Company Registration No. 02070501 (England and Wales)
CARMEL SOUTHEND LIMITED
FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023
PAGES FOR FILING WITH REGISTRAR
CARMEL SOUTHEND LIMITED
CONTENTS
Page
Balance sheet
1
Notes to the financial statements
2 - 10
CARMEL SOUTHEND LIMITED
BALANCE SHEET
AS AT
31 MARCH 2023
31 March 2023
- 1 -
2023
2022
Notes
£
£
£
£
Fixed assets
Tangible assets
8
10,398
10,958
Investment properties
9
25,150,000
19,850,712
25,160,398
19,861,670
Current assets
Debtors
11
6,790,591
13,140,102
Investments
12
209,671
216,181
Cash at bank and in hand
999,378
1,025,294
7,999,640
14,381,577
Creditors: amounts falling due within one year
13
(2,121,785)
(3,188,674)
Net current assets
5,877,855
11,192,903
Total assets less current liabilities
31,038,253
31,054,573
Creditors: amounts falling due after more than one year
14
(13,937,353)
(13,848,822)
Provisions for liabilities
Deferred tax liability
15
1,263,647
1,660,458
(1,263,647)
(1,660,458)
Net assets
15,837,253
15,545,293
Capital and reserves
Called up share capital
16
100
100
Investment property reserve
9,182,627
9,945,784
Profit and loss reserves
6,654,526
5,599,409
Total equity
15,837,253
15,545,293

The directors of the company have elected not to include a copy of the profit and loss account within the financial statements.true

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

The financial statements were approved by the board of directors and authorised for issue on 12 March 2024 and are signed on its behalf by:
D  Uzel
Director
Company Registration No. 02070501
CARMEL SOUTHEND LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023
- 2 -
1
Accounting policies
Company information

Carmel Southend Limited is a private company limited by shares incorporated in England and Wales. The registered office is Acre House, 11-15 William Road, London, United Kingdom, NW1 3ER.

1.1
Accounting convention

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 investment properties and certain financial instruments at fair value. The principal accounting policies adopted are set out below.

1.2
Going concern

The directors have considered the effect on the Company's activities of the current global challenges including rising interest rates and rising cost of living in the UK. The directors have determined that a degree of uncertainty exists in relation to the ability of the company's tenants to fulfil their rental and other obligations, however the directors have been in contact with tenants and are of the opinion that the majority of rents for the foreseeable future will be received. To date, the company has not experienced significant difficulties in receiving rental amounts due from tenants. true

 

Accordingly, at the time of approving the financial statements, the directors have a reasonable expectation that the Company has adequate resources to continue in operation for the foreseeable future. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.

1.3
Turnover

Turnover represents rental income, property insurance premiums, service charges receivable, insurance claims and dilapidations receivable excluding value added tax.

 

Recognition of rental income takes into account the terms of the lease including any lease incentives which are spread over the length of the lease.

 

Property insurance premiums and service charges receivable are recognised over the period it relates to. Where the tenant pays in advance, the company defers that amount and recognises it as turnover over the period it relates to on a straight line basis.

 

Insurance claims are recognised when the right to receive payment is established.

 

Where the right to consideration arises from the occurrence of a critical event the turnover is recognised when the event occurs.

1.4
Tangible fixed assets

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

Depreciation is recognised so as to write off the cost of assets less their residual values over their useful lives on the following bases:

Fixtures and fittings
20% Reducing Balance

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 profit or loss.

CARMEL SOUTHEND LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
1
Accounting policies
(Continued)
- 3 -
1.5
Investment properties

Investment property, which is property held to earn rentals and/or for capital appreciation, is initially recognised at cost, which includes the purchase cost and any directly attributable expenditure. Subsequently it is measured at fair value at the reporting end date. The gain or loss on valuation is recognised in profit or loss and is subsequently transferred within equity to the "investment property reserve" together with the associated deferred tax.

1.6
Impairment of fixed assets

At each reporting period end date, the company 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). The impairment loss (if any) is recognised in the profit and loss account.

1.7
Financial instruments

The company 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 company's balance sheet when the company becomes party to the contractual provisions of the instrument.

 

Financial assets and liabilities are offset, with 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

Basic financial assets, which include 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.

Impairment of financial assets

Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.

Classification of 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 deducting all of its liabilities.

Basic financial liabilities

Basic financial liabilities, including creditors and non bank loans 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 payments 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 rate method.

1.8
Equity instruments

Equity instruments issued by the company 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 company.

1.9
Taxation

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

CARMEL SOUTHEND LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
1
Accounting policies
(Continued)
- 4 -
Current 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 company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.

Deferred tax

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.

1.10
Employee benefits

The costs of short-term employee benefits are recognised as a liability and an expense.

 

The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.

1.11

Investment property reserve

The investment property reserve comprises the fair value uplift on the company's investment property net of the associated deferred tax. Any movement in the fair value of the investment property and/or the deferred tax associated with it during the year is transferred from the profit and loss account into this reserve as a reserve movement in the Statement of Changes in Equity. The reserve is non-distributable.

1.12

Investments

Investments comprise investments in listed shares which are initially measured at transaction price excluding transaction costs and are subsequently measured at fair value at each reporting date. Changes in fair value are recognised through profit and loss.

CARMEL SOUTHEND LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
- 5 -
2
Judgements and key sources of estimation uncertainty

In the application of the company’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

 

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.

Critical judgements

The following judgements (apart from those involving estimates) have had the most significant effect on amounts recognised in the financial statements.

Fair value of investment properties

Investment properties are valued at fair value with changes in fair value being recognised in the profit and loss account. The fair value of the investment properties have been arrived at on the basis of a valuation carried out in July 2023 by Knight Frank LLP Chartered Surveyors. The directors do not consider there to be any material changes to the fair value of the investment properties from the balance sheet date and July 2023 when the valuation took place and therefore believe the fair value of the investment properties recognised in the accounts is not materially misstated. Making this assessment requires judgements to be made by the directors by reference to market conditions.

 

Deferred tax has been recognised on the investment property based on the estimated fair value at the year-end date.

Recoverability of intercompany debtor

As at 31 March 2023, Carmel Southend Limited was owed £5,525,906 (2022: £4,781,591) by Grammont Properties Limited. The balance is considered to be recoverable. Therefore, as at 31 March 2023, no provision is required.

3
Employees

The average monthly number of persons (including directors) employed by the company during the year was:

2023
2022
Number
Number
Total
2
2
4
Interest receivable and similar income
2023
2022
£
£
Interest receivable and similar income includes the following:
2433
6039
5
Interest payable and similar expenses
2023
2022
£
£
Interest payable and similar expenses includes the following:
Interest payable to group undertakings
470,775
466,410
CARMEL SOUTHEND LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
- 6 -
6
Fair value gains/(losses) on financial assets
2023
2022
£
£
Fair value gains/(losses) on financial assets
Change in value of current asset investments held at fair value through profit or loss
(9,434)
2,123
Other gains/(losses)
Loss on disposal of investments held at fair value
(85,577)
(125,367)
(Loss)/gain on disposal of current asset investments
(7,039)
705
(102,050)
(122,539)
7
Taxation
2023
2022
£
£
Current tax
UK corporation tax on profits for the current period
209,324
466,012
Adjustments in respect of prior periods
(751,025)
-
0
Total UK current tax
(541,701)
466,012
Foreign current tax on profits for the current period
63
58
Total current tax
(541,638)
466,070
Deferred tax
Origination and reversal of timing differences
(396,811)
437,783
Total tax (credit)/charge
(938,449)
903,853
CARMEL SOUTHEND LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
- 7 -
8
Tangible fixed assets
Fixtures and fittings
£
Cost
At 1 April 2022
30,504
Additions
2,040
At 31 March 2023
32,544
Depreciation and impairment
At 1 April 2022
19,546
Depreciation charged in the year
2,600
At 31 March 2023
22,146
Carrying amount
At 31 March 2023
10,398
At 31 March 2022
10,958
9
Investment property
2023
£
Fair value
At 1 April 2022
19,850,712
Additions
6,459,153
Net gains or losses through fair value adjustments
(1,159,865)
At 31 March 2023
25,150,000

The fair value of the investment properties has been arrived at on the basis of a valuation carried out in July 2023 by Knight Frank Chartered Surveyors, who are not connected with the company. The valuation has been carried out using the investment method whereby market values of the freehold and leasehold interests in the properties have been derived, subject to existing tenancies and taking into account comparable investment and rental transactions, together with evidence of demand with the vicinity of the subject properties.

The directors do not consider there to be any material changes to the fair value of the investment properties from the balance sheet date and July 2023 when the valuation took place and therefore believe the fair value of the investment properties recognised in the accounts is not materially misstated.

The historic cost of the investment properties held by the company as at 31 March 2023 is £14,705,738 (2022: £8,246,585).

10
Financial instruments
2023
2022
£
£
Carrying amount of financial assets
Instruments measured at fair value through profit or loss
209,671
216,181
CARMEL SOUTHEND LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
- 8 -
11
Debtors
2023
2022
Amounts falling due within one year:
£
£
Trade debtors
74,274
350,124
Amounts owed by group undertakings
5,951,290
5,199,267
Other debtors
765,027
7,589,180
Prepayments and accrued income
-
0
1,531
6,790,591
13,140,102

Included within other debtors is £763,630 (2022: £590,428) owed by related entities.

 

All balances due from group undertakings and related entities are interest free and repayable on demand.

12
Current asset investments
2023
2022
£
£
Listed investments
209,671
216,181

Listed investments are stated at the market value at the balance sheet date and is based on the market value of the investments as provided by the investment brokers.

13
Creditors: amounts falling due within one year
2023
2022
£
£
Trade creditors
1,840
2,425
Corporation tax
209,324
751,025
Other taxation and social security
86,272
1,242,191
Other creditors
1,218,437
694,286
Accruals and deferred income
605,912
498,747
2,121,785
3,188,674

The company’s non bank loans are detailed in note 14.

 

Included within other creditors is £908,963 (2022: £380,990) owed to related entities. This amount is unsecured, interest free and repayable on demand.

CARMEL SOUTHEND LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
- 9 -
14
Creditors: amounts falling due after more than one year
2023
2022
£
£
Non bank loans
13,937,353
13,848,822

The maturity date of the non bank loans is 17 September 2025. The company had non bank loans principal of £14,127,896. As at 31 March 2023, the loan had a net carrying value of £13,937,353 (2022: £13,848,822) after amortised transaction costs. These are secured by a legal charge over certain assets of the company. Interest is payable quarterly at an interest rate of 2.7% per annum. The principal amount of the non bank loans is repaid on maturity.

15
Deferred taxation

The following are the major deferred tax liabilities and assets recognised by the company and movements thereon:

Liabilities
Liabilities
2023
2022
Balances:
£
£
Accelerated capital allowances
2,012
2,115
Investment property
1,261,635
1,658,343
1,263,647
1,660,458
2023
Movements in the year:
£
Liability at 1 April 2022
1,660,458
Credit to profit or loss
(396,811)
Liability at 31 March 2023
1,263,647
16
Called up share capital
2023
2022
Ordinary share capital
£
£
Issued and fully paid
Ordinary shares of £1 each
100
100
17
Audit report information

As the profit and loss account has been omitted from the filing copy of the financial statements the following information in relation to the audit report on the statutory financial statements is provided in accordance with s444(5B) of the Companies Act 2006:

The auditor's report was unqualified.

The senior statutory auditor was Mandy Janes.
The auditor was HW Fisher LLP.
CARMEL SOUTHEND LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
- 10 -
18
Financial commitments, guarantees and contingent liabilities

The company has given cross party guarantees with group and related entities for non bank loans provided to these entities. At the balance sheet date, the non bank loan principal owed to lenders by these related entities for the non bank loans was £24,372,134 (2022: £24,372,134).

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