Company registration number 07834757 (England and Wales)
COMPASS INFRASTRUCTURE UK (CI UK) LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
COMPASS INFRASTRUCTURE UK (CI UK) LIMITED
COMPANY INFORMATION
Directors
Mr C H van Dommele
Compass Europe Group (CEG) BV
Company number
07834757
Registered office
7 Maitland Road
Lion Barn Industrial Estate
Needham Market
Ipswich
IP6 8NZ
Auditor
Ensors Accountants LLP
Victory House
Vision Park
Chivers Way, Histon
Cambridge
CB24 9ZR
COMPASS INFRASTRUCTURE UK (CI UK) LIMITED
CONTENTS
Page
Strategic report
1
Directors' report
2
Directors' responsibilities statement
3
Independent auditor's report
4 - 6
Statement of comprehensive income
7
Balance sheet
8
Statement of changes in equity
9
Statement of cash flows
10
Notes to the financial statements
11 - 23
COMPASS INFRASTRUCTURE UK (CI UK) LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 1 -
The directors present the strategic report for the year ended 31 December 2023.
Review of the business
The directors are pleased with the results for the year ending 31 December 2023.
The actions taken by the directors have improved matters operationally and this is expected to be reflected in future trading results.
Principal risks and uncertainties
The objective of the company is to manage its financial risks as well as its other business risks within parameters agreed and approved by the company's directors.
The directors manage these risks by forward planning and actively managing cash flow and budgets.
Development and performance
The directors consider that the financial position of the company remains strong. On the back of another strong trading year, cash balances are up from £1.9m to £2.3m in the current year. The company has seen a decrease in net assets which are now at £1.8m compared to £3.3m at the prior year end. The main reason for this movement is within amounts owed by group undertakings as the prior year included an interest free loan of £1.7m owed from Compass Europe Group BV (CEG) which is now £nil at the current year end.
Taxation The company had significant tax losses arising in 2018 and 2019 whereby the related deferred tax asset was recognised. The tax losses have been utilised against the current years trading profits.
Key performance indicators
There are a number of financial key performance indicators used by the directors to evaluate the company's performance. These indicators are applied to individual projects and the company as a whole. The key financial indicators are turnover, gross profit and therefore gross margins achieved, in addition to operating profit.
The directors have reviewed the key performance indicators and consider that the results for the year are satisfying.
Mr C H van Dommele
Director
16 April 2024
COMPASS INFRASTRUCTURE UK (CI UK) LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 2 -
The directors present their annual report and financial statements for the year ended 31 December 2023.
Principal activities
The principal activity of the company continued to be that of developing, management, designing and delivering telecommunication and HV & EHV cabling.
Results and dividends
The results for the year are set out on page 7.
Ordinary dividends were paid amounting to £861,955. The directors do not recommend payment of a final dividend.
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
Mr C H van Dommele
Compass Europe Group (CEG) BV
Auditor
The auditor, Ensors Accountants LLP, is deemed to be reappointed under section 487(2) of the Companies Act 2006.
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 company’s auditor is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the company’s auditor is aware of that information.
Medium-sized companies exemption
This report has been prepared in accordance with the provisions applicable to companies entitled to the medium-sized companies exemption.
On behalf of the board
Mr C H van Dommele
Director
16 April 2024
COMPASS INFRASTRUCTURE UK (CI UK) LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 3 -
The directors are responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to:
select suitable accounting policies and then apply them consistently;
make judgements and accounting estimates that are reasonable and prudent;
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company’s transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
COMPASS INFRASTRUCTURE UK (CI UK) LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBER OF COMPASS INFRASTRUCTURE UK (CI UK) LIMITED
- 4 -
Opinion
We have audited the financial statements of Compass Infrastructure UK (CI UK) Limited (the 'company') for the year ended 31 December 2023 which comprise the statement of comprehensive income, the balance sheet, the statement of changes in equity, the statement of cash flows and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).
In our opinion the financial statements:
give a true and fair view of the state of the company's affairs as at 31 December 2023 and of its profit for the year then ended;
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
have been prepared in accordance with the requirements of the Companies Act 2006.
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
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:
the information given in the strategic report and the directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the strategic report and the directors' report have been prepared in accordance with applicable legal requirements.
COMPASS INFRASTRUCTURE UK (CI UK) LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBER OF COMPASS INFRASTRUCTURE UK (CI UK) LIMITED
- 5 -
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 strategic report or the directors' report.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:
adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
the financial statements are not in agreement with the accounting records and returns; or
certain disclosures of remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.
Responsibilities of directors
As explained more fully in the directors' 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 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.
The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.
In identifying and assessing risks of material misstatement in respect of irregularities, including fraud, the audit engagement team:
Obtained a detailed understanding of the methodology adopted by management and the key assumptions underpinning the calculation of the stage of completion applied in the work in progress;
Audited the risk of management override of controls, including through testing journal entries and other adjustments for appropriateness, and evaluating the business rational of significant transactions outside the normal course of business;
obtained an understanding of the nature of the industry and sector, including the legal and regulatory framework that the company operates in and how the company are complying with the legal and regulatory framework;
inquired of management, and those charged with governance, about their own identification and assessment of the risks of irregularities, including any known actual, suspected or alleged instances of fraud;
discussed matters about non-compliance with laws and regulations and how fraud might occur including assessment of how and where the financial statements may be susceptible to fraud.
However, it is the primary responsibility of management, with the oversight of those charged with governance, to ensure that the entity's operations are conducted in accordance with the provisions of laws and regulations and for the prevention and detection of fraud.
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.
COMPASS INFRASTRUCTURE UK (CI UK) LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBER OF COMPASS INFRASTRUCTURE UK (CI UK) LIMITED
- 6 -
This report is made solely to the company's member 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 member those matters we are required to state to the member 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 member, for our audit work, for this report, or for the opinions we have formed.
Jayson Lawson
Senior Statutory Auditor
For and on behalf of Ensors Accountants LLP
17 April 2024
Chartered Accountants
Statutory Auditor
Victory House
Vision Park
Chivers Way, Histon
Cambridge
CB24 9ZR
COMPASS INFRASTRUCTURE UK (CI UK) LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2023
- 7 -
2023
2022
Notes
£
£
Turnover
3
16,388,159
12,028,512
Cost of sales
(12,771,088)
(8,552,522)
Gross profit
3,617,071
3,475,990
Administrative expenses
(2,190,933)
(2,065,406)
Other operating income
649
Operating profit
4
1,426,138
1,411,233
Interest receivable and similar income
7
75
Interest payable and similar expenses
8
(1,086)
Profit before taxation
1,426,213
1,410,147
Tax on profit
9
(359,282)
(204,794)
Profit for the financial year
1,066,931
1,205,353
The profit and loss account has been prepared on the basis that all operations are continuing operations.
COMPASS INFRASTRUCTURE UK (CI UK) LIMITED
BALANCE SHEET
AS AT 31 DECEMBER 2023
31 December 2023
- 8 -
2023
2022
Notes
£
£
£
£
Fixed assets
Tangible assets
12
218,773
174,034
Current assets
Debtors
15
3,027,559
4,160,269
Cash at bank and in hand
2,277,229
1,919,596
5,304,788
6,079,865
Creditors: amounts falling due within one year
16
(3,704,176)
(2,948,660)
Net current assets
1,600,612
3,131,205
Total assets less current liabilities
1,819,385
3,305,239
Provisions for liabilities
(9,170)
Net assets
1,810,215
3,305,239
Capital and reserves
Called up share capital
21
1
2
Share premium account
1,699,999
Profit and loss reserves
1,810,214
1,605,238
Total equity
1,810,215
3,305,239
The financial statements were approved by the board of directors and authorised for issue on 16 April 2024 and are signed on its behalf by:
Mr C H van Dommele
Director
Company Registration No. 07834757
COMPASS INFRASTRUCTURE UK (CI UK) LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
- 9 -
Share capital
Share premium account
Profit and loss reserves
Total
Notes
£
£
£
£
Balance at 1 January 2022
2
1,699,999
399,885
2,099,886
Year ended 31 December 2022:
Profit and total comprehensive income for the year
-
-
1,205,353
1,205,353
Balance at 31 December 2022
2
1,699,999
1,605,238
3,305,239
Year ended 31 December 2023:
Profit and total comprehensive income for the year
-
-
1,066,931
1,066,931
Dividends
10
-
-
(861,955)
(861,955)
Redemption of shares
21
(1)
(1,699,999)
(1,700,000)
Balance at 31 December 2023
1
1,810,214
1,810,215
COMPASS INFRASTRUCTURE UK (CI UK) LIMITED
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 10 -
2023
2022
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from/(absorbed by) operations
25
3,259,024
(2,265,912)
Interest paid
(1,086)
Income taxes (paid)/refunded
(273,512)
36,770
Net cash inflow/(outflow) from operating activities
2,985,512
(2,230,228)
Investing activities
Purchase of tangible fixed assets
(90,837)
(138,665)
Proceeds from disposal of tangible fixed assets
25,276
72,470
Interest received
75
Net cash used in investing activities
(65,486)
(66,195)
Financing activities
Redemption of shares
(1,700,000)
Payment of finance leases obligations
(438)
(28,703)
Dividends paid
(861,955)
Net cash used in financing activities
(2,562,393)
(28,703)
Net increase/(decrease) in cash and cash equivalents
357,633
(2,325,126)
Cash and cash equivalents at beginning of year
1,919,596
4,244,722
Cash and cash equivalents at end of year
2,277,229
1,919,596
COMPASS INFRASTRUCTURE UK (CI UK) LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 11 -
1
Accounting policies
Company information
Compass Infrastructure UK (CI UK) Limited is a private company limited by shares incorporated in England and Wales. The registered office is 7 Maitland Road, Lion Barn Industrial Estate, Needham Market, Ipswich, IP6 8NZ.
1.1
Accounting convention
These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.
The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.
The financial statements have been prepared under the historical cost convention, modified to include the revaluation of freehold properties and to include investment properties and certain financial instruments at fair value. The principal accounting policies adopted are set out below.
1.2
Going concern
The directors have considered the current trading position, future forecasts and the impact of current inflation upon the basis of preparation of the financial statements. Having considered all of these factors and considering future forecasts, relationships with customers and suppliers the directors continue to adopt the going concern basis of preparationtrue
1.3
Turnover
The turnover shown in the profit and loss account represents amounts invoiced during the year, exclusive of Value Added Tax.
In respect of long-term contracts turnover represents the value of work done in the year, including estimates of amounts not invoiced. Turnover in respect of long-term contracts is recognised by reference to the stage of completion using costs incurred to date as a proportion of total costs.
1.4
Intangible fixed assets - goodwill
Goodwill represents the excess of the cost of acquisition of unincorporated businesses 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.
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.
1.5
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.
COMPASS INFRASTRUCTURE UK (CI UK) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 12 -
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:
Property improvements
against the term of the lease
Computer equipment
3 years straight line
Motor vehicles
4 years straight line
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is credited or charged to profit or loss.
1.6
Impairment of fixed assets
At each reporting period end date, the company 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 company estimates the recoverable amount of the cash-generating unit to which the asset belongs.
The 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.
1.7
Cash and cash equivalents
Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.
1.8
Financial instruments
The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the company's balance sheet when the company becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
COMPASS INFRASTRUCTURE UK (CI UK) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 13 -
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.
Impairment of financial assets
Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.
Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.
If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.
Derecognition of financial assets
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the company transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.
Classification of financial liabilities
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.
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.
COMPASS INFRASTRUCTURE UK (CI UK) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 14 -
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.
Derecognition of financial liabilities
Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.
1.9
Equity instruments
Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.
1.10
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 company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
Deferred tax
Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the company has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.
COMPASS INFRASTRUCTURE UK (CI UK) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 15 -
1.11
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 company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.
1.12
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.13
Leases
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessees. All other leases are classified as operating leases.
Assets held under finance leases are recognised as assets at the lower of the assets fair value at the date of inception and the present value of the minimum lease payments. The related liability is included in the balance sheet as a finance lease obligation. Lease payments are treated as consisting of capital and interest elements. The interest is charged to profit or loss so as to produce a constant periodic rate of interest on the remaining balance of the liability.
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 leases asset are consumed.
1.14
Foreign exchange
Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation in the period are included in profit or loss.
2
Judgements and key sources of estimation uncertainty
In the application of the company’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
Critical judgements
The following judgements (apart from those involving estimates) have had the most significant effect on amounts recognised in the financial statements.
Deferred Tax Asset
A deferred tax asset has been recognised in respect of tax losses because it is probable that future taxable profits will be available against which the Company can use the benefits therefrom. The inclusion of such an asset requires a judgement of future profits. See Deferred Taxation note for the carrying amount of the deferred tax asset at the reporting end.
COMPASS INFRASTRUCTURE UK (CI UK) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
2
Judgements and key sources of estimation uncertainty
(Continued)
- 16 -
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.
Percentage of completion
Significant areas requiring the use of estimates relate to the determination of percentage of completion and estimated project costs for contract revenue recognition. Management are required to assess the percentage of completion and the costs to completion on individual contracts. This assessment involves an element of estimation.
3
Turnover and other revenue
An analysis of the company's turnover is as follows:
2023
2022
£
£
Turnover analysed by class of business
Contract revenue
16,388,159
12,028,512
2023
2022
£
£
Turnover analysed by geographical market
United Kingdom
16,388,159
12,028,512
2023
2022
£
£
Other revenue
Interest income
75
-
4
Operating profit
2023
2022
Operating profit for the year is stated after charging/(crediting):
£
£
Exchange (gains)/losses
(4,234)
19,870
Fees payable to the company's auditor for the audit of the company's financial statements
18,000
14,750
Depreciation of owned tangible fixed assets
48,468
86,253
Profit on disposal of tangible fixed assets
(27,646)
(36,790)
Operating lease charges
137,352
155,385
5
Auditor's remuneration
2023
2022
Fees payable to the company's auditor and associates:
£
£
For audit services
Audit of the financial statements of the company
18,000
14,750
COMPASS INFRASTRUCTURE UK (CI UK) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 17 -
6
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2023
2022
Number
Number
Director
1
1
Office Staff
5
5
Operational Staff
9
8
Total
15
14
Their aggregate remuneration comprised:
2023
2022
£
£
Wages and salaries
844,450
752,857
Social security costs
102,535
94,628
Pension costs
32,482
23,107
979,467
870,592
7
Interest receivable and similar income
2023
2022
£
£
Interest income
Interest on bank deposits
75
2023
2022
Investment income includes the following:
£
£
Interest on financial assets not measured at fair value through profit or loss
75
8
Interest payable and similar expenses
2023
2022
£
£
Other finance costs:
Interest on finance leases and hire purchase contracts
-
1,086
COMPASS INFRASTRUCTURE UK (CI UK) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 18 -
9
Taxation
2023
2022
£
£
Current tax
UK corporation tax on profits for the current period
87,394
273,365
Deferred tax
Origination and reversal of timing differences
271,888
(68,571)
Total tax charge
359,282
204,794
The actual charge for the year can be reconciled to the expected charge for the year based on the profit or loss and the standard rate of tax as follows:
2023
2022
£
£
Profit before taxation
1,426,213
1,410,147
Expected tax charge based on the standard rate of corporation tax in the UK of 23.52% (2022: 19.00%)
335,445
267,928
Tax effect of expenses that are not deductible in determining taxable profit
2,424
1,755
Adjustments in respect of prior years
(7,338)
Effect of change in corporation tax rate
16,099
(63,067)
Permanent capital allowances in excess of depreciation
5,314
5,516
Taxation charge for the year
359,282
204,794
Corporation tax rates in the UK changed from 01 April 2023 onwards, the main rate of corporation tax increased to 25% (from 19%).
10
Dividends
2023
2022
£
£
Interim paid
861,955
COMPASS INFRASTRUCTURE UK (CI UK) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 19 -
11
Intangible fixed assets
Goodwill
£
Cost
At 1 January 2023 and 31 December 2023
672,132
Amortisation and impairment
At 1 January 2023 and 31 December 2023
672,132
Carrying amount
At 31 December 2023
At 31 December 2022
12
Tangible fixed assets
Property improvements
Computer equipment
Motor vehicles
Total
£
£
£
£
Cost
At 1 January 2023
211,481
129,475
290,104
631,060
Additions
7,558
83,279
90,837
Disposals
(83,038)
(83,038)
At 31 December 2023
211,481
137,033
290,345
638,859
Depreciation and impairment
At 1 January 2023
108,850
116,641
231,535
457,026
Depreciation charged in the year
10,613
13,288
24,567
48,468
Eliminated in respect of disposals
(85,408)
(85,408)
At 31 December 2023
119,463
129,929
170,694
420,086
Carrying amount
At 31 December 2023
92,018
7,104
119,651
218,773
At 31 December 2022
102,631
12,834
58,569
174,034
13
Financial instruments
2023
2022
£
£
Carrying amount of financial assets
Debt instruments measured at amortised cost
297,184
1,943,722
Carrying amount of financial liabilities
Measured at amortised cost
2,260,991
1,628,560
COMPASS INFRASTRUCTURE UK (CI UK) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 20 -
14
Construction contracts
2023
2022
£
£
Contracts in progress at the reporting date
Gross amounts owed by contract customers included in debtors
2,678,352
1,803,772
15
Debtors
2023
2022
Amounts falling due within one year:
£
£
Trade debtors
203,076
124,735
Gross amounts owed by contract customers
2,678,352
1,803,772
Amounts owed by group undertakings
49,258
1,756,675
Other debtors
44,850
62,312
Prepayments and accrued income
52,023
150,204
3,027,559
3,897,698
Deferred tax asset (note 18)
262,571
3,027,559
4,160,269
Included within amounts owed by group undertakings is an interest free loan £nil (2022: £1,699,999) owed from Compass Europe Group BV (CEG) which is repayable on demand.
16
Creditors: amounts falling due within one year
2023
2022
Notes
£
£
Obligations under finance leases
17
438
Trade creditors
1,633,774
1,130,929
Amounts owed to group undertakings
1,685
33,843
Corporation tax
87,394
273,365
Other taxation and social security
802,035
544,610
Deferred income
19
553,756
502,125
Accruals and deferred income
625,532
463,350
3,704,176
2,948,660
17
Finance lease obligations
2023
2022
Future minimum lease payments due under finance leases:
£
£
Within one year
438
Finance lease payments represent rentals payable by the company for certain items of plant and machinery. Leases include purchase options at the end of the lease period, and no restrictions are placed on the use of the assets. The average lease term is 3-5 years. All leases are on a fixed repayment basis and no arrangements have been entered into for contingent rental payments.
COMPASS INFRASTRUCTURE UK (CI UK) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 21 -
18
Deferred taxation
Deferred tax assets and liabilities are offset where the company has a legally enforceable right to do so. The following is the analysis of the deferred tax balances (after offset) for financial reporting purposes:
Liabilities
Liabilities
Assets
Assets
2023
2022
2023
2022
Balances:
£
£
£
£
Accelerated capital allowances
9,170
-
-
1,139
Tax losses
-
-
-
261,432
9,170
-
-
262,571
2023
Movements in the year:
£
Asset at 1 January 2023
(262,571)
Charge to profit or loss
271,741
Liability at 31 December 2023
9,170
The deferred tax liability set out above is expected to reverse within the next few years and relates to accelerated capital allowances that are expected to mature within the same period.
19
Deferred income
2023
2022
£
£
Other deferred income
553,756
502,125
Deferred Income represents the amount due to customers for contract work, as a liability.
20
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
32,482
23,107
The company operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the company in an independently administered fund.
21
Share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
ordinary share of £1 each
1
2
1
2
COMPASS INFRASTRUCTURE UK (CI UK) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 22 -
22
Operating lease commitments
Lessee
At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:
2023
2022
£
£
Within one year
49,966
62,132
Between two and five years
29,000
79,466
78,966
141,598
23
Related party transactions
During the period the company incurred management charges and costs of £438,687 (2022: £439,522) from Compass Europe Group B.V, (CEG) the immediate parent company. In addition to this, Expenses of £37,288 (2022: £77,262) were incurred and recharged to CEG. At the balance sheet end date £37,288 (2022: £46,745) has been included within debtors due within one year. At the balance sheet date £nil (2022: £nil) has been included within creditors as an intercompany loan from CEG and £nil (2022:£1,699,999) has been included within debtors as an intercompany loan to CEG.
In addition to the above, expenses of £57,858 (2022: £71,668) were incurred from Compass Infrastructuur Nederland B.V. (CIN), a fellow subsidiary company. At the balance sheet date £1,685 (2022: £33,843) was included within creditors due within one year and £11,971 (2022: £9,931) was included as a debtor owed within one year.
At the year end date £1,943,969 (2022: £1,943,969) was included within trade debtors as due from MS 3 Networks limited, a company in which Mr H Van Dommele is a director. Against this amount a bad debt provision of £1,943,969 (2022: £1,943,969) has been provided for.
24
Ultimate controlling party
The immediate parent company is Compass Europe Group B.V. (CEG) , a company registered in the Netherlands.
Compass Europe Group B.V. (CEG) draws up the accounts of the group in which Compass Infrastructure (CI UK) belongs.
The registered address of Compass Europe Group B.V. (CEG) is; Bovenstraat 132, 3077 BH Rotterdam
Postbus 9199, 3007 AD Rotterdam.
COMPASS INFRASTRUCTURE UK (CI UK) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 23 -
25
Cash generated from/(absorbed by) operations
2023
2022
£
£
Profit for the year after tax
1,066,931
1,205,353
Adjustments for:
Taxation charged
359,282
204,794
Finance costs
1,086
Investment income
(75)
Gain on disposal of tangible fixed assets
(27,646)
(36,790)
Depreciation and impairment of tangible fixed assets
48,468
86,253
Movements in working capital:
Decrease in stocks
1,000
Decrease/(increase) in debtors
870,139
(2,741,637)
Increase/(decrease) in creditors
890,294
(698,776)
Increase/(decrease) in deferred income
51,631
(287,195)
Cash generated from/(absorbed by) operations
3,259,024
(2,265,912)
26
Analysis of changes in net funds
1 January 2023
Cash flows
31 December 2023
£
£
£
Cash at bank and in hand
1,919,596
357,633
2,277,229
Obligations under finance leases
(438)
438
-
1,919,158
358,071
2,277,229
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