Constellation Cold Midco - Limited company accounts 23.2

CONSTELLATION COLD LOGISTICS UK MIDCO LIMITED - Company Information

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REGISTERED NUMBER: 13076994 (England and Wales)

Constellation Cold Logistics UK Midco

Limited

Previously known as

HSH Midco Limited

Group Strategic Report, Report of the Directors and

Audited Consolidated Financial Statements for the Year Ended 31st December 2022

Page

Company Information

Group Strategic Report

Report of the Directors

Report of the Independent Auditors

Consolidated Income Statement

Consolidated Other Comprehensive Income

Consolidated Balance Sheet

Company Balance Sheet

Consolidated Statement of Changes in Equity

Company Statement of Changes in Equity

Consolidated Cash Flow Statement

Notes to the Consolidated Cash Flow Statement

Notes to the Consolidated Financial Statements

DIRECTORS:

A J Howard

Mrs A Wiltshire

J C R Marquez

REGISTERED OFFICE:

6th Floor

1 Aldermanbury Square

London

EC2V 7JR

REGISTERED NUMBER:

13076994 (England and Wales)

AUDITORS:

Smailes Goldie

Chartered Accountants

Statutory Auditor

Regent's Court

Princess Street

Hull

East Yorkshire

HU2 8BA

The directors present their strategic report of the company and the group for the year ended 31st December 2022.

REVIEW OF BUSINESS

The principal activity of the group is of an operator of cold storage premises located in Grimsby and Redditch and transport services direct from the cold storage facilities to customers. The group supplies entirely to the UK.

The key financial performance indicators during the year were as follows:

2022

2021

Turnover

18,674,393

15,574,489

Operating (loss)

(1,658,092)

(171,141

)

(Loss) after tax

(2,788,227)

(1,757,182

)

Equity shareholder funds

21,274,915

13,347,483

Operating profit was significantly affected by higher energy prices commencing in quarter 4 2021 giving an additional cost year on year of £1.3m.

The fall in shareholder' funds relates entirely to the profit after tax result for the year.

PRINCIPAL RISKS AND UNCERTAINTIES

The group's activities expose it to a number of financial risks including cash flow risk.

Liquidity risk

In order to maintain liquidity to ensure that sufficient funds are available for ongoing operations and future developments, the group utilises available resources provided from within the group. Effective cash flow forecasting allows for the provision of group resources for any significant cash outflows that could not be covered by the company individually.

Energy costs

Due to high levels of electricity required to run the cold stores and fuel for haulage operations, the directors monitor prices regularly and take steps to mitigate the effect of price increases on profitability.

FUTURE DEVELOPMENTS

The directors anticipate that the business environment will remain competitive. They believe that the group is in a good position and that the risks that have been identified are being well managed. The directors are confident in the group's ability to maintain and build on the current position, and as a result are overseeing the continuing development of the Alpine complex in Grimsby.

FINANCIAL INSTRUMENTS

The group has a normal level of exposure to price, credit, liquidity and cash flow risks arising from trading activities which are entirely conducted in sterling. The group does not enter into any formally designated hedging arrangements.

EVENTS SINCE THE YEAR END

On 26 November 2022, HSH Cold Stores Ltd announced that it had exchanged contracts on the purchase of Associated Cold Stores & Transport Limited. The transaction subsequently completed on 10 January 2023.

On 23 March 2023 an investigation was opened by the Competition and Markets Authority to look into the above completed acquisition and whether it may be expected to result in a substantial lessening of competition within any market in the UK for goods and services. On 20 June 2023, the CMA cleared the completed acquisition.

On 12 May 2023, HSH Cold Stores Limited rebranded in line with its parent company under the name Constellation Cold Logistics UK Limited, followed by other group companies.

ON BEHALF OF THE BOARD:

A J Howard - Director

20th December 2023

The directors present their report with the financial statements of the company and the group for the year ended 31st December 2022.

CHANGE OF NAME

The group passed a special resolution on 24th August 2023 changing its name from HSH Midco Limited to Constellation Cold Logistics UK Midco Limited.

DIVIDENDS

No dividends will be distributed for the year ended 31st December 2022.

EVENTS SINCE THE END OF THE YEAR

Information relating to events since the end of the year is given in the notes to the financial statements.

DIRECTORS

A J Howard , Mrs A Wiltshire and J C R Marquez were appointed as directors after 31st December 2022 but prior to the date of this report.

J A Cott and S D Gray ceased to be directors after 31st December 2022 but prior to the date of this report.

STATEMENT OF DIRECTORS' RESPONSIBILITIES

The directors are responsible for preparing the Group Strategic Report, the Report of the Directors 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 group and of the profit or loss of the group 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 and the group's transactions and disclose with reasonable accuracy at any time the financial position of the company and the group 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 the group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

STATEMENT AS TO DISCLOSURE OF INFORMATION TO AUDITORS

So far as the directors are aware, there is no relevant audit information (as defined by Section 418 of the Companies Act 2006) of which the group's auditors are unaware, and each director has taken all the steps that he ought to have taken as a director in order to make himself aware of any relevant audit information and to establish that the group's auditors are aware of that information.

AUDITORS

The auditors, Smailes Goldie, will be proposed for re-appointment at the forthcoming Annual General Meeting.

ON BEHALF OF THE BOARD:

A J Howard - Director

20th December 2023

Opinion

We have audited the financial statements of Constellation Cold Logistics UK Midco Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 31st December 2022 which comprise the Consolidated Income Statement, Consolidated Other Comprehensive Income, Consolidated Balance Sheet, Company Balance Sheet, Consolidated Statement of Changes in Equity, Company Statement of Changes in Equity, Consolidated Cash Flow Statement and Notes to the Consolidated Cash Flow Statement, Notes to the Financial Statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting 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 group's and of the parent company affairs as at 31st December 2022 and of the group's 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 Auditors' responsibilities for the audit of the financial statements section of our report. We are independent of the group 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's and the 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.

Other information

The directors are responsible for the other information. The other information comprises the information in the Group Strategic Report and the Report of the Directors, but does not include the financial statements and our Report of the Auditors 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.

In connection with our audit of the financial statements, 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 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 Group Strategic Report and the Report of the Directors for the financial year for which the financial statements are prepared is consistent with the financial statements; and

-	the Group Strategic Report and the Report of the Directors 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 group and the parent company and its environment obtained in the course of the audit, we have not identified material misstatements in the Group Strategic Report or the Report of the Directors.

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 by the parent company, or returns adequate for our audit have not been received from branches not visited by us; or

-	the parent company 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.

Responsibilities of directors

As explained more fully in the Statement of Directors' Responsibilities set out on page four, 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 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 group's and the parent 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 group or the parent company or to cease operations, or have no realistic alternative but to do so.

Auditors' 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 a Report of the Auditors 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.

The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:

Our approach to identifying and assessing the risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, was focused on specific laws and regulations which we considered may have a direct material effect on the financial statements or the operations of the company, including the Companies Act 2006, tax legislation, data protection, anti-bribery, employment, environmental and health and safety legislation. An understanding of these laws and regulations and the extent of compliance was obtained through discussion with management and inspecting legal and regulatory correspondence.

We assessed the susceptibility of the company's financial statements to material misstatement, including obtaining an understanding of how fraud might occur, by making enquiries of management and considering the internal controls in place to mitigate risks of fraud and non-compliance with laws and regulations.

To address the risk of fraud through management bias and override of controls, we:

performed analytical procedures to identify any unusual or unexpected relationships;

tested journal entries to identify unusual transactions;

assessed whether judgements and assumptions made in determining the accounting estimates were
indicative of potential bias; and

investigated the rationale behind significant or unusual transactions.

In response to the risk of irregularities and non-compliance with laws and regulations, we designed procedures which included, but were not limited to:

agreeing financial statement disclosures to underlying supporting documentation;

reading the minutes of meetings of those charged with governance;

enquiring of management as to actual and potential litigation and claims; and

reviewing correspondence with relevant regulators and the company's legal advisors.

A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at www.frc.org.uk/auditorsresponsibilities. This description forms part of our Report of the Auditors.

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 a Report of the Auditors 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.

Matthew Fox FCCA (Senior Statutory Auditor)

for and on behalf of Smailes Goldie

Chartered Accountants

Statutory Auditor

Regent's Court

Princess Street

Hull

East Yorkshire

HU2 8BA

21st December 2023

Constellation Cold Logistics UK Midco

Limited (Registered number: 13076994)

Consolidated Income Statement

for the year ended 31st December 2022

Year ended

Period

31.12.22

11.12.20 to 31.12.21

Notes

TURNOVER

18,674,393

15,574,489

Cost of sales

9,711,100

8,233,661

GROSS PROFIT

8,963,293

7,340,828

Distribution costs

645,957

541,710

Administrative expenses

10,146,839

7,502,793

10,792,796

8,044,503

(1,829,503

)

(703,675

)

Other operating income

171,411

532,534

OPERATING LOSS

(1,658,092

)

(171,141

)

Exceptional item

253,110

128,000

(1,911,202

)

(299,141

)

Interest receivable and similar income

582

(1,910,620

)

(299,141

)

Interest payable and similar expenses

865,532

705,146

LOSS BEFORE TAXATION

(2,776,152

)

(1,004,287

)

Tax on loss

12,075

752,895

LOSS FOR THE FINANCIAL YEAR

(2,788,227

)

(1,757,182

)

Loss attributable to:

Owners of the parent

(2,788,227

)

(1,408,381

)

Non-controlling interests

(348,801

)

(2,788,227

)

(1,757,182

)

Constellation Cold Logistics UK Midco

Limited (Registered number: 13076994)

Consolidated Other Comprehensive Income

for the year ended 31st December 2022

Period

11.12.20

Year ended

31.12.22

31.12.21

Notes

LOSS FOR THE YEAR

(2,788,227

)

(1,757,182

)

OTHER COMPREHENSIVE INCOME

TOTAL COMPREHENSIVE INCOME
FOR THE YEAR

(2,788,227

)

(1,757,182

)

Total comprehensive income attributable to:

Owners of the parent

(2,788,227

)

(1,408,381

)

Non-controlling interests

(348,801

)

(2,788,227

)

(1,757,182

)

FIXED ASSETS

Intangible assets

20,672,695

17,580,991

Tangible assets

23,313,312

23,753,108

Investments

43,986,007

41,334,099

CURRENT ASSETS

Stocks

96,603

80,386

Debtors

4,259,546

3,285,325

Cash at bank and in hand

4,020,365

30,234

8,376,514

3,395,945

CREDITORS

Amounts falling due within one year

5,385,500

4,297,826

NET CURRENT ASSETS/(LIABILITIES)

2,991,014

(901,881

)

TOTAL ASSETS LESS CURRENT
LIABILITIES

46,977,021

40,432,218

CREDITORS

Amounts falling due after more than one
year

(23,695,550

)

(21,750,089

)

PROVISIONS FOR LIABILITIES

(2,006,556

)

(1,994,481

)

NET ASSETS

21,274,915

16,687,648

CAPITAL AND RESERVES

Called up share capital

8,001

8,000

Share premium

25,463,522

14,747,864

Retained earnings

(4,196,608

)

(1,408,381

)

SHAREHOLDERS' FUNDS

21,274,915

13,347,483

NON-CONTROLLING INTERESTS

3,340,165

TOTAL EQUITY

21,274,915

16,687,648

The financial statements were approved by the Board of Directors and authorised for issue on 20th December 2023 and were signed on its behalf by:

A J Howard - Director

FIXED ASSETS

Intangible assets

Tangible assets

Investments

23,956,901

14,940,944

23,956,901

14,940,944

CURRENT ASSETS

Debtors

1,699,703

CREDITORS

Amounts falling due within one year

185,081

NET CURRENT ASSETS/(LIABILITIES)

1,514,622

(185,081

)

TOTAL ASSETS LESS CURRENT
LIABILITIES

25,471,523

14,755,863

CAPITAL AND RESERVES

Called up share capital

8,001

8,000

Share premium

25,463,522

14,747,863

SHAREHOLDERS' FUNDS

25,471,523

14,755,863

Company's profit for the financial year

The financial statements were approved by the Board of Directors and authorised for issue on 20th December 2023 and were signed on its behalf by:

A J Howard - Director

Called up

Retained

capital

earnings

premium

Changes in equity

Issue of share capital

8,000

14,747,864

Total comprehensive income

(1,408,381

)

8,000

(1,408,381

)

14,747,864

Non-controlling interest arising
on business combination

Balance at 31st December 2021

8,000

(1,408,381

)

14,747,864

Changes in equity

Issue of share capital

10,715,658

Total comprehensive income

(2,788,227

)

8,001

(4,196,608

)

25,463,522

Acquisition of non-controlling
interest

Balance at 31st December 2022

8,001

(4,196,608

)

25,463,522

Non-controlling

Total

interests

equity

Changes in equity

Issue of share capital

14,755,864

Total comprehensive income

(1,408,381

)

(348,801

)

(1,757,182

)

13,347,483

(348,801

)

12,998,682

Non-controlling interest arising
on business combination

3,688,966

Balance at 31st December 2021

13,347,483

3,340,165

16,687,648

Changes in equity

Issue of share capital

10,715,659

Total comprehensive income

(2,788,227

)

(2,788,227

)

21,274,915

3,340,165

24,615,080

Acquisition of non-controlling
interest

(3,340,165

)

(3,340,165

)

Balance at 31st December 2022

21,274,915

Called up

Retained

Total

capital

earnings

premium

equity

Changes in equity

Issue of share capital

8,000

14,747,863

14,755,863

Balance at 31st December 2021

8,000

14,747,863

14,755,863

Changes in equity

Issue of share capital

10,715,659

10,715,660

Balance at 31st December 2022

8,001

25,463,522

25,471,523

Constellation Cold Logistics UK Midco

Limited (Registered number: 13076994)

Consolidated Cash Flow Statement

for the year ended 31st December 2022

Period

11.12.20

Year ended

31.12.22

31.12.21

Notes

Cash flows from operating activities

Cash generated from operations

3,767,820

4,016,522

Interest paid

(843,084

)

(661,832

)

Interest element of hire purchase
payments paid

(22,448

)

(43,314

)

Tax paid

(236,382

)

(533,766

)

Net cash from operating activities

2,665,906

2,777,610

Cash flows from investing activities

Purchase of tangible fixed assets

(1,860,963

)

(776,864

)

Sale of tangible fixed assets

60,025

Payment to acquire subsidiary

(22,845,871

)

Cash acquired with subsidiary

491,246

Payments to acquire minority interest

(9,015,957

)

Interest received

582

Net cash from investing activities

(10,816,313

)

(23,131,489

)

Cash flows from financing activities

New loans in year

16,000,000

8,291,794

Loan repayments in year

(13,856,126

)

(1,704,048

)

Capital repayments in year

(493,205

)

(1,152,697

)

Amount withdrawn by directors

(93,303

)

Share issue

10,715,658

14,755,864

Net cash from financing activities

12,273,024

20,190,913

Increase/(decrease) in cash and cash equivalents

4,122,617

(162,966

)

Cash and cash equivalents at
beginning of year

(162,966

)

Cash and cash equivalents at end of
year

3,959,651

(162,966

)

1.	RECONCILIATION OF LOSS BEFORE TAXATION TO CASH GENERATED FROM OPERATIONS

Period

11.12.20

Year ended

31.12.22

31.12.21

Loss before taxation

(2,776,152

)

(1,004,287

)

Depreciation charges

4,874,580

4,146,376

Profit on disposal of fixed assets

(49,758

)

Government grants

(171,411

)

Finance costs

865,532

705,146

Finance income

(582

)

2,742,209

3,847,235

Increase in stocks

(16,217

)

(49,521

)

(Increase)/decrease in trade and other debtors

(799,029

)

252,115

Increase/(decrease) in trade and other creditors

1,840,857

(33,307

)

Cash generated from operations

3,767,820

4,016,522

2.	CASH AND CASH EQUIVALENTS

The amounts disclosed on the Cash Flow Statement in respect of cash and cash equivalents are in respect of these Balance Sheet amounts:

Year ended 31st December 2022

31.12.22

1.1.22

Cash and cash equivalents

4,020,365

30,234

Bank overdrafts

(60,714

)

(193,200

)

3,959,651

(162,966

)

Period ended 31st December 2021

31.12.21

11.12.20

Cash and cash equivalents

30,234

Bank overdrafts

(193,200

)

(162,966

)

3.	ANALYSIS OF CHANGES IN NET DEBT

At 1.1.22

Cash flow

At 31.12.22

Net cash

Cash at bank and in hand

30,234

3,990,131

4,020,365

Bank overdrafts

(193,200

)

132,486

(60,714

)

(162,966

)

4,122,617

3,959,651

Debt

Finance leases

(1,566,950

)

493,205

(1,073,745

)

Debts falling due within 1 year

(1,181,912

)

381,912

(800,000

)

Debts falling due after 1 year

(19,699,653

)

(2,354,374

)

(22,054,027

)

(22,448,515

)

(1,479,257

)

(23,927,772

)

Total

(22,611,481

)

2,643,360

(19,968,121

)

1.	STATUTORY INFORMATION

Constellation Cold Logistics UK Midco Limited is a private company, limited by shares , registered in England and Wales. The company's registered number and registered office address can be found on the General Information page.

2.	ACCOUNTING POLICIES

Basis of preparing the financial statements

These financial statements have been prepared in accordance with Financial Reporting Standard 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland" and the Companies Act 2006. The financial statements have been prepared under the historical cost convention.

Basis of consolidation

The group financial statements consolidate the financial statements of Constellation Cold Logistics UK Midco Limited and all its subsidiary undertakings drawn up to 31st December each year.

Turnover

Turnover is measured at fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales tax.

The company recognises revenue at fair value of the consideration received or receivable.

Revenue is calculated as the gross sales value which is recuced for volume discounts, rebates and similar discounts and allowances. Revenue is measured net of customer returns.

Goodwill

Purchased goodwill (representing the excess of the fair value of the consideration given over the fair value of the separable net assets acquired) arising on business combinations is capitalised. Positive goodwill is amortised to zero by equal annual instalments over its estimated useful life of 10 years. The carrying value of goodwill is reviewed whenever there is an indicator of impairment. Any impairment is recognised in the period in which it is identified.

Fixed asset investments

Investments in subsidiary undertakings are held at cost less provision for any permanent diminution in value.

Intangible assets

Intangible assets are initially measured at cost. After initial recognition, intangible assets are measured at cost less any accumulated amortisation and any accumulated impairment losses.

Tangible fixed assets

Depreciation is provided at the following annual rates in order to write off each asset over its estimated useful life or, if held under a finance lease, over the lease term, whichever is the shorter.

Freehold property

5% on cost

Improvements to property

20% on cost and 5% on cost

Plant and machinery

33% on cost and 20% on cost

Fixtures and fittings

33% on cost and 20% on cost

Motor vehicles

20% on cost

Government grants

Grants are accounted for under the accruals model as permitted by FRS 102. Grants relating to expenditure on tangible fixed assets are credited to the income statement at the same rate as the depreciation on the asset to which the grant relates. The deferred element of grants is included in creditors as deferred income. Grants of a revenue nature are recognised in the statement of comprehensive income in the same period as the related expenditure.

The Coronavirus Job Retention Scheme (CJRS) grant has been recognised as income on a systematic basis over the periods in which the entity has recognised the related costs for which the grant is intended to compensate.

Stocks

Stocks are valued at the lower of cost and net realisable value, after making due allowance for obsolete and slow moving items.

Taxation

Taxation for the year comprises current and deferred tax. Tax is recognised in the Consolidated Income Statement, except to the extent that it relates to items recognised in other comprehensive income or directly in equity.

Current or deferred taxation assets and liabilities are not discounted.

Current tax is recognised at the amount of tax payable using the tax rates and laws that have been enacted or substantively enacted by the balance sheet date.

Deferred tax

Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the balance sheet date.

Timing differences arise from the inclusion of income and expenses in tax assessments in periods different from those in which they are recognised in financial statements. Deferred tax is measured using tax rates and laws that have been enacted or substantively enacted by the year end and that are expected to apply to the reversal of the timing difference.

Unrelieved tax losses and other deferred tax assets are recognised only to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits.

Hire purchase and leasing commitments

Assets obtained under hire purchase contracts or finance leases are capitalised in the balance sheet. Those held under hire purchase contracts are depreciated over their estimated useful lives. Those held under finance leases are depreciated over their estimated useful lives or the lease term, whichever is the shorter.

The interest element of these obligations is charged to profit or loss over the relevant period. The capital element of the future payments is treated as a liability.

Rentals paid under operating leases are charged to profit or loss on a straight line basis over the period of the lease.

Pension costs and other post-retirement benefits

The group operates a defined contribution pension scheme. Contributions payable to the group's pension scheme are charged to profit or loss in the period to which they relate.

TURNOVER

The turnover and loss before taxation are attributable to the one principal activity of the group.

4.	OTHER OPERATING INCOME

Period

11.12.20

Year ended

31.12.22

31.12.21

Rents received

325,176

Government grants

171,411

207,358

171,411

532,534

5.	EMPLOYEES AND DIRECTORS

Period

11.12.20

Year ended

31.12.22

31.12.21

Wages and salaries

5,964,607

5,443,938

Social security costs

687,299

183,938

Other pension costs

192,955

210,327

6,844,861

5,838,203

The average number of employees during the year was as follows:

Period

11.12.20

Year ended

31.12.22

31.12.21

Directors

Management, sales and distribution

139

135

142

138

6.	DIRECTORS' EMOLUMENTS

Group

Year ended

Period ended

31.12.2022

31.12.2021

Directors' remuneration

501,825

440,440

Director's contribution to money purchase pension scheme

28,477

Company

Year ended

Period ended

31.12.2022

31.12.2021

Directors' remuneration

Directors' pension contributions to money purchase schemes

Information regarding the highest paid director is as follows:

Year ended

Period ended

31.12.2022

31.12.2021

Emoluments etc.

Directors' pension contributions to money purchase schemes

7.	OPERATING LOSS

The operating loss is stated after charging/(crediting):

Period

11.12.20

Year ended

31.12.22

31.12.21

Other operating leases

41,739

57,134

Depreciation - owned assets

1,969,166

1,333,299

Depreciation - assets on hire purchase contracts

321,326

859,633

Profit on disposal of fixed assets

(49,758

)

Goodwill amortisation

2,584,088

1,953,444

Auditors' remuneration

24,000

15,000

Auditors' remuneration for non audit work

6,000

8.	EXCEPTIONAL ITEMS

31.12.2022

31.12.2021

Customer claim

(128,000

)

Cost of fundamental reorganisation

(253,110

)

(253,110

)

(128,000

)

INTEREST RECEIVABLE AND SIMILAR INCOME

Period

11.12.20

Year ended

31.12.22

31.12.21

Deposit account interest

582

10.

INTEREST PAYABLE AND SIMILAR EXPENSES

Period

11.12.20

Year ended

31.12.22

31.12.21

Bank interest

1,617

1,319

Bank loan interest

410,863

261,145

ID interest and charges

10,830

12,503

Other interest payable

419,774

386,865

Hire purchase

22,448

43,314

865,532

705,146

11.

TAXATION

Analysis of the tax charge

The tax charge on the loss for the year was as follows:

Period

11.12.20

Year ended

31.12.22

31.12.21

Current tax:

UK corporation tax

263,145

Deferred tax

12,075

489,750

Tax on loss

12,075

752,895

UK corporation tax has been charged at 19 % (2021 - 19 %).

Reconciliation of total tax charge included in profit and loss

The tax assessed for the year is higher than the standard rate of corporation tax in the UK. The difference is explained below:

Period

11.12.20

Year ended

31.12.22

31.12.21

Loss before tax

(2,776,152

)

(1,004,287

)

Loss multiplied by the standard rate of corporation tax in the UK of
19 % (2021 - 19 %)

(527,469

)

(190,815

)

Effects of:

Expenses not deductible for tax purposes

54,122

Income not taxable for tax purposes

(32,581

)

Depreciation in excess of capital allowances

27,603

93,797

Change in rate of deferred tax

725

478,676

Amortisation of goodwill

490,977

371,155

Deferred tax not recognised

(920

)

Other permanent differences

188

Other tax adjustments, reliefs and transfers

(570

)

Total tax charge

12,075

752,895

12.	INDIVIDUAL INCOME STATEMENT

As permitted by Section 408 of the Companies Act 2006, the Income Statement of the parent company is not presented as part of these financial statements.

13.	INTANGIBLE FIXED ASSETS

Group

Goodwill

COST

At 1st January 2022

19,534,435

Additions

5,675,792

At 31st December 2022

25,210,227

AMORTISATION

At 1st January 2022

1,953,444

Amortisation for year

2,584,088

At 31st December 2022

4,537,532

NET BOOK VALUE

At 31st December 2022

20,672,695

At 31st December 2021

17,580,991

14.	TANGIBLE FIXED ASSETS

Group

Improvements

Freehold

Plant and

property

machinery

COST

At 1st January 2022

23,887,129

415,529

2,833,169

Additions

60,570

723,612

Disposals

At 31st December 2022

23,947,699

415,529

3,556,781

DEPRECIATION

At 1st January 2022

3,283,528

136,988

2,538,851

Charge for year

955,859

4,209

314,912

Eliminated on disposal

At 31st December 2022

4,239,387

141,197

2,853,763

NET BOOK VALUE

At 31st December 2022

19,708,312

274,332

703,018

At 31st December 2021

20,603,601

278,541

294,318

Fixtures

and

Motor

fittings

vehicles

Totals

COST

At 1st January 2022

1,871,676

5,359,788

34,367,291

Additions

481,460

595,321

1,860,963

Disposals

(116,125

)

(116,125

)

At 31st December 2022

2,353,136

5,838,984

36,112,129

DEPRECIATION

At 1st January 2022

801,650

3,853,166

10,614,183

Charge for year

257,963

757,549

2,290,492

Eliminated on disposal

(105,858

)

(105,858

)

At 31st December 2022

1,059,613

4,504,857

12,798,817

NET BOOK VALUE

At 31st December 2022

1,293,523

1,334,127

23,313,312

At 31st December 2021

1,070,026

1,506,622

23,753,108

Fixed assets, included in the above, which are held under hire purchase contracts are as follows:

Fixtures

Freehold

Plant and

and

Motor

property

machinery

fittings

vehicles

Totals

COST

At 1st January 2022

59,725

824,940

339,000

3,155,000

4,378,665

Transfer to ownership

(59,725

)

(135,166

)

(194,891

)

At 31st December 2022

689,774

339,000

3,155,000

4,183,774

DEPRECIATION

At 1st January 2022

11,944

748,682

131,834

1,757,901

2,650,361

Charge for year

61,006

113,000

147,320

321,326

Transfer to ownership

(11,944

)

(135,166

)

(147,110

)

At 31st December 2022

674,522

244,834

1,905,221

2,824,577

NET BOOK VALUE

At 31st December 2022

15,252

94,166

1,249,779

1,359,197

At 31st December 2021

47,781

76,258

207,166

1,397,099

1,728,304

15.	FIXED ASSET INVESTMENTS

Company

Shares in

group

undertakings

COST

At 1st January 2022

14,940,944

Additions

9,015,957

At 31st December 2022

23,956,901

NET BOOK VALUE

At 31st December 2022

23,956,901

At 31st December 2021

14,940,944

The directors have considered if indicators of impairment were present at the balance sheet date and concluded that they were not. The transaction to acquire the minority shareholder interest in the final month of the reporting period provided the directors with sufficient evidence to conclude that no indication of impairment was present.

The directors believe the carrying value of the investments are supported by their underlying net assets and future cashflows.

Details of subsidiary undertakings at the year end are as follows:

Name of company

Holding

Percentage
held

Nature of business

Constellation Cold Logistics UK Holdings
Limited

Ordinary A and
Ordinary B shares

100

Intermediate holding
company

Constellation Cold Logistics UK Limited

Ordinary shares

100

Cold storage

Cryotech (Grimsby) Limited

Ordinary shares

100

Cold storage

SAL Commercials Limited

Ordinary shares

100

Cold storage

On 14th September 2022 the trade and assets of Cryotech (Grimsby) Limited and SAL Commercials Limited was hived up into their immediate parent company Constellation Cold Logistics UK Limited.

On 15th December 2022 Constellation Cold Logistics UK Midco Limited purchased 100% of the issued Ordinary B shares in its subsidiary Constellation Cold Logistics UK LImited for consideration of £9,015,957 from the minority shareholder.

On 6th January 2023 the Ordinary A and Ordinary B shares in Constellation Cold Logistics UK Holdings Limited were reclassified as Ordinary shares.

All of the companies prepare financial statements for the year ended 31st December 2022, and are registered and operate in England & Wales. The registered office for all of the above companies is Birchin Way, Grimsby, DN31 2SG.

16.

STOCKS

Group

2022

2021

Stocks

96,603

80,386

17.

DEBTORS: AMOUNTS FALLING DUE WITHIN ONE YEAR

Group

Company

2022

2021

2022

2021

Trade debtors

3,181,426

2,448,894

Amounts owed by group undertakings

118,718

Other debtors

234,101

17,996

1,580,985

Invoice discounting advances

2,032

195,006

Directors' current accounts

93,303

Tax

141,744

59,855

Prepayments and accrued income

606,940

563,574

4,259,546

3,285,325

1,699,703

18.

CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR

Group

Company

2022

2021

2022

2021

Bank loans and overdrafts (see note 20)

860,714

1,375,112

Hire purchase contracts (see note 21)

599,774

959,227

Trade creditors

1,664,430

1,057,924

Amounts owed to group undertakings

795,901

185,081

Tax

154,493

Social security and other taxes

216,990

185,911

VAT

600,359

132,783

Other creditors

398,377

75,285

Accruals and deferred income

248,955

172,010

5,385,500

4,297,826

185,081

19.

CREDITORS: AMOUNTS FALLING DUE AFTER MORE THAN ONE
YEAR

Group

2022

2021

Bank loans (see note 20)

15,200,000

11,407,862

Other loans (see note 20)

6,854,027

8,291,791

Hire purchase contracts (see note 21)

473,971

607,723

Deferred government grants

1,167,552

1,442,713

23,695,550

21,750,089

20.

LOANS

An analysis of the maturity of loans is given below:

Group

2022

2021

Amounts falling due within one year or

on demand:

Bank overdrafts

60,714

193,200

Bank loans

800,000

1,181,912

860,714

1,375,112

Amounts falling due between one and

two years:

Bank loans - 1-2 years

800,000

Amounts falling due between two and

five years:

Bank loans - 2-5 years

14,400,000

4,599,312

Other loans - 2-5 years

6,854,027

21,254,027

4,599,312

Amounts falling due in more than five

years:

Repayable otherwise than by instalments

Other loans more 5yrs

8,291,791

Repayable by instalments

Bank loans more 5 yr

6,808,550

21.	LEASING AGREEMENTS

Minimum lease payments fall due as follows:

Group

Hire purchase

contracts

2022

2021

Net obligations repayable:

Within one year

599,774

959,227

Between one and five years

473,971

607,723

1,073,745

1,566,950

22.	SECURED DEBTS

The following secured debts are included within creditors:

Group

2022

2021

Bank overdrafts

60,714

193,200

Bank loans

16,000,000

12,589,774

Hire purchase contracts

1,073,745

1,566,950

17,134,459

14,349,924

The bank loans and overdrafts are secured by a fixed and floating charge over all assets of the company. The hire purchase contracts are secured over the asset the contract relates to.

23.	PROVISIONS FOR LIABILITIES

Group

2022

2021

Deferred tax

2,006,556

1,994,481

Group

Deferred

tax

Balance at 1st January 2022

1,994,481

Acquired with subsidiaries

(Credit)/charge for the year

12,075

Balance at 31st December 2022

2,006,556

24.	CALLED UP SHARE CAPITAL

Allotted, issued and fully paid:

Number:

Class:

Nominal

2022

2021

value:

8,000

Ordinary

£1

8,001

8,000

During the year one Ordinary share was issued at a premium of £10,715,658.

25.

RESERVES

Group

Retained

earnings

premium

Totals

At 1st January 2022

(1,408,381

)

14,747,864

13,339,483

Deficit for the year

(2,788,227

)

(2,788,227

)

Cash share issue

10,715,658

At 31st December 2022

(4,196,608

)

25,463,522

21,266,914

Company

Retained

earnings

premium

Totals

At 1st January 2022

14,747,863

Profit for the year

Cash share issue

10,715,659

At 31st December 2022

25,463,522

26.	NON-CONTROLLING INTERESTS

2022

2021

At 1 January 2022

3,340,165

Upon acquisition of group undertakings

3,688,966

Minority share of profit for the year

(348,801

)

Purchase of minority interest

(3,340,165

)

At 31 December 2022

3,340,165

The minority interest represents a 20% shareholding in Constellation Cold Logistics UK Holdings Limited and its subsidiaries Constellation Cold Logistics UK Limited, SAL Commercials Limited and Cryotech (Grimsby) Limited. On 16 December 2022 the remaining 20% of the issued share capital of Constellation Cold Logistics UK Holdings Limited was purchased by Constellation Cold Logistics UK Midco Limited.

27.	PENSION COMMITMENTS

The group operates defined contribution pension schemes, the cost to the group for the period ended 31 December 2022 was £192,955 (2021 £210,327). The amount outstanding at 31 December 2022 was £64,741 (2021 £23,100).

28.	CAPITAL COMMITMENTS

On 16 December 2022, the group entered into a pre-contractual agreement to purchase the entire issued share capital of Associated Cold Stores and Transport limited for an initial consideration of £16,334,559,

29.	DIRECTORS' ADVANCES, CREDITS AND GUARANTEES

Group

On 15 December 2022 as a result of a wider restructuring of the group, a payment was made to Mr Howard of £124,592 in relation to interest on loan note held in Constellation Cold Logistics UK Holdings Limited. In the subsequent months it transpired that this was £93,303 in excess of what it should have been. Mr Howard repaid the excess in full on 18 May 2023 as soon as he was made aware of the issue. As this payment was an error by the company, no interest has been charged in this regard but is technically recognised as an overdrawn director's loan account at the year end.

30.	RELATED PARTY DISCLOSURES

The company has taken advantage of exemption, under the terms of Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland', not to disclose related party transactions with wholly owned subsidiaries within the group.

Transactions between group entities which have been eliminated on consolidation are not disclosed within the financial statements.

Entities with control, joint control or significant influence over the entity

2022

2021

Amount due to related party

185,081

31.	POST BALANCE SHEET EVENTS

On 10 January 2023 Constellation Cold Logistics UK Limited purchased the entire share capital of Associated Cold Stores & Transport Limited for £16,334,559.

32.	ULTIMATE CONTROLLING PARTY

As at the year end date the controlling party is Constellation Cold Logistics United Kingdom S.a.r.l. a company registered in Luxembourg.