Company registration number 01902919 (England and Wales)
CDS GLOBAL LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
CDS GLOBAL LIMITED
COMPANY INFORMATION
Directors
Mr M Judd
D Chirichella
Mr T Ghareeb
Mr T D Rowinski
(Appointed 21 August 2024)
Secretary
Mr T Eldridge
Company number
01902919
Registered office
Sovereign Park
Lathkill Street
Market Harborough
Leicestershire
LE16 9EF
Auditor
Berry Accountants Ltd
Bowden House
36 Northampton Road
Market Harborough
Leicestershire
LE16 9HE
Bankers
HSBC plc
CDS GLOBAL LIMITED
CONTENTS
Page
Strategic report
1
Directors' report
2 - 3
Directors' responsibilities statement
4
Independent auditor's report
5 - 7
Income statement
8
Statement of comprehensive income
9
Statement of financial position
10
Statement of changes in equity
11
Notes to the financial statements
12 - 23
CDS GLOBAL 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 company is a wholly owned subsidiary of Hearst Communications Inc, a trust that is registered in the United States of America.
Turnover is reported at £9.8 million (2022 : £9.1 million), an increase from last year of 7%, The loss for the year before tax was £0.5 million (2022 :profit £0.5 million). The gross profit for the year is consistent with the previous financial year's gross margin. The financial performance for the year has reduced the net current assets to £1.8 million (2022 : £2.3 million) and net assets to £3.0 million (2022 : £3.5 million).
There were no dividends paid during the year (2022 : nil) and none are proposed for the 2024 year.
.
Principal risks and uncertainties
The directors consider the following risks to be the most material or significant for the management of the business. These issues do not purport to be a complete list or explanation of all the risk factors facing the company. In particular the company's performance may be affected by any significant changes in the market and/or economic climate and changes in legal, regulatory or tax requirement legislation.
Competitor pressure
Competitor pressure in the United Kingdom is a continuing risk for the company, which could result in it losing sales to its key competitors. The company has looked to mitigate the dependency on the UK economy by accelerating its business growth with clients that have an international customer base. The company continues to react to downturns in consumer volumes by winning new clients and developing new products and services for its clients, and through ongoing investment in its people and technology solutions.
Information systems risk
The successful operation of the company's business depends on maintaining the integrity and operation of the company's computer and communications systems. These systems are resilient with geographical redundancy but are vulnerable to damage or interruption from events, which are beyond the control of the company. The company continues to mitigate these risks by hosting its infrastructure in specialist third party data centres, investing in Cyber and Data Security tools and migrating applications and services to cloud platforms.
Future developments
There are no future developments relating to the business. The business continues to focus on its core business as it seeks to secure new client contracts with traditional magazine publishing companies and also membership organisations.
The directors consider there are no direct risks in the supply chain, but the business risks remain around the macro effects of economic impacts and consumer expenditure.
Key performance indicators
The directors consider that the key performance indicators are revenue growth and profit margin as detailed above.
Mr T Eldridge
Secretary
25 September 2024
CDS GLOBAL 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 during the year was the provision of computer database and fulfilment services for publishing companies. There have not been any significant changes in this principal activity in the year under review.
Results and dividends
The results for the year are set out on page 8.
No ordinary dividends were paid. 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 M Judd
Mr P Polus
(Resigned 21 August 2024)
D Chirichella
Mr T Ghareeb
Mr T D Rowinski
(Appointed 21 August 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.
Financial instruments
In order to maintain liquidity to ensure that sufficient funds are available for ongoing operations and future developments, the company relies on no external borrowings, but instead manages the timing of payments to the parent company.
Credit risk
The company's principle financial assets are bank account balances and cash, and trade and other receivables.
The company's credit risk is primarily attributable to its trade receivables, the amounts presented in the balance sheet are net of allowances for doubtful receivables. An allowance for impairment is made where there is an identified loss event which, based on previous experience, is evidence of a reduction in the recoverability of the cash flows.
The company has no significant concentration of credit risk, with exposure spread over a large number of counterparties and customers.
Going Concern
The company is dependent on support from another company in the group. The parent company has indicated its intention to provide continued support to this company for a period of no less than 12 months from the signing of these financial statements. As a result, the financial statements have been prepared on a going concern basis.
After making enquiries, the directors have reasonable expectation that the company has adequate resources to continue in operational existence for a period of no less than 12 months from the signing of these financial statements. The company has returned to profitability and is forecast to remain in that status into future periods. Thus, they continue to adopt the going concern basis of accounting in preparing the annual financial statements.
Post reporting date events
The are no significant events after the balance sheet date.
CDS GLOBAL LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 3 -
Future developments
Details of future developments can be found in the Strategic Report on page 1.
Auditor
In accordance with the company's articles, a resolution proposing that Berry Accountants Ltd be reappointed as auditor of the company will be put at a General Meeting.
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.
By order of the board
Mr T Eldridge
Mr M Judd
Secretary
Director
25 September 2024
CDS GLOBAL LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 4 -
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.
CDS GLOBAL LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBER OF CDS GLOBAL LIMITED
- 5 -
Opinion
We have audited the financial statements of CDS Global Limited (the 'company') for the year ended 31 December 2023 which comprise the income statement, the statement of comprehensive income, the statement of financial position, the statement of changes in equity 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 FRS 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 loss for the year then ended;
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
have been prepared in accordance with the requirements of the Companies Act 2006.
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.
CDS GLOBAL LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBER OF CDS GLOBAL LIMITED (CONTINUED)
- 6 -
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.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.
Explanation as to what extent the audit was considered capable of detecting irregularities, including fraud
The objectives of our audit are to identify and assess the risks of material misstatement of the financial statements due to fraud or error;
To obtain sufficient appropriate audit evidence regarding the assessed risks of material misstatement due to fraud or error, and to respond appropriately to those risks.
Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation.
In identifying and assessing risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations our procedures included the following:
CDS GLOBAL LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBER OF CDS GLOBAL LIMITED (CONTINUED)
- 7 -
We obtained an understanding of how the Company is complying with those legal and regulatory frameworks by making inquiries to the management. We corroborated our inquiries through our review of board minutes.
We assessed the susceptibility of the Company’s financial statements to material misstatement including how fraud might occur. Audit procedures performed by the engagement team included:
Identifying and assessing the design effectiveness of controls management has in place to prevent and detect fraud:
Understanding how those charged with governance considered and addressed the potential for override of controls or other inappropriate influence over the financial reporting process:
Challenging assumptions and judgments made by management in its significant accounting estimates:
Identifying and testing journal entries, in particular any journal entries posted with unusual account combinations and
Assessing the extent of compliance with the relevant laws and regulations.
A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.
This report is made solely to the company's 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.
Mr Adrian Neal BA (Hons) FCA
Senior Statutory Auditor
For and on behalf of Berry Accountants Ltd
25 September 2024
Chartered Accountants
Statutory Auditor
Bowden House
36 Northampton Road
Market Harborough
Leicestershire
LE16 9HE
CDS GLOBAL LIMITED
INCOME STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 8 -
2023
2022
Notes
£
£
Turnover
3
9,790,080
9,150,521
Cost of sales
(7,341,347)
(6,775,578)
Gross profit
2,448,733
2,374,943
Administrative expenses
(2,974,192)
(2,234,406)
Other operating income
51,264
276,556
Operating (loss)/profit
4
(474,195)
417,093
Amounts written off investments
7
-
118,384
(Loss)/profit before taxation
(474,195)
535,477
Tax on (loss)/profit
8
(Loss)/profit for the financial year
(474,195)
535,477
The income statement has been prepared on the basis that all operations are continuing operations.
CDS GLOBAL LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2023
- 9 -
2023
2022
£
£
(Loss)/profit for the year
(474,195)
535,477
Other comprehensive income
-
-
Total comprehensive income for the year
(474,195)
535,477
CDS GLOBAL LIMITED
STATEMENT OF FINANCIAL POSITION
AS AT
31 DECEMBER 2023
31 December 2023
- 10 -
2023
2022
Notes
£
£
£
£
Fixed assets
Intangible assets
9
101,752
100,671
Tangible assets
10
1,052,140
1,074,670
1,153,892
1,175,341
Current assets
Debtors
11
3,042,956
2,591,403
Cash at bank and in hand
1,362,343
1,587,118
4,405,299
4,178,521
Creditors: amounts falling due within one year
12
(2,536,245)
(1,856,721)
Net current assets
1,869,054
2,321,800
Net assets
3,022,946
3,497,141
Capital and reserves
Called up share capital
14
3,300,100
3,300,100
Profit and loss reserves
(277,154)
197,041
Total equity
3,022,946
3,497,141
These financial statements have been prepared in accordance with the provisions relating to medium-sized companies.
The financial statements were approved by the board of directors and authorised for issue on 25 September 2024 and are signed on its behalf by:
Mr M Judd
Director
Company registration number 01902919 (England and Wales)
CDS GLOBAL LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
- 11 -
Share capital
Profit and loss reserves
Total
£
£
£
Balance at 1 January 2022
3,300,100
(338,436)
2,961,664
Year ended 31 December 2022:
Profit and total comprehensive income
-
535,477
535,477
Balance at 31 December 2022
3,300,100
197,041
3,497,141
Year ended 31 December 2023:
Loss and total comprehensive income
-
(474,195)
(474,195)
Balance at 31 December 2023
3,300,100
(277,154)
3,022,946
CDS GLOBAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 12 -
1
Accounting policies
Company information
CDS Global Limited is a private company limited by shares incorporated in England and Wales. The registered office is Sovereign Park, Lathkill Street, Market Harborough, Leicestershire, LE16 9EF.
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. The principal accounting policies adopted are set out below.
This company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group. The company has therefore taken advantage of exemptions from the following disclosure requirements:
Section 7 ‘Statement of Cash Flows’: Presentation of a statement of cash flow and related notes and disclosures;
Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instrument Issues’: Interest income/expense and net gains/losses for each category of financial instrument; basis of determining fair values; details of collateral, loan defaults or breaches, details of hedges, hedging fair value changes recognised in profit or loss and in other comprehensive income;
Section 26 ‘Share based Payment’: Share-based payment expense charged to profit or loss, reconciliation of opening and closing number and weighted average exercise price of share options, how the fair value of options granted was measured, measurement and carrying amount of liabilities for cash-settled share-based payments, explanation of modifications to arrangements;
Section 33 ‘Related Party Disclosures’: Compensation for key management personnel.
The company has taken advantage of the exemption under section 400 of the Companies Act 2006 not to prepare consolidated accounts. The financial statements present information about the company as an individual entity and not about its group.
CDS Global Limited is a wholly owned subsidiary of The Hearst Corporation Inc. and the results of CDS Global Limited are included in the consolidated financial statements of The Hearst Corporation Inc registered office 959 Eighth Avenue, New York, NY 10019, United States.
1.2
Going concern
Atruet the time of approving the financial statements, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.
1.3
Turnover
Turnover is recognised at the fair value of the consideration received or receivable for services provided in the normal course of business, and is shown net of VAT and other sales related taxes. The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.
CDS GLOBAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 13 -
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, which is 5 years.
1.5
Intangible fixed assets other than goodwill
Intangible assets acquired separately from a business are recognised at cost and are subsequently measured at cost less accumulated amortisation and accumulated impairment losses.
Intangible assets acquired on business combinations are recognised separately from goodwill at the acquisition date where it is probable that the expected future economic benefits that are attributable to the asset will flow to the entity and the fair value of the asset can be measured reliably; the intangible asset arises from contractual or other legal rights; and the intangible asset is separable from the entity.
Amortisation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:
Software
Equal annual instalments over 3-5 years
Intellectual property
Equal annual instalments over 5 years
1.6
Tangible fixed assets
Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.
Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:
Freehold buildings
2% - 4% per annum
Plant and equipment
12.5% - 20% per annum
Computers
33% per annum
Freehold land is not depreciated.
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.
1.7
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.
CDS GLOBAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 14 -
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.
1.8
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.
1.9
Financial instruments
The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the company's statement of financial position when the company becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
Basic financial assets
Basic financial assets, which include debtors 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.
CDS GLOBAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 15 -
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.
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.
CDS GLOBAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 16 -
Derecognition of financial liabilities
Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.
1.10
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.
1.11
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the income statement because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
Deferred tax
Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. 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.
1.12
Employee benefits
The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.
1.13
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.14
Leases
Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leases asset are consumed.
CDS GLOBAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 17 -
Rental income from operating leases is recognised on a straight line basis over the term of the relevant lease. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognised on a straight line basis over the lease term.
1.15
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.
The directors do not consider there to be any critical accounting judgements within the financial statements.
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.
Recoverability of capitalised migration costs
Amounts are recorded on the balance sheet relating to capitalised costs relating to the migration of customer databases onto the Company's OMS system. The asset is then amortised over the life of the contracts held with the relevant customers. A critical estimate for the Company relates to the recoverability of the asset and whether the underlying contract performance supports the assets being amortised.
The carrying value of these assets as at 31 December 2023 was £404,117 (2022 : £119,036).
3
Turnover
2023
2022
£
£
Turnover analysed by class of business
Services
9,790,080
9,150,521
CDS GLOBAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
3
Turnover
(Continued)
- 18 -
2023
2022
£
£
Turnover analysed by geographical market
United Kingdom
8,051,344
7,224,275
Rest of the world
1,738,736
1,926,246
9,790,080
9,150,521
4
Operating (loss)/profit
2023
2022
Operating (loss)/profit for the year is stated after charging/(crediting):
£
£
Exchange losses/(gains)
126,026
(149,482)
Fees payable to the company's auditor for the audit of the company's financial statements
12,300
9,525
Depreciation of owned tangible fixed assets
51,480
49,809
Amortisation of intangible assets
38,507
12,868
Operating lease charges
124,500
95,255
5
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2023
2022
Number
Number
Production
146
134
Administration
6
6
Total
152
140
Their aggregate remuneration comprised:
2023
2022
£
£
Wages and salaries
4,670,698
4,151,756
Social security costs
475,611
431,357
Pension costs
132,472
109,733
5,278,781
4,692,846
CDS GLOBAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 19 -
6
Directors' remuneration
2023
2022
£
£
Remuneration for qualifying services
226,416
214,638
Company pension contributions to defined contribution schemes
17,073
16,145
243,489
230,783
The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 1 (2022 - 1).
Remuneration disclosed above include the following amounts paid to the highest paid director:
2023
2022
£
£
Remuneration for qualifying services
226,416
214,638
Company pension contributions to defined contribution schemes
17,073
16,145
Three of the company's directors are remunerated by other companies within the Hearst Corporation.
7
Amounts written off investments
2023
2022
£
£
Other gains and losses
-
118,384
8
Taxation
2023
2022
£
£
Current tax
UK corporation tax on profits for the current period
(29,661)
Adjustments in respect of prior periods
29,661
Total current tax
CDS GLOBAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
8
Taxation
(Continued)
- 20 -
The actual charge for the year can be reconciled to the expected (credit)/charge for the year based on the profit or loss and the standard rate of tax as follows:
2023
2022
£
£
(Loss)/profit before taxation
(474,195)
535,477
Expected tax (credit)/charge based on the standard rate of corporation tax in the UK of 23.50% (2022: 19.00%)
(111,436)
101,741
Tax effect of expenses that are not deductible in determining taxable profit
1,734
90
Gains not taxable
(22,493)
Change in unrecognised deferred tax assets
73,009
(45,885)
Adjustments in respect of prior years
29,661
Effect of change in corporation tax rate
7,032
(1,659)
Group relief
(54,652)
Amount provided in excess of estimated charge
22,858
Taxation charge for the year
-
-
The company has tax losses still to recover which are carried forward to the current year of £428,320. The associated deferred tax asset of £107,080 has not been accounted for in these financial statements.
The corporation tax rate remained at 19% until 1 April 2023 when the main rate of corporation tax increased to 25% for taxable profits over £250,000. There are marginal rates below £250,000.
Deferred tax has been calculated using the substantively enacted rates at the year end.
Part of the deferred tax asset arising from trading losses has been offset against the deferred tax liability. The remaining balance of the deferred tax asset has not been recognised in these financial statements.
CDS GLOBAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 21 -
9
Intangible fixed assets
Goodwill
Software
Intellectual property
Total
£
£
£
£
Cost
At 1 January 2023
600,000
2,971,030
200,000
3,771,030
Additions
39,588
39,588
At 31 December 2023
600,000
3,010,618
200,000
3,810,618
Amortisation and impairment
At 1 January 2023
600,000
2,870,359
200,000
3,670,359
Amortisation charged for the year
38,507
38,507
At 31 December 2023
600,000
2,908,866
200,000
3,708,866
Carrying amount
At 31 December 2023
101,752
101,752
At 31 December 2022
100,671
100,671
10
Tangible fixed assets
Freehold buildings
Plant and equipment
Computers
Total
£
£
£
£
Cost
At 1 January 2023
1,837,939
453,755
533,592
2,825,286
Additions
28,950
28,950
At 31 December 2023
1,837,939
453,755
562,542
2,854,236
Depreciation and impairment
At 1 January 2023
814,785
404,151
531,680
1,750,616
Depreciation charged in the year
36,994
8,554
5,932
51,480
At 31 December 2023
851,779
412,705
537,612
1,802,096
Carrying amount
At 31 December 2023
986,160
41,050
24,930
1,052,140
At 31 December 2022
1,023,154
49,604
1,912
1,074,670
The carrying value of land and buildings comprises:
2023
2022
£
£
Freehold
986,160
1,023,154
CDS GLOBAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 22 -
11
Debtors
2023
2022
Amounts falling due within one year:
£
£
Trade debtors
1,301,013
962,203
Amounts owed by group undertakings
1,135,216
1,130,385
Other debtors
12,648
19,997
Prepayments and accrued income
594,079
478,818
3,042,956
2,591,403
12
Creditors: amounts falling due within one year
2023
2022
£
£
Trade creditors
91,430
200,931
Amounts owed to group undertakings
957,781
615,870
Taxation and social security
519,362
391,622
Other creditors
87,244
103,840
Accruals and deferred income
880,428
544,458
2,536,245
1,856,721
13
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
132,472
109,733
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.
14
Share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary of £1 each
3,300,100
3,300,100
3,300,100
3,300,100
The Company has one class of ordinary shares which carry no right to fixed income.
CDS GLOBAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 23 -
15
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
14,542
31,206
Between two and five years
11,525
6,859
26,067
38,065
17
Ultimate controlling party
The immediate parent company is CDS Global Inc. 1901 Bell Avenue, Des Moines, Iowa, 50315.
The directors consider the ultimate parent undertaking to be The Hearst Corporation Inc. a Trust registered in the United States of America. The registered address can be found below,
The smallest and largest group in which the results of the company are consolidated and are publicly available is that headed by The Hearst Corporation Inc. 959 Eighth Avenue, New York, NY10019, United States
18
Auditor's liability limitation agreement
The total aggregate liability to the company, of whatever nature, whether in contract, tort or otherwise, of the Auditor for any losses whatsoever and howsoever caused arising from or in any way connected with this engagement shall not exceed £100,000. The date of the resolution was 27 September 2022.
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