12. Fixed asset investments

Investment in subsidiary companies at cost

Details of the investments in which the company holds 20% or more of the nominal value of any class of share capital are as follows:

All of the above investments are holdings of ordinary shares. All companies are registered in England.

13. Debtors

The amounts owed by parent undertakings are expected to be recovered after more than one year.

14. Trade and other creditors

15. Borrowings (a) Bank loans and other borrowings

At 31 December 2022 the Group had committed but undrawn credit facilities of £300m (2021 - £265m) under revolving credit facility arrangements expiring in April 2024. On 15 March 2023 the Group extended its revolving credit facilities, amounting to £350m in total, expiring in September 2026.

15. Borrowings (continued)

b) Bank loans and other long-term borrowings

Amounts falling due in two to five years:

Amounts falling due after more than five years:

15. Borrowings (continued)

b) Bank loans and other long-term borrowings (continued)

The commercial mortgage loan is secured by fixed charges over specific freehold investment properties of the Group. £968,059,000 (2021 – £858,145,000) of the total bank loans and long-term borrowings is subject to fixed rates of interest to maturity which average 4.19% (2021 – 4.44%).

All the interest payments and principal repayments relating to the loan notes issued in US dollars were swapped into sterling at fixed exchange rates. This currency swap has the effect of reducing the effective interest rate on the US dollar loans from the rates shown above to an average effective rate of 5.72% (2021 – 5.72%). This, combined with the fixed interest rates payable on the sterling loans gives an overall effective interest rate across all the series of notes, fixed until maturity, of 4.02% (2021 – 4.26%).

16. Called up share capital

17. Reserves

In the current year the non-distributable reserve and the profit and loss reserve have been combined into a single reserve account. This reserve is used to record:

Increases in fair value of freehold and leasehold investment properties and decreases to the extent that such decreases relate to the increase on the same asset. These figures are stated net of the associated deferred tax asset or liability;

Increases and decreases in fair value of freehold land and building;

– Increases and decreases in the net fair value of derivative financial instruments. The figure is stated net of the associated deferred tax release or charge; and

– Distributable profits

18. Notes to the statement of cash flows

(a) Reconciliation of profit to net cash inflow from operating activities

(b) Net debt reconciliation

19. Pension arrangements

The Group operates both defined benefit and defined contribution funded pension schemes for its employees. The assets of these schemes are held separately from those of the Group in independently administered funds.

Defined benefit scheme

The Group’s defined benefit pension scheme, which is closed to new members in 1994 and was closed to future accrual for active members on 31 March 2014, is called the Cadogan Pension & Assurance Scheme (“the Scheme”). The following disclosures exclude any allowance for defined contribution schemes operated by the Group. The liability value does not include allowance for any discretionary benefits.

The Scheme is subject to the Statutory Funding Objective under the Pensions Act 2004. A valuation of the Scheme is carried out at least once every three years to determine whether the Statutory Funding Objective is met. As part of the process the Group must agree with the Trustees of the scheme the contributions to be paid to address any shortfall against the Statutory Funding Objective.

The most recent comprehensive actuarial valuation of the Scheme was carried out as at 25 December 2019 and the next valuation of the Scheme as at 31 December 2022 is ongoing. In the event that the valuation reveals a larger deficit than expected the Group may be required to increase contributions above these set out in the existing Schedule of Conditions. Conversely, if the position is better than expected, it is possible that contributions may be reduced.

Under the current Schedule of Contributions, no contributions are required from the Group to be paid into the Scheme in the year to 31 December 2023 (2022 – no contributions).

The Group is committed to supporting the Scheme in the long term on a basis more prudent than the Scheme Funding basis used in the formal actuarial valuation as at 31 December 2019 but wants to avoid overfunding the Scheme, and therefore an Escrow Account has been established to provide additional security to the Scheme. Details regarding the Escrow Account are set out in a separate Framework Agreement. At the Review Date the Escrow Account balance was £1,500,000 (2021 – £435,000) (£1,065,000 was paid in by the Group during the year to 31 December 2022), which has not been included in the disclosures below. If the Escrow Account balance was included in the Scheme’s assets, the deficit in the Scheme would be reduced by the amount of the Escrow Account balance to £4,642,000. There were no plan amendments, curtailments or settlements during the period.

Risk Mitigation Strategies

The Scheme invests a proportion of its assets in LDI funds which are designed to hedge the interest rate risk within the Scheme.

Disclosures

Figures for disclosure in accounts for period ending 31 December under FRS 102 are set out below. Results are shown in pounds, rounded to the nearest £000.

Assumptions

The principal assumptions used to calculate Scheme liabilities include:

Post retirement mortality assumption

80% of the S2NXA tables with CMI 2021 projections using a long-term improvement rate of 1% per annum. The 2020 and 2021 weight parameters are nil.

80% of the S2NXA tables with CMI 2020 projections using a long-term improvement rate of 1% per annum. The 2020 weight parameter is nil.