Contents of the Financial Statements
for the Period Ended 30 June 2023
Directors' report period ended 30 June 2023
The directors present their report with the financial statements of the company for the period ended 30 June 2023
Principal activities of the company
Capital Industrial 2 Limited is engaged with providing financing to affiliated companies in connection with acquiring, holding and managing of property investments.
Additional information
Capital Industrial 2 Limited is a subsidiary of Capital Industrial PLC, a Real Estate Investment Trust (REIT).The Board of Directors believes the key risks of the Company’s activity include exposure to risks as described below:Credit risk – ensure rental contracts are entered into only with lessees with an appropriate credit history, or adequate deposits are in place to reduce the risk of bad debt exposure.Liquidity risk – ensure the Company has sufficient liquidity to meet its liabilities when due.Market risk (including currency risk, interest rate risk, property valuation risk and other price risk) – use of fixed interest rate loans to manage exposure to interest rate movements on bank borrowings.The risks and Company’s policies to address these are further described in note 2.Results for the yearThe Company has no recognized profit and loss and therefore no profit and loss account has been prepared.DirectorsThe Directors of the Company during the year and, unless otherwise indicated, up to the date on which the financial statements were approved, are shown on page 3. The Company has made qualifying third party indemnity provisions for the benefit of its Directors which were made during the year and remain in force at the date of this report.Future DevelopmentsThe Directors expect the level of activity in the Company for the forthcoming year to remain consistent with the current year, with no significant future developments planned.Going concernThe Directors expect the Company will continue in its present form for a period of at least 12 months from the date of approval of the financial statements based on the fact that the property-owning companies and parent company are going concerns, therefore repayment of internal loans is secured.The Capital Industrial Group has invested in high-quality assets, which, for the foreseeable future, are expected to generate positive cash flows and holds sufficient cash resources to settle its obligations as they fall due.The Directors also note the current elevated levels of uncertainty in the UK economy due to a mix of high interest rates, high inflation and low expected growth. The Directors do not expect this to have a material effect on the operations of the Group for at least the next 12 months as the Company has fixed debt until 2028, but will continue to monitor the situation and consider the effect the uncertainty may have in the future.On the bases mentioned above, the Directors have a reasonable expectation that the Company has adequate resources to continue in operational existence for a period of at least 12 months from the date of signing these financial statements.Events after the reporting periodThere were no significant events occurring after the reporting period, but before the financial statements were authorised for issue.
Directors
The directors shown below have held office during the whole of the period from
1 July 2022 to 30 June 2023
Glenn Aaronson
Pina Ardu
Harold McCarney
Jeffrey Schwartz
Trishul Thakore
The above report has been prepared in accordance with the special provisions in part 15 of the Companies Act 2006
This report was approved by the board of directors on
19 December 2023
And signed on behalf of the board by:
Name: Harold McCarney
Status: Director
Balance sheet
As at 30 June 2023
| Notes | 2023 | 2022 |
| | £ | £ |
Current assets |
Debtors: | 3 | 38,705,433 | 43,206,450 |
Total current assets: | | 38,705,433 | 43,206,450 |
Net current assets (liabilities): | | 38,705,433 | 43,206,450 |
Total assets less current liabilities: | | 38,705,433 | 43,206,450 |
Creditors: amounts falling due after more than one year: | 4 | ( 38,705,431 ) | ( 43,206,448 ) |
Total net assets (liabilities): | | 2 | 2 |
Capital and reserves |
Called up share capital: | | 2 | 2 |
Total Shareholders' funds: | | 2 | 2 |
The notes form part of these financial statements
Balance sheet statements
For the year ending 30 June 2023 the company was entitled to exemption under section 477 of the Companies Act 2006 relating to small companies.
The members have not required the company to obtain an audit in accordance with section 476 of the Companies Act 2006.
The directors acknowledge their responsibilities for complying with the requirements of the Act with respect to accounting records and the preparation of accounts.
These accounts have been prepared and delivered in accordance with the provisions applicable to companies subject to the small companies regime.
The directors have chosen not to file a copy of the company's profit and loss account.
This report was approved by the board of directors on 19 December 2023
and signed on behalf of the board by:
Name: Harold McCarney
Status: Director
The notes form part of these financial statements
Notes to the Financial Statements
for the Period Ended 30 June 2023
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1. Accounting policies
Basis of measurement and preparation
These financial statements have been prepared in accordance with the provisions of Financial Reporting Standard 101
Other accounting policies
General informationCapital Industrial 2 Limited is engaged with providing financing to affiliated companies in connection with acquiring, holding and managing of property investments.Capital Industrial 2 Limited is a subsidiary of Capital Industrial PLC, a Real Estate Investment Trust (REIT).Going concernThe Directors expect the Company will continue in its present form for a period of at least 12 months from the date of approval of the financial statements based on the fact that the property-owning companies and parent company are going concerns, therefore repayment of internal loans is secured.The Capital Industrial Group has invested in high-quality assets, which, for the foreseeable future, are expected to generate positive cash flows and holds sufficient cash resources to settle its obligations as they fall due.The Directors also note the current elevated levels of uncertainty in the UK economy due to a mix of high interest rates, high inflation and low expected growth. The Directors do not expect this to have a material effect on the operations of the Group for at least the next 12 months as the Company has fixed debt until 2028, but will continue to monitor the situation and consider the effect the uncertainty may have in the future.On the bases mentioned above, the Directors have a reasonable expectation that the Company has adequate resources to continue in operational existence for a period of at least 12 months from the date of signing these financial statements.Basis of preparationThe Company meets the definition of a qualifying entity under Financial Reporting Standard 100 (FRS 100) issued by the Financial Reporting Council. Accordingly, these financial statements have been prepared in accordance with Financial Reporting Standard 101 ‘Reduced Disclosure Framework’ (FRS 101). In preparing these financial statements, the Company applies the recognition and measurement requirements of International Financial Reporting Standards (IFRS) as adopted by the UK but makes amendments where necessary in order to comply with the Companies Act 2006 and sets out below where advantage of the FRS 101 disclosure exemptions has been taken.These financial statements have been prepared on an historical cost basis and are presented in pounds sterling which is the currency of the primary economic environment in which the Company operates.These financial statements have been prepared on a going concern basis, which presumes that the Company has adequate resources to remain in operation, and that the Directors intend it to do so, for at least one year from the date the financial statements are signed. As the Company is part of a larger group, it participates in the group’s centralised treasury arrangements and so shares banking arrangements with its parent and fellow subsidiaries.These financial statements are presented in the format as set out in the Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008 (SI 2008/410).As a qualifying entity, the Company has taken the following exemptions in the preparation of these financial statements in accordance with FRS 101:a cash flow statement and related notes;disclosures in respect of transactions with group companies;disclosures in respect of capital management;disclosures in respect of fixed asset investments; andthe effects of new but not yet effective IFRS standards.As the financial statements of Capital Industrial PLC, which are available from the registered office, include the equivalent disclosures, the Company has taken the exemptions under FRS 101 in respect of certain disclosures required by IFRS 13 ‘Fair value measurement’ and the disclosures required by IFRS 7 ‘Financial instruments disclosures.Summary of significant accounting policiesThese financial statements have been prepared in accordance with the Company’s accounting policies approved by the Board of Directors and described below:a) Current and deferred taxThe tax expense for the year comprises current and deferred tax. Current tax is provided at amounts expected to be paid (or recovered) using the tax rates and laws that have been enacted or substantively enacted by the year end date. The Company is part of a REIT group and so does not incur Corporation Tax on income from its property business. Any residual net income is subject to UK Corporation tax at 19%. Prior to the entry of the group into the REIT regime on 5 February 2021 UK rental business profits were subject to United Kingdom income tax at the prevailing basic rate of 19%.Deferred income tax is provided in full, using the liability method, on temporary differences arising between the tax base of assets and liabilities and their carrying amounts in the consolidated financial statements. However, deferred tax is not accounted for if it arises from initial recognition of an asset or liability in a transaction other than a business combination that at the time of the transaction affect neither accounting nor taxable profit or loss. Deferred tax is determined using tax rates and laws that have been enacted or substantially enacted at the year end date and are expected to apply when the related deferred tax asset is realised or the deferred tax liability is settled. Deferred tax balances are not discounted.Deferred tax assets are recognised to the extent that it is probable that future taxable profit will be available against which the temporary differences can be utilised.Deferred income tax is provided on temporary differences arising on investments in subsidiaries and joint ventures, except where the timing of the reversal of the temporary difference is controlled by the Company and it is probable that the temporary difference will not reverse in the foreseeable future. Revenues, expenses and assets are recognised net of the amount of sales tax, except for receivables and payables that are stated with the amount of sales tax included. The net amount of sales tax recoverable from, or payable to, the taxation authority is included as part of receivables or payables in the balance sheet.b) InterestInterest income and interest expense is recognised in profit or loss as it accrues, using the effective interest method.The effective interest method is a method of calculating the amortised cost of a financial asset or financial liability and of allocating the interest income or interest expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash payments or receipts throughout the expected life of the financial instrument, to the net carrying amount of the financial asset or financial liability. When calculating the effective interest rate, the Group estimates cash flows considering all contractual terms of the financial instrument. The calculation includes all fees paid or received between parties to the contract that are an integral part of the effective interest rate, transaction costs and all other premiums and discounts.c) Share capitalShares are classified as equity when there is no obligation to transfer cash or other assets.Significant accounting judgements and estimatesThe preparation of financial statements may require management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosures of contingent assets and liabilities and the reported amounts of income and expenses during the reporting period. Actual results could differ from these estimates. Information about such judgements and estimations is contained in the notes to the financial statements.There are no areas of judgement that are considered to have a significant effect on the amounts recognised in the financial statements.
Notes to the Financial Statements
for the Period Ended 30 June 2023
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2. Employees
| 2023 | 2022 |
Average number of employees during the period | 0 | 0 |