Company registration number 13983004 (England and Wales)
CILS MILTON LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
CILS MILTON LIMITED
COMPANY INFORMATION
Directors
Mr C N Saverino
Mr J S Goldstein
(Appointed 27 March 2024)
Mr T Brazier
(Appointed 16 September 2024)
Company number
13983004
Registered office
72 Welbeck Street
London
United Kingdom
W1G 0AY
Auditor
Ernst & Young LLP
144 Morrison Street
Edinburgh
United Kingdom
EH3 8EX
Bankers
Barclays Bank Plc
1 Churchill Place
London
United Kingdom
E14 5HP
Solicitors
Taylor Wessing LLP
5 New Street Square
London
EC4A 3TW
CILS MILTON LIMITED
CONTENTS
Page
Directors' report
1 - 3
Independent auditor's report
4 - 6
Income statement
7
Statement of financial position
8
Statement of changes in equity
9
Notes to the financial statements
10 - 20
CILS MILTON LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 1 -

The Directors present their annual report and audited financial statements for CILS Milton Limited (the "Company") for the year ended 31 December 2023.

 

In preparing this report, the Company has taken the advantage of the exemption provided by section 414B of the Companies Act 2006 in not preparing a Strategic Report under the small company exemption.

Principal activities

The principal activity of the Company is the leasing of commercial logistics property.

Results and dividends

The results for the period are set out on page 7. The Company made a loss before taxation of £6,292,873 (2022: £18,043,551) of which £3,175,286 (2022: £17,066,858) relates to fair value loss on investment properties.

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

Business performance

The results and the financial position of the Company are considered to be satisfactory by the Directors. Turnover is driven by the leasing of commercial units, revenue for the year from lease income was £2,526,055 (2022: £1,851,103). The Company has had a successful year maintaining its fully occupied commercial units as at the year end.

Directors

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

Mr D S Harris
(Resigned 17 September 2024)
Mr R M Pilkington
(Resigned 27 March 2024)
Mr C N Saverino
Mr J S Goldstein
(Appointed 27 March 2024)
Mr T Brazier
(Appointed 16 September 2024)
Qualifying third party indemnity provisions

The Company has made qualifying third party indemnity provisions for the benefit of its directors during the year. These provisions remain in force at the reporting date.

Donations

During the year the Company made no charitable donations.

Future developments

The Directors consider the Company will continue to achieve stable revenue while focus is now on maximising the efficiency of operating costs over the coming year. The Directors expect revenue to be stable with the existing tenant lease in place until 2036.

 

The Directors are positive about the outlook for Northampton as a town with continuing appeal in the logistics sector and to businesses seeking a location with good links to the rest of the UK.

CILS MILTON LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 2 -

Going concern

The directors have conducted a robust assessment of the Company's ability to continue as a going concern for the financial year ended 31 December 2023, considering the available resources and expected obligations up until 31 October 2025, being the going concern period. The Company is part of a Group which also includes CI Logistics Strat 1 LP, CI Logistics Strat 1 GP Limited, CILS1 UK Holdings Limited and its subsidiaries (collectively referred to as the ‘Group’). The directors have assessed that the going concern of the Company is dependent upon the going concern of the Group. At the Group level, the directors have prepared a detailed forecast of the anticipated operational outgoings, incorporating severe but plausible downside risks, and have considered the operational income, expenses, and financing costs up until 31 October 2025. As at 31 December 2023, the Company has net current liabilities of £3,428,631 (2022: £530,411) and net liabilities of £1,644,028 (2022: £261,967 net assets). The Company’s activities are funded by capital from its shareholder CILS1 UK Holdings Limited, which in turn is funded by capital from CI Logistics Strat 1 LP.

 

The Group has a lending facility of £422,200,000 of which £379,422,476 is drawn as at 31 December 2023. The facility expires in April 2025 at which point the Group has two options, firstly to extend the current loan agreement for 12 months up to April 2026 or to refinance the loan with a new lender. Both options are outside of the Group’s control. The directors have considered both options, along with their associated covenants and indicative terms received from two lenders and have determined that in both cases the Group is able to meet the required criteria, subject to an amount of equity which will be required to pay down the loan which will likely lead to cash shortfall during the going concern period.

 

The directors have determined that there are material uncertainties in relation to (i) the Group’s ability to extend the loan or refinance, since both options depend on meeting certain covenants, as well as future valuation and occupancy levels of the assets over which management does not have absolute control or discretion and (ii) whether the Group will be able to secure additional capital from the Limited Partners of CI Logistics Strat 1 LP to cover the identified cash shortfall, resulting from requirements to extend the current loan or refinance with a new lender by 2025. These material uncertainties may cast significant doubt over the ability of the Company to continue as a going concern and, therefore, that it may be unable to realise its assets and discharge its liabilities in the normal course of business.

 

Notwithstanding the material uncertainties described above, the Company has a reasonable expectation that given the quality and location of the assets, that the Group will be able to lease all assets during the going concern period which will in turn increase rental income received and the fair value of the assets held. Since the year end the Group has signed an additional lease representing 20% of the entire property portfolio. The directors also have a reasonable expectation that the Company will receive additional capital from its direct and indirect shareholders to fund the cash shortfall. This expectation is based on the financial outlook of the Limited Partners of CI Logistics Strat 1 LP, past experience of the Limited Partners providing financial support, and their willingness to support the Group to protect their invested economic interest. In addition, since the year-end the Limited Partners have continued to support the Partnership with the signing of an upsized LPA in April 2024 taking the Limited Partners commitment up to £262,200,000 plus an optional commitment of £46,139,893. For these reasons the directors have a reasonable expectation that the Company has adequate resources to continue in operational existence for a period up until 31 October 2025 being the going concern period, and therefore considers it appropriate to prepare the financial statements on a going concern basis.

Auditor

Ernst & Young LLP were re-appointed as auditor to the Company 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.

CILS MILTON LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 3 -
Statement of directors' responsibilities

The Directors are responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.

 

Company law requires the Directors to prepare financial statements for each financial year. Under that law the Directors have elected to prepare the financial statements in accordance with applicable law and United Kingdom Accounting Standards including FRS 101 “Reduced Disclosure Framework" (United Kingdom Generally Accepted Accounting Practice). Under company law the Directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Company and of the profit or loss of the Company for that period. In preparing these financial statements, the Directors are required to:

 

 

The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company’s transactions and disclose with reasonable accuracy at any time the financial position of the Company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

Statement of disclosure to auditor

So far as each person who is a Director of the Company at the date of approving this report is aware, there is no relevant audit information, being information needed by the auditor in connection with preparing its report, of which the auditor is unaware. Having made enquiries of fellow Directors and the Company's auditor, each Director has taken all steps that he is obliged to take as a Director of the Company in order to make himself aware of any relevant audit information and to establish that the auditor is aware of that information.

Subsequent events

Details of subsequent events are set out in note 20.

On behalf of the board
Mr J S Goldstein
Director
21 October 2024
CILS MILTON LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF CILS MILTON LIMITED
- 4 -
Opinion

We have audited the financial statements of CILS Milton Limited (the ‘Company’) for the year ended 31 December 2023 which comprise of the Income Statement, the Statement of Financial Position, the Statement of Changes in Equity and the related notes 1 to 20, including material accounting policy information. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards including FRS 101 “Reduced Disclosure Framework (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 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.

Material uncertainties relating to going concern

We draw attention to Note 1.2 in the financial statements, which states that the Company, along with CI Logistics Strat 1 LP, CI Logistics Strat 1 GP Limited, CILS1 UK Holdings Limited, and its subsidiaries (collectively the 'Group'), has material uncertainties regarding its ability to continue as a going concern. The material uncertainties relate to (i) the Group's ability to extend the loan or refinance, since both options depend on meeting certain covenants, as well as on the future valuation and occupancy levels of the asset over which management of the Group does not have absolute control or discretion and (ii) whether the Group will be able to secure additional capital from the Limited Partners of CI Logistics Strat 1 LP to cover the identified cash shortfall, resulting from requirements to extend the current loan or refinance with a new lender by 2025.

As stated in note 1.2, these events or conditions, indicate that material uncertainties exist that may cast significant doubt over the ability of the Company to continue as a going concern. Our opinion is not modified in respect of these matters.

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.

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

Other information

The other information comprises the information included in the annual report, other than the financial statements and our auditor’s report thereon. The Directors are responsible for the other information contained within the annual report.

 

Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in this report, we do not express any form of assurance conclusion thereon.

 

Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of the other information, we are required to report that fact.

 

We have nothing to report in this regard.

 

CILS MILTON LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF CILS MILTON LIMITED
- 5 -

Opinions on other matters prescribed by the Companies Act 2006

In our opinion, based on the work undertaken in the course of the audit:

Matters on which we are required to report by exception

In the light of the knowledge and understanding of the Company and its environment obtained in the course of the audit, we have not identified material misstatements in 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 set out on page 3, the Directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the Directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

 

In preparing the financial statements, the Directors are responsible for assessing the Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Directors either intend to liquidate the Company or to cease operations, or have no realistic alternative but to do so.

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.

CILS MILTON LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF CILS MILTON LIMITED
- 6 -

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

 

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

Our approach was as follows:

 

 

 

 

A further description of our responsibilities for the audit of the financial statements is located on the

Financial Reporting Council’s website at https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.

Use of our report

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

Caroline Mercer (Senior statutory auditor)
for and on behalf of Ernst & Young LLP, Statutory Auditor
Edinburgh
21 October 2024
CILS MILTON LIMITED
INCOME STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 7 -
For the period
Year
17 March 2022
ended
to
31 December
31 December
2023
2022
Notes
£
£
Revenue
3
2,526,055
1,851,103
Administrative expenses
(233,213)
(148,883)
Fair value loss on investment properties
(3,175,286)
(17,066,858)
Operating Loss
5
(882,444)
(15,364,638)
Finance income
7
-
682
Finance costs
8
(5,410,429)
(2,679,595)
Loss before taxation
(6,292,873)
(18,043,551)
Tax on loss
9
-
0
(2,967)
Total loss for the year/period
17
(6,292,873)
(18,046,518)

The Income statement has been prepared on the basis that all operations are continuing operations.

 

The Company has no other comprehensive income for the current financial year other than the results above and, therefore, no statement of other comprehensive income is presented.

 

The financial statements include the notes presented in pages 10 - 20.

CILS MILTON LIMITED
STATEMENT OF FINANCIAL POSITION
AS AT
31 DECEMBER 2023
31 December 2023
- 8 -
2023
2022
Notes
£
£
£
£
Non-current assets
Investment property
10
56,900,000
58,900,000
Current assets
Trade and other receivables
11
760,572
710,334
Cash and cash equivalents
581,553
577,037
1,342,125
1,287,371
Current liabilities
Trade and other payables
12
4,320,001
1,505,948
Deferred income
14
450,755
311,834
4,770,756
1,817,782
Net current liabilities
(3,428,631)
(530,411)
Total assets less current liabilities
53,471,369
58,369,589
Non-current liabilities
Borrowings
13
55,115,397
58,107,622
(55,115,397)
(58,107,622)
Net (liabilities)/assets
(1,644,028)
261,967
Equity
Called up share capital
15
8
4
Share premium account
16
22,695,355
18,308,481
Retained earnings
17
(24,339,391)
(18,046,518)
Total equity
(1,644,028)
261,967

The financial statements include the Notes presented on pages 10 to 20.

 

These financial statements have been prepared in accordance with the provisions applicable to companies subject to the small companies regime.

The financial statements were approved by the board of directors and authorised for issue on 21 October 2024 and are signed on its behalf by:
Mr J S Goldstein
Director
Company registration number 13983004
CILS MILTON LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
- 9 -
Share capital
Share premium
Retained
Total
account
earnings
Notes
£
£
£
£
Balance at 17 March 2022
-
-
0
-
0
-
Period ended 31 December 2022:
Loss for the period
-
-
(18,046,518)
(18,046,518)
Issue of share capital
15
4
18,308,481
-
18,308,485
Balance at 31 December 2022
4
18,308,481
(18,046,518)
261,967
Year ended 31 December 2023:
Loss for the year
-
-
(6,292,873)
(6,292,873)
Issue of share capital
15
4
4,386,874
-
4,386,878
Balance at 31 December 2023
8
22,695,355
(24,339,391)
(1,644,028)
CILS MILTON LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 10 -
1
Accounting policies
Company information

CILS Milton Limited is a private Company limited by shares registered in England and Wales and incorporated in the United Kingdom under the Companies Act 2006. The principal activity of the Company is the leasing of commercial logistics property. The immediate parent company is CILS1 UK Holdings Limited, the ultimate parent company is CI Logistics Strat 1 LP, an entity registered in Jersey.

 

The registered office of the company was changed to 72 Welbeck Street, London, United Kingdom W1G 0AY on 22 April 2024 (previously 116 Upper Street, London, N1 1QP).

1.1
Accounting convention

The principal accounting policies applied in the preparation of these financial statements are set out below. These policies have been consistently applied to the period presented, unless otherwise stated.

 

Basis of accounting

The financial statements have been prepared in accordance with Financial Reporting Standard 101 Reduced Disclosure Framework (FRS 101).

The financial statements are prepared in sterling, which is the functional currency of the Company. The financial statements have been prepared under the historical cost convention, with the exception of investment property, which is measured at fair value through the profit or loss. Monetary amounts in these financial statements are rounded to the nearest £.

 

Comparative period

The comparatives are presented for the period from 17 March 2022, being the date of incorporation, to 31 December 2022.

 

Summary of disclosure exemptions

The preparation of financial statements in conformity with FRS 101 requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the company’s accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the financial statements, are disclosed in note 2.

 

The following exemptions from the requirements of UK Adopted International Accounting Standards have been applied in the preparation of these financial statements, in accordance with FRS 101:

 

• IFRS 7, ‘Financial instruments: Disclosures’.

• Paragraph 38 of IAS 1, ‘Presentation of financial statements’ – comparative information requirements in respect of paragraph 79(a)(iv):

• The following paragraphs of IAS 1, ‘Presentation of financial statements’:

- 10(d) (statement of cash flows)

- 16 (statement of compliance with all IFRS)

- 38A (requirement for minimum of two primary statements, including cash flow statements)

- 38B-D (additional comparative information)

- 111 (cash flow statement information); and

- 134-136 (capital management disclosures)

• IAS 7, ‘Statement of cash flow’.

• Paragraph 17 of IAS 24, ‘Related party disclosures’ (key management compensation).

• The requirements in IAS 24, ‘Related party disclosures’, to disclose related party transactions entered into between two or more members of a group.

IFRS 13, 'Fair Value Measurement: Disclosures.

IAS 40, 'Investment property: comparative disclosures.

 

Where relevant, these disclosures have been made in the financial statements of CILS1 UK Holdings Limited. Which are publicly available and can be obtained as set out in note 18. Details of the parent entity are given in note 18 to the financial statements.

 

CILS MILTON LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 11 -
1.2
Going concern

The directors have conducted a robust assessment of the Company's ability to continue as a going concern for the financial year ended 31 December 2023, considering the available resources and expected obligations up until 3true1 October 2025, being the going concern period. The Company is part of a Group which also includes CI Logistics Strat 1 LP, CI Logistics Strat 1 GP Limited, CILS1 UK Holdings Limited and its subsidiaries (collectively referred to as the ‘Group’). The directors have assessed that the going concern of the Company is dependent upon the going concern of the Group. At the Group level, the directors have prepared a detailed forecast of the anticipated operational outgoings, incorporating severe but plausible downside risks, and have considered the operational income, expenses, and financing costs up until 31 October 2025. As at 31 December 2023, the Company has net current liabilities of £3,428,631 (2022: £530,411) and net liabilities of £1,644,028 (2022: £261,967 net assets). The Company’s activities are funded by capital from its shareholder CILS1 UK Holdings Limited, which in turn is funded by capital from CI Logistics Strat 1 LP.

 

The Group has a lending facility of £422,200,000 of which £379,422,476 is drawn as at 31 December 2023. The facility expires in April 2025 at which point the Group has two options, firstly to extend the current loan agreement for 12 months up to April 2026 or to refinance the loan with a new lender. Both options are outside of the Group’s control. The directors have considered both options, along with their associated covenants and indicative terms received from two lenders and have determined that in both cases the Group is able to meet the required criteria, subject to an amount of equity which will be required to pay down the loan which will likely lead to cash shortfall during the going concern period.

 

The directors have determined that there are material uncertainties in relation to (i) the Group’s ability to extend the loan or refinance, since both options depend on meeting certain covenants, as well as future valuation and occupancy levels of the assets over which management does not have absolute control or discretion and (ii) whether the Group will be able to secure additional capital from the Limited Partners of CI Logistics Strat 1 LP to cover the identified cash shortfall, resulting from requirements to extend the current loan or refinance with a new lender by 2025. These material uncertainties may cast significant doubt over the ability of the Company to continue as a going concern and, therefore, that it may be unable to realise its assets and discharge its liabilities in the normal course of business.

 

Notwithstanding the material uncertainties described above, the Company has a reasonable expectation that given the quality and location of the assets, that the Group will be able to lease all assets during the going concern period which will in turn increase rental income received and the fair value of the assets held. Since the year end the Group has signed an additional lease representing 20% of the entire property portfolio. The directors also have a reasonable expectation that the Company will receive additional capital from its direct and indirect shareholders to fund the cash shortfall. This expectation is based on the financial outlook of the Limited Partners of CI Logistics Strat 1 LP, past experience of the Limited Partners providing financial support, and their willingness to support the Group to protect their invested economic interest. In addition, since the year-end the Limited Partners have continued to support the Partnership with the signing of an upsized LPA in April 2024 taking the Limited Partners commitment up to £262,200,000 plus an optional commitment of £46,139,893. For these reasons the directors have a reasonable expectation that the Company has adequate resources to continue in operational existence for a period up until 31 October 2025 being the going concern period, and therefore considers it appropriate to prepare the financial statements on a going concern basis.

1.3
Revenue

Revenue is measured based on the consideration specified in a contract with a customer and excludes amounts collected on behalf of third parties. The Company recognises revenue when it transfers control of a product or service to a customer.

 

Revenue from the rental of commercial units is recognised on a straight-line basis over the term of the relevant lease and to the extent that the Company obtains right to consideration in exchange for its performance that can be reliably measured. Revenue is recognised in the period in which it is earned and measured as the fair value of the consideration received or receivable, adjusted for any capital contributions or other lease incentives provided, excluding value added tax.

 

Tenant lease incentives are recognised as a reduction of rental revenue on a straight-line basis over the term of the lease, or the break clause date. The lease term is the non-cancellable period of the lease together with any further term for which the tenant has the option to continue the lease, where, at the inception of the lease, the Company is reasonably certain that the tenant will exercise that option.

 

Revenue is stated net of VAT and comprises of commercial rental income.

CILS MILTON LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 12 -
1.4
Investment property

Investment properties are properties that are held either to earn rental income or for capital appreciation, or both, and are not occupied by the Company.

 

Investment property is measured initially at cost, including related transaction costs. After initial recognition investment property is held at fair value based on a valuation undertaken by an independent professional valuer.

 

The Company's investment property is comprised of a logistics asset in Northampton. The investment property in the Company is held at fair value during the year ended 31 December 2023.

 

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

1.5
Borrowing cost

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

All other borrowing costs are recognised in profit or loss in the period in which they are incurred.

1.6
Cash and cash equivalents

Cash and cash equivalents include cash in hand, current and fixed deposits with banks and similar institutions, with original maturities of three months or less, which are readily convertible to known amounts of cash and which are subject to insignificant risk of changes in value.

1.7
Taxation

The tax expense represents the sum of the tax currently payable and deferred tax.

Current tax

Current income tax assets and liabilities are measured at the amount expected to be recovered from or paid to taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted, or substantively enacted, at the reporting date in the countries where the Company operates and generates taxable income.

 

Management periodically evaluates positions taken in tax returns with respect to situations in which applicable tax regulations are subject to interpretation and establishes provisions where appropriate.

Deferred tax

Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit, and is accounted for using the balance sheet liability method. Deferred tax liabilities are generally recognised for all taxable temporary differences and deferred tax assets are recognised to the extent that it is probable that taxable profits will be available against which deductible temporary differences can be utilised. Such assets and liabilities are not recognised if the temporary 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 income statement, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the Company has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.

CILS MILTON LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 13 -
1.8

Trade and other receivables

Trade and other receivables are initially recognised at fair value which is the transaction price and subsequently measured at amortised cost less provision for impairment.

 

The Company applies the simplified approach to providing for expected credit losses prescribed by IFRS 9, which permits the use of the lifetime expected loss provision for all trade receivables and contract assets. These estimates are based on historic credit loss experience, adjusted for forward-looking factors specific to the debtors and macro-economic and specific country-risk considerations with higher default rates applied to older balances.

 

In addition, if specific circumstances exist which would indicate that the receivable is irrecoverable a specific provision is made. A provision is made against trade receivables and contract assets until such time as the Company believes there to be no reasonable expectation of recovery, after which the trade receivable or contract asset balance is written off.

1.9

Trade and other payables

These amounts represent liabilities for services provided to the Company prior to the end of the financial year which are unpaid. Trade and other payables are presented as current liabilities. They are recognised initially at their fair value and subsequently measured at amortised cost using the effective interest method.

1.10

Share capital

Share capital and Share premium issued by the Company are recorded at the proceeds received, net of direct issue costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the Company.

 

2
Critical accounting estimates and judgements

The key assumptions concerning the future, and other key sources of estimation uncertainty at the reporting period end that may have a significant risk of causing a material misstatement to the carrying amounts of assets and liabilities within the next financial year, are discussed below:

 

In the application of the Company's accounting policies that are set out in note 1, the Directors are required to make judgements, estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. The directors have also made judgements about the going concern of the Company as described in note 1.2. 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 if the revision affects only that period, or in the period if the revision and future periods if the revision affects both current and future periods.

The following are the Company's key sources of estimation uncertainty:
CILS MILTON LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
2
Critical accounting estimates and judgements
(Continued)
- 14 -
Key sources of estimation uncertainty
Fair value of investment property

The Company's investment property held is initially measured at cost and subsequently at fair value through profit or loss at the end of the reporting period. Any unrealised gains or losses on this investment is recognised immediately in the income statement.

 

Fair value is the amount for which an asset could be exchanged, a liability settled, or an equity instrument granted could be exchanged, between knowledgeable, willing parties in an arm's length transaction.

 

The fair valuation of the property was carried out by an external third-party valuation expert for inclusion in the audited financial statements where a significant period of time had elapsed since its acquisition date as part of quantifying the investment property held by the Company. The significant methods and assumptions used by valuers in estimating fair value of investment property are set out in Note 10.

 

Investment property is measured based on estimates prepared by independent real estate valuation experts.

 

3
Revenue
For the period
Year
17 March 2022
ended
to
31 December
31 December
2023
2022
£
£
Revenue analysed by class of business
Rental income (excluding straight-lining of lease incentives)
2,700,829
1,979,430
Straight-lining of lease incentives (at earlier of lease end date or break clause date)
(174,774)
(128,327)
2,526,055
1,851,103
There is only one operating segment. All revenue arose within the United Kingdom.

The Company has granted incentives such as rent-free periods to new tenants. The total unamortised portion of rent-free periods is, as follows:

For the period
Year
17 March 2022
ended
to
31 December
31 December
2023
2022
£
£
Other income
Cumulative amount of unamortised lease incentive
2,038,235
862,949
2,038,235
862,949
CILS MILTON LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 15 -
4
Other leasing information

 

The Company earns rental income from leasing out its completed logistics space to commercial tenants. The future minimum lease payments in relation to non-cancellable operating leases are as follows:

 

For the period
Year
17 March 2022
ended
to
31 December
31 December
2023
2022
£
£
Within one year
2,529,975
1,350,060
One to two years
2,700,120
2,529,975
Two to three years
2,700,120
2,700,120
Three to four years
2,700,120
2,552,168
Four to five years
2,700,120
-
Over five years
20,602,283
-
Total
33,932,738
9,132,323
5
Operating loss
For the period
Year
17 March 2022
ended
to
31 December
31 December
2023
2022
Operating loss for the year/period is stated after charging/(crediting):
£
£
Asset management
114,755
86,066
Fee payable in relation to auditor remuneration
42,000
40,000
Fees paid for taxation advisory services
28,000
-
6
Employees

The Company had no employees and incurred no staff costs during the year. There were £nil Directors' emoluments in the year (2022: £nil).

7
Finance income
For the period
Year
17 March 2022
ended
to
31 December
31 December
2023
2022
£
£
Interest income
Interest on bank deposits
-
0
682
CILS MILTON LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 16 -
8
Finance costs
For the period
Year
17 March 2022
ended
to
31 December
31 December
2023
2022
£
£
Interest on financial liabilities measured at amortised cost:
Interest on bank overdrafts and loans
4,786,037
2,221,137
Amortisation of finance costs
624,392
458,458
5,410,429
2,679,595
9
Taxation
2023
2022
£
£
Current tax
UK corporation tax on profits for the current period
-
2,967

The charge for the year can be reconciled to the loss per the income statement as follows:

For the period
Year
17 March 2022
ended
to
31 December
31 December
2023
2022
£
£
Loss before taxation
(6,292,873)
(18,043,551)
Expected tax credit based on a corporation tax rate of 23.50% (2022: 19.00%)
(1,478,825)
(3,428,275)
Fair value movement on investement properties not recognised for tax purpose
746,192
3,242,703
Anti hybrid disallowances
329,685
83,509
Corporate interest restriction
938,081
285,555
Capital allowances relief
(199,881)
(137,637)
Group relief utilised
(335,252)
(42,888)
Taxation charge for the period
-
2,967

The Company has unutilised carried forward tax losses of £nil as at 31 December 2023 (2022: £nil). No deferred tax asset has been recognised on this amount as the Company cannot be certain that there will be taxable profits arising within its residual business from which the future reversal of the deferred tax asset could be deducted.

 

There was no deferred income tax recognised during the year.

 

In the March 2021 Budget it was announced that legislation would be introduced in the Finance Bill 2021 to increase the main rate of UK corporation tax from 19% to 25%, effective April 2023. This was substantively enacted in May 2021 therefore, any closing deferred tax balance is calculated at 25%.

CILS MILTON LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 17 -
10
Investment property
2023
£
Fair value
At 1 January 2023
58,900,000
Net Loss from fair value adjustement
(3,175,286)
Addition of capitalised lease incentive
1,175,286
At 31 December 2023
56,900,000

The cost of the Investment Property as at 31 December 2023, based on the historical cost basis is £75,103,909 (2022: £75,103,909).

 

The illustrative calculations of a valuation considered to be compliant with the principals of RICS Valuation -Professional Standards 2022, were carried out by CBRE Limited as at 31 December 2023 (2022: KPMG LLP). The valuers have prepared the calculations using the basis of fair value as at the valuation date pursuant to IFRS 13 - Fair Value Measurement.

 

Key assumptions used in the valuation include an estimated rental value of £9.00per sq ft (2022: £8.75 per sq ft), a capitalisation rate of 5.25% (2022: 4.63%) and adjusting for purchaser costs at 6.8% (2022: 6.8%).

11
Trade and other receivables
2023
2022
£
£
Trade receivables
-
77,619
Amount owed by parent undertaking
8,323
8,323
Other receivables
752,249
624,392
760,572
710,334

All trade and other receivables are interest free and unsecured.

 

Amounts owed by parent undertaking is repayable on demand.

 

The Company always recognises lifetime ECL (expected credit losses) for trade receivables, which are estimated using an analysis of the debtor's current financial position and general economic conditions at the reporting date. The Company did not make any impairment in the year.

 

CILS MILTON LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 18 -
12
Trade and other payables
2023
2022
£
£
Trade payables
43,032
35,935
Amount owed to parent undertaking
2,684,824
246,772
Retention payable
306,594
307,514
Loan interest accrual
1,044,127
743,325
Accruals
82,720
42,967
Taxation and social security
158,704
129,435
4,320,001
1,505,948

Amounts owed to the parent undertaking are unsecured, interest-free and repayable on demand.

 

The Loan interest accrual include amounts accrued from 21 October to 31 December in both 2022 and 2023 in relation to the bank borrowings.

13
Borrowings
2023
2022
£
£
Borrowings held at amortised cost:
Bank borrowings
55,279,621
58,897,948
Unamortised finance costs
(790,326)
(1,414,718)
Unamortised finance costs released within 1 year
626,102
624,392
55,115,397
58,107,622

The Company has a finance facility provided by Blackstone (via Claus Investments S.a.r.l) for a 5-year loan facility, commencing 2 April 2022 and guaranteed by its parent CILS1 UK Holdings Limited. The initial facility terms is for 3 years with the option to extend annually for the remaining two years. The facility is secured against a fully completed asset.

 

The bank finance is subject to a 82.5% loan-to-value and 4.5% debt yield, which is applicable to April 2025. The Company was compliant with this requirement as at the year end.

 

As at the year end there is £1,044,127 (2022: £743,325) of accrued loan interest shown as a current liability. Interest is repayable quarterly and capital repayable at the end of the term.

 

CILS1 UK Holdings Limited, the parent entity, purchased a two year interest rate cap in March 2022, for the group facility, to hedge the interest rate risk, capping the total interest payable at 2.50%.

 

CILS1 UK Holdings Limited, the parent entity, purchased a one year interest rate cap in April 2024, for the group facility, to hedge the interest rate risk, capping the total interest payable at 6%.

 

14
Deferred revenue
2023
2022
£
£
Arising from Rental Income
450,755
311,834
CILS MILTON LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 19 -
15
Share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Authorised
Ordinary share of £1 each
8
4
8
4
Issued and fully paid
Ordinary share of £1 each
8
4
8
4

On 4 April 2023, the Company issued 1 Ordinary Share of £1 at a price of £34,427, creating share premium of £34,426.

On 20 June 2023, the Company issued 1 Ordinary Share of £1 at a price of £62,000, creating share premium of £61,999.

On 28 September 2023, the Company issued 1 Ordinary Share of £1 at a price of £50,000, creating share premium of £49,999.

On 22 December 2023, the Company issued 1 Ordinary Share of £1 at a price of £4,240,451, creating share premium of £4,240,450.

16
Share premium account
2023
2022
£
£
At the beginning of the year
18,308,481
-
0
Issued during the year
4,386,874
-
On conversion of inter-company loan
-
18,308,481
At the end of the year
22,695,355
18,308,481

During the year ended 31 December 2023, CILS1 UK Holdings Limited provided the Company with funding amounts totaling £4,386,878 which were unsecured, interest free and repayable on demand. During 2023 the amounts were converted to equity consisting of a total of four equity shares of £1 each issued at a total premium of £4,386,874 (2022: £18,308,481 of loan under the ICL agreement was converted to 4 shares at a premium of £18,308,481).

17
Retained earnings
2023
2022
£
£
At the beginning of the year
(18,046,518)
-
Loss for the year
(6,292,873)
(18,046,518)
At the end of the year
(24,339,391)
(18,046,518)

The accumulated losses reserve represents cumulative profits and losses net of dividends paid and other adjustments. These are shown in the statement of changes in equity (page 9).

 

CILS MILTON LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 20 -
18
Controlling party

As at 31 December 2023, the only parent undertaking that consolidates the results of the Company and whose financial statements are publicly available is CILS1 UK Holdings Limited, an entity incorporated in the United Kingdom.

 

CILS1 UK Holdings Limited is 100% owned by CI Logistics Strat 1 LP, a partnership incorporated in Jersey. The general partner of CI Logistics Strat 1 LP is CI Logistics Strat 1 GP Limited, an entity incorporated in Jersey. The financial statements of these entities are not publicly available.

 

ACZ Investments LP and UKLP Holding LP, the two shareholders of CI Logistics Strat 1 GP Limited, equally share control of the Company and the directors consider there to be no ultimate controlling party.

 

19
Related party transactions

In accordance with FRS 101 under IAS 24, the Company has taken advantage of the exemption from disclosing related party transactions with entities owned wholly by the group.

20
Post balance sheet events

On 28 March 2024, £135,000 of temporary funding was converted to 1 ordinary £1 share at a premium of £134,999.

 

On 26 September 2024, £50,000 of temporary funding was converted to 1 ordinary £1 share at a premium of £49,999.

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