial statements
19,550
18,650

The Company has taken advantage of the exemption not to disclose amounts paid for non-audit services as these are disclosed in the consolidated accounts of the parent Company.

Page 19

 
CONNOLLY HOMES LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2025

8.


EMPLOYEES

Staff costs, including directors' remuneration, were as follows:


2025
2024
£
£

Wages and salaries
90,269
173,030

Social security costs
11,837
23,228

Cost of defined contribution scheme
2,015
67,900

104,121
264,158


The average monthly number of employees, including the directors, during the year was as follows:


        2025
        2024
            No.
            No.







Directors
1
1


9.


DIRECTORS' REMUNERATION

2025
2024
£
£

Directors' emoluments
90,321
173,030

Company contributions to defined contribution pension schemes
(6,667)
60,000

83,654
233,030


During the year retirement benefits were accruing to no directors (2024 - 1) in respect of defined contribution pension schemes.


10.


INTEREST RECEIVABLE AND SIMILAR INCOME

2025
2024
£
£


Bank interest receivable
694,410
758,818

Other interest receivable
145,896
163,920

840,306
922,738

Page 20

 
CONNOLLY HOMES LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2025

11.


INTEREST PAYABLE AND SIMILAR EXPENSES

2025
2024
£
£


Bank interest payable
2,250
2,204


12.


TAXATION


2025
2024
£
£



TOTAL CURRENT TAX
-
-

FACTORS AFFECTING TAX CHARGE FOR THE YEAR

No taxation arises in the current year as a result of gift aid donations made to the Company's charitable parent.


FACTORS THAT MAY AFFECT FUTURE TAX CHARGES

There were no factors that may affect future tax charges.

Page 21

 
CONNOLLY HOMES LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2025

13.


TANGIBLE FIXED ASSETS





Plant and machinery
Office equipment
Total

£
£
£



COST


At 1 June 2024
40,000
8,934
48,934


Disposals
(40,000)
-
(40,000)



At 31 May 2025

-
8,934
8,934



DEPRECIATION


At 1 June 2024
40,000
2,037
42,037


Charge for the year
-
1,787
1,787


Disposals
(40,000)
-
(40,000)



At 31 May 2025

-
3,824
3,824



NET BOOK VALUE



At 31 May 2025
-
5,110
5,110



At 31 May 2024
-
6,897
6,897

Page 22

 
CONNOLLY HOMES LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2025

14.


FIXED ASSET INVESTMENTS





Investments in subsidiary companies

£



COST


At 1 June 2024
102


Disposals
(2)



At 31 May 2025
100





SUBSIDIARY UNDERTAKING


The following was a subsidiary undertaking of the Company:

Name

Registered office

Principal activity

Class of shares

Holding

DB (NI) Realisations Limited
[1]
Property development
Ordinary
100%

[1] 50 Bedford Street, Belfast, Northern Ireland, BT2 7FW.


15.


STOCKS

2025
2024
£
£

Land held for development
17,278,964
14,002,138


Page 23

 
CONNOLLY HOMES LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2025

16.


DEBTORS


2025
2024
£
£

DUE AFTER MORE THAN ONE YEAR

Prepayments and accrued income
-
1,360,436

-
1,360,436

DUE WITHIN ONE YEAR

Trade debtors
4,750,000
-

Amounts owed by group undertakings
3,044,233
9,978,507

Other debtors
183,220
176,832

Prepayments and accrued income
1,510,545
1,566,497

9,487,998
13,082,272



17.


CASH AND CASH EQUIVALENTS

2025
2024
£
£

Cash at bank and in hand
15,992,407
17,973,349



18.


CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR

2025
2024
£
£

Trade creditors
14,665
12,005

Amounts owed to group undertakings
1,160,669
3,455,236

Other taxation and social security
150
8,141

Accruals and deferred income
670,043
662,772

1,845,527
4,138,154


Disclosure of the terms and conditions attached to the non-equity shares is made in note 20.


19.


CREDITORS: AMOUNTS FALLING DUE AFTER MORE THAN ONE YEAR

2025
2024
£
£

Share capital treated as debt (see note 20)
24,930
24,930


Page 24

 
CONNOLLY HOMES LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2025

20.


SHARE CAPITAL

2025
2024
£
£
SHARES CLASSIFIED AS EQUITY

ALLOTTED, CALLED UP AND FULLY PAID



25,070 (2024 - 25,070) Ordinary shares of £1.00 each
25,070
25,070

2025
2024
£
£
SHARES CLASSIFIED AS DEBT

ALLOTTED, CALLED UP AND FULLY PAID



20,000 (2024 - 20,000) 4.9% preference shares of £1.00 each
20,000
20,000
4,900 (2024 - 4,900) 3.5% preference shares of £1.00 each
4,900
4,900
30 (2024 - 30) 4.2% participating preference shares of £1.00 each
30
30

24,930

24,930


Each class of preference shares confers a right to a capital preference over the ordinary shares in winding-up but does not entitle the holders to vote on matters in general meetings other than those pertaining to the preference shares or their dividend entitlements. The non-cumulative preference shares confer no other rights to participate in the profits or assets of the Company. The participating preference shares confer on the holders a right to additional dividends based on profits available for distribution in any year, but confer no other rights to participate in the profits or assets of the Company.


21.


RESERVES

Capital redemption reserve

The capital redemption reserve includes amounts transferred following the redemption or purchase of a Company's own shares.

Profit and loss account

The profit and loss account includes all current and prior periods retained profit and losses.

Page 25

 
CONNOLLY HOMES LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2025
22.


ANALYSIS OF NET DEBT




At 1 June 2024
Cash flows
At 31 May 2025
£

£

£

Cash at bank and in hand

17,973,349

(1,980,942)

15,992,407

Debt due after 1 year

(24,930)

-

(24,930)



17,948,419
(1,980,942)
15,967,477


23.


PENSION COMMITMENTS

The Company operates two defined contribution pension schemes. The assets of the schemes are held separately from those of the Company in independently administered funds. The pension charge represents contributions payable by the Company to the funds and amounted to £2,015 (2024 - £67,900). Contributions totalling £NIL (2024 - £6,667) were payable to the funds at the balance sheet date.

The Company operates a defined benefit pension scheme.

The Connolly Group Pension Fund ("the Fund") provides benefits for some of the employees of the Company and some employees of fellow group companies.

The Fund became “paid up” in 2003, since when members have built up no further benefits. The assets of the Fund are administered by trustees and are independent of the companies’ finances. Contributions by the participating employers are paid to the Fund in accordance with the recommendations of an independent actuarial advisor.

The funding plan is for the Fund to hold assets equal to the value of the benefits earned by employees, based on a set of assumptions used for funding the Fund. The funding assumptions differ from the assumptions used to calculate the figures for these accounts, and therefore produce different results. If there is a shortfall against this funding plan, then the participating employers and trustees agreed on deficit contributions to meet this deficit over a period. As the Fund was in a surplus at 1 October 2023, no deficit contributions were required.

The results of the formal actuarial valuation as at 1 October 2023 were updated to the accounting date by an independent qualified actuary in accordance with FRS102. As required by FRS102, the value of the defined benefit liabilities has been measured using the projected unit method and both the assets and the liabilities include the value of those pensions in payment which are secured with insured annuities.
 
Page 26

 
CONNOLLY HOMES LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2025
 
23.PENSION COMMITMENTS (CONTINUED)

The results, based on assumptions used for FRS 102, are as follows:



Reconciliation of present value of plan liabilities:


2025
2024
£
£


At the beginning of the year
1,215,000
1,202,000

Interest on obligation
60,000
62,000

Actuarial gains/losses
236,000
33,000

Benefits paid
(74,000)
(82,000)

AT THE END OF THE YEAR
1,437,000
1,215,000



Reconciliation of present value of plan assets:


2025
2024
£
£


At the beginning of the year
2,258,000
2,102,000

Running costs
(12,000)
(17,000)

Interest income
113,000
110,000

Actuarial gains/losses
(323,000)
84,000

Contributions
26,000
61,000

Benefits paid
(74,000)
(82,000)

AT THE END OF THE YEAR
1,988,000
2,258,000

The total loss on the assets over the year was £210,000 (2023/24 - a gain of £194,000).


Composition of plan assets:


2025
2024
£
£


Equity instruments
467,000
471,000

Debt instruments
689,000
738,000

Property
292,000
279,000

All other assets
540,000
770,000

TOTAL PLAN ASSETS
1,988,000
2,258,000

Page 27

 
CONNOLLY HOMES LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2025
 
23.PENSION COMMITMENTS (CONTINUED)

2025
2024
£
£


Fair value of plan assets
1,988,000
2,258,000

Present value of plan liabilities
(1,437,000)
(1,215,000)

Amount not recognised due to asset limit
(551,000)
(1,043,000)

NET PENSION SCHEME LIABILITY
-
-

The plan does not invest directly in property occupied by the Company or in financial securities issued by the Company.


The amounts recognised in profit or loss are as follows:

2025
2024
£
£


Running costs
12,000
17,000






The following table sets out the significant assumptions used for the plan:

2025
2024
Discount rate


5.7% pa

5.1% pa
 
Inflation measured by:



 
- Retail Prices Index (RPI)


3.0% pa

3.2% pa
 
- Consumer Prices Index (CPI)


2.2% pa

2.4% pa
 
- RPI with a maximum of 5% pa and a minimum of 0% pa


2.9% pa

3.1% pa
 
- CPI with a maximum of 5% pa and a minimum of 0% pa


2.2% pa

2.4% pa
 
Fixed 3% pa


3.0% pa

3.0% pa
 
Pension increases in deferment


2.2% pa

2.4% pa
 
Life expectancy of male aged 65 at balance sheet date


21.4 years

21.5 years
 
Life expectancy of male aged 65 in 20 years’ time


22.4 years

22.5 years
 





Page 28

 
CONNOLLY HOMES LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2025

24.


RELATED PARTY TRANSACTIONS

The parent company prepares consolidated group accounts and, accordingly, the Company has taken advantage of the exemptions contained within FRS 102 paragraph 33.1A not to disclose transactions with wholly owned group undertakings.


25.


CONTROLLING PARTY

The Company is a subsidiary of The Connolly Foundation (UK) Limited, which is the immediate and ultimate parent entity.

 
Page 29