CSG_INVESTMENTS_LIMITED - Accounts

The directors present their annual report and financial statements for the year ended 30 June 2023.

The principal activity of the company is that of a holding company. The principal activity of the group continued to be that of the purchase and development of property for letting and resale.

The directors who held office during the year and up to the date of signature of the financial statements were as follows:

The company has made qualifying third party indemnity provisions for the benefit of its directors during the year. These provisions remain in force at the reporting date.

This report has been prepared in accordance with the provisions applicable to companies entitled to the small companies exemption.

For the financial year ended 30 June 2023 the group was entitled to exemption from audit under section 477 of the Companies Act 2006.

Directors' responsibilities under the Companies Act 2006:

• The members have not required the company to obtain an audit of its financial statements for the year in question in accordance with section 476;

• The directors acknowledge their responsibilities for complying with the requirements of the Act with respect to accounting records and the preparation of financial statements.

These financial statements have been prepared in accordance with the provisions applicable to groups and companies subject to the small companies' regime.

As permitted by s408 Companies Act 2006, the company has not presented its own profit and loss account and related notes. The company’s profit for the year was £4,898,645 (2022 - £344,710 loss).

For the financial year ended 30 June 2023 the company was entitled to exemption from audit under section 477 of the Companies Act 2006 relating to small companies.

The directors acknowledge their responsibilities for complying with the requirements of the Companies Act 2006 with respect to accounting records and the preparation of financial statements.

The members have not required the company to obtain an audit of its financial statements for the year in question in accordance with section 476.

These financial statements have been prepared in accordance with the provisions applicable to companies subject to the small companies regime.

CSG Investments Limited ("the company") is a limited company domiciled and incorporated in Scotland. The registered office is 12 Hope Street, EDINBURGH, EH2 4DB.

The group consists of CSG Investments Limited and its subsidiaries.

These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006 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 company. 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 the revaluation of freehold properties and to include investment properties at fair value. The principal accounting policies adopted are set out below.

The consolidated financial statements incorporate those of CSG Investments Limited and its subsidiaries (ie entities that the group controls through its power to govern the financial and operating policies so as to obtain economic benefits).

All financial statements are made up to 30 June 2023. Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by other members of the group.

All intra-group transactions, balances and unrealised gains on transactions between group companies are eliminated on consolidation. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.

At the time of approving the financial statements, the directors have a reasonable expectation that the group has adequate resources to continue in operational existence for the foreseeable future. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.

Turnover represents amounts receivable for rent and service charges net of VAT.

Turnover from rent receivable is recognised on a straight line basis.

Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.

Depreciation is recognised so as to write off the cost or valuation of assets less their residual values. No depreciation has been applied to the group's freehold land and buildings. The directors believe that, given the nature of the properties, the residual value is at least equal to the properties' carrying value.

For other assets, depreciation is recognised so as to write off the cost or valuation less their residual values over their useful lives on the following bases:

The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is credited or charged to the profit and loss account.

Investment property, which is property held to earn rentals and/or for capital appreciation, is measured using the fair value model and stated at its fair value at the reporting end date. The surplus or deficit on revaluation is recognised in the profit and loss account. Within the statement of changes in equity, a transfer is made to reflect the valuation movements in a separate revaluation reserve.

In the parent company financial statements, investments in subsidiaries, associates and jointly controlled entities are initially measured at cost and subsequently measured at cost less any accumulated impairment losses.

A subsidiary is an entity controlled by the group. 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 group reviews the carrying amounts of its tangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company 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 the profit and loss account, 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 the profit and loss account, 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 and deposits held at call with banks.

The group has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.

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

Financial assets and liabilities are offset and the net amounts presented in the financial statements when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.

Basic financial assets, which include certain 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 the profit and loss account.

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 the profit and loss account.

Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the group transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.

Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the group after deducting all of its liabilities.

Basic financial liabilities, including certain creditors, bank loans and amounts due to fellow group or related companies, 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 receipts 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 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.

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

Equity instruments issued by the group are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the group.

The tax expense represents the sum of the tax currently payable and deferred tax.

The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The group’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.

Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.

The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset if, and only if, there is a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.

The average monthly number of persons employed by the group during the year was 0 (2022 - 0).

During the year, the group disposed of Urbanite Investments Limited, a wholly-owned subsidiary.

If land and buildings were stated on an historical cost basis rather than a fair value basis, the total amounts included would have been as follows:

The fair value of the investment property has been arrived at on the basis of a valuation carried out by the directors at the balance sheet date and informed by, for certain properties, a valuation conducted in March 2023 by Shepherd Commercial, independent property agents, who are not connected with the company.

Investments are valued at historic cost less impairment.

Details of the company's subsidiaries at 30 June 2023 are as follows:

The registered office of Crisp Investment Limited is The Tower, 7 Advocate's Close, Edinburgh, EH1 1ND.

Bank loans stated above are secured by standard securities, assignation of rents and a floating charge over the assets of the group.

Deferred tax assets and liabilities are offset where the group or company has a legally enforceable right to do so. The following is the analysis of the deferred tax balances (after offset) for financial reporting purposes:

The group had estimated tax losses of £109k (2022 - £62k) available for offset against future trading profits.

On 24 August 2021, the company repurchased all of the B Ordinary shares in issue for a consideration of £5,322,370 including stamp duty. The B Ordinary shares were cancelled by the company on repurchase.

The rights of each remaining share class are detailed in the Articles of Association of the company which are available from Companies House.

On 12 October 2023, CSG Investments Limited purchased the share capital of CSG George Street Limited for market value of £1.

At the reporting end date the group had contracted with tenants for the following minimum lease payments:

Group

During the year, CSG Projects Limited repaid £nil (2022: £26,480) to CSG Investments Limited. At 30 June 2023, £942,761 (2022: £942,761) was due from CSG Projects Limited.

During the year, CSG Baxter’s Place Holdings Limited repaid £nil (2022: £2,878,432) to CSG Investments Limited. At 30 June 2023, £3,184,021 (2022: £3,184,021) was due from CSG Baxter’s Place Holdings Limited.

During the year, CSG Commercial Limited advanced £4,200,000 to CSG Investments Limited. This remained outstanding at year end.

During the year, as part of a group wide restructure exercise, CSG Investments Limited sold Urbanite Investments Limited to Lateral City Limited for £2. This remained outstanding at year end.

During the year, CSG Projects Limited provided services of £nil (2022: £388) to Crisp Investment. Amounts totalling £574,926 (2022: £nil) were repaid by CSG Projects Limited to Crisp Investment Limited. Crisp Investment Limited repaid £nil (2022: £nil) to CSG Projects Limited. At 30 June 2023, Crisp Investment Limited was due £28,268 (2022: £603,194) from CSG Projects Limited.

During the year Crisp Investment Limited made a charge of £8,000 (2022: £nil) to Devil’s Advocate Limited in relation to commercial rent. At 30 June 2023, this remained outstanding (2022: £nil).

During the year, Crisp Investment Limited was charged £21,627 (2022: £13,030) by FMLY Limited in respect of facilities management services on the Torphichen Street investment property. At the year-end £607 (2022: £407) remained outstanding.

During the year, Urbanite Investments Limited was repaid £72,029 (2022: £nil) by CSG Projects Limited. Rent of £33,000 (2022: £33,000) was charged by Urbanite Investments Limited to CSG Projects Limited during the year. At the year-end, a sum of £nil (2022: £72,029) was due from CSG Projects Limited.

During the year, Urbanite Investments Limited made a charge of £333,241 (2022: £284,379) to Lateral City Limited in respect of the operating results of the latter’s serviced apartment business, (14 of its 74 apartments at Old Town Chambers being owned by the company). Rent of £12,000 (2022: £21,900) was charged by Urbanite Investments Limited to Lateral City Limited during the year. Subsequent to CSG Investments Limited selling Urbanite Investments Limited to Lateral City Limited, the assets and liabilities of Urbanite Investments Limited were hived up into Lateral City Limited. As at 30 June 2023, £nil (2022: £1,590,738) was due to Lateral City Limited.

During the year Urbanite Investments Limited repaid £1,814,277 (2022: £964,439 was advanced by) to St Andrew Square (Property) Limited. At the period end, £nil (2022: £1,814,277) was due to St Andrew Square (Property) Limited.

At year-end, CSG Baxter’s Place Holdings was owed £nil (2022: £1,666,588) by Urbanite Investments Limited. At year-end CSG Hotels and Apartments Limited owed Urbanite Investments Limited £nil (2022: £3,825,000). At year-end CSG Commercial Limited owed Urbanite Investments Limited £nil (2022: £4,200,000).

Rent of £11,550 (2022: £8,400) was charged by Urbanite Investments Limited to FMLY Limited during the year. At the year-end, £nil (2022: £1,260) was outstanding.

Rent of £83,020 (2022: £67,700) was charged by Urbanite Investments Limited to Devil’s Advocate Limited during the year. At the year-end, £nil (2022: £7,340) was outstanding.

Rent of £137,500 (2022: £137,500) was charged by Urbanite Investments Limited to Roxburgh’s Court Limited during the year. At the year-end £nil (2022: £nil) was outstanding.

Company

The company has taken advantage of the exemption available in FRS 102 Section 1A whereby it has not disclosed transactions with any wholly owned subsidiary undertaking of the group.

The ultimate controlling party is Christopher Stewart.