Company registration number 12490390 (England and Wales)
STAR UK TOPCO LIMITED
ANNUAL REPORT AND CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
STAR UK TOPCO LIMITED
COMPANY INFORMATION
Directors
David Reis
Rianne Schipper
Daniel Zamlong
Bernie Iversen II
Zachary Lazar
Mary Zappone
Mark Blinn
Secretary
Vistra Cosec Limited
Company number
12490390
Registered office
Suite 1
7th Floor
50 Broadway
London
United Kingdom
SW1H 0BL
Auditor
HJS Accountants Limited
Tagus House
9 Ocean Way
Southampton
Hampshire
United Kingdom
SO14 3TJ
STAR UK TOPCO LIMITED
CONTENTS
Page
Strategic report
1 - 3
Directors' report
4 - 6
Directors' responsibilities statement
7
Independent auditor's report
8 - 10
Profit and loss account
11
Group statement of comprehensive income
12
Group balance sheet
13 - 14
Company balance sheet
15
Group statement of changes in equity
16 - 17
Company statement of changes in equity
18
Group statement of cash flows
19
Company statement of cash flows
20
Notes to the financial statements
21 - 48
STAR UK TOPCO LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 1 -

The Directors present the strategic report for the year ended 31 December 2023.

Fair review of the business

Turnover in 2023 was 23% higher compared to 2022. Gross Profit increased from 42% in 2022 to 51% in 2023. Overall financial results for the year improved during 2023 due primarily to a 23% increase in turnover, and a 49% increase in gross profit. Offsetting this, administrative expenses supporting higher turnover increased 5% and net finance costs increased 64% in connection with increased debt related to the payment of dividends in 2023 and 2022.

The Group continued to focus on strategic initiatives including developments in the chemical and industrial sectors, customers’ decarbonisation initiatives, pricing strategies, and capacity expansions to support growth. The Group continues to see strong momentum in demand from the renewables, particularly within carbon capture, and liquified natural gas sectors. Equipment sales were up 28% and aftermarket sales were up 20% in 2023 compared to 2022.

Principal risks and uncertainties

The Group's operations expose it to a variety of financial risks that include the effects of liquidity risk, commodity price risk, credit risk, interest rate risk and currency fluctuation risk. The Group has in place procedures that seek to limit the adverse effects of these risks.

 

The policies set by the Board of Directors are implemented by the Group's finance department which has a policy and procedures manual that sets out specific guidelines to manage risk and the circumstances where it would be appropriate to use financial instruments to manage these.

 

Liquidity risk

Liquidity risk is the risk that cash may not be available to pay obligations when due. The risk is managed centrally by the finance team. The Directors are satisfied that the Group is not subject to significant liquidity risk.

 

Commodity Price Risk

The Group is exposed to commodity price risk as a result of its operations. However, given the size of the Group's operations, the costs of managing exposure to commodity price risk exceed any potential benefits. The Directors will revisit the appropriateness of this policy should the Group's operations change in size or nature. The Group has no exposure to equity securities price risk as it holds no listed or other equity investments.

 

Credit Risk

The Group has implemented policies that require appropriate credit checks on potential customers before sales are made. The amount of exposure to any individual counterparty is subject to a limit, which is reassessed annually by the finance team. Cash is placed with financial institutions who are deemed to be low risk.

 

Interest Rate Risk

Interest rate risk arises from balances due on our external borrowings which include a senior credit facility which bears interest at the Secured Overnight Financing Rate (“SOFR”) plus 4.35%. The Group directors continually review the Group’s exposure to interest rates and take appropriate action to ensure that the risk is appropriate in relation to the financial results of the Group.

 

Currency Fluctuation Risk

The Group is exposed to currency fluctuation risk as a result of its operations. The risk is managed centrally by the finance team and is monitored on a regular basis.

Development and performance

The results for the years are set out on page 11.

 

At the year end the Group’s net assets were $35.2m. Current assets exceeded current liabilities by $148.1m and the Group’s directors consider the period-end position of the Group is satisfactory.

 

STAR UK TOPCO LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 2 -
Key performance indicators

Key performance indicators (KPI) for the period are list below.

 

KPI                2023        2022        Definition and method of calculations

Turnover                 $364m        $295m

Growth in turnover (%)     23.4%     13.5%        Year on year movement in turnover

from continuing operations, expressed

as a percentage

 

Operating profit             2.8%        (13.4%)        Ratio of operating profit to turnover

expressed as a percentage

 

Inventory turn (days)     108     94        Total inventory at year-end divided by

cost of sales and multiplied by 365

 

Debtor days             91         104        Trade debtors at year-end divided by

turnover and multiplied by 365

 

Section 172 statement

Section 172 of the Companies Act 2006 requires that the Directors act in a way that they consider to be in good faith, would be most likely to promote the success of the Group for the benefit of its shareholders and in doing so have regard to:

 

Our responsibility to act fairly between suppliers, customers and other stakeholders

Our interaction with stakeholders is predicated on respect for each relationship. The Group competes vigorously and fairly, working closely with stakeholders to maintain good relationships. The Directors acknowledge the need to act fairly between stakeholders.

 

Conducting transactions with high standards of business conduct

Building and maintaining our reputation and high standards of business conduct are essential to future success. We have been in business for decades and are proud to have many repeat customers based upon operating in an ethical manner. We maintain a Code of Ethics and a robust Anti-Bribery and Anti-Corruption Policy with which all employees are expected to comply. These policies are regularly reviewed and updated and all employees receive at least annual training relating to them.

 

Considering the impact of our operations on community and environment

The Group is keen to operate in a manner which strongly considers the impact of its operations on the community and the environment. Our facilities have programs for compliance with local quality and environmental standards. As noted above, we also work with customers to develop solutions for the changing environment and cleaner energy.

Understanding the consequences of long-term strategies

Being a recent undertaking with new management, planning and implementing a long-range plan has been in focus for the Group Directors.

 

Maintaining the interests of our employees

The success of our business depends on attracting, retaining and motivating talented employees. We consider and assess the implications of decisions on employees and the wider workforce, where relevant and feasible. Additionally, we seek to remain a responsible employer, including with respect to pay and benefits, health and safety issues, and the workplace environment.

 

The need to act fairly between all shareholders

In conjunction with the aforementioned philosophies and culture, we believe we operate in a manner that expresses fair treatment between all shareholders.

STAR UK TOPCO LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 3 -

On behalf of the board

David Reis
Director
12 August 2024
STAR UK TOPCO LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 4 -

The Directors present their annual report and financial statements for the year ended 31 December 2023.

Principal activities

The principal activity of the Company is that of a holding company and Group continues to be that of design and manufacture of pumps and compressors for industrial use.

Results and dividends

The results for the year are set out on page 11.

Directors

The Directors who held office during the year and up to the date of signature of the financial statements were as follows:

David Reis
Rianne Schipper
Daniel Zamlong
Bernie Iversen II
Zachary Lazar
Mary Zappone
Mark Blinn
Research and development

The research and development activities of the Group continue to be directed towards the development of new products and improving the performance and effectiveness of existing products.

Disabled persons

Applications for employment by disabled persons are always fully considered, bearing in mind the aptitudes of the applicant concerned. In the event of members of staff becoming disabled, every effort is made to ensure that their employment within the Group continues and that the appropriate training is arranged. It is the policy of the Group that the training, career development and promotion of disabled persons should, as far as possible, be identical to that of other employees.

Employee involvement

The Group's policy is to consult and discuss with employees, through unions, staff councils and at meetings, matters likely to affect employees' interests.

 

Information about matters of concern to employees is given through information bulletins and reports which seek to achieve a common awareness on the part of all employees of the financial and economic factors affecting the Group's performance.

 

During 2023 the Group recorded expense related to a share-based payment Equity Incentive Plan by an affiliate.

Post reporting date events

There are no significant subsequent events.

Future developments

There are no significant future events.

Auditor

HJS Accountants Limited were appointed as auditor to the Group and in accordance with section 485 of the Companies Act 2006, a resolution proposing that they be re-appointed will be put at a General Meeting.

STAR UK TOPCO LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 5 -
Energy and carbon report
2023
2022
Energy consumption
kWh
kWh
Aggregate of energy consumption in the year
- Gas combustion
187,652
172,529
- Electricity purchased
547,937
522,841
735,589
695,370
2023
2022
Emissions of CO2 equivalent
metric tonnes
metric tonnes
Scope 1 - direct emissions
- Gas combustion
34.25
31.60
- Fuel consumed for owned transport
0.03
0.04
34.28
31.64
Scope 2 - indirect emissions
- Electricity purchased
105.96
111.02
Scope 3 - other indirect emissions
- Fuel consumed for transport not owned by the
-
-
Total gross emissions
140.24
142.66
Intensity ratio
Tonnes, CO2e per employee
1.06
1.31
Quantification and reporting methodology

The group has followed the 2019 HM Government Environmental Reporting Guidelines. The group has also used the GHG Reporting Protocol – Corporate Standard and have used the 2020 UK Government’s Conversion Factors for Company Reporting

Intensity measurement

The chosen intensity measurement ratio is total gross emissions in metric tonnes CO2e per employee, the recommended ratio for the sector.

Measures taken to improve energy efficiency

We have completed an upgrade of the boilers and continued to replace all lighting with a more efficient LED solution.

Strategic report

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

Statement of disclosure to auditor

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

STAR UK TOPCO LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 6 -
On behalf of the board
David Reis
Director
12 August 2024
STAR UK TOPCO LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 7 -

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 Group and Company, and of the profit or loss of the Group for that period. In preparing these financial statements, the Directors are required to:

 

 

The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Group’s and Company’s transactions and disclose with reasonable accuracy at any time the financial position of the Group and 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 Group and Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

STAR UK TOPCO LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF STAR UK TOPCO LIMITED
- 8 -
Opinion

We have audited the financial statements of Star UK Topco Limited (the 'Parent Company') and its subsidiaries (the 'Group') for the year ended 31 December 2023 which comprise the Group profit and loss account, the Group statement of comprehensive income, the Group balance sheet, the Parent Company balance sheet, the Group statement of changes in equity, the Parent Company statement of changes in equity, the Group statement of cash flows, the Parent Company 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 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:

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the Group and Parent Company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Conclusions relating to going concern

In auditing the financial statements, we have concluded that the Directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.

 

Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the Group's and 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 other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The Directors are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in 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 our audit:

STAR UK TOPCO LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF STAR UK TOPCO LIMITED
- 9 -
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 their environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the Directors' report.

 

We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:

Responsibilities of Directors

As explained more fully in the Directors' responsibilities statement, 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 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 Parent Company or to cease operations, or have no realistic alternative but to do so.

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

Based on our understanding of the Group and industry, we identified that the principal risks of non-compliance with laws and regulations related to breaches of UK and overseas regulatory principles. We also considered the laws and regulations which have a direct impact on the financial statements such as the Companies Act 2006.

We evaluated management's incentives and opportunities for fraudulent manipulation of the financial statements (including the risk of override of controls), and determined that the principal risks were related to management bias in accounting estimates and judgemental areas of the financial statements.

Audit procedures performed by the audit engagement team included:

 

There are inherent limitations in the audit procedures described above. We are less likely to become aware of instances of non-compliance with laws and regulations that are not closely related to events and transactions reflected in the financial statements. 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 though collusion.

STAR UK TOPCO LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF STAR UK TOPCO LIMITED
- 10 -

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.

Use of our report

This report is made solely to the Company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the Company’s members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the Company’s members as a body, for our audit work, for this report, or for the opinions we have formed.

Angela Trainor
For and on behalf of HJS Accountants Limited
16 August 2024
Chartered Accountants and Statutory Auditor
Tagus House
9 Ocean Way
Southampton
Hampshire
United Kingdom
SO14 3TJ
STAR UK TOPCO LIMITED
GROUP PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 11 -
2023
2022
Notes
$'000s
$'000s
Turnover
3
364,065
294,920
Cost of sales
(178,828)
(170,285)
Gross profit
185,237
124,635
Administrative expenses
(170,458)
(161,000)
Other operating expenses
(4,672)
(3,299)
Operating profit/(loss)
4
10,107
(39,664)
Interest receivable and similar income
7
236
56
Interest payable and similar expenses
8
(73,560)
(44,821)
Loss before taxation
(63,217)
(84,429)
Tax on loss
9
15,027
(4,545)
Loss for the financial year
(48,190)
(88,974)
Loss for the financial year is attributable to:
- Owners of the Parent Company
(48,196)
(88,978)
- Non-controlling interests
6
4
(48,190)
(88,974)
STAR UK TOPCO LIMITED
GROUP STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2023
- 12 -
2023
2022
$'000s
$'000s
Loss for the year
(48,190)
(88,974)
Other comprehensive income
Remeasurement of the net defined benefit obligation
(244)
2,141
Currency translation differences
10,702
(14,553)
Tax relating to other comprehensive income
86
(374)
Other comprehensive income/(loss) for the year
10,544
(12,786)
Total comprehensive loss for the year
(37,646)
(101,760)
Total comprehensive loss for the year is attributable to:
- Owners of the Parent Company
(37,652)
(101,764)
- Non-controlling interests
6
4
(37,646)
(101,760)
STAR UK TOPCO LIMITED
GROUP BALANCE SHEET
AS AT
31 DECEMBER 2023
31 December 2023
- 13 -
2023
2022
Notes
$'000s
$'000s
$'000s
$'000s
Fixed assets
Goodwill
11
310,751
357,930
Other intangible assets
11
239,272
280,322
Total intangible assets
550,023
638,252
Tangible assets
12
57,806
54,973
607,829
693,225
Current assets
Stocks
15
52,804
43,859
Debtors falling due after more than one year
16
4,751
5,215
Debtors falling due within one year
16
149,627
119,228
Cash at bank and in hand
35,649
44,955
242,831
213,257
Creditors: amounts falling due within one year
17
(94,409)
(83,145)
Net current assets
148,422
130,112
Total assets less current liabilities
756,251
823,337
Creditors: amounts falling due after more than one year
18
(652,883)
(613,152)
Provisions for liabilities
Provisions
20
(2,194)
(1,782)
Deferred tax liability
21
(59,820)
(60,919)
(62,014)
(62,701)
Net assets excluding pension liability
41,354
147,484
Defined benefit pension liability
22
(6,201)
(5,597)
Net assets
35,153
141,887
Capital and reserves
Called up share capital
24
-
0
-
0
Share premium account
359,525
359,525
Profit and loss reserves
(324,393)
(217,653)
Equity attributable to owners of the Parent Company
35,132
141,872
Non-controlling interests
21
15
35,153
141,887
STAR UK TOPCO LIMITED
GROUP BALANCE SHEET (CONTINUED)
AS AT
31 DECEMBER 2023
31 December 2023
31 December 2023
- 14 -
The financial statements were approved by the Board of Directors and authorised for issue on 12 August 2024 and are signed on its behalf by:
David Reis
Director
STAR UK TOPCO LIMITED
COMPANY BALANCE SHEET
AS AT 31 DECEMBER 2023
- 15 -
2023
2022
Notes
$'000s
$'000s
$'000s
$'000s
Fixed assets
Investments
13
533,525
533,525
Current assets
Debtors
16
301
751
Creditors: amounts falling due within one year
17
(5)
(156)
Net current assets
296
595
Net assets
533,821
534,120
Capital and reserves
Called up share capital
24
-
0
-
0
Share premium account
359,525
359,525
Profit and loss reserves
174,296
174,595
Total equity
533,821
534,120

As permitted by s408 Companies Act 2006, the Company has not presented its own profit and loss account and related notes. The Company’s profit for the year was $69,700,793 (2022 - $151,729,327 profit).

The financial statements were approved by the board of directors and authorised for issue on 12 August 2024 and are signed on its behalf by:
David Reis
Director
Company Registration No. 12490390
STAR UK TOPCO LIMITED
GROUP STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
- 16 -
Share capital
Share premium account
Profit and loss reserves
Total controlling interest
Non-controlling interest
Total
Notes
$'000s
$'000s
$'000s
$'000s
$'000s
$'000s
Balance at 1 January 2022
-
0
534,525
(139,722)
394,803
11
394,814
Year ended 31 December 2022:
Loss for the year
-
-
(88,978)
(88,978)
4
(88,974)
Other comprehensive income:
Remeasurement of the net defined benefit obligation
-
-
2,141
2,141
-
2,141
Currency translation differences
-
-
(14,553)
(14,553)
-
(14,553)
Tax relating to other comprehensive income
-
-
(374)
(374)
-
(374)
Total comprehensive income
-
-
(101,764)
(101,764)
4
(101,760)
Dividends
10
-
-
(151,900)
(151,900)
-
(151,900)
Credit to equity for equity settled share-based payments
23
-
-
733
733
-
733
Transfers
-
(175,000)
175,000
-
-
-
Balance at 31 December 2022
-
0
359,525
(217,653)
141,872
15
141,887
STAR UK TOPCO LIMITED
GROUP STATEMENT OF CHANGES IN EQUITY (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
Share capital
Share premium account
Profit and loss reserves
Total controlling interest
Non-controlling interest
Total
Notes
$'000s
$'000s
$'000s
$'000s
$'000s
$'000s
- 17 -
Year ended 31 December 2023:
Loss for the year
-
-
(48,196)
(48,196)
6
(48,190)
Other comprehensive income:
Remeasurement of the net defined benefit obligation
-
-
(244)
(244)
-
(244)
Currency translation differences
-
-
10,702
10,702
-
10,702
Tax relating to other comprehensive income
-
-
86
86
-
86
Total comprehensive income
-
-
(37,652)
(37,652)
6
(37,646)
Dividends
10
-
-
(70,000)
(70,000)
-
(70,000)
Credit to equity for equity settled share-based payments
23
-
-
912
912
-
912
Balance at 31 December 2023
-
0
359,525
(324,393)
35,132
21
35,153
STAR UK TOPCO LIMITED
COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
- 18 -
Share capital
Share premium account
Profit and loss reserves
Total
Notes
$'000s
$'000s
$'000s
$'000s
Balance at 1 January 2022
-
0
534,525
(234)
534,291
Year ended 31 December 2022:
Profit and total comprehensive income for the year
-
-
151,729
151,729
Dividends
10
-
-
(151,900)
(151,900)
Transfers
-
(175,000)
175,000
-
Balance at 31 December 2022
-
0
359,525
174,595
534,120
Year ended 31 December 2023:
Profit and total comprehensive income
-
-
69,701
69,701
Dividends
10
-
-
(70,000)
(70,000)
Balance at 31 December 2023
-
0
359,525
174,296
533,821
STAR UK TOPCO LIMITED
GROUP STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 19 -
2023
2022
Notes
$'000s
$'000s
$'000s
$'000s
Cash flows from operating activities
Cash generated from operations
29
102,231
77,933
Interest paid
(65,803)
(40,257)
Income taxes paid
(8,325)
(6,444)
Net cash inflow from operating activities
28,103
31,232
Investing activities
Purchase of intangible assets
-
(2,866)
Purchase of tangible fixed assets
(8,896)
(7,860)
Proceeds on disposal of tangible fixed assets
6
12
Interest received
236
56
Net cash used in investing activities
(8,654)
(10,658)
Financing activities
Proceeds from borrowings
148,906
101,850
Repayment of borrowings
(110,739)
(6,865)
Payment of debt issuance costs
(4,167)
(1,034)
Payment of finance leases obligations
-
(120)
Dividends paid to equity shareholders
(70,000)
(151,900)
Net cash used in financing activities
(36,000)
(58,069)
Net decrease in cash and cash equivalents
(16,551)
(37,495)
Cash and cash equivalents at beginning of year
44,955
74,238
Effect of foreign exchange rates
7,245
8,212
Cash and cash equivalents at end of year
35,649
44,955
STAR UK TOPCO LIMITED
COMPANY STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 20 -
2023
2022
Notes
$'000s
$'000s
$'000s
$'000s
Cash flows from operating activities
Investing activities
Dividends received
70,000
151,900
Net cash generated from investing activities
70,000
151,900
Financing activities
Dividends paid to equity shareholders
(70,000)
(151,900)
Net cash used in financing activities
(70,000)
(151,900)
Net increase in cash and cash equivalents
-
-
Cash and cash equivalents at beginning of year
-
0
-
0
Cash and cash equivalents at end of year
-
0
-
0
STAR UK TOPCO LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 21 -
1
Accounting policies
Company information

Star UK Topco Limited (“the Company”) is a private limited company domiciled and incorporated in England and Wales. The registered office is Suite 1, 7th Floor 50 Broadway, London, United Kingdom, SW1H 0BL.

 

The Group consists of Star UK Topco Limited and all of its subsidiaries.

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 US Dollars, which is the functional currency of the Group. Monetary amounts in these financial statements are rounded to the nearest thousand $.

The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.

1.2
Business combinations

In the Company's financial statements, the cost of a business combination is the fair value at the acquisition date of the assets given, equity instruments issued and liabilities incurred or assumed, plus costs directly attributable to the business combination. The excess of the cost of a business combination over the fair value of the identifiable assets, liabilities and contingent liabilities acquired is recognised as goodwill. The cost of the combination includes the estimated amount of contingent consideration that is probable and can be measured reliably, and is adjusted for changes in contingent consideration after the acquisition date. Provisional fair values recognised for business combinations in previous periods are adjusted retrospectively for final fair values determined in the 12 months following the acquisition date. Investments in subsidiaries, joint ventures and associates are accounted for at cost less impairment.

 

Deferred tax is recognised on differences between the value of assets (other than goodwill) and liabilities recognised in a business combination accounted for using the purchase method and the amounts that can be deducted or assessed for tax, considering the manner in which the carrying amount of the asset or liability is expected to be recovered or settled. The deferred tax recognised is adjusted against goodwill or negative goodwill.

1.3
Basis of consolidation

The consolidated Group financial statements consist of the financial statements of the Parent Company Star UK Topco Limited together with all entities controlled by the Parent Company (its subsidiaries) and the Group’s share of its interests in joint ventures and associates.

 

All financial statements are made up to 31 December 2023. Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by other members of the Group.

 

All intra-Group transactions, balances and unrealised gains on transactions between Group companies are eliminated on consolidation. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.

Subsidiaries are consolidated in the Group’s financial statements from the date that control commences until the date that control ceases.

Entities in which the Group holds an interest and which are jointly controlled by the Group and one or more other ventures under a contractual arrangement are treated as joint ventures. Entities other than subsidiary undertakings or joint ventures, in which the Group has a participating interest and over whose operating and financial policies the Group exercises a significant influence, are treated as associates.

STAR UK TOPCO LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 22 -

Investments in joint ventures and associates are carried in the Company's or Group's balance sheets at cost plus post-acquisition changes in the Group’s share of the net assets of the entity, less any impairment in value. The carrying values of investments in joint ventures and associates include acquired goodwill.

 

If the Company's or Group’s share of losses in a joint venture or associate equals or exceeds its investment in the joint venture or associate, the Group does not recognise further losses unless it has incurred obligations to do so or has made payments on behalf of the joint venture or associate.

1.4
Going concern

At the time of approving the financial statements, the Directors have a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future. Thus the Directors continue to adopt the going concern basis of accounting in preparing the financial statements.

1.5
Turnover

We enter into contracts with customers sometimes having multiple commitments of goods and services including any combination of designing, developing, manufacturing, modifying, installing and commissioning of flow management equipment and providing services and parts related to the performance of such products. We evaluate the commitments in our contracts with customers to determine if the commitments are both capable of being distinct and distinct in the context of the contract to identify performance obligations.

 

We recognise revenue when (or as) we satisfy a performance obligation by transferring control of the performance obligation to a customer. Control of a performance obligation may transfer to the customer either over time or at a point in time depending on an evaluation of the specific facts and circumstances for each contract, including the terms and conditions of the contract as agreed with the customer, as well as the nature of the products or services to be provided. Our larger contracts are typically completed within a six to eighteen-month period, while many other contracts, such as “short cycle” contracts, have a shorter time frame for revenue recognition.

 

Control transfers over time when the customer can direct the use of and obtain substantially all the benefits of our work as we perform. This typically occurs when products have no alternative use and we have a right to payment for performance completed to date, including a reasonable profit margin. Our contracts often include cancellation provisions that require the customer to reimburse us for costs incurred up to the date of cancellation, and some contracts also provide for reimbursement of profit upon cancellation in addition to costs incurred to date.

STAR UK TOPCO LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 23 -

The Group's revenue is generated primarily from customer orders that involve designing, developing, manufacturing, modifying, installing and commissioning of advanced pumps and compressors, providing services and parts related to the performance of such products. Generally, contracts under which the Group provides goods or services with lead times under a year involve a single performance obligation. More complex contracts, which span over a period of time exceeding a year, typically have multiple performance obligations involving goods and services. Revenue is recognised as the Group satisfies performance obligations when services are performed or as the transfer of control of goods is made to a customer. Transfer of control is evaluated based on the customer's ability to direct the use of and obtain substantially all the benefits from a performance obligation. Revenue is recognised either over time or at a point in time, depending on the specific facts and circumstances for each contract, including the terms and conditions of the contract as agreed with the customer and the nature of the products or services to be provided. Projects generally require the customer to make advance cash payments as work progresses, which is recorded as a contract liability until the time when the related performance obligation and transfer of control is complete. In the event that revenue recognised under the POC method exceeds the billings to customers, a contract asset is recorded. The Group established an allowance for expected credit losses for recognised contract assets based on available evidence of a customer's financial condition and other economic information.

 

The Group recognises revenue over time as control transfers. This typically occurs when products have no alternative use and the Group has a right to payment for performance completed to date, including a profit margin. For revenue recognised over time, the Group primarily uses the % of completion (POC) method, with progress towards completion measured by applying an input measure based on costs incurred to date relative to total estimated costs at completion.

 

All other revenues are recognised at a point in time which is determined based on when control transfers to a customer. For revenue recognised at a point in time, the Group evaluates specific indicators such as title transfer, risk of loss transfer, customer acceptance and physical possession. Costs incurred on these projects is recorded as a contract asset until transfer of control is complete. Revenue recognised at a point time accounted for approximately 51% of total revenue for the year ended 31 December 2023, and 52% of total revenue during the year ended 31 December 2022.

 

The Group records freight charges billed to customers in net sales and the related shipping cost in cost of sales. The Group has elected to record revenue net of taxes collected from customers that are remitted to governmental authorities, with the collected taxes recorded within accrued liabilities until remitted to the relevant government authority.

 

Under certain contracts, the Group provides guaranteed completion dates. Late delivery penalties, if expected to be incurred, result in a reduction of net sales related to the contract.

 

Incremental costs incurred to obtain a contract generally include sales commissions which are expensed as incurred due to materiality.

1.6
Research and development expenditure

Research and development expenditure is written off against profits in the year in which it is incurred.

1.7
Intangible fixed assets - goodwill

Goodwill represents the excess of the cost of acquisition of a business over the fair value of net assets acquired. It is initially recognised as an asset at cost and is subsequently measured at cost less accumulated amortisation and accumulated impairment losses. Goodwill is considered to have a finite useful life and is amortised on a systematic basis over its expected life, which is 10 years.

 

For the purposes of impairment testing, goodwill is allocated to the cash-generating units expected to benefit from the acquisition. Cash-generating units to which goodwill has been allocated are tested for impairment at least annually, or more frequently when there is an indication that the unit may be impaired. If the recoverable amount of the cash-generating unit is less than the carrying amount of the unit, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro-rata on the basis of the carrying amount of each asset in the unit.

STAR UK TOPCO LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 24 -
1.8
Intangible fixed assets other than goodwill

Intangible assets acquired separately from a business are recognised at cost and are subsequently measured at cost less accumulated amortisation and accumulated impairment losses.

 

Intangible assets acquired on business combinations are recognised separately from goodwill at the acquisition date where it is probable that the expected future economic benefits that are attributable to the asset will flow to the entity and the fair value of the asset can be measured reliably; the intangible asset arises from contractual or other legal rights; and the intangible asset is separable from the entity.

Amortisation 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:

Trade marks
20 years
Customer relationships & other
15 years on a sum of digits basis
1.9
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:

Freehold land and buildings
2 - 40 years
Leasehold improvements
Shorter of lease term or useful life
Plant and equipment
2 - 40 years

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 recognised in the profit and loss account.

1.10
Fixed asset investments

Equity investments are measured at fair value through profit or loss, except for those equity investments that are not publicly traded and whose fair value cannot otherwise be measured reliably, which are recognised at cost less impairment until a reliable measure of fair value becomes available.

 

In the Company's financial statements, investments in subsidiaries, associates and jointly controlled entities are initially measured at cost and subsequently measured at cost less any accumulated impairment losses.

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

STAR UK TOPCO LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 25 -

An associate is an entity, being neither a subsidiary nor a joint venture, in which the Company or Group holds a long-term interest and where the Company or Group has significant influence. The Group considers that it has significant influence where it has the power to participate in the financial and operating decisions of the associate.

 

Investments in associates are initially recognised at the transaction price (including transaction costs) and are subsequently adjusted to reflect the Group’s share of the profit or loss, other comprehensive income and equity of the associate using the equity method. Any difference between the cost of acquisition and the share of the fair value of the net identifiable assets of the associate on acquisition is recognised as goodwill. Any unamortised balance of goodwill is included in the carrying value of the investment in associates.

 

Losses in excess of the carrying amount of an investment in an associate are recorded as a provision only when the Company has incurred legal or constructive obligations or has made payments on behalf of the associate.

 

In the Parent Company financial statements, investments in associates are accounted for at cost less impairment.

Entities in which the Group has a long term interest and shares control under a contractual arrangement are classified as jointly controlled entities.

1.11
Impairment of fixed assets

At each reporting period end date, the Group reviews the carrying amounts of its tangible and intangible 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 Group estimates the recoverable amount of the cash-generating unit to which the asset belongs.

 

The carrying amount of the investments accounted for using the equity method is tested for impairment as a single asset. Any goodwill included in the carrying amount of the investment is not tested separately for impairment.

Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.

 

If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.

Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.

STAR UK TOPCO LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 26 -
1.12
Stocks

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

 

Stocks held for distribution at no or nominal consideration are measured at the lower of cost and estimated realisable value and are primarily based on the first in, first out ("FIFO") method.

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

1.13
Construction contracts

The Group follows the construction contract rules under FRS 102 and details of this have been discussed in revenue recognition.

1.14
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.

1.15
Financial instruments

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

 

Financial assets and liabilities are offset and the net amounts presented in the financial statements when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.

Basic financial assets

Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.

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.

STAR UK TOPCO LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 27 -
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 Group 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 Group after deducting all of its liabilities.

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 payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.

 

Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.

 

Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.

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 subsequently 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 through 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.

STAR UK TOPCO LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 28 -
Derecognition of financial liabilities

Financial liabilities are derecognised when the Group's contractual obligations expire or are discharged or cancelled.

1.16
Equity instruments

Equity instruments issued by the Group 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 Group.

1.17
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 profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The Group’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. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset if, and only if, there is 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.

1.18
Provisions

Provisions are recognised when the Group has a legal or constructive present obligation as a result of a past event, it is probable that the Group will be required to settle that obligation and a reliable estimate can be made of the amount of the obligation.

 

The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the reporting end date, taking into account the risks and uncertainties surrounding the obligation. Where the effect of the time value of money is material, the amount expected to be required to settle the obligation is recognised at present value. When a provision is measured at present value, the unwinding of the discount is recognised as a finance cost in profit or loss in the period in which it arises.

STAR UK TOPCO LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 29 -
1.19
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 is recognised in the period in which the employee’s services are received.

 

Termination benefits are recognised immediately as an expense when the Group is demonstrably committed to terminate the employment of an employee or to provide termination benefits.

1.20
Retirement benefits

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

The cost of providing benefits under defined benefit plans is determined separately for each plan using the projected unit credit method, and is based on actuarial advice.

 

The change in the net defined benefit liability arising from employee service during the year is recognised as an employee cost. The cost of plan introductions, benefit changes, settlements and curtailments are recognised as an expense in measuring profit or loss in the period in which they arise.

The net interest element is determined by multiplying the net defined benefit liability by the discount rate, taking into account any changes in the net defined benefit liability during the period as a result of contribution and benefit payments. The net interest is recognised in profit or loss as other finance revenue or cost.

 

Remeasurement changes comprise actuarial gains and losses, the effect of the asset ceiling and the return on the net defined benefit liability excluding amounts included in net interest. These are recognised immediately in other comprehensive income in the period in which they occur and are not reclassified to profit and loss in subsequent periods.

The net defined benefit pension asset or liability in the balance sheet comprises the total for each plan of the present value of the defined benefit obligation (using a discount rate based on high quality corporate bonds), less the fair value of plan assets out of which the obligations are to be settled directly. Fair value is based on market price information, and in the case of quoted securities is the published bid price. The value of a net pension benefit asset is limited to the amount that may be recovered either through reduced contributions or agreed refunds from the scheme.

1.21
Share-based payments

Stock-based compensation is measured at the grant date, based on the fair value of the award, and depending on the type of award granted. Time-based options are recognised as an expense under the straight-line attribution method over the requisite service period or performance-based options which are expensed upon the date that both a market and performance condition tied to an award is satisfied. We account for forfeitures as they occur.

See note 23 Share-based payment transactions for additional information.

1.22
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 leased asset are consumed.

Rental income from operating leases is recognised on a straight line basis over the term of the relevant lease. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognised on a straight line basis over the lease term.

STAR UK TOPCO LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 30 -
1.23
Foreign exchange

Transactions in currencies other than US Dollars 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.

Assets and liabilities of our foreign subsidiaries are translated to US dollars at exchange rates prevailing at the balance sheet date, while income and expenses are translated at average rates for each month. Translation gains and losses are reported as a component of accumulated other comprehensive loss.

 

Transaction and translation gains and losses arising from intercompany balances are reported as a component of accumulated other comprehensive loss when the underlying transaction stems from a debt designated as not due in the foreseeable future. Otherwise we recognise transaction gains and losses arising from intercompany transaction as a component of income.

2
Judgements and key sources of estimation uncertainty

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

 

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

Critical judgements

The critical judgements which have the most significant impact on the amounts recognised in the financial statements are as follows:

Inventory provisioning

Provision is made where necessary for obsolete, slow moving and defective stocks. Management review the level of the provision based on the level and condition of stock items and their knowledge of the business.

Warranty provisioning

As disclosed in note 20 the Group provides a 1 to 3 year warranty provision on its products. A provision for expected warranty claims is calculated based on prior experience of levels of warranty claims incurred and future expectations.

Useful expected life of tangible fixed assets

Management estimate the expected useful lives of the Group's fixed assets which in turn impacts on the amount of depreciation charged in the year.

Impairment

In determining whether there are any factors that indicate that the Group's fixed assets and investments are impaired, COVID-19 has been considered in relation to whether any impairment has arisen.

STAR UK TOPCO LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
2
Judgements and key sources of estimation uncertainty
(Continued)
- 31 -
Key sources of estimation uncertainty

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

In the opinion of the directors there are no estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities within the next financial year.

3
Turnover and other revenue

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

2023
2022
$'000s
$'000s
Turnover analysed by class of business
Sale of pumps and compressors, and related parts and services
364,065
294,920
2023
2022
$'000s
$'000s
Turnover analysed by geographical market
Americas
166,123
128,463
EMEA
118,077
93,656
Asia
79,865
72,801
364,065
294,920
2023
2022
$'000s
$'000s
Other revenue
Interest income
236
56
4
Operating profit/(loss)
2023
2022
$'000s
$'000s
Operating profit/(loss) for the year is stated after charging/(crediting):
Exchange (gains)/losses
(1,068)
8,102
Research and development costs
18,133
16,251
Depreciation of owned tangible fixed assets
6,868
7,449
Profit on disposal of tangible fixed assets
(2)
(7)
Amortisation of intangible assets
98,655
105,149
Share-based payments
912
733
Operating lease charges
393
259
STAR UK TOPCO LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 32 -
5
Auditor's remuneration
2023
2022
Fees payable to the company's auditor and associates:
$'000s
$'000s
For audit services
Audit of the financial statements of the Company
103
87
Audit of the financial statements of the Group
519
512
622
599
6
Employees

The average number of persons (including directors) employed by the Group and Company during the year was:

Group
Company
2023
2022
2023
2022
Number
Number
Number
Number
Direct labour
183
179
-
-
Indirect labour
759
717
-
-
Total
942
896
-
0
-
0

Their aggregate remuneration comprised:

Group
Company
2023
2022
2023
2022
$'000s
$'000s
$'000s
$'000s
Wages and salaries
73,054
63,568
-
0
-
0
Social security costs
14,634
10,797
-
-
Pension costs
1,953
1,648
-
0
-
0
89,641
76,013
-
0
-
0
7
Interest receivable and similar income
2023
2022
$'000s
$'000s
Interest income
Other interest income
236
56
STAR UK TOPCO LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 33 -
8
Interest payable and similar expenses
2023
2022
$'000s
$'000s
Interest on financial liabilities measured at amortised cost:
Interest payable to group undertakings
-
0
2
Other finance costs:
Other interest
73,560
44,819
Total finance costs
73,560
44,821
9
Taxation
2023
2022
$'000s
$'000s
Current tax
UK corporation tax on profits for the current period
-
0
5
Foreign current tax on profits for the current period
9,707
6,918
Total current tax
9,707
6,923
Deferred tax
Origination and reversal of timing differences
(24,734)
(2,378)
Total tax (credit)/charge
(15,027)
4,545

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

2023
2022
$'000s
$'000s
Loss before taxation
(63,217)
(84,429)
Expected tax credit based on the standard rate of corporation tax in the UK of 23.52% (2022: 19.00%)
(14,869)
(16,042)
Tax effect of expenses that are not deductible in determining taxable profit
12,840
10,371
Unutilised tax losses carried forward
(13,391)
14,950
Group relief
(655)
(486)
Research and development tax credit
15
35
Other permanent differences
(252)
(1)
Effect of overseas tax rates
1,041
(481)
Dividend income
91
(4,049)
Foreign exchange differences
153
248
Taxation (credit)/charge
(15,027)
4,545
STAR UK TOPCO LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
9
Taxation
(Continued)
- 34 -

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

2023
2022
$'000s
$'000s
Deferred tax arising on:
Actuarial differences recognised as other comprehensive income
(86)
374
10
Dividends
2023
2022
Recognised as distributions to equity holders:
$'000s
$'000s
Final paid
70,000
151,900
11
Intangible fixed assets
Group
Goodwill
Trade marks
Customer relationships & other
Total
$'000s
$'000s
$'000s
$'000s
Cost
At 1 January 2023
511,328
73,946
341,405
926,679
Exchange adjustments
6,591
1,077
3,879
11,547
At 31 December 2023
517,919
75,023
345,284
938,226
Amortisation and impairment
At 1 January 2023
153,398
17,785
117,244
288,427
Amortisation charged for the year
54,582
5,806
38,267
98,655
Exchange adjustments
(812)
309
1,624
1,121
At 31 December 2023
207,168
23,900
157,135
388,203
Carrying amount
At 31 December 2023
310,751
51,123
188,149
550,023
At 31 December 2022
357,930
56,161
224,161
638,252
The Company had no intangible fixed assets at 31 December 2023 or 31 December 2022.
STAR UK TOPCO LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 35 -
12
Tangible fixed assets
Group
Freehold land and buildings
Leasehold improvements
Assets under construction
Plant and equipment
Total
$'000s
$'000s
$'000s
$'000s
$'000s
Cost
At 1 January 2023
29,316
225
4,810
44,318
78,669
Additions
609
-
0
1,346
6,941
8,896
Disposals
-
0
-
0
-
0
(300)
(300)
Exchange adjustments
582
(15)
28
463
1,058
At 31 December 2023
30,507
210
6,184
51,422
88,323
Depreciation and impairment
At 1 January 2023
3,202
96
-
0
20,398
23,696
Depreciation charged in the year
1,338
1
-
0
5,529
6,868
Eliminated in respect of disposals
-
0
-
0
-
0
(296)
(296)
Exchange adjustments
252
7
-
0
(10)
249
At 31 December 2023
4,792
104
-
0
25,621
30,517
Carrying amount
At 31 December 2023
25,715
106
6,184
25,801
57,806
At 31 December 2022
26,114
129
4,810
23,920
54,973
The Company had no tangible fixed assets at 31 December 2023 or 31 December 2022.
13
Fixed asset investments
Group
Company
2023
2022
2023
2022
Notes
$'000s
$'000s
$'000s
$'000s
Investments in subsidiaries
14
-
0
-
0
533,525
533,525
Movements in fixed asset investments
Company
Shares in subsidiaries
$'000s
Cost or valuation
At 1 January 2023 and 31 December 2023
533,525
Carrying amount
At 31 December 2023
533,525
At 31 December 2022
533,525
STAR UK TOPCO LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 36 -
14
Subsidiaries

Details of the Company's subsidiaries at 31 December 2023 are as follows:

Name of undertaking
Registered office
Class of
% Held
shares held
Direct
Indirect
Star UK Holdco Limited
Suite 1, 7th Floor 50 Broadway, London, United Kingdom, SW1 0BL
Ordinary
100.00
-
Star UK Midco Limited
Suite 1, 7th Floor 50 Broadway, London, United Kingdom, SW1 0BL
Ordinary
-
100.00
Star UK Bidco Limited
Suite 1, 7th Floor 50 Broadway, London, United Kingdom, SW1 0BL
Ordinary
-
100.00
HMD Seal/Less Pumps Limited
Marshall Road, Hampden Park, Eastbourne, Sussex, BN22 9AN
Ordinary
-
100.00
Bombas Ercole Marelli S.L.
Ctra. Madrid - Toledo, Km. 30.8, 45200 Illescas, Toledo, Spain
Ordinary
-
100.00
Sundyne International Corporation S.A.
c/o Fiduconsult, Rue Des Pilettes 3,Case Postale 144, Fribourg Switzerland 1705
Ordinary
-
100.00
Sundyne Asia Japan Co. Ltd
Odakyu Dai-ichi Seimei Bldg, 6F, 2-7-1, Nishi-Shinjuku-ku, Tokyo, Japan 163-0706
Ordinary
-
100.00
Sundyne US Purchaser LLC
14845 West 64th Avenue, Arvada, CO 80007, USA
Ordinary
-
100.00
Sundyne Holdings France S.A.S
13-15 Boulevard Eiffel, Longvic, Cedex, Dijon, France 21604
Ordinary
-
100.00
Sundyne Industrial Equipment (Shanghai) Co. Ltd
Building 1, No.879 Shan Fu Road, XinZhuang Industrial Zone, Min Hang District, Shanghai, China 2011
Ordinary
-
100.00
Sundyne Asia Pte Ltd
9 Raffles Place, #26-01, Republic Plaza, Singapore 048619
Ordinary
-
100.00
Sundyne International S.A.
13-15 Boulevard Eiffel, Longvic, Cedex, Dijon, France 21604
Ordinary
-
100.00
HMD Seal/Less Pumps Industrial (India) Co Ltd
Office 4+5 L Square, PI 8, S No 145/151, Aundh, Sanghvina, Pune Pune MH  411007, India
Ordinary
-
100.00
Star US Bidco LLC
14845 West 64th Avenue, Arvada, CO 80007, USA
Ordinary
-
100.00
Sundyne LLC
14845 West 64th Avenue, Arvada, CO 80007, USA
Ordinary
-
100.00
Sundyne Middle East FZE
Office No 1156, Jafza 1, 11 Floor, BCW Jebei Ali Free Zone, Dubai, UAE
Ordinary
-
100.00
Sundyne Arabia LLC
7593 Al Amir Muhammed Ibn Fahd Rd, Ash Shati Ash Sharqi Dist Unit 44, As Dammam, Saudi Arabia, 32413
Ordinary
-
100.00
Silver II UK Holdings Ltd
10-12 Marshall Road, Hampden Park, Eastbourne, Sussex, BN22 9AN
Ordinary
-
100.00
Sundyne International Corporation SA (Belgium Branch)
Goorstraat 67, 2560 Nijlen, Belgium
Ordinary
-
100.00
Sundyne Industrial Equipment (Shanghai) Co Ltd (Beijing Branch)
Building 1, No.879 Shan Fu Road, XinZhuang Industrial Zone, Min Hang District, Shanghai, China 2011
Ordinary
-
100.00

The following subsidiaries have taken advantage of audit exemption under exemption under s479A of the Companies Act 2006:

 

Name of undertaking        Company number

 

Star UK Holdco Limited         12377158

Star UK Midco Limited         12377228

Star UK Bidco Limited         12377278

STAR UK TOPCO LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 37 -
15
Stocks
Group
Company
2023
2022
2023
2022
$'000s
$'000s
$'000s
$'000s
Finished goods, raw materials and work in progress
52,804
43,859
-
0
-
0
16
Debtors
Group
Company
2023
2022
2023
2022
Amounts falling due within one year:
$'000s
$'000s
$'000s
$'000s
Trade debtors
67,151
67,521
-
0
-
0
Gross amounts owed by contract customers
23,017
16,612
-
0
-
0
Corporation tax recoverable
416
132
-
0
-
0
Amounts owed by group undertakings
-
-
301
751
Other debtors
482
484
-
0
-
0
Prepayments and accrued income
5,224
3,913
-
0
-
0
96,290
88,662
301
751
Deferred tax asset (note 21)
53,337
30,566
-
0
-
0
149,627
119,228
301
751
Amounts falling due after more than one year:
Other debtors
4,547
5,023
-
0
-
0
Deferred tax asset (note 21)
204
192
-
0
-
0
4,751
5,215
-
-
Total debtors
154,378
124,443
301
751
17
Creditors: amounts falling due within one year
Group
Company
2023
2022
2023
2022
Notes
$'000s
$'000s
$'000s
$'000s
Other borrowings
19
6,905
5,350
-
0
-
0
Trade creditors
26,069
27,778
-
0
151
Gross amounts owed to contract customers
22,522
23,182
-
0
-
0
Corporation tax payable
2,570
888
-
0
-
0
Accruals and deferred income
36,343
25,947
5
5
94,409
83,145
5
156
STAR UK TOPCO LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 38 -
18
Creditors: amounts falling due after more than one year
Group
Company
2023
2022
2023
2022
Notes
$'000s
$'000s
$'000s
$'000s
Other borrowings
19
643,059
603,789
-
0
-
0
Amounts owed to group undertakings
316
1,063
-
0
-
0
Other creditors
9,508
8,300
-
0
-
0
652,883
613,152
-
-
19
Loans and overdrafts
Group
Company
2023
2022
2023
2022
$'000s
$'000s
$'000s
$'000s
Other loans
649,964
609,139
-
0
-
0
Payable within one year
6,905
5,350
-
0
-
0
Payable after one year
643,059
603,789
-
0
-
0
STAR UK TOPCO LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
19
Loans and overdrafts
(Continued)
- 39 -

For the period ended December 31, 2023, the Group made $8,421 (2022: $6,865) of principal payments. The Term Loan agreement requires quarterly principal payments of $1,726 until maturity at March 17, 2027.

 

Senior Secured Credit Facility

 

On March 17, 2020, subsidiaries of the Group, entered into a First Lien Credit and Guarantee Agreement with a syndicate of financial institutions, (and related agreements, collectively “Senior Credit Facility”, as amended) and borrowed an aggregate $535,000 under the term loan portion of the agreement (“Term Loan”) and secured a $100,000 revolving line-of credit (“Revolver”). In December 2023, the Senior Credit Facility was amended to increase the borrowed amount under the Term Loan portion of the agreement by an incremental $150,000, and extend the Revolver maturity date by two years. The increase in the borrowed amount was deemed to be a modification of the original terms and as such, debt issuance costs associated with the modification were capitalised. In addition, there are U.S. denominated secured ancillary lines of credit of $30,000 and euro-denominated secured ancillary lines of credit equivalent to approximately $13,231 as capacity for the issuance of performance guarantees and letters of credit at December 31, 2023.

 

On June 22, 2022, a subsidiary of the Group entered into a Second Lien Credit Agreement (and related agreements, collectively "Second Lien Credit Facility", together with the Senior Credit Facility "Credit Facilities") and borrowed an aggregate $105,000 which originally matured in March 2028. The Group repaid borrowings under the Second Lien Credit Facility and the facility was terminated in December 2023. In connection with the repayment and termination of the Second Lien Credit Facility, the Group wrote off $3,180 of debt issuance costs which is included in interest expense.

 

The borrowings under the Senior Credit Facility are secured in total by first priority pledges of shares of certain significant Group companies and first priority security interest over the intra-group receivables between certain subsidiaries in addition to the majority of assets of the Sundyne guarantors, as defined in the loan documents.

 

The Senior Credit Facility contains restrictions and covenants which require maintenance of certain ratios and restrictions on the Group’s ability to grant additional liens or security interests on the Group’s assets, make acquisitions, loans, advances or investments, pay dividends, prepay other indebtedness, sell or otherwise transfer assets, or enter into certain transactions with affiliates. Maintenance of ratios under the Senior Credit Facility are dependent upon utilisation of the Group’s Revolver. As of December 31, 2023 and 2022, there were no amounts drawn under the Revolver.

 

The Group may incur a prepayment penalty in the event of optional prepayment of amounts outstanding under the Term Loan and may be required to make prepayments based on excess cash flow or other limited circumstances as required under the Senior Credit Facility.

The Group recognised $71,080 and $42,613 of interest expense under the Credit Facilities during the years ended December 31, 2023 and 2022, respectively. The interest rate on the Term Loan as of December 31, 2023 is the Secured Overnight Financing Rate ("SOFR") plus 4.35%.

 

The Group is required to pay an unused credit availability fee under the Revolver of 0.375% per annum, and a letter of credit participation and fronting fees equal to 0.375% and 0.125% as of December 31, 2023, respectively. The interest rate on amounts drawn under the Revolver is based on SOFR plus a margin of 4% (subject to change based on the Group's leverage ratio, as defined in the agreement). As of December 31, 2023 and 2022, the Group had utilised approximately $18,009 and $19,700, respectively, of capacity by the issuance of performance-related guarantees and letters of credit under the Ancillary Facilities and the Group's unused capacity under the Ancillary Facilities was approximately $25,222 and $23,100.

STAR UK TOPCO LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 40 -
20
Provisions for liabilities
Group
Company
2023
2022
2023
2022
$'000s
$'000s
$'000s
$'000s
Warranties
2,194
1,782
-
-
Movements on provisions:
Warranties
Group
$'000s
At 1 January 2023
1,782
Additional provisions in the year
1,607
Utilisation of provision
(1,195)
At 31 December 2023
2,194

Corporate legal matters

 

The Group has been named in litigation arising in the ordinary course of business. In the opinion of legal counsel and management, the Group has meritorious defenses against such claims and is covered by insurance and has reserves to cover self-insured retentions for any material adverse outcome in most claims. For claims for which insurance coverage may not be available, the Group has established reserves deemed adequate to cover possible adverse outcomes, and any related fees. As a result, these cases are not expected to have a significant negative impact on future results of operations or the financial condition of the Group.

Warranties

 

The provision for warranty claims is a provision for future product warranty costs arising in the normal course of business from prior year sales. The Group provides a 1-3 year warranty on its products and therefore the warranty provision is expected to be utilised over a 3 year period.

STAR UK TOPCO LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 41 -
21
Deferred taxation

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

Liabilities
Liabilities
Assets
Assets
2023
2022
2023
2022
Group
$'000s
$'000s
$'000s
$'000s
Valuation allowance
-
-
(48,136)
(62,097)
Current assets and liabilities
-
-
8,817
5,923
Tax loss and credit carryforwards
-
-
87,452
83,045
Pension obligations
-
-
1,110
1,082
Intangible assets
54,852
56,173
-
-
Property, plant and equipment
4,968
4,746
-
-
Revenue recognition
-
-
3,192
525
Other
-
-
1,106
2,280
59,820
60,919
53,541
30,758
The Company has no deferred tax assets or liabilities.
Deferred tax assets and liabilities reflect the effects of future income tax effects of temporary differences between the consolidated financial statement carrying amounts of existing assets and liabilities and their respective tax bases and are measured using enacted tax rates that apply to taxable income in the years in which those temporary differences are expected to be recovered or settled.
The ultimate realisation of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. The Group has recorded a valuation allowance against certain deferred tax assets as it has been determined it is more likely than not that the benefit for certain U.K., U.S. and other foreign deferred tax assets will not be realised. A history of pre-tax losses limits the Group's ability to utilise certain deferred tax assets in these jurisdictions.
The valuation allowance decreased by $13,961 and increased by $12,972 during the years ended December, 31, 2023 and 2022, respectively, due to changes in deferred tax assets recorded in jurisdictions where a partial valuation has been recorded. In addition, in 2023 deferred tax assets associated with U.S net operating losses previously subject to valuation allowance were recognised.
Group
Company
2023
2023
Movements in the year:
$'000s
$'000s
Liability at 1 January 2023
30,161
-
Credit to profit or loss
(24,734)
-
Charge to equity
852
-
Liability at 31 December 2023
6,279
-
STAR UK TOPCO LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
21
Deferred taxation
(Continued)
- 42 -

At December 31, 2023, the gross amount of net operating loss, foreign tax credits and disallowed interest carryover along with the expiration period by jurisdiction are as follows:

 

Tax Attribute
Jurisdiction
Expiration
Total
$'000s
Net Operating Losses - Federal
United States
2031 - 2036
96,510
Net Operating Losses - Federal
United States
Unlimited
82,895
Net Operating Losses - State
United States
Various
65,022
Net Operating Losses
United Kingdom
Unlimited
86,621
Net Operating Losses
Spain
Unlimited
5,093
Net Operating Losses
France
Unlimited
841
Net Operating Losses
Switzerland
2025 - 2030
2,845
Foreign credits
United States
2024 - 2026
577
Disallowed Interest
United States
Unlimited
60,982
Disallowed Interest
Japan
2024 - 2030
2,856
Disallowed Interest
United Kingdom
Unlimited
40,405

The Group assesses its unrecognised tax positions annually. There are no unrecognised tax benefits for the periods presented. As of December 31, 2023, tax years from 2019 forward remain subject to examination in the United Kingdom, United States, France, and other foreign jurisdictions where the Group has operations.

 

22
Retirement benefit schemes
2023
2022
Defined contribution schemes
$'000s
$'000s
Charge to profit or loss in respect of defined contribution schemes
1,507
1,260

A defined contribution pension scheme is operated for all qualifying employees.

Defined benefit schemes

The Group sponsors various unfunded foreign defined benefit pension plans that cover certain employees. Our plans use a December 31 measurement date consistent with the fiscal year. Plan benefits comply with requirements in place at each business jurisdiction and are generally based on an employee’s years of service and compensation.

2023
2022
Key assumptions
%
%
Discount rate
3.7
1.1
Expected rate of salary increases
3
3
Expected return on plan assets
3
3
STAR UK TOPCO LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
22
Retirement benefit schemes
(Continued)
- 43 -
Mortality assumptions
2023
2022

Assumed life expectations on retirement at age 65:

Years
Years
Retiring today
- Males
25.7
25.5
- Females
29.2
29.1
Retiring in 20 years
- Males
29.1
28.9
- Females
32.8
32.7

The amounts included in the balance sheet arising from obligations in respect of defined benefit plans are as follows:

2023
2022
Group
$'000s
$'000s
Present value of defined benefit obligations
7,064
6,458
Fair value of plan assets
(863)
(861)
Deficit in scheme
6,201
5,597
Group
2023
2022

Amounts recognised in the profit and loss account

$'000s
$'000s
Current service cost
230
320
Net interest on net defined benefit liability/(asset)
243
93
Restriction on net interest income credited to the income statement
(26)
(25)
Total costs
447
388
Group
2023
2022

Amounts taken to other comprehensive income

$'000s
$'000s
Actual return on scheme assets
23
(25)
Less: calculated interest element
-
-
Return on scheme assets excluding interest income
23
(25)
Restriction on net interest income credited to the income statement
26
25
Actuarial changes related to obligations
195
(2,141)
Total costs/(income)
244
(2,141)
STAR UK TOPCO LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
22
Retirement benefit schemes
(Continued)
- 44 -
Group
2023

Movements in the present value of defined benefit obligations

$'000s
Liabilities at 1 January 2023
6,458
Current service cost
230
Benefits paid
(237)
Actuarial gains and losses
195
Interest cost
243
Other
175
At 31 December 2023
7,064

The defined benefit obligations arise from plans which are unfunded or partly funded.

Group
2023

Movements in the fair value of plan assets

$'000s
Fair value of assets at 1 January 2023
861
Return on plan assets (excluding amounts included in net interest)
(23)
Benefits paid
(237)
Contributions by the employer
237
Other
25
At 31 December 2023
863

The actual return on plan assets was $25.

Fair value of plan assets at the reporting period end

Group
2023
2022
$'000s
$'000s
Cash
863
861
STAR UK TOPCO LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 45 -
23
Share-based payment transactions

Equity Incentive Plan – Stock options

 

The Group and Company are subsidiaries of Star Guernsey Topco Limited ("Star Guernsey"), a private limited company registered in Guernsey and an entity which has issued performance and time-vesting options to employees of the Group. Compensation expense related to these options is allocated to the Group based on the estimated fair value of the awards as of the grant date using an option pricing model. Stock-based compensation allocated to the Group for time-based options is recognised over the requisite service period using the straight-line method based on the grant date fair value of the award. Performance-based options are recognised as an expense based upon whether it is deemed probable that both a market and performance condition tied to an award is expected to be satisfied. Stock-based compensation allocated to the Group is reduced at the time forfeitures occur. There were 6,150 and 46,322 forfeitures during the years ended December 31, 2023 and 2022, respectively. During the years ended December 31, 2023 and 2022, adjustments were made to outstanding option prices in conjunction with distributions to shareholders. As a result, the exercise price of options outstanding at the distribution dates were reduced to prevent dilution of value with respect to those share options. The revision of the exercise price was not considered a modification of the original agreement.

 

As of December 31, 2023 and 2022, outstanding options for the purchase of Star Guernsey shares are 569,500 and 498,500 respectively. The weighted-average-remaining-contractual life of the options as of December 31, 2023 and 2022 is approximately 7 and 8 years, respectively. All options have been issued with an exercise price of $72 to $92.

 

All stock options granted have an expiration date of 10 years from the date of grant.

Shares of Star Guernsey issued to Group employees and Directors
Number of share options
Weighted average exercise price
2023
2022
2023
2022
$
$
Outstanding at 1 January 2023
498,500
503,500
100.00
100.00
Granted
78,500
41,322
95.00
95.00
Forfeited
(6,150)
(46,322)
105.00
105.00
Exercised
(1,350)
-
72.00
-
Outstanding at 31 December 2023
569,500
498,500
62.00
72.00
Exercisable at 31 December 2023
94,478
64,150
60.00
72.00

Stock price volatility is based on an average of historical volatility from comparable public companies that have sufficient trading history to cover the expected term to estimate the expected volatility. The expected term of the options granted were based, in part, on the median path of successful trials of the market condition derived from the Monte Carlo simulations and on the terms and conditions of the options. The risk-free interest rates utilised are based on the U.S. Treasury yield in effect at each grant date.

Inputs are as follows for the years ended December 31, 2023 and 2022:
2023
2022
Expected volatility
60.00%
60.00%
Expected life
4.00
4.00
Risk free rate
4.00%
4.00%
STAR UK TOPCO LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
23
Share-based payment transactions
(Continued)
- 46 -
Group
Company
2023
2022
2023
2022
$'000s
$'000s
$'000s
$'000s
Expenses recognised in the year
Arising from equity settled share based payment transactions
912
733
-
-

Time-Based Options

 

The time-based options granted generally vest and become exercisable ratably over five years of continued employment or service as defined in each grant agreement.

 

During the period, the Group recognised $913 (2022: $733) of non-cash compensation expense which was recognised within general and administrative expense for the time-based options.

 

As of December 31, 2023 and 2022, there is $2,300 and $2,600, respectively, of total unrecognised compensation costs related to unvested time-based options with the cost expected to be recognised ratably over a remaining weighted average period of 3 years.

 

Performance-Based Options

 

The performance-based options with a market condition vest and become exercisable upon the date that both the performance and market conditions are satisfied which are specifically disclosed in the Option Plan. The stock options are exercisable at prices determined in the Option Grant Agreement for each participant and issued with an exercise price that is equal to the value of the underlying share on the date of grant.

 

The time-based and performance options contain market conditions, which are required to be considered when calculating the grant date fair value. To reflect the substantive characteristics of the market condition option award, a Monte Carlo simulation valuation model was used to calculate the grant date fair value of all stock options granted. A Monte Carlo model simulates potential stock price scenarios over time and incorporates assumptions about volatility and exercise behavior for those various scenarios. The Group determines a fair value for each potential outcome. The grant date fair value of the award is the average of the fair values of each potential outcome.

 

Management recorded no compensation expense for the performance-based options with a market condition as the performance condition is not probable of being satisfied as of December 31, 2023 and 2022.

24
Share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
$
$
Issued and fully paid
Ordinary shares of $1 each
4
4
4
4

The Company has one class of ordinary shares which carry no right to fixed income. All shares rank equally for voting rights, dividend rights and for any distribution made on wind up of the Company.

STAR UK TOPCO LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 47 -
25
Operating lease commitments
Lessee

At the reporting end date the Group and Company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:

Group
Company
2023
2022
2023
2022
$'000s
$'000s
$'000s
$'000s
Within one year
552
491
-
-
Between two and five years
578
696
-
-
1,130
1,187
-
-
26
Related party transactions
Remuneration of key management personnel

Group

 

The remuneration of key management personnel is as follows.

2023
2022
$'000s
$'000s
Aggregate compensation
2,500
2,400
Other information

The Company and Group have taken advantage of the exemption available under FRS 102 paragraph 33.1a whereby it has not disclosed transactions with any wholly-owned subsidiary undertaking of the Group.

27
Controlling party

At the balance sheet date the immediate parent company and ultimate controlling party of Star UK Topco Limited was Star Guernsey Topco Limited, a private limited company registered in Guernsey. The registered office is C/o First Green Limited, Of Floor 2 Trafalgar Court, Les Banques, St Peter Port, Guernsey.

 

The accounts reported herein are not included in any consolidated accounts above those of Star UK Topco Limited.

Star UK Topco Limited is ultimately owned and controlled by investment funds that are advised and managed by Warburg Pincus LLC, a New York based private equity firm.

28
Non-controlling Interests

The Group recorded non-controlling interests for equity interests in consolidated subsidiaries that were not 100% owned by them or one of their wholly owned subsidiaries. Net income attributable to non-controlling interests are stated separately on the Group’s consolidated statement of operations and comprehensive income.

STAR UK TOPCO LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 48 -
29
Cash generated from group operations
2023
2022
$'000s
$'000s
Loss for the year after tax
(48,190)
(88,974)
Adjustments for:
Taxation (credited)/charged
(15,027)
4,545
Finance costs
73,560
44,821
Investment income
(236)
(56)
Non cash interest expense
(7,625)
(4,079)
Gain on disposal of tangible fixed assets
(2)
(7)
Amortisation and impairment of intangible assets
98,655
105,149
Depreciation and impairment of tangible fixed assets
6,868
7,449
Pension scheme non-cash movement
360
(383)
Equity settled share based payment expense
912
733
Increase/(decrease) in provisions
412
(1,071)
Movements in working capital:
Increase in stocks
(8,945)
(9,737)
(Increase)/decrease in debtors
(6,868)
5,541
Increase in creditors
8,357
14,002
Cash generated from operations
102,231
77,933
30
Cash absorbed by operations - company
2023
2022
$'000s
$'000s
Profit for the year after tax
69,701
151,729
Adjustments for:
Investment income
(70,000)
(151,900)
Movements in working capital:
Decrease in debtors
450
250
Decrease in creditors
(151)
(79)
Cash absorbed by operations
-
-
31
Analysis of changes in net debt - group
1 January 2023
Cash flows
Non cash movements
Exchange rate movements
31 December 2023
$'000s
$'000s
$'000s
$'000s
$'000s
Cash at bank and in hand
44,955
(15,597)
-
6,291
35,649
Borrowings excluding overdrafts
(609,139)
(34,001)
(6,824)
-
(649,964)
(564,184)
(49,598)
(6,824)
6,291
(614,315)
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