The Directors present the strategic report for Sager House (Almeida) Limited (the "Company") for the year ended 31 December 2024.

Turnover is driven by the service charge and leasing of commercial units.

The Directors continue to focus on maximizing the number of leased commercial units over the coming year. As the leasing has progressed and the market is in a strong position, the Directors have decided to put the whole asset up for sale post year end.

The Directors believe that the attractive location and expected strong retail performance in 2025 will increase the future turnover and make the site more attractive to prospective purchasers. These factors along with continued careful management of operational costs are expected to drive profitability for the year ahead.

The Directors are positive about the outlook for London as a global city with continuing appeal to businesses and people wanting to live in a vibrant environment. The Company’s property assets are located within a prime London metropolitan area and are well placed to benefit from the positive long-term outlook for the city.

A part of the Company's strategy is to identify risks and uncertainties in the course of its day to day operations and assess those risks with a view to minimizing or mitigating these where possible. The Directors consider that the principal risks and uncertainties faced by the Company are in the following categories:

Market risk

The major market risk factors affecting property investment activity are:

-A lack of demand from occupiers which affects the amount of rent obtainable for the commercial properties and the level of occupancy in the portfolio of the Company;

-Excess in the supply of properties for rent in the Company´s market;

-Tenant defaults in the payment of rent and charges; and

-Increased interest rates.

The Company manages these risks through suitable policies and procedures. The Company is committed to improving performance through regular review and continuous learning. The maximum risk exposure to the Company as at 31 December 2024 is represented by the value of its investment property.

Liquidity risk

The liquidity risk faced by the Company arises from the inability to access funds to cover future commitments.

The Company manages this liquidity risk by continually monitoring its cash flow commitments, credit facilities, and cash reserves with a wider focus on any potential economic impact of being able to service its existing debt facilities and refinance it prior to maturity.

Credit risk

The Company's credit risk arises from its exposure to unpaid rental debts that could create liquidity issues if the magnitude was of sufficient size.

This is mitigated through an assessment of the credit-worthiness of prospective new tenants and other sources of information such as publicly available reports on potential commercial tenants.

Interest rate risk

Interest rate fluctuations affect future cash outflows of liabilities indexed to variable interest rates.

The Company has mitigated this risk through interest swap derivative contracts.

The Company reported a loss before taxation of £17.5m (2023: £39.2m). The loss has decreased significantly from 2023 due to a large decrease in loss on investment property from fair valuation, with no significant change in operating cost.

The positive outlook for the future is evidenced by the Company is operating at 97% (2023: 92%) occupancy. The increase in rental income in 2024 as compared to 2023 is due to the increasing stability of the operation of the asset with a continued increase in new leasehold tenants as the site approaches maximum occupancy.

The Directors consider, both individually and together, 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 its stakeholders (having regard to matters set out in Section 172 (1) (a) to (f) of the Companies Act 2006) in the decisions taken during the year ended 31 December 2024. Such considerations are set out below, having regard for, amongst other matters, the following:

- the need for the Company to foster strong business relationships with all stakeholders;

- the likely long term consequences of any decision making during the financial year;

- the need to communicate strategic decisions to stakeholders and explain the thought process and impact;

- the desirability of the Company maintaining a reputation for high standards of business conduct;

- the impact of the Company's operations on the community and the environment;

- the health, safety and wellbeing of suppliers and those on-site; and

- the need to act fairly and with integrity.

Whilst the Company does not have any employees (refer to note 5), and does not envision any significant impact to the community or environment due to its operations, no disclosures in relation to the same have been made below. The Directors understand the importance of maintaining positive relations with all stakeholders.

Suppliers

As part of ensuring that the Company’s and its stakeholders’ commercial dealings are aligned, regular meetings and other forms of engagement are undertaken. This allows the Company to build on the relationships, discuss the appropriate strategic decisions and ensure milestones are met. This is important to ensure that the principal activity of the Company meets its customers' requirements whilst suppliers are treated ethically and fairly.

Customers

Our commercial tenants are our principal customers. The Company continuously seeks to identify areas of the property which can be improved with the aim to provide an overall better area in which our tenants can operate. The Company also engages with tenants in order to identify areas which can be refined in order to provide a more engaging space to the local community which ultimately leads to increased commercial performance.

Shareholders

The Company seeks to generate a long term and stable return for its shareholders. Growth rates in revenue, together with strong performance in residential sales and contract exchanges on new commercial tenants indicate the Company is servicing the requirements of its shareholders.

On behalf of the board

The Directors present their annual report and financial statements for the year ended 31 December 2024.

During the year the Company continued to manage the operation of a mixed use site at Islington Square, London. The Company has leased 39 of 41 available commercial units.

The results for the year are set out on page 9 and further details on the key performance indicators relating to the Company during both the current and prior financial years ended can be reviewed in the Strategic Report on page 2. The Directors do not recommend payment of a dividend for the year (2023: £nil).

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.

During the year, the Company made charitable donations of £31,500 (2023:£30,000).

The Company intends to increase the number of leased commercial units before marketing the asset for sale to take advantage of the favorable market conditions. The Directors consider that the Company will continue to perform its principal activities until the asset is sold. The Directors will continue to monitor the impacts of the principal risks and uncertainties detailed in the Strategic Report above. The Directors will take appropriate action as necessary to ensure the Company continues to operate as a going concern.

Going concern

The Directors have assessed the Company's ability to continue as a going concern for the financial year ended 31 December 2024, covering a period of at least twelve months from the date of approval of these financial statements to 31 October 2026 (the "going concern period"). This assessment considered the Company's available resources, expected cash flows, and contractual obligations throughout that period. The Directors prepared detailed financial forecasts incorporating base case and severe but plausible downside scenarios, including projected operational income, expenditure, and financing costs through to 31 October 2026. As at 31 December 2024, the Company had net liabilities of £89.7 million (2023:  £72.1m). On 30 June 2025, shareholder loans and accrued interest totalling £129.3 million were converted to equity, resulting in a net asset position for the Company of £33.4m at that date.

The going concern assessment is based on (i) an expectation of a sale of the property prior to maturity of the finance facility in May 2026, with net proceeds expected to be sufficient to discharge all outstanding liabilities in full; and otherwise (ii) the Company continuing normal trading operations, supported by ongoing financial assistance from the parent undertaking (if required) to meet obligations as they fall due. In both scenarios the Directors have considered a waiver the Company has obtained from Investec Bank plc in respect of a financial covenant breach on its lending facility. The waiver is conditional upon a £5.5 million loan repayment by the end of December 2025.

The Directors have received written confirmation from the parent undertaking confirming its intention to provide financial support to the Company throughout the going concern period – which would therefore include the £5.5m loan repayment if necessary. The Directors have evaluated the financial position and forecast performance of the parent undertaking and are satisfied it possesses the necessary resources and intent to provide such support. The Directors therefore have a reasonable expectation that the Company has adequate resources to continue in operational existence for a period up until 31 October 2026 being the going concern period and therefore considers it appropriate to prepare the financial statements on a going concern basis.

In accordance with the Company's articles, Ernst & Young LLP were appointed as auditors on 18 May 2015. The auditors, Ernst & Young LLP, are deemed to be reappointed under section 485 of the Companies Act 2006.

The Directors' Report and the Strategic Report confirm compliance with the obligations set out in section 172 of the Companies Act 2006.

So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the company’s auditor is unaware. Additionally, the Directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the company’s auditor is aware of that information.

As per the UK Government's Streamlined Energy and Carbon Reporting ("SECR") guidelines, the Company qualifies as a low energy user and is exempt from reporting requirements under the SECR guidelines.

Details of any subsequent events are set out in note 24.

The Directors are responsible for preparing the annual report and the financial statements, which includes the Directors' Report and Strategic Report, in accordance with applicable UK 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 United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the Director 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 and then apply them consistently;

• make judgements and accounting estimates that are reasonable and prudent;

• state whether applicable UK Accounting Standards have been followed, subject to any materiadepartures disclosed and explained in the financial statements;

• 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 enable them to ensure that the financial statements comply with the Companies Act 2006. They 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.

We have audited the financial statements of Sager House (Almeida) Limited for the year ended 31 December 2024 which comprise the Statement of financial position, the Statement of comprehensive income, the Statement of changes in equity and the related notes 1 to 24, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards including FRS 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 company’s affairs as at 31 December 2024 and of its loss 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 UK, including the FRC’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 until 31 October 2026.

Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report. However, because not all future events or conditions can be predicted, this statement is not a guarantee as to the company’s ability to continue as a going concern.

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 report.

Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in this 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 the other information, we are required to report that fact.

We have nothing to report in this regard.

Opinions 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 directors’ report have been prepared in accordance with applicable legal requirements.

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 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.

As explained more fully in the directors’ responsibilities statement set out on page 5, 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.

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.

Explanation as to what extent the audit was considered capable of detecting irregularities, including fraud

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect irregularities, including fraud. The risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentations, or through collusion. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below. However, the primary responsibility for the prevention and detection of fraud rests with both those charged with governance of the entity and management.

• We obtained an understanding of the legal and regulatory frameworks that are applicable to the company and determined that the most significant are Companies Act 2006, those relating to its reporting framework being the United Kingdom Generally Accepted Accounting Practice, and any relevant tax regulations in the United Kingdom. In addition, the Company has to comply with laws and regulations relating to its operations, including landlord and tenant, health and safety and anti-bribery & corruption including anti money laundering.

• We understood how Sager House (Almeida) Limited is complying with those frameworks by making enquiries of management and those responsible for legal and compliance procedures. We corroborated our enquiries through our review of minutes of board meetings of the Company as well as validating how policies and procedures in these areas are communicated and monitored. We also reviewed any correspondence with relevant authorities.

• We assessed the susceptibility of the Company’s financial statements to material misstatement, including how fraud might occur during the financial period by making enquiries of management and those charged with governance. We also considered management’s incentives around improving the performance of the Company, the opportunities available to execute any such actions through management override as well as the controls that the Company has established to address any such risks identified, including to prevent, deter and detect fraud and the monitoring of such controls by management.

• Based on this understanding we designed our audit procedures to identify non-compliance with such laws and regulations. Our procedures involved supplementing our enquiries of management and those charged with governance, as well as review of meeting minutes, with journal entry testing procedures undertaken using defined risk criteria tailored to the fraud risk factors affecting the Company and substantive tests of revenue recognition.

A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council’s website at https://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 2006. Our 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.

The notes on pages 12 - 24 form part of these financial statements.

The Statement of Comprehensive Income has been prepared on the basis that all operations are continuing operations in the United Kingdom.

The notes to these accounts from pages 12 - 24 form an integral part of these financial statements.

Sager House (Almeida) Limited is a private company limited by shares incorporated in England and Wales. The registered office was changed to 72 Welbeck Street, London, W1G 0AY on 22 April 2024 (previously 116 Upper Street, London, N1 1QP). The date of incorporation was 12 March 2001.

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.

The preparation of the 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 2).

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

The Company has taken the exemption under section 3.1B of FRS 102 from the requirement to prepare a statement of cash flows and related disclosures for the financial period.

Basis of consolidation

Section 405(2) of the Companies Act 2006 provides an exemption from preparing consolidated financial statements if all the Company’s subsidiary undertakings are not material for the purpose of giving a true and fair view. For each subsidiary, its total asset value is £1 and the net asset value is £1. Moreover, none of the subsidiaries have had any profit and loss activity during the financial year ending 31 December 2024. This is considered not material for the consolidated Group headed by the Company, and therefore the section 405(2) exemption has been applied.

The Directors have assessed the Company's ability to continue as a going concern for the financial year ended 31 December 2024, covering a period of at least twelve months from the date of approval of these financial statements to 31 October 2026 (the "going concern period"). This assessment considered the Company's available resources, expected cash flows, and contractual obligations throughout that period. The Directors prepared detailed financial forecasts incorporating base case and severe but plausible downside scenarios, including projected operational income, expenditure, and financing costs through to 31 October 2026. As at 31 December 2024, the Company had net liabilities of £89.7 million (2023:  £72.1m). On 30 June 2025, shareholder loans and accrued interest totalling £129.3 million were converted to equity, resulting in a net asset position for the Company of £33.4m at that date.true

The going concern assessment is based on (i) an expectation of a sale of the property prior to maturity of the finance facility in May 2026, with net proceeds expected to be sufficient to discharge all outstanding liabilities in full; and otherwise (ii) the Company continuing normal trading operations, supported by ongoing financial assistance from the parent undertaking (if required) to meet obligations as they fall due. In both scenarios the Directors have considered a waiver the Company has obtained from Investec Bank plc in respect of a financial covenant breach on its lending facility. The waiver is conditional upon a £5.5 million loan repayment by the end of December 2025.

The Directors have received written confirmation from the parent undertaking confirming its intention to provide financial support to the Company throughout the going concern period – which would therefore include the £5.5m loan repayment if necessary. The Directors have evaluated the financial position and forecast performance of the parent undertaking and are satisfied it possesses the necessary resources and intent to provide such support. The Directors therefore have a reasonable expectation that the Company has adequate resources to continue in operational existence for a period up until 31 October 2026 being the going concern period and therefore considers it appropriate to prepare the financial statements on a going concern basis.

Turnover from the rental of commercial units is recognised on a straight-line basis over the lease term. Contingent rent is recognised when receivable.

Turnover from service charges to lease tenants for recoverable expenses is recognised in the period in which the expenses are incurred. The Company concluded that it acts as a principal in relation to these services as it controls the specified services before transferring them to the customer. Therefore, the Company records turnover on a gross basis.

Turnover from ground rent income on the sold residential units is recognised in the period in which it is earned.

Investment properties are properties that are held either to earn rental income or for capital appreciation, or both. Investment properties are measured initially at cost including related transaction costs, and subsequently at fair value.

Investment properties are covered by Section 16 of FRS 102 and are eligible to be measured at fair value. In accordance with the Company’s investment properties valuation method, they are valued at fair value by external valuers

The Company's investment properties are comprised of office, retail & leisure commercial units as well as the asset arising from the residential ground rent revenue stream in Islington Square.

Independent valuations are conducted in accordance with RICS Appraisal and Valuation Standards, which is mandatory for Chartered Surveyors for United Kingdom properties.

Under FRS 102, the Company previously elected to capitalise borrowing costs that are directly attributable to a qualifying asset. As a result, Investment properties include borrowing costs of £20,531,460 (2023: £20,531,460), which have been capitalised to date.

Gains and losses arising from the changes in the fair value of the investment properties are included in the Statement of Comprehensive Income in the period in which they arise.

Moreover, any lease incentives provided by the Company to its retail commercial tenants reduce the reported value of the investment property and correspondingly adjusted against the gains and losses arising from the changes in the fair value of the investment properties including in the Statement of Comprehensive income.

Interests in subsidiaries are measured at cost less any accumulated impairment losses.

Stock represents fully completed development properties held with the intention of sale in the ordinary course of the Company’s operations and are valued at the lower of cost and estimated selling price, net of selling costs, less cost to complete. Cost includes all direct costs related to developing the properties for their intended use.

Sales and marketing costs related to the sale of the completed properties are expensed as administrative expenses when incurred.

At each reporting date, an assessment is made for impairment. Any excess of the carrying amount of stock over its estimated selling price less costs to complete and sell is recognised as an impairment loss in the Statement of Comprehensive Income. Reversals of impairment losses are also recognised in the Statement of Comprehensive Income.

Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks as well as other short-term liquid investments with original maturities of three months or less. These are subject to insignificant risk of changes in fair value.

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 statement of financial position 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.

Derivative financial Instruments

The Company uses interest rate derivative financial instruments to hedge its exposure to movements in interest rates. All classes of derivatives are initially recognised at fair value, which is considered to be equal to cost on initial acquisition, and subsequently remeasured to their prevailing fair value at each Statement of Financial Position Date. Changes in the fair value of derivative financial instruments are recognised in the Statement of Comprehensive Income as they arise.

Derivatives are derecognised either when they are sold to a third party or the termination date is reached.

Basic financial assets, which include debtors and cash at 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 and are subsequently measured at amortised cost using effective interest method.

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 Statement of Comprehensive Income. 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.

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

Basic financial liabilities, including creditors, bank loans and loans from related parties that are classified as debt, 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 and are subsequently measured at amortised costs using the effective interest method.

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

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.

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 income statement 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 taxation is provided in full in respect of taxation deferred by timing differences between the treatment of certain items for taxation and accounting purposes. Unrelieved tax losses and other deferred tax assets are recognised only to the extent it is more likely than not that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits.

Administration expenses

Administration expenses include service charge related expenses.

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.

The Company has identified the following areas where significant judgement and estimation are required:

The Company establishes provisions based on reasonable estimates for possible consequences of audits by the tax authority in which it operates. The amount of such provisions is based on various factors, such as experience with previous tax audits and differing interpretations of tax regulations by the taxable entity and the responsible tax authority.

Management estimation is required to determine the amount of deferred tax assets that can be recognised, based upon likely timing and level of future taxable profits together with an assessment of the effect of future tax planning strategies. Further details are contained in note 9.

The Company makes an estimate of the recoverable value of all debtors (including trade debtors, other debtors and prepayments). When assessing impairment of debtors, management considers factors including the ageing profile and historical experience.

The Company carries the investment property at fair value and has engaged independent RICS qualified valuation specialists to determine the fair value at year end. The valuer has used a valuation technique based on an income-based approach by capitalising the estimated rental value (ERV) or initial income to be recognised for the investment property element based on assumptions of equivalent yield percentage. As a result, the determined fair value of the investment property is most sensitive to the equivalent yield percentage applied for each property element, which is subject to a degree of uncertainty.

The fair value of the investment property is illustrated in note 10.

The average monthly number of persons (excluding directors) employed by the Company during the year was nil (2023: nil).

Directors of the Company received no remuneration during the current year (2023: £nil) from the Company. These Directors are also Directors of other related party undertakings within the Group controlled by Cain International LP, with these related party entities bearing the cost of these emoluments for the current and prior financial years ended. The Directors believe that their qualifying services provided to the Company are incidental to the qualifying services provided to the other related party entities within the aforementioned Group.

The actual charge for the year can be reconciled to the profit or loss and the standard rate of tax as follows:

Corporate interest restriction

The Company has recognised aggregate interest payments of £65.5m (2023: £52.6m) for which no tax deductions have been claimed. If the interest is deductible, it would represent a potential deferred tax asset of £16.38m (2023: £12.36m) but no such asset has been recognised due to uncertainty of the amount and timing of such claims and the availability of profits to realise any asset.

Tax losses carried forward

The Company has tax losses arising in the UK of £16.46m (2023: £11.7m) as at the year-end that are available indefinitely to offset against future taxable profits. No deferred tax asset has been recognised in the year in respect of these losses due to there being no suitable taxable profits against which these could be utilised for the foreseeable future.

Investment property valuation

The valuation of the property in the balance sheet at 31 December 2024 is lower than the cost tax base by £83.5 million which would give rise to an equivalent capital loss if realised. No deferred tax asset has been recognised because no realisation of such a capital loss against suitable taxable gains can be foreseen.

Capital allowances

The Company has an unrecognised deferred tax asset of £2.7 million in respect of temporary differences relating to capital expenditure allowances. This has not been recognised due to uncertainty about the realisation of those amounts against future taxable profits.

Investment properties include borrowing costs of £20,531,460 (2023: £20,531,460). The historical cost of the investment property as at 31 December 2024 was £165,828,479 (2023: £165,828,479).

Investment properties are comprised of office, retail & leisure commercial units as well as the asset arising from the residential ground rent revenue stream in Islington Square. All investment properties are held for long term capital appreciation.

Investment property carried at fair value is comprised of the commercial units and ground rent asset which has a fair value as at year end of £80.5m and £1.6m,( 2023: £84.7m and £1.7m, respectively).

The fair value at year end of the investment property of £82.2m (2023: £86.4m) has been disclosed on the face of the Statement of Financial Position. The valuation has been carried out by CBRE Limited, Chartered Surveyors, who are also appointed as Property Manager and Facility Manager for the Company. The valuation of the commercial element of the investment property balance was calculated capitalising the Estimated Rental Value of £6.1m (2023: £6.1m) of the unit by a concluded Equivalent Yield of 7.37% (2023: 7.19%) whilst adjusting for outstanding capital expenditure, capital contributions (if any), letting fees, rent-free periods, letting Periods, void costs and 6.71% (2023: 6.72%) of purchaser costs.

The valuation of the ground rent asset was calculated by capitalizing the initial ground rent income by an equivalent yield of 7% (2023: 6%) and allowing for 6.71% (2023: 6%) of purchaser costs resulting in a fair value of £1.6m at year-end (2023: £1.7m).

Details of the company's subsidiaries at 31 December 2024 are as follows:

The registered address for each of the subsidiaries is 72 Welbeck Street, London, England, W1G 0AY (previously 116 Upper Street, London, N1 1QP).

Derivatives consist of one interest rate swap hedge with Investec Bank plc which was entered into on 31 July 2024 for the purpose of hedging against interest rate rises. This hedge matures on 28 May 2026.

In 2023 derivative instruments consist of one interest rate cap hedge with Investec Bank plc which was entered into on 28 May 2021 for the purpose of hedging against interest rate rises. This hedge matured on 28 May 2024.

Trade debtors include £0.1m (2023: £0.1m) of receivables from historic residential property sales.

The Company issued an unsecured loan of £6.0m to CH Capital A Holdings LLC on 28 May 2021 at a rate of 5% per annum. The total amount receivable from CH Capital A Holdings LLC as at 31 December 2024 is £7.08m (2023: £6.78m) of which £1.08m (2023: £0.78m) relates to accrued interest.

For more information on derivative financial instruments, see Note 13.

Amounts owed by group undertakings include £0.25m (2023: £0.25m) receivable for historic deferred guarantee arrangement costs.

All trade and other creditors are unsecured, interest free and repayable on demand.

The Loan interest accrual includes amounts accrued from 1 November 2024 to 31 December 2024 in relation to the bank borrowings.

On 28 May 2021, the Company refinanced an amount of £86.4m with Investec Bank plc allowing the previous bank loan balance, due to Lloyds bank, and shareholder loans, due to Investec Investments UK Limited, as at that date to be repaid in full. The bank loan is secured by way of a fixed and floating charge over the assets and shares of the Company and interest payable at an aggregate of the 3.85% margin plus the compounded SONIA rate per annum. It reached maturity on 28 May 2024 and the Company has excercised the option to extend for a further two years until 28 May 2026. As such, this balance has been classified as falling due greater than one year as at year end. The principal bank loan balance outstanding on 31 December 2024 is £47.7m (2023: £53.5m) (refer to Note 17).

The Company has a loan facility with CH Capital A Holdings LLC at a rate of 15% per annum which was entered into on 1 November 2017, due for repayment on 10 September 2021 but subsequently extended post 2020 until 28 May 2024. During the year the extension was exercised to 28 May 2026. During the year the Company made £7.2m (2023: £4.0m) of drawdowns under the same loan facility which was entered on 1 November 2017. The total amount due to CH Capital A Holdings LLC as at 31 December 2024 is £129.3m (2023: £111.3m) of which £53.1m (2023: £42.4m) relates to accrued interest. As such, this balance has been classified as falling due greater than one year as at year end (refer to Note 17).

On 28 May 2021, the Company refinanced an amount of £86.4m with Investec Bank plc allowing the previous bank loan balance, due to Lloyds bank, and shareholder loans, due to Investec Investments UK Limited, as at that date to be repaid in full. The bank loan is secured by way of a fixed and floating charge over the assets and shares of the Company and interest payable at an aggregate of the 3.85% margin plus the compounded SONIA rate per annum. It reached maturity on 28 May 2024 and the Company has excercised the option to extend for a further two years until 28 May 2026. As such, this balance has been classified as falling due greater than one year as at year end. The principal bank loan balance outstanding on 31 December 2024 is £47.7m (2023: £53.5m).

The Company has a loan facility with CH Capital A Holdings LLC at a rate of 15% per annum which was entered into on 1 November 2017, due for repayment on 10 September 2021 but subsequently extended post 2020 until 28 May 2024. During the year the extension was exercised to 28 May 2026. During the year the Company made £7.2m (2023: £4.0m) of drawdowns under the same loan facility which was entered on 1 November 2017. The total amount due to CH Capital A Holdings LLC as at 31 December 2024 is £129.3m (2023: £111.3m) of which £53.1m (2023: £42.4m) relates to accrued interest. As such, this balance has been classified as falling due greater than one year as at year end.

Class A and B Ordinary shares carry the same rights which include the right to receive notice or attend and vote at general meetings, and the right to receive dividends and all other distributions including on winding up prorata to the numbers of A Ordinary shares and B Ordinary Shares in issue.

On 28 May 2021 CH Capital A Holdings LLC purchased 7.5% of the share capital previously held by Investec Investments (UK) Limited in the Company for a consideration of £6m. Subsequent to 28 May 2021, the Company's share capital is now 100% owned by CH Capital A Holdings LLC.

On 17th August 2015, the Company issued 99,999 ordinary shares at a premium totalling £70,590,658.

At the reporting end date the Company's future minimum lease receivables under non-cancellable operating leases were as follows:

During the year the Company entered into the following transactions with related parties:

During the year, the Company incurred support service fees of £300,000 (2023: £300,000) from Cain International UK Services Ltd. At the year end, there was a £nil prepayment for fees paid for the following period (2023: £75,000). Moreover, included in the current year Turnover for the Company is £342,236 (2023: £349,682) of rental income earned from Cain International UK Services Limited, which was a commercial tenant during the year in Islington Square.

Capitalised lease incentives (note 10) include £487,324 (£2023: £570,748) attributable to Cain International UK Services Ltd.

CH Capital A Holdings LLC is the immediate parent undertaking of the Company, which provided a guarantee on behalf of the Company. The Company paid no guarantee fees (2023: £nil) to CH Capital A Holdings LLC during the year. The guarantee provided by CH Capital A Holdings LLC was released during the financial year ended 31 December 2019 and a new guarantee was provided by Cain International LP, an entity that controls the Company through its investment in CH Capital A Holdings LLC, for which the Company paid a guarantee fee during the year of £nil (2023: £nil). At the year end £1,952,556 was due to Cain International LP (2023: £1,952,556). At the year end the Company has a loan receivable from CH Capital A Holdings LLC of £6,000,000 (2023: £6,000,000) with accrued loan interest receivable of £1,079,178 (2023: £779,178).

During the year, the Company has a drawdown on its loan facility of £7.2m (2023: £4m) from CH Capital A Holdings LLC at a 15% per annum rate. The facility is due for repayment on 28 May 2024. See note 16 for details on amounts outstanding at the year-end.

Included in Turnover £473,583 of rental income for Fulwell 73 Limited (2023: £493,276), which is part of the Eldridge Industries LLC Group, of which the Company is also a subsidiary, arising from being a leaseholder of an office unit at Islington Square.

Included in capitalised lease incentives (note 10) is £994,409 (2023: £1,892,439) attributable to Fulwell 73 Limited which is part of the Eldridge Industries LLC Group. At the year-end £890,221 (2023: £nil) was included in Trade Debtors as rental income receivable.

Included in Turnover £171,437 of rental income for Prezzo Trading Limited (2023: £173,193), which is part of Cain International LP Goup.

Included in capitalised lease incentives (note 10) is £828,917 (2023: £951,497) attributable to Prezzo Trading Limited, which is part of the Cain International LP Group. At the year-end £200,100 (2023: £29,900) was included in Trade Debtors as rental income receivable.

Term and Condition of Transactions with related parties:

Sales and purchases between related parties are made at normal market prices. Outstanding balances with entities are unsecured, and interest fees and cash settlements are expected within 60 days of invoice. The group has not provided or benefited from any guarantees for any related party receivables of payables. During the year ended 31 December 2024, the Group has provided for £874,426 of doubtful debts relating to amounts owed by related parties (2023: £nil).

The Company's immediate parent undertaking is CH Capital A Holdings LLC, an entity incorporated in the United States of America.

As at 31 December 2024, the smallest group in which the results of the Company are consolidated is that prepared by Cain RE LLC, of 767 Fifth Avenue, 17th Floor New York, 10153. The financial statements of this entity are not publicly available. The largest group in which the results of the Company are consolidated is that prepared by Eldridge Industries LLC, of 600 Steamboat Road, Greenwich, CT 06830. The financial statements of this entity are not publicly available.

Shareholder loan

On 30 June 2025, the shareholder loan and accrued interest (totaling £129.3million as at 31 December 2024) was fully settled through the issuance of one £1 ordinary share, with the remaining balance credited to the share premium account.

Bank loan

The Company breached a loan covenant in July 2025 in respect of the Loan to Value. The lender has granted a three-month waiver subject to a repayment of £5.5m in December 2025 that is anticipated to bring the covenants back into compliance.