Company Registration No. SC231678 (Scotland)
CS Managers Ltd
Annual report and financial statements
for the year ended 31 March 2021
CS Managers Ltd
Company information
Directors
Andrew Campbell
William Forsyth
Linda Forsyth
Secretary
Linda Forsyth
Company number
SC231678
Registered office
Edinburgh Quay
133 Fountainbridge
Edinburgh
EH3 9BA
Independent auditor
Saffery Champness LLP
Edinburgh Quay
133 Fountainbridge
Edinburgh
EH3 9BA
Business address
43 Charlotte Square
Edinburgh
EH2 4HQ
Bankers
Handelsbanken
18 Charlotte Square
Edinburgh
EH2 4DF
CS Managers Ltd
Contents
Page
Strategic report
1 - 3
Directors' report
4 - 5
Independent auditor's report
6 - 9
Statement of comprehensive income
10
Statement of financial position
11
Statement of changes in equity
12
Statement of cash flows
13
Notes to the financial statements
14 - 29
CS Managers Ltd
Strategic report
For the year ended 31 March 2021
Page 1
The directors present the strategic report for the year ended 31 March 2021.
Fair review of the business
CS Managers Ltd is a UK Company regulated by the Financial Conduct Authority (“FCA”) providing discretionary investment management and advice services to
private client, charity and pension portfolios
.
The directors are responsible for the overall stewardship of the company. The company’s performance for the year is set out in the Profit and Loss account on page 10 and is considered by the directors to be satisfactory compared to last year, to budget and to the company’s longer term strategy as an FCA authorised firm.
The company's strategic aims are primarily measured by the growth in the assets under its management, its turnover and profit before tax and the investment returns over the long term it generates for its clients.
Principal risks and uncertainties
The company has identified and assessed the key risks to the business as set out below. Given the size of the company and its business model, which is not complex, it considers these risks to be modest and appropriately managed or mitigated.
Credit risk
This represents loss that would result from non-payment of management fees. Since all fees are automatically settled by deduction from the funds held by the custodian, there is little credit risk associated with these . At the balance sheet date there was no other significant external exposure to credit risk.
Operational risk
This refers to the risk of financial or other loss that can arise from inadequate or failed business processes and systems, human error or external events. This could include administration and/or dealing errors or breaches or investment mandate breach. The company's risk management framework is designed to identify potential sources of error arising from its operations and strengthen, as necessary, its internal systems and processes, supervisory and oversight functions in order to minimise residual risk exposure.
Market risk
Since a major part of the company's income is linked to the value of assets under its management, there is a risk of reduction in revenues resulting from adverse movement in securities markets. There is also an investment risk associated with over exposure to certain sectors or assets. The company seeks to mitigate these risks by the breadth of diversification within a sound asset allocation framework and the quality of its research and analysis.
CS Managers Ltd
Strategic report (continued)
For the year ended 31 March 2021
Page 2
Business and regulatory risk
This is the risk arising from changes in its business, which may prevent the company from carrying out its business plan and desired strategy. The company keeps under review progress against the company's strategic objectives, and any material structural changes to these. The company applies internal and external sources of regulatory advice to minimise the risk of breaches occurring, which could affect reputational risk and regulatory standing. The company maintains professional indemnity cover from established industry provider to minimise the risk of loss.
Liquidity risk
In order to ensure the company has sufficient funds to meets its financial obligations in a timely manner, it monitors the position within a liquidity risk management framework and maintains an excess of liquidity in excess of the regulatory BIPRU requirements to mitigate the risk. The company does not hold illiquid assets on its Balance Sheet except for fixed assets, nor is it dependent on borrowing or external financing for any aspect of its business.
FCA and BIPRU Disclosures
The disclosures of the company made in order to comply with the UK Financial Conduct Authority (FCA) Prudential Sourcebook for Banks, Building Societies and Investment Firms (BIPRU) and the rules which implement the EU Directives underlying the capital adequacy framework, are available on the company's website.
Regulatory Capital
The company's Capital Resources Requirement ("CRR") Pillar 1 calculation, as a €50k BIPRU investment firm, is its variable capital requirement (£238,000), which is higher than its base capital requirement (£44,000).
Having performed the ICAAP, the company has concluded that no additional capital is required in excess of its Pillar 1 capital requirement. The company currently holds £1,251,000 as Tier 1 capital to meet its CRR. The company considers this amount to be sufficient regulatory capital to support the business and has not identified any areas which give rise to a requirement to hold additional risk based capital.
The company’s ICAAP is reviewed annually, but will be revised in the event of any material changes to the Firm’s business or risk profile.
Financial Position of the company at 31 March 2021
Having generated a profit after tax for the year of £256,135 (2020: £192,093), the company had net assets amounting to £1,253,877 (2020: £1,266,354) at 31 March 2021 and a strong cash position. The directors are satisfied with the financial position of the company at the year end and expect sound financial performance in the future.
Key Perfomance Indicators
The company's activities are not complex in nature. The directors measure performance from a combination
of factors including good customer outcomes; a growth in assets under management by value and in
portfolios by number; net business gained or lost; increase in Balance Sheet value; comparative profitability;
CS Managers Ltd
Strategic report (continued)
For the year ended 31 March 2021
Page 3
Linda Forsyth
Secretary
26 July 2021
CS Managers Ltd
Directors' report
For the year ended 31 March 2021
Page 4
The directors present their report and financial statements for the year ended 31 March 2021.
Principal activities
The principal activity of the company is
providing discretionary investment management and advice services
.
Results and dividends
The results for the year are set out on page 10.
Ordinary dividends were paid amounting to £15,037. The directors do not recommend payment of a final dividend.
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
Andrew Campbell
William Forsyth
Linda Forsyth
Acquisition of own shares
During the year 241,500 of the company's own shares with a nominal value of £12,075 were purchased for a consideration of £253,575. These shares continued to be held in Treasury as at 31 March 2021, representing 26.11% of issued share capital.
Auditor
Saffery Champness LLP have expressed their willingness to continue in office.
CS Managers Ltd
Directors' report (continued)
For the year ended 31 March 2021
Page 5
Statement of directors' responsibilities
The directors are responsible for preparing the annual 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 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;
-
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.
Statement of disclosure to auditor
So far as the directors are aware, there is no relevant audit information of which the company's auditors are unaware. Additionally, the directors 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 auditors are aware of that information.
By order of the board
Linda Forsyth
Secretary
26 July 2021
CS Managers Ltd
Independent auditor's report
To the members of CS Managers Ltd
Page 6
Opinion
We have audited the financial statements of CS Managers Ltd (the 'company') for the year ended 31 March 2021 which comprise the statement of comprehensive income, the statement of financial position, the statement of changes in equity, the statement of cash flows and notes to the financial statements, including significant accounting policies.
The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards,
including Financial Reporting
S
tandard 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 31 March 2021 and of its profit 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.
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 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.
CS Managers Ltd
Independent auditor's report (continued)
To the members of CS Managers Ltd
Page 7
The directors are responsible for the other information. The other information comprises the information included in the annual report, other than the financial statements and our auditor’s report thereon. 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'
r
eport 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.
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identifie
d
material misstatements in the strategic report and the directors'
r
eport
.
We have nothing to report in respect of the following matters where 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
remuneration specified by law are not made; or
-
we have not received all the information and explanations we require for our audit.
Responsibilities of directors
As explained more fully in the directors'
r
esponsibilities
s
tatement, 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.
CS Managers Ltd
Independent auditor's report (continued)
To the members of CS Managers Ltd
Page 8
Auditor's responsibilities for the audit of the financial statements
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
.
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 specific procedures for this engagement and the extent to which these are capable of detecting irregularities, including fraud are detailed below.
Identifying and assessing risks related to irregularities:
We assessed the susceptibility of the company’s financial statements to material misstatement and how fraud might occur, including through discussions with the directors, discussions within our audit team planning meeting, updating our record of internal controls and ensuring these controls operated as intended. We evaluated possible incentives and opportunities for fraudulent manipulation of the financial statements. We identified laws and regulations that are of significance in the context of the company by discussions with directors and by updating our understanding of the sector in which the company operates.
Laws and regulations of direct significance in the context of the company include The Companies Act 2006 and UK Tax legislation.
Audit response to risks identified
We considered the extent of compliance with these laws and regulations as part of our audit procedures on the related financial statement items including a review of financial statement disclosures. We reviewed the company's records of breaches of laws and regulations, minutes of meetings and correspondence with relevant authorities to identify potential material misstatements arising. We discussed the company's policies and procedures for compliance with laws and regulations with members of management responsible for compliance.
CS Managers Ltd
Independent auditor's report (continued)
To the members of CS Managers Ltd
Page 9
During the planning meeting with the audit team, the engagement partner drew attention to the key areas
which might involve non-compliance with laws and regulations or fraud. We enquired of management
whether they were aware of any instances of non-compliance with laws and regulations or kn
o
wledge of any
actual, suspected or alleged fraud. We addressed the risk of fraud through management override of controls
by testing the appropriateness of journal entries and identifying any significant transactions that were
unusual or outside the normal course of business. We assessed whether judgements made in making
accounting estimates gave rise to a possible indication of management bias. At the completion stage of the
audit, the engagement partner’s review included ensuring that the team had
a
pproached their work with
appropriate professional scepticism and thus the capacity to identify non-compliance with laws and
regulations and fraud.
The company is regulated by the FCA. We discussed the company’s authorisation and permitted activities
with the SMF16 and obtained evidence of this from the FCA register. We obtained additional
e
vidence about
compliance by discussing any breaches with the SMF16 and SMF17 and reviewing correspondence with the
FCA.
There are inherent limitations in the audit procedures described above and the further removed noncompliance
with laws and regulations is from the events and transactions reflected in the financial
statements, the less likely we would become aware of it. Also, 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.
A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's 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.
Kenneth McDowell (Senior Statutory Auditor)
For and on behalf of Saffery Champness LLP
26 July 2021
Chartered Accountants
Statutory Auditors
Edinburgh Quay
133 Fountainbridge
Edinburgh
EH3 9BA
CS Managers Ltd
Statement of comprehensive income
For the year ended 31 March 2021
Page 10
2021
2020
Notes
£
£
Turnover
3
1,487,485
1,185,230
Administrative expenses
(1,209,146)
(954,946)
Other operating income
5,228
-
Operating profit
4
283,567
230,284
Interest receivable and similar income
7
12,720
11,752
Other gains and losses
8
20,904
(2,282)
Profit before taxation
317,191
239,754
Tax on profit
9
(59,963)
(47,661)
Profit for the financial year
257,228
192,093
The income statement has been prepared on the basis that all operations are continuing operations.
CS Managers Ltd
Statement of financial position
As at 31 March 2021
31 March 2021
Page 11
2021
2020
Notes
£
£
£
£
Fixed assets
Tangible assets
11
15,812
20,322
Investments
12
489,603
588,485
505,415
608,807
Current assets
Debtors
14
366,649
334,437
Cash at bank and in hand
567,067
468,718
933,716
803,155
Creditors: amounts falling due within one year
15
(179,408)
(140,348)
Net current assets
754,308
662,807
Total assets less current liabilities
1,259,723
1,271,614
Provisions for liabilities
(4,753)
(5,260)
Net assets
1,254,970
1,266,354
Capital and reserves
Called up share capital
18
46,250
46,250
Share premium account
19
152,502
152,502
Other reserves
20
203,391
203,391
Profit and loss reserves
22
852,827
864,211
Total equity
1,254,970
1,266,354
The financial statements were approved by the board of directors and authorised for issue on 26 July 2021 and are signed on its behalf by:
William Forsyth
Director
Company Registration No. SC231678
CS Managers Ltd
Statement of changes in equity
For the year ended 31 March 2021
Page 12
Share capital
Share premium account
Other reserves
Profit and loss reserves
Total
Notes
£
£
£
£
£
Balance at 1 April 2019
46,250
152,502
203,391
692,468
1,094,611
Year ended 31 March 2020:
Profit and total comprehensive income for the year
-
-
-
192,093
192,093
Dividends
10
-
-
-
(20,350)
(20,350)
Balance at 31 March 2020
46,250
152,502
203,391
864,211
1,266,354
Year ended 31 March 2021:
Profit and total comprehensive income for the year
-
-
-
257,228
257,228
Dividends
10
-
-
-
(15,037)
(15,037)
Own shares acquired
-
-
-
(253,575)
(253,575)
Balance at 31 March 2021
46,250
152,502
203,391
852,827
1,254,970
CS Managers Ltd
Statement of cash flows
For the year ended 31 March 2021
Page 13
2021
2020
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from operations
25
286,732
109,722
Income taxes paid
(44,809)
(47,479)
Net cash inflow from operating activities
241,923
62,243
Investing activities
Purchase of tangible fixed assets
(7,468)
(9,466)
Proceeds on disposal of investments
98,882
(6,900)
Receipts arising from loans made
20,904
(2,282)
Interest received
7,386
5,610
Dividends received
5,334
6,142
Net cash generated from/(used in) investing activities
125,038
(6,896)
Financing activities
Purchase of treasury shares
(253,575)
-
Dividends paid
(15,037)
(20,350)
Net cash used in financing activities
(268,612)
(20,350)
Net increase in cash and cash equivalents
98,349
34,997
Cash and cash equivalents at beginning of year
468,718
433,721
Cash and cash equivalents at end of year
567,067
468,718
CS Managers Ltd
Notes to the financial statements
For the year ended 31 March 2021
Page 14
1
Accounting policies
Company information
CS Managers Ltd is a
private
company
limited by shares
incorporated in
Scotland
.
The registered office is
Edinburgh Quay, 133 Fountainbridge, Edinburgh, EH3 9BA.
1.1
Accounting convention
These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.
The financial statements are prepared in
sterling
, which is the functional currency of the company.
Monetary a
mounts
in these financial statements are
rounded to the nearest £.
The financial statements have been prepared under the historical cost convention, modified to include the revaluation of freehold properties and to include investment properties and certain financial instruments at fair value. The principal accounting policies adopted are set out below.
1.2
Going concern
A
true
t the time of approving the financial statements
,
t
he directors have a reasonable expectation that the
company
has adequate resources to continue in operational existence for the foreseeable future. Thus
t
he directors continue to adopt the going concern basis of accounting in preparing the financial statements.
Going concern considerations as a consequence of COVID-19 are disclosed further in note 25 to the financial statements.
1.3
Turnover
Turnover represents
fees received in relation to investment management. Fees are recognised once earned.
1.4
Tangible fixed assets
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 over their useful lives on the following bases:
Fixtures and fittings
33% Straight line
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and
is credited or charged to profit or loss
.
1.5
Fixed asset investments
Interests in subsidiaries are initially measured at cost and subsequently measured at cost less any accumulated impairment losses.
CS Managers Ltd
Notes to the financial statements (continued)
For the year ended 31 March 2021
1
Accounting policies (continued)
Page 15
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.
An associate is an entity, being neither a subsidiary nor a joint venture, in which the company holds a long-term interest and where the company has significant influence. The company considers that it has significant influence where it has the power to participate in the financial and operating decisions of the associate.
Entities in which the company has a long term interest and shares control under a contractual arrangement are classified as jointly controlled entities
.
Other investments are included at fair value.
1.6
Impairment of fixed assets
At each reporting
period
end date, the
company
reviews the carrying amounts of its tangible
assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). 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.
1.7
Cash and cash equivalents
Cash and cash equivalents
are basic financial assets
and
include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.
1.8
Financial instruments
The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the company's 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.
Basic financial assets
Basic financial assets, which include debtors, 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.
CS Managers Ltd
Notes to the financial statements (continued)
For the year ended 31 March 2021
1
Accounting policies (continued)
Page 16
Other financial assets
Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in
profit
or
loss
, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.
Impairment of financial assets
Financial assets, other than those
held
at
fair value through profit and loss
, are assessed for indicators of impairment at each reporting end date.
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 profit or loss.
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 profit or loss.
Derecognition of financial assets
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.
Classification of financial liabilities
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.
CS Managers Ltd
Notes to the financial statements (continued)
For the year ended 31 March 2021
1
Accounting policies (continued)
Page 17
Basic financial liabilities
Basic financial liabilities, including
creditors
, bank loans, loans from
fellow group companies and preference shares 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
paymen
ts discounted at a market rate of interest.
Financial liabilities classified as payable within one year are not amortised.
Debt instruments are subsequently carried at amortised cost, using the effective
interest rate method.
Trade creditors
are obligations to pay for goods or services that have been acquired
in the ordinary course of business from suppliers. A
m
ounts 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.
Other financial liabilities
Derivatives, including interest rate swaps and forward foreign exchange contracts,
are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are
s
ubsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in
profit
or
loss
in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.
Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as
being measured at
fair value th
r
ough profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.
Derecognition of financial liabilities
Financial liabilities are derecognised when the company’s contractual obligations
expire or are discharged or cancelled.
1.9
Equity instruments
Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.
CS Managers Ltd
Notes to the financial statements (continued)
For the year ended 31 March 2021
1
Accounting policies (continued)
Page 18
1.10
Derivatives
Derivatives are initially recognised at fair value at the date a derivative contract is entered into and are subsequently remeasured to fair value at each reporting end date. The resulting gain or loss is recognised in
profit
or
loss
immediately unless the derivative is designated and effective as a hedging instrument, in which event the timing of the recognition in
profit
or
loss
depends on the nature of the hedge relationship.
A derivative with a positive fair value is recognised as a financial asset, whereas a derivative with a negative fair value is recognised as a financial liability.
1.11
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
Current 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 tax
Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.
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. Where items recognised in other comprehensive income or equity are chargeable to or deductible for tax purposes, the resulting current or deferred tax expense or income is presented in the same component of comprehensive income or equity as the transaction or other event that resulted in the tax expense or income. 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.
CS Managers Ltd
Notes to the financial statements (continued)
For the year ended 31 March 2021
1
Accounting policies (continued)
Page 19
1.12
Employee benefits
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
if material,
is recognised in the period in which the employee’s services are received.
Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.
1.13
Retirement benefits
The company operates a defined contribution scheme for the benefit of some of its employees. Contributions payable are charged to the profit and loss account in the year they are payable.
1.14
Leases
Rentals payable under operating leases,
including
any lease incentives received, are charged to
profit or loss
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 lease
s
asset are consumed.
1.15
Government grants
Government grants are recognised at the fair value of the asset receive
d
or receivable when there is reasonable assurance that the grant conditions will be met and the grants will be received.
A grant that specifies performance conditions is recognised in income when the performance conditions are met
. Where a
grant does not specify performance conditions
it
is recognised in income when the proceeds are received or receivable
. A grant received before the recognition criteria are satisfied is recognised as a liability.
1.16
Foreign exchange
Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation
in the period
are included in profit or loss.
1.17
Website development costs
Website development costs are expensed as the website is not considered to be a revenue generating asset in its own right therefore no enduring economic benefit arises to the company directly as a result of operating the website. This treatment is in accordance with
FRS 102
.
CS Managers Ltd
Notes to the financial statements (continued)
For the year ended 31 March 2021
Page 20
2
Critical accounting judgements and key sources of estimation uncertainty
In the application of the company’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
3
Turnover and other revenue
An analysis of the company's turnover is as follows:
2021
2020
£
£
Turnover analysed by class of business
Loyalty bonus
38,687
44,137
Management fees
1,448,798
1,136,093
Other income
-
5,000
1,487,485
1,185,230
2021
2020
£
£
Other significant revenue
Interest income
7,386
5,610
Dividends received
5,334
6,142
Grants received
5,228
-
2021
2020
£
£
Turnover analysed by geographical market
United Kingdom
1,487,485
1,185,230
CS Managers Ltd
Notes to the financial statements (continued)
For the year ended 31 March 2021
Page 21
4
Operating profit
2021
2020
Operating profit for the year is stated after charging/(crediting):
£
£
Government grants
(5,228)
-
Fees payable to the company's auditor for the audit of the company's financial statements
10,500
7,650
Depreciation of owned tangible fixed assets
11,978
9,309
Operating lease charges
67,921
63,868
5
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2021
2020
Number
Number
10
11
Their aggregate remuneration comprised:
2021
2020
£
£
Wages and salaries
496,963
489,331
Social security costs
53,257
53,275
Pension costs
63,099
37,199
613,319
579,805
6
Directors' remuneration
2021
2020
£
£
Remuneration for qualifying services
199,800
189,400
Company pension contributions to defined contribution schemes
52,050
22,050
251,850
211,450
CS Managers Ltd
Notes to the financial statements (continued)
For the year ended 31 March 2021
Page 22
7
Interest receivable and similar income
2021
2020
£
£
Interest income
Interest on bank deposits
7,386
5,610
Other income from investments
Dividends received
5,334
6,142
Total income
12,720
11,752
Investment income includes the following:
Interest on financial assets not measured at fair value through profit or loss
7,386
5,610
Dividends from financial assets measured at fair value through profit or loss
5,334
6,142
8
Other gains and losses
2021
2020
£
£
Fair value gains/(losses) on financial instruments
Amounts written back to fair value through profit or loss
23,810
4,337
Other gains/(losses)
Loss on disposal of financial assets held at fair value through profit or loss
(2,906)
(6,619)
20,904
(2,282)
9
Taxation
2021
2020
£
£
Current tax
UK corporation tax on profits for the current period
60,470
43,673
Deferred tax
Origination and reversal of timing differences
(507)
3,988
Total tax charge
59,963
47,661
CS Managers Ltd
Notes to the financial statements (continued)
For the year ended 31 March 2021
9
Taxation (continued)
Page 23
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:
2021
2020
£
£
Profit before taxation
317,191
239,754
Expected tax charge based on the standard rate of corporation tax in the UK of 19.00% (2020: 19.00%)
60,266
45,553
Tax effect of expenses that are not deductible in determining taxable profit
3,459
5,086
Tax effect of income not taxable in determining taxable profit
(6,044)
(824)
Adjustments in respect of prior years
-
(1,135)
Other permanent differences
(1,009)
(1,167)
Deferred tax adjustments in respect of prior years
-
148
Chargeable gains
3,291
-
Taxation charge for the year
59,963
47,661
10
Dividends
2021
2020
£
£
Interim paid
15,037
20,350
CS Managers Ltd
Notes to the financial statements (continued)
For the year ended 31 March 2021
Page 24
11
Tangible fixed assets
Fixtures and fittings
£
Cost
At 1 April 2020
57,270
Additions
7,468
Disposals
(13,027)
At 31 March 2021
51,711
Depreciation and impairment
At 1 April 2020
36,948
Depreciation charged in the year
11,978
Eliminated in respect of disposals
(13,027)
At 31 March 2021
35,899
Carrying amount
At 31 March 2021
15,812
At 31 March 2020
20,322
12
Fixed asset investments
2021
2020
Notes
£
£
Investments in subsidiaries
13
2
2
Listed investments
489,601
588,483
489,603
588,485
Listed
investments
included above:
Listed investments carrying amount
489,601
588,483
CS Managers Ltd
Notes to the financial statements (continued)
For the year ended 31 March 2021
12
Fixed asset investments (continued)
Page 25
Movements in fixed asset investments
Shares in group undertakings
Other investments other than loans
Total
£
£
£
Cost or valuation
At 1 April 2020
2
588,483
588,485
Additions
-
446,650
446,650
Valuation changes
-
5,694
5,694
Disposals
-
(551,226)
(551,226)
At 31 March 2021
2
489,601
489,603
Carrying amount
At 31 March 2021
2
489,601
489,603
At 31 March 2020
2
588,483
588,485
13
Subsidiaries
Details of the company's subsidiaries at 31 March 2021 are as follows:
Name of undertaking
Registered office
Class of
% Held
shares held
Direct
Indirect
Charlotte Square Investments Ltd
Scotland
Ordinary
100.00
0
Charlotte Square Wealth Managers Ltd
Scotland
Ordinary
100.00
0
Charlotte Square Managers Limited
Scotland
Ordinary
100.00
0
The aggregate capital and reserves and the result for the year of the subsidiaries noted above was as follows:
Name of undertaking
Capital and Reserves
Profit/(Loss)
£
£
Charlotte Square Investments Ltd
1
Charlotte Square Wealth Managers Ltd
1
CS Managers Ltd
Notes to the financial statements (continued)
For the year ended 31 March 2021
Page 26
14
Debtors
2021
2020
Amounts falling due within one year:
£
£
Trade debtors
350,412
317,185
Prepayments and accrued income
16,237
17,252
366,649
334,437
15
Creditors: amounts falling due within one year
2021
2020
£
£
Trade creditors
16,608
14,061
Amounts owed to group undertakings
1
1
Corporation tax
60,470
44,809
Other taxation and social security
67,906
60,859
Other creditors
3,233
6,618
Accruals and deferred income
31,190
14,000
179,408
140,348
16
Deferred taxation
The following are the major deferred tax liabilities and assets recognised by the company and movements thereon:
Liabilities
Liabilities
2021
2020
Balances:
£
£
Accelerated capital allowances
4,753
5,260
2021
Movements in the year:
£
Liability at 1 April 2020
5,260
Credit to profit or loss
(507)
Liability at 31 March 2021
4,753
CS Managers Ltd
Notes to the financial statements (continued)
For the year ended 31 March 2021
16
Deferred taxation (continued)
Page 27
The deferred tax liability set out above is expected to reverse within [12 months] and relates to accelerated capital allowances that are expected to mature within the same period.
17
Retirement benefit schemes
2021
2020
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
63,099
37,199
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.
18
Share capital
2021
2020
2021
2020
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of 5p each
925,000
925,000
46,250
46,250
19
Share premium account
2021
2020
£
£
At the beginning and end of the year
152,502
152,502
20
Other reserves
£
At the beginning of the prior year
203,391
At the end of the prior year
203,391
At the end of the current year
203,391
CS Managers Ltd
Notes to the financial statements (continued)
For the year ended 31 March 2021
Page 28
21
Equity settled share-based transactions
An employee of the company holds options to subscribe for 138,750 shares in the company under the Enterprise Management Incentive scheme. The options are exercisable at prices ranging from £0.05p to £0.90p per share. At 31 March 2021, 138,750 shares (2020: 138,750) had vested. None of the options have been exercised. The options expire in December 2025. Any charge in relation to these options would be immaterial and so no charge has been made.
22
Profit and loss reserves
2021
2020
£
£
At the beginning of the year
864,211
692,468
Profit for the year
257,228
192,093
Dividends declared and paid in the year
(15,037)
(20,350)
Own shares acquired
(253,575)
-
At the end of the year
852,827
864,211
23
Operating lease commitments
Lessee
The company has future operating lease commitment of £87,080 (2020: £131,476).
At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:
2021
2020
£
£
Within one year
55,200
44,396
Between two and five years
96,600
87,080
151,800
131,476
24
Related party transactions
The company paid a dividend of £6,634 (2020: £6,634) to the company's directors.
CS Managers Ltd
Notes to the financial statements (continued)
For the year ended 31 March 2021
Page 29
25
Cash generated from operations
2021
2020
£
£
Profit for the year after tax
257,228
192,093
Adjustments for:
Taxation charged
59,963
47,661
Investment income
(12,720)
(11,752)
Depreciation and impairment of tangible fixed assets
11,978
9,309
Other gains and losses
(20,904)
2,282
Movements in working capital:
Increase in debtors
(32,212)
(128,063)
Increase/(decrease) in creditors
23,399
(1,808)
Cash generated from operations
286,732
109,722
26
Analysis of changes in net funds
1 April 2020
Cash flows
31 March 2021
£
£
£
Cash at bank and in hand
468,718
98,349
567,067
2021-03-31
2020-04-01
false
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