The directors present the strategic report for the year ended 30 June 2025.

The Company experienced a challenging financial year. Revenue increased by 5% to £10.6m (2024: £10.1m); however, operating profit decreased by 37%. The reduction in operating profit was primarily attributable to cost inflation across the business, increased expenditure on marketing and commissions, and a one‑off head office recharge.

In addition, expenditure was incurred to upgrade the property in preparation for a change of brand to Marriott Autograph. These works were undertaken to enhance the quality and positioning of the property and to support its long‑term performance.

Cheval Collection Limited continued to manage Old Town Chambers under the Cheval brand throughout the year. With effect from 1 July 2025, the property was successfully rebranded as part of the Marriott Autograph Collection.

Financing

During the year, the RBS loan facility was amended to include additional companies within the CSG Hotels and Apartments group. As part of this amendment, the total Group facility was increased from £53.0m to £84.55m, incorporating a £18.5m revolving credit facility and £1.5m overdraft. The facility provides ongoing flexibility to repay and redraw borrowings, supporting efficient cash management and minimisation of interest costs. The Company’s share of the Group facility is £29.3m with further details in respect of the facility outlined at notes 15 and 25.

Property – valuation

Savill’s conducted an independent valuation of the land and buildings during 2023. The valuation has increased by £3.8m since then due to the addition of 8 extra apartments.

The principal risks and uncertainties affecting the Company include the following:

• Competition: new entrants into the market within close proximity to the property. The Company continues to focus upon guest services and brand standards allowing its product to be differentiated from competitors.

• Political risk: Instability and changes in geopolitical relationships may impact the ease of accessibility to the UK for overseas visitors. Increases in domestic taxes such as VAT being higher than the European average, increases in National Insurance and Air Passenger Duty may deter overseas visitors.

• Economic risk: increases in costs due to supplier price increases, budgetary changes to payroll costs, labour shortages, and continued increases in energy costs. The introduction of the Edinburgh Visitor Levy, being a charge of 5% on overnight accommodation in the city also poses a further challenge.

Key areas of strategic development and performance of the Company include:

• Sales and marketing: the targeting of higher rate business through all sales channels, specifically focusing on improving direct business to reduce commission costs.

• Competitive advantage: the Company focuses on areas where it has a competitive advantage in the five-star market which places it well in terms of long term income/cash flow growth potential.

• Brand awareness and reputation: we continue to work hard at building brand awareness and ensuring our reputation for quality, value and commitment to excellence in customer service is maintained. The re-brand to the Marriott Autograph Collection is expected to improve awareness and encourage direct business.

• Expansion: the Company will continue to evaluate further expansion plans as opportunities arise.

The Company monitors key financial performance indicators across its sites in order to maximise performance, room rate and occupancy. Performance is benchmarked regularly against hotels in the immediate vicinity.

The Company also monitors key non-financial indicators such as feedback from guests, ratings on guest online surveys and third-party internet feedback sites such as Google, TripAdvisor and Booking.com.

Food and Beverage

The Company uses a range of financial and non-financial key performance indicators to monitor and manage the business. These include:

Sales: daily, weekly and period sales measured against budget and prior period. The conversion of sales to EBITDA ratios for each unit and Cost of Sale % and Wage %.

Management accounts: these are produced monthly for each operating unit with variances to budget and prior period analysed.

Customer feedback: a variety of measures are used to capture feedback and learn from complaints, both at point of sale and via internet and social media sites online.

Employee Turnover and Engagement: this is reviewed monthly, and training and engagement modules are completed online and reviewed regularly by management.

On behalf of the board

The directors present their annual report and financial statements for the year ended 30 June 2025.

The company's accounting reference date is 24 June 2025 however the company has taken advantage of the option available under s390(3) of the Companies Act 2006 to prepare its financial statements for the year ended 30 June 2025.

The principal activity of the company is an operator of short stay serviced apartments and a licensed restaurant.

The results for the year are set out on page 10.

No ordinary dividends were paid. The directors do not recommend payment of a final dividend.

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.

The company does not use derivatives for either financial risk management or for speculative purposes. The company's financial risk management objectives, policies and exposure to financial risks are not considered material for the assessment of the company's assets, liabilities, financial position or result for the year and as such, no further disclosure is considered necessary.

Details of events after the reporting date are included with note 25 of the financial statements.

The auditor, Johnston Carmichael LLP, is deemed to be reappointed under section 487(2) of the Companies Act 2006.

The company has chosen in accordance with Companies Act 2006, s. 414C(11) to set out in the company's strategic report information required by Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008, Sch. 7 to be contained in the directors' report. It has done so in respect of future developments.

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.

The financial statements have been prepared on the going concern basis, notwithstanding the net current liabilities of £37,464,032 (2024: £9,559,855) which the directors believe to be appropriate for the following reasons.

The directors have prepared these forecasts for a period in excess of 12 months from the date of signing the financial statements. They are based on management’s latest assumptions including occupancy rates, average daily rate and staff costs. The forecasts have been prepared with reference to latest actual trading results as well as seeking to model the impact of severe but plausible downside risks.

At the balance sheet date, the group, of which the company is a part of, was in breach of the gross leverage covenant relating to its bank facility. Accordingly, the bank loans and overdrafts under the RBS facility have been classified as falling due within one year. Subsequent to the year end, RBS formally waived the covenant breach and confirmed that the facility remains available in accordance with its original maturity profile, with no requirement for repayment within 12 months of the reporting date.

The forecasts for the company assume that its creditors under common control of the ultimate controlling party, Christopher Stewart, will not withdraw amounts forwarded to it. This has been confirmed in writing by those parties.

Based on the company’s forecast and projections, access to finance and support from related parties, the directors have a reasonable expectation that the company will have adequate resources to meet its liabilities as they fall due for at least 12 months from the date of approval of the financial statements. Thus, they continue to adopt the going concern basis of accounting in preparing the annual financial statements.

The directors are responsible for preparing the strategic report, directors' report and the financial statements in accordance with applicable 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 directors 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 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;

• 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 Lateral City Limited ('the company') for the year ended 30 June 2025 which comprise the Statement of Comprehensive Income, Statement of Financial Position, Statement of Changes in Equity, and notes to the financial statements, including significant accounting policies. The financial statement that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Report Standard 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 state of the company's affairs as at 30 June 2025 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 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 group or parent company’s ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.

Our responsibilities and the responsibilities of the Directors with respect to going concern are described in the relevant sections of this report.

The other information comprises the information included in the annual report and financial statements other than the financial statements and our auditor’s report thereon. The Directors are responsible for the other information contained within the annual report and financial statements. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our 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 this 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 the 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 the 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.

A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council’s website at: http://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.

We assessed whether the engagement team collectively had the appropriate competence and capabilities to identify or recognise non-compliance with laws and regulations by considering their experience, past performance and support available.

All engagement team members were briefed on relevant identified laws and regulations and potential fraud risks at the planning stage of the audit. Engagement team members were reminded to remain alert to any indications of fraud or non-compliance with laws and regulations throughout the audit.

We obtained an understanding of the legal and regulatory frameworks that are applicable to the company and the sector in which it operates, focusing on those provisions that had a direct effect on the determination of material amounts and disclosures in the financial statements. The most relevant frameworks we identified include:

• Companies Act 2006;

• UK Tax legislation;

• VAT legislation; and

• UK Generally Accepted Accounting Practice.

Extent to which the audit was considered capable of detecting irregularities, including fraud (continued)

We gained an understanding of how the company is complying with these laws and regulations by making enquiries of management and those charged with governance. We corroborated these enquiries through our review of submitted returns, external inspections and relevant correspondence with regulatory bodies.

We assessed the susceptibility of the financial statements to material misstatement, including how fraud might occur, by meeting with management and those charged with governance to understand where it was considered there was susceptibility to fraud. This evaluation also considered how management and those charged with governance were remunerated and whether this provided an incentive for fraudulent activity. We considered the overall control environment and how management and those charged with governance oversee the implementation and operation of controls. In areas of the financial statements where the risks were considered to be higher, we performed procedures to address each identified risk. We identified a heightened fraud risk in relation to:

• Management override of controls; and

• Revenue recognition.

In addition to the above, the following procedures were performed to provide reasonable assurance that the financial statements were free of material fraud or error:

• Reviewing the level of and reasoning behind the company's procurement of legal and professional services

• Performing audit procedures over the risk of management override of controls, including testing of journal entries and other adjustments for appropriateness, evaluating the business rationale of significant transactions outside the normal course of business and assessing judgements made by management in their calculation of accounting estimates for potential management bias;

• Performing audit procedures over the risk of revenue recognition, including detailed substantive testing over the completeness of revenue recorded through selecting a sample of reports from the respective booking system and tracing the transactions through to the accounting system and bank;

• Completion of appropriate checklists and use of our experience to assess the Company’s compliance with the Companies Act 2006; and

• Agreement of the financial statement disclosures to supporting documentation.

Our audit procedures were designed to respond to the risk of material misstatements in the financial statements, recognising that 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 intentional concealment, forgery, collusion, omission or misrepresentation. There are inherent limitations in the audit procedures performed and the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely we would become aware of it.

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 profit and loss account has been prepared on the basis that all operations are continuing operations.

Lateral City Limited is a private company limited by shares incorporated and domiciled in Scotland. The registered office is c/o Johnston Carmichael, 7-11 Melville Street, Edinburgh, Scotland, EH3 7PE.

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 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 land and buildings and investment properties carried at fair value. The principal accounting policies adopted are set out below.

This company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group. The company has therefore taken advantage of exemptions from the following disclosure requirements where applicable to the entity:

• Section 7 ‘Statement of Cash Flows’: Presentation of a statement of cash flow and related notes and disclosures;

• Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instrument Issues: Interest income/expense and net gains/losses for financial instruments not measured at fair value; basis of determining fair values; details of collateral, loan defaults or breaches, details of hedges, hedging fair value changes recognised in profit or loss and in other comprehensive income;

• Section 26 ‘Share based Payment’: Share-based payment expense charged to profit or loss, reconciliation of opening and closing number and weighted average exercise price of share options, how the fair value of options granted was measured, measurement and carrying amount of liabilities for cash-settled share-based payments, explanation of modifications to arrangements;

• Section 33 ‘Related Party Disclosures’: Compensation for key management personnel.

The financial statements of the company are consolidated in the financial statements of CSG Hotels and Apartments Limited. These consolidated financial statements are available from its registered office, 12 Hope Street, Edinburgh, EH2 4DB.

The company has taken advantage of the exemption under section 400 of the Companies Act 2006 not to prepare consolidated accounts. The financial statements present information about the company as an individual entity and not about its group.

The financial statements have been prepared on the going concern basis, notwithstanding the net current liabilities of £37,464,032 (2024: £9,559,855) which the directors believe to be appropriate for the following reasons. true

The directors have prepared these forecasts for a period in excess of 12 months from the date of signing the financial statements. They are based on management’s latest assumptions including occupancy rates, average daily rate and staff costs. The forecasts have been prepared with reference to latest actual trading results as well as seeking to model the impact of severe but plausible downside risks.

At the balance sheet date, the group, of which the company is a part of, was in breach of the gross leverage covenant relating to its bank facility. Accordingly, the bank loans and overdrafts under the RBS facility have been classified as falling due within one year. Subsequent to the year end, RBS formally waived the covenant breach and confirmed that the facility remains available in accordance with its original maturity profile, with no requirement for repayment within 12 months of the reporting date.

The forecasts for the company assume that its creditors under common control of the ultimate controlling party, Christopher Stewart, will not withdraw amounts forwarded to it. This has been confirmed in writing by those parties.

Based on the company’s forecast and projections, access to finance and support from related parties, the directors have a reasonable expectation that the company will have adequate resources to meet its liabilities as they fall due for at least 12 months from the date of approval of the financial statements. Thus, they continue to adopt the going concern basis of accounting in preparing the annual financial statements.

Turnover represents the total invoice value of sales made during the year and is shown net of VAT and other sales related taxes.

Turnover comprises the following streams:

- Sale of goods: Turnover from the sale of food and beverages is recognised at the point of sale.

- Rendering of services: Revenue from room sales and other guest services is recognised when rooms are occupied and as services are provided.

- Commercial rent: Revenue from commercial rent is recognised on a straight line basis over the term of the rental agreement.

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 company'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.

Properties whose fair value can be measured reliably are held under the revaluation model and are carried at a revalued amount, being their fair value at the date of valuation less any subsequent accumulated depreciation and subsequent accumulated impairment losses. The fair value of the land and buildings is usually considered to be their market value.

Revaluation gains and losses are recognised in other comprehensive income and accumulated in equity, except to the extent that a revaluation gain reverses a revaluation loss previously recognised in the profit and loss account or a revaluation loss exceeds the accumulated revaluation gains recognised in equity; such gains and losses are recognised in the profit and loss account.

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 surplus or deficit on revaluation is recognised in the profit and loss account.

Interests in subsidiaries are initially measured at cost and subsequently measured at cost less any accumulated impairment losses. The investments are assessed for impairment at each reporting date and any impairment losses or reversals of impairment losses are recognised immediately in the profit and loss account.

A subsidiary is an entity controlled by the company. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.

Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are assets that necessarily take a substantial period of time to get ready for their intended use or sale, are added to the cost of those assets, until such time as the assets are substantially ready for their intended use or sale.

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). 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. Losses arising on revaluation are recognised in other comprehensive income to the extent of any previously recognised revaluation increase accumulated in equity, in respect of that asset. Any excess is recognised in the profit and loss account.

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.

Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the stocks to their present location and condition.

Stock is valued on an average cost basis.

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

Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.

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, 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 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 company 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 company after deducting all of its liabilities.

Basic financial liabilities, including certain creditors, bank loans and loans from fellow group companies and related parties, 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 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 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 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 when the company has 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 costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.

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

Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.

Rentals payable under operating leases, including any lease incentives received, are charged to the profit and loss account on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed.

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 estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are as follows.

The company’s freehold land and buildings and investment property are carried at valuation. The directors are therefore required to consider the valuations each year to ensure that this remains appropriately stated. In performing this review, the directors consider a number of factors including recent valuations of the land and buildings performed by Chartered Surveyors in accordance with RICS appraisal and valuation standards. The directors also reflect frequently on residual value assessments and thus any depreciable amount of the company's freehold land and buildings. In making their residual value assessment, the directors take account of the nature of the properties concerned and valuation frequency.

The carrying value of tangible fixed assets and investment property at the reporting date is outlined at notes 9 and 10 respectively.

An analysis of the company's turnover is as follows:

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

Their aggregate remuneration comprised:

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

In addition to the amount charged to the profit and loss account, the following amounts relating to tax have been recognised directly in other comprehensive income:

Included within freehold land and buildings is borrowing costs of £216,042 (2024: £216,042) directly attributable to the acquisition and development of the assets.

Freehold land and buildings have been valued at the reporting date by the company's directors. The valuation has been informed by an April 2023 valuation which was carried out by Savills, independent property agents not connected with the company, on the basis of market value. The Savills valuation conformed to International Valuation Standards and was based on recent market transactions on arm's length terms for similar properties. The directors have considered market and trading conditions in the intervening period in arriving at their valuation assessment at the balance sheet date.

If revalued assets 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 a valuation conducted in April 2023 by Savills, independent property agents, who are not connected with the company.

Details of the company's subsidiaries at 30 June 2025 are as follows:

The registered office of Urbanite Investments Limited 12 Hope Street, Edinburgh, EH2 4DB.

Amounts due to group undertakings and related parties are unsecured, interest free and repayable on demand.

Current year bank loans and overdrafts outlined above include amounts drawn down by the company during the year against the company's allocation of a group facility agreement held with RBS. Bank borrowings are secured by fixed and floating charges over all of the property or undertaking of the company.

At the balance sheet date, the group, of which the company is a part of, was in breach of a gross leverage covenant relating to its bank facility. Accordingly, the bank loans and overdrafts under the RBS facility have been classified as falling due within one year. Subsequent to the year end, RBS formally waived these covenant breaches and confirmed that the facility remains available in accordance with its original maturity profile, with no requirement for repayment within 12 months of the reporting date.

Current year bank loans outlined above include amounts drawn down by the company against the company's allocation of a group facility agreement held with RBS. The balance includes £19.3m of term loans and £9.7m of revolving credit facilities.

Further details of the maturity of bank borrowings and accounting classification within the current year financial statements is provided at note 15.

Deferred tax assets and liabilities are offset where the 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 company had estimated tax losses of £2.6m (2024: £3.5m) available for carry forward against future trading profits.

The company operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the company in an independently administered fund. Contributions totalling £7,287 (2024: £6,179) were payable to the fund at the year end and are included within creditors falling due within one year.

During the current financial year the company had the following movements in Ordinary share capital:

• On 17 December 2024, through special resolution, the company capitalised an amount of £10,500,000 standing to credit on the company's revaluation reserve applying the amount to the bonus allotment of £10,500,000 Ordinary shares of £1 each; and

• Also on 17 December 2024, through special resolution, reduced the company's Ordinary share capital by £10,500,000, through cancellation of 10,500,000 Ordinary shares of £1 each. The amount of share capital so reduced was credited to the company's profit and loss reserves.

Revaluation reserves represent the difference between the fair value and the carrying value on an historic cost basis of assets held at valuation, net of associated deferred tax.

Profit and loss reserves represent the total comprehensive income for the year and prior periods less dividends paid.

As outlined at note 20, the profit and loss reserve also reflects amounts credited following the cancellation of Ordinary share capital through special resolution.

As a condition to the availability of the bank loan and overdraft facilities made available by The Royal Bank of Scotland plc to Lateral City Limited, CSG Glasgow Limited, Love Loan Limited and St Andrew Square (Property) Limited, all related by virtue of common ownership (the “Related Group”), The Royal Bank of Scotland plc (in its capacity as Security Agent) holds a floating charge over all the assets of the company and certain fixed charges over certain assets of the company. Under the terms of these finance documents the Related Group must meet certain financial covenants in relation to the Related Group’s financial position. The company’s liability in respect of these finance documents (including pursuant to the guarantees granted under these finance documents) as at 30 June 2025 amounted to £50.9m.

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

Subsequent to the reporting date, the Group, of which the company is a part, agreed amendments to its existing financing arrangements with its lenders.

The principal changes to the facilities are as follows:

• The maturity date of the term loan, previously June 2028, has been amended to include an option to extend for up to a further two years.

• The margin has been reduced to 1.8%, subject to a leverage-based ratchet mechanism, with a maximum margin of 2.25%.

• The leverage covenant ceiling has been increased, and the existing cash flow cover covenant has been replaced with an interest cover covenant, simplifying the covenant structure and improving covenant headroom.

• The repayment profile of the loan has been amended from amortising to interest-only, increasing short-term cash availability within the Group.

• The £5.0 million revolving credit facility, previously due to expire in June 2026, has been extended to align with the revised term loan maturity date.

These amendments were agreed on 22 May 2026.

The amendments are treated as a non-adjusting event after the reporting date in accordance with FRS 102 Section 32, as they relate to changes in conditions arising after the reporting date. Accordingly, no adjustment has been made to the carrying value of borrowings at the reporting date.

The amendments strengthen the Group’s financial flexibility through extended maturities, an improved covenant structure and enhanced cash flow availability.

As a result of these amendments, the Group expects that the borrowings, which are classified as current liabilities at the reporting date, will be classified as non-current in future reporting periods.

The Directors have considered the impact of these changes in the context of the Group’s going concern assessment and are satisfied that the revised facilities provide improved liquidity and covenant headroom for a period of at least 12 months from the date of approval of the financial statements.

As at 30 June 2025, the immediate parent company and the largest group in which the results are consolidated is CSG Hotels and Apartments Limited, a company registered in Scotland whose registered address is C/O Johnston Carmichael, 7-11 Melville Street, Edinburgh, City Of Edinburgh, Scotland, EH3 7PE. The accounts of CSG Hotels and Apartments Limited can be obtained from the Companies House online register at https://www.gov.uk/government/organisations/companies-house. The ultimate parent company is CSG H&A Holdings Limited, a company registered in Scotland whose registered address is C/O Johnston Carmichael, 7-11 Melville Street, Edinburgh, City Of Edinburgh, Scotland, EH3 7PE. The ultimate controlling party is Christopher Stewart.

During the year, services of £118,193 (2024: £40,928) were provided by CSG Projects Limited. Amounts totalling £444,747 (2024: £613,617 received from) were repaid to CSG Projects Limited. At June 2025 an amount of £155,677 (2024: £600,424) was due to CSG Projects Limited.

During the year, a charge of £799,548 (2024: £507,183) was made by FMLY Limited in respect of facilities management and property improvement services. As at 30 June 2025 £23,134 (2024: £139,662) remained outstanding.

During the year, goods of £33,692 (2024: £93,000) were purchased from Bacchus&Liber Limited. As at 30 June 2025 £nil (2024: £4,213) remained outstanding.

At 30 June 2025 an amount of £1,045,458 (2024: £1,045,458) was due from CSG Hamilton Place Limited.

During the year, Devil’s Advocate Limited recharged costs of £35,133 (2024: £30,845). As at 30 June 2025 £2,912 (2024: £55,248 due from) was due to Devil’s Advocate Limited.

During the year, Lateral City Limited charged rent to Crisp Investment Limited of £nil (2024: £59,794) and was recharged £1,275 by Crisp Investment Limited. As at 30 June 2025 £1,275 (2024: £26,753 due from) was due to Crisp Investment Limited.

The company has taken advantage of the exemption available in FRS 102 Section 33 whereby it has not disclosed transactions with the immediate parent company or any wholly owned subsidiary undertaking of the group.