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Registration number: 06353379

Global Tunnelling Experts UK Limited

Annual Report and Financial Statements

for the Year Ended 31 December 2023

 

Global Tunnelling Experts UK Limited

Contents

Company Information

1

Strategic Report

2 to 3

Directors' Report

4 to 6

Statement of Directors' Responsibilities

7

Independent Auditor's Report

8 to 10

Profit and Loss Account

11

Statement of Comprehensive Income

12

Balance Sheet

13

Statement of Changes in Equity

14

Statement of Cash Flows

15

Notes to the Financial Statements

16 to 26

 

Global Tunnelling Experts UK Limited

Company Information

Directors

K Browning

C Nielsen

Registered office

Unit 2 Gordano Court
Serbert Close
Portishead
Bristol
BS20 7FS

Auditors

Milsted Langdon LLP
Chartered Accountants and Statutory Auditors
Winchester House
Deane Gate Avenue
Taunton
Somerset
TA1 2UH

 

Global Tunnelling Experts UK Limited

Strategic Report for the Year Ended 31 December 2023

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

Principal activity

The principal activity of the company is providing specialist key tunnelling personnel to the construction industry.

Fair review of the business

Company Profile
Global Tunnelling Experts UK Limited (GTU) is a fully owned subsidiary of Herrenknecht AG (HAG), world’s market leader in mechanized tunnel technology. GTU provides construction companies with qualified, specialist personnel for all jobs throughout all construction phases on tunnel construction sites. This includes operational job profiles for all aspects of mechanized tunnelling operations and the equipment they involve. In addition, GTU takes care of all the administrative aspects of providing personnel, from arranging visas, work permits and insurance cover, to organizing accommodation at the place of work. We are fast and reliable. Our mission is clear: we always provide our customers with the right personnel in the right place at the right time.

Business Strategy
GTU positions itself as an “all-in-one” service provider, which offers the entire life cycle of both the operational as well as the administrative and legal handling of the workforce deployment.

Financial Performance and Position
The turnover has decreased 38% due to the fact that our biggest project Hinkley Point C is reaching finalisation phase resulting in a decrease in manpower.

The gross profit decreased 22% what is in contrary to the revenue development. The increase in gross profit is related to a more profitable mix of projects.

The net profit decreased by 27% which is in relation to the decrease in revenue. Due to better project results and a stable overhead the net profit percentage as part of the revenue increased by 1.7%.

The net current assets shows a decrease of 20% due to a lower cash balance which is the result of dividends payments.

The company's key financial and other performance indicators during the year were as follows:

 

Unit

2023

2022

Turnover

£

13,143,711

21,264,335

Gross profit

£

3,450,794

4,419,240

Net profit

£

1,486,763

2,035,294

Net assets

£

4,074,430

5,118,448

 

Global Tunnelling Experts UK Limited

Strategic Report for the Year Ended 31 December 2023

Principal risks and uncertainties

The directors have reviewed the industry in which the company operates and they consider that there are no significant risks and uncertainties that need disclosing within this report.

Approved and authorised by the Board on 2 May 2024 and signed on its behalf by:


K Browning
Director

   
     
 

Global Tunnelling Experts UK Limited

Directors' Report for the Year Ended 31 December 2023

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

Directors of the company

The directors who held office during the year were as follows:

K Browning

C Nielsen

Message of the Board
As expected the financial year 2023 showed a decrease in revenue from £ 21.26 Mil last year towards £ 13.14 Mil this year. The decrease is related to the fact that our biggest project Hinkley Point C is coming to an end, resulted in a decrease in manpower during the year. The project will still generate revenue for 2024 but will not be on the excessive levels of the years before. In relation to less revenue the net profit also decreased from £ 2.04 towards £ 1.49 Mil. Due to better project results the net profit % increased from 9.6% towards 11.3%.

Financial instruments

Objectives and policies

Management has assessed and analyzed a number of risk areas which could have an impact on our business operations.

Risk management

Market risk
Market risk arises when a company is subject to adverse sales conditions due to either increased competition in the marketplace, adverse demand conditions within the market, or the inability to develop markets or position products to service targeted customers.

Due to the overall integration of GTU into Herrenknecht AG, world's market leader in mechanized tunnel technology (HAG), business operations and given the circumstance that HAG is among GTU's major customers, GTU is to a certain extent affected by the overall order situation at the level of HAG. However, on the one hand GTU is mediating this risk by developing its own brand reputation as a premium service provider in order to attract external third party customers from the tunnelling and construction peripherals. On the other hand, GTE strategically develops its product portfolio and market presence to new external business.

Liability and warranty risks
Liability refers to the legal liability of sellers to compensate buyers, users, and even bystanders, for damages or injuries suffered because of mal-services. The party bearing the service defect (warranty) risk is responsible for compensating buyers for any defective service purchased. Compensation can include replacement of the product, or a full refund.

As HAG holds the direct contract with the customer, HAG operates as the customer's first point of contact in case of any liability or warranty claims. In order to mitigate such risks, GTU has set strict personnel requirements in order to ensure that only personnel with sufficient experience is employed. GTU's project managers are performing local oversight on the service provision. Furthermore, GTU has an employer's liability insurance in place which will cover any potential claim from third parties.

 

Global Tunnelling Experts UK Limited

Directors' Report for the Year Ended 31 December 2023

Credit risk
Customer credit risk refers to the risk that counterparties may default on their contractual obligations and thus result in a loss to the company.

Due to HAG's outstanding financial power, the risk that HAG may default on its contractual obligations can be considered rather low. Credit risk of third party will always remain. By having the payment terms stated in the third party contracts and by actively monitoring the third party receivables GTU will manage to keep the risk at an acceptable level.

Foreign exchange risk
Foreign exchange risk is the risk associated with the possibility of profits being affected by fluctuations in exchange rates. This risk arises when prices are set in a currency different from the company's functional currency. The majority of GTU's business is running in GBP and therefore no foreign exchange risk exists. Part of the intercompany business is in EUR and therefore there will be an foreign exchange risk exposure. GTU will respond to this by keeping outstanding balances as low as possible and keeping options open for hedging.

Price risk
Price risk is the potential for the decline in the sales price which can occur due to a higher level of competition. GTU mitigates this risk by having contracts in place including fixed sales prices for the third party business. For the intercompany business there are also fixed agreed charge rates in place and therefore GTU consider this risk as rather low.

Liquidity risk
Liquidity risk is the potential that an entity will be unable to meet short or intermediate term obligations. In many cases, capital is locked up in assets that are difficult to convert to cash when it is required to pay current bills. GTU has at the moment a very high liquidity position and capital is not locked up into assets. GTU also doesn't need to rely on any lines of credit and therefore we consider this risk rather low at this point.

Cashflow risk
Cashflow risk can be defined as the extent to which future cash flows may fall short of expectations as a consequence of changes in market variables. Typical risks could include things like unexpected expenses, decreases in revenue or sudden market fluctuations. Due to the nature of the business it will be unlikely for GTU to receive unexpected expenses which will have a major impact on the cashflow position. Decreases in revenue are already known at an earlier stage due to running contracts and the expected running period per project. Therefore, GTU is able to take necessary measures in order to maintain a healthy cashflow. Further GTU mitigates this risk by reviewing the cash flow planning regularly and by holding a cash reserve.

Future developments

For the year 2024 we expect to have more or less the same amount of revenue. Running 3rd party projects like Hinkley Point C and Woodsmith Mine will remain stable and the same will be with our IC business. We continue making efforts to develop additional revenue streams in providing courses in our training center and with providing permanent placements roles to all major construction projects. Further we keep tendering for all future tunnel projects inside the United Kingdom and are confident that some part of this new business will be awarded to us.

There are no material investments planned for the immediate future. The liquidity position remains very strong and additional funding will not be expected.

Disclosure of information to the auditors

Each director has taken steps that they ought to have taken as a director in order to make themselves aware of any relevant audit information and to establish that the company's auditors are aware of that information. The directors confirm that there is no relevant information that they know of and of which they know the auditors are unaware.

 

Global Tunnelling Experts UK Limited

Directors' Report for the Year Ended 31 December 2023

Reappointment of auditors

The auditors Milsted Langdon LLP are deemed to be reappointed under section 487(2) of the Companies Act 2006.

Approved by the Board on 2 May 2024 and signed on its behalf by:

K Browning
Director

   
     
 

Global Tunnelling Experts UK Limited

Statement of Directors' Responsibilities

The directors acknowledge their responsibilities 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 apply them consistently;

make judgements and accounting estimates that are reasonable and prudent;

state whether applicable United Kingdom Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements; and

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.

 

Global Tunnelling Experts UK Limited

Independent Auditor's Report to the Members of Global Tunnelling Experts UK Limited

Opinion

We have audited the financial statements of Global Tunnelling Experts UK Limited (the 'company') for the year ended 31 December 2023, which comprise the Profit and Loss Account, Statement of Comprehensive Income, Balance Sheet, Statement of Changes in Equity, Statement of Cash Flows, and Notes to the Financial Statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:

give a true and fair view of the state of the 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.

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the auditor 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 were authorised for issue.

Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.

Other information

The directors are responsible for the other information. The other information comprises the information included in the annual report, other than the financial statements and our auditor’s report thereon. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.

In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. 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.

 

Global Tunnelling Experts UK Limited

Independent Auditor's Report to the Members of Global Tunnelling Experts UK Limited

We have nothing to report in this regard.

Opinion on other matter prescribed by the Companies Act 2006

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

the information given in the Strategic Report and Directors' Report for the financial year for which the financial statements are prepared is consistent with the financial statements; and

the Strategic Report and Directors' Report have been prepared in accordance with applicable legal requirements.

Matters on which we are required to report by exception

In the light of our 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 and the Directors' Report.

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

adequate accounting records have not been kept, 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 directors' remuneration specified by law are not made; or

we have not received all the information and explanations we require for our audit.

Responsibilities of directors

As explained more fully in the Statement of Directors' Responsibilities set out on page 7, 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 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.

In identifying and assessing risks of material misstatement in respect of irregularities, including fraud, the audit engagement team:

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 is complying with the legal and regulatory framework;

 

Global Tunnelling Experts UK Limited

Independent Auditor's Report to the Members of Global Tunnelling Experts UK Limited

inquired of management, and those charged with governance, about their own identification and assessment of the risks or irregularities, including known and 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 for the audit of the financial statements is located on the Financial Reporting Council’s website at: http://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.

Use of our report

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





Robert Cadwallader (Senior Statutory Auditor)
For and on behalf of Milsted Langdon LLP, Statutory Auditor
Winchester House
Deane Gate Avenue
Taunton
Somerset
TA1 2UH

2 May 2024

 

Global Tunnelling Experts UK Limited

Profit and Loss Account for the Year Ended 31 December 2023

Note

2023
£

2022
£

Turnover

3

13,143,711

21,264,335

Cost of sales

 

(9,692,917)

(16,845,095)

Gross profit

 

3,450,794

4,419,240

Administrative expenses

 

(1,869,480)

(1,887,960)

Operating profit

4

1,581,314

2,531,280

Other interest receivable and similar income

5

30,253

-

Interest payable and similar expenses

6

(13,820)

(11,280)

   

16,433

(11,280)

Profit before tax

 

1,597,747

2,520,000

Tax on profit

10

(110,984)

(484,706)

Profit for the financial year

 

1,486,763

2,035,294

The above results were derived from continuing operations.

 

Global Tunnelling Experts UK Limited

Statement of Comprehensive Income for the Year Ended 31 December 2023

2023
£

2022
£

Profit for the year

1,486,763

2,035,294

Total comprehensive income for the year

1,486,763

2,035,294

 

Global Tunnelling Experts UK Limited

(Registration number: 06353379)
Balance Sheet as at 31 December 2023

Note

2023
£

2022
£

Fixed assets

 

Tangible assets

11

30,781

41,651

Current assets

 

Debtors

12

2,857,512

2,612,749

Cash at bank and in hand

13

2,460,368

5,084,903

 

5,317,880

7,697,652

Creditors: Amounts falling due within one year

14

(1,243,450)

(2,620,855)

Net current assets

 

4,074,430

5,076,797

Net assets

 

4,105,211

5,118,448

Capital and reserves

 

Called up share capital

16

10,000

10,000

Profit and loss account

4,095,211

5,108,448

Total equity

 

4,105,211

5,118,448

Approved and authorised by the Board on 2 May 2024 and signed on its behalf by:
 

K Browning
Director

   
     
 

Global Tunnelling Experts UK Limited

Statement of Changes in Equity for the Year Ended 31 December 2023

Share capital
£

Retained earnings
£

Total
£

At 1 January 2023

10,000

5,108,448

5,118,448

Profit for the year

-

1,486,763

1,486,763

Dividends

-

(2,500,000)

(2,500,000)

At 31 December 2023

10,000

4,095,211

4,105,211

Share capital
£

Retained earnings
£

Total
£

At 1 January 2022

10,000

4,073,154

4,083,154

Profit for the year

-

2,035,294

2,035,294

Dividends

-

(1,000,000)

(1,000,000)

At 31 December 2022

10,000

5,108,448

5,118,448


 

 

Global Tunnelling Experts UK Limited

Statement of Cash Flows for the Year Ended 31 December 2023

Note

2023
£

2022
£

Cash flows from operating activities

Profit for the year

 

1,486,763

2,035,294

Adjustments to cash flows from non-cash items

 

Depreciation and amortisation

4

14,870

18,729

Finance income

5

(30,253)

-

Finance costs

6

7,702

-

Income tax expense

10

110,984

484,706

 

1,590,066

2,538,729

Working capital adjustments

 

(Increase)/decrease in trade debtors

12

(50,962)

351,634

Decrease in creditors

14

(1,079,111)

(331,852)

Cash generated from operations

 

459,993

2,558,511

Income taxes paid

10

(603,079)

(327,006)

Net cash flow from operating activities

 

(143,086)

2,231,505

Cash flows from investing activities

 

Interest received

5

30,253

-

Acquisitions of tangible assets

(4,000)

-

Net cash flows from investing activities

 

26,253

-

Cash flows from financing activities

 

Interest paid

6

(7,702)

-

Dividends paid

18

(2,500,000)

(1,000,000)

Net cash flows from financing activities

 

(2,507,702)

(1,000,000)

Net (decrease)/increase in cash and cash equivalents

 

(2,624,535)

1,231,505

Cash and cash equivalents at 1 January

 

5,084,903

3,853,398

Cash and cash equivalents at 31 December

 

2,460,368

5,084,903

 

Global Tunnelling Experts UK Limited

Notes to the Financial Statements for the Year Ended 31 December 2023

1

General information

The company is a private company limited by share capital, incorporated in England & Wales.

The address of its registered office is:
Unit 2 Gordano Court
Serbert Close
Portishead
Bristol
BS20 7FS
England

These financial statements were authorised for issue by the Board on 2 May 2024.

2

Accounting policies

Summary of significant accounting policies and key accounting estimates

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

Statement of compliance

These financial statements have been prepared in accordance with Financial Reporting Standard 102 - 'The Financial Reporting Standard applicable in the United Kingdom and Republic of Ireland' and the Companies Act 2006 (as applicable to companies subject to the small companies' regime).

Basis of preparation

These financial statements have been prepared using the historical cost convention except that as disclosed in the accounting policies certain items are shown at fair value.

The financial statements are prepared in sterling, which is the functional currency of the company, and rounded to the nearest £.

Going concern

The financial statements have been prepared on a going concern basis, as the directors believe the company has adequate resources to continue trading and satisfy its debts and obligations as they fall due for the foreseeable future.

Revenue recognition

Turnover comprises the fair value of the consideration received or receivable for the provision of services in the ordinary course of the company’s activities. Turnover consists of two sources of income. Firstly, management fees received from the company's immediate parent for performing administrative duties on its behalf. Secondly, income received from the company's immediate parent, ultimate parent and external third parties for the supply of personnel to the tunnelling industry. Turnover is measured at the fair value of the consideration received or receivable, net of value added tax, returns, rebates and discounts.

The company recognises revenue when:
The amount of revenue can be reliably measured;
it is probable that future economic benefits will flow to the entity;
and specific criteria have been met for each of the company's activities.

 

Global Tunnelling Experts UK Limited

Notes to the Financial Statements for the Year Ended 31 December 2023

Government grants

Grants are recognised in the financial statements when there is reasonable assurance that the entity will comply with the conditions attached to them and the grants will be received.

Grants intended as compensation for expenses or losses already incurred or for the purpose of giving immediate financial support to the entity with no future related costs shall be recognised in income in the period in which they become receivable. Grants towards capital expenditure are initially recognised as deferred revenue and then released to the profit and loss account over the expected useful life of the assets.

Grants towards revenue expenditure are released to the profit and loss account as the related expenditure is incurred.

Foreign currency transactions and balances

Transactions in foreign currencies are initially recorded at the functional currency rate prevailing at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are retranslated into the respective functional currency of the entity at the rates prevailing on the reporting period date. Non-monetary items carried at fair value that are denominated in foreign currencies are retranslated at the rate on the date when the fair value is re-measured.

Non-monetary items measured in terms of historical cost in a foreign currency are not retranslated.

Tax

The tax expense for the period comprises current and deferred tax. Tax is recognised in profit or loss, except that a change attributable to an item of income or expense recognised as other comprehensive income is also recognised directly in other comprehensive income.

The current corporation tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the reporting date in the countries where the company operates and generates taxable income.

Deferred income tax is recognised on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements and on unused tax losses or tax credits in the company to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Deferred income tax is determined using tax rates and laws that have been enacted or substantively enacted by the reporting date.

Tangible assets

Tangible assets are stated in the Balance Sheet at cost, less any subsequent accumulated depreciation and subsequent accumulated impairment losses.

The cost of tangible assets includes directly attributable incremental costs incurred in their acquisition and installation.

Depreciation

Depreciation is charged so as to write off the cost of assets, other than land and properties under construction over their estimated useful lives, as follows:

Asset class

Depreciation method and rate

Leasehold land and buildings

20% straight line method

Office equipment

20% straight line method

Motor vehicles

20% straight line method

 

Global Tunnelling Experts UK Limited

Notes to the Financial Statements for the Year Ended 31 December 2023

Debtors

Trade debtors are amounts due from customers for merchandise sold or services performed in the ordinary course of business.

Trade debtors are recognised initially at the transaction price. They are subsequently measured at amortised cost using the effective interest method, less provision for impairment. A provision for the impairment of trade debtors is established when there is objective evidence that the company will not be able to collect all amounts due according to the original terms of the receivables.

Cash and cash equivalents

Cash and cash equivalents comprise cash on hand and call deposits, and other short-term highly liquid investments that are readily convertible to a known amount of cash and are subject to an insignificant risk of change in value.

Creditors

Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Trade creditors are classified as current liabilities if the company does not have an unconditional right, at the end of the reporting period, to defer settlement of the creditor for at least twelve months after the reporting date. If there is an unconditional right to defer settlement for at least twelve months after the reporting date, they are presented as non-current liabilities.

Trade creditors are recognised initially at the transaction price and subsequently measured at amortised cost using the effective interest method.

Leases

A lease is classified as a finance lease if it transfers substantially all the risks and rewards incidental to ownership to the lessee. All other leases are classified as operating leases. The rights of use and obligations under finance lease are initially recognised as assets and liabilities at amounts equal to the lower of the fair value of the leased assets or the present value of the minimum lease payments due. Finance lease liabilities are subsequently measured at amortised cost using the effective interest rate method. Payments made under operating leases are charged to profit or loss on a straight-line basis over the period of the lease.

Share capital

Ordinary shares are classified as equity. Equity instruments are measured at the fair value of the cash or other resources received or receivable, net of the direct costs of issuing the equity instruments. If payment is deferred and the time value of money is material, the initial measurement is on a present value basis.

Dividends

A dividend distribution to the company’s shareholders is recognised as a liability in the financial statements in the reporting period in which the dividends are declared.

 

Global Tunnelling Experts UK Limited

Notes to the Financial Statements for the Year Ended 31 December 2023

Defined contribution pension obligation

A defined contribution plan is a pension plan under which fixed contributions are paid into a pension fund and the company has no legal or constructive obligation to pay further contributions even if the fund does not hold sufficient assets to pay all employees the benefits relating to employee service in the current and prior periods.

Contributions to defined contribution plans are recognised as employee benefit expense when they are due. If contribution payments exceed the contribution due for service, the excess is recognised as a prepayment.

Financial instruments

Classification
Financial instruments are classified and accounted for, according to the substance of the contractual arrangement, as financial assets, financial liabilities or equity instruments.
 Recognition and measurement
An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities. Where shares are issued, any component that creates a financial liability of the company is presented as a liability in the balance sheet. The corresponding dividends relating to the liability component are charged as interest expense in the profit and loss account.

Financial instruments are recognised in the company's balance sheet when the company becomes party to the contractual provisions of the instrument.

 Impairment
Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.

 

Global Tunnelling Experts UK Limited

Notes to the Financial Statements for the Year Ended 31 December 2023

3

Turnover

The analysis of the company's Turnover for the year from continuing operations is as follows:

2023
£

2022
£

Fees

11,800,136

20,367,544

Management Charges

1,343,575

896,791

13,143,711

21,264,335

The analysis of the company's turnover for the year by market is as follows:

2023
£

2022
£

UK

13,143,711

21,264,335

4

Operating profit

Arrived at after charging/(crediting):

2023
£

2022
£

Depreciation expense

14,870

18,729

Operating lease expense - property

71,940

65,721

Operating lease expense - plant and machinery

-

18,039

Operating lease expense - other

2,843

2,843

5

Other interest receivable and similar income

2023
£

2022
£

Interest income on bank deposits

30,253

-

6

Interest payable and similar expenses

2023
£

2022
£

Interest expense on other finance liabilities

7,702

-

Foreign exchange losses

6,118

11,280

13,820

11,280

 

Global Tunnelling Experts UK Limited

Notes to the Financial Statements for the Year Ended 31 December 2023

7

Staff costs

The aggregate payroll costs (including directors' remuneration) were as follows:

2023
£

2022
£

Wages and salaries

9,704,906

15,963,168

Social security costs

1,137,917

1,917,683

Pension costs, defined contribution scheme

106,879

181,893

10,949,702

18,062,744

The average number of persons employed by the company (including directors) during the year, analysed by category, was as follows:

2023
No.

2022
No.

Administration and support

19

20

Fieldworkers

82

154

101

174

8

Directors' remuneration

The directors' remuneration for the year was as follows:

2023
£

2022
£

Remuneration

116,940

116,940

Contributions paid to money purchase schemes

1,321

1,321

118,261

118,261

During the year the number of directors who were receiving benefits and share incentives was as follows:

2023
No.

2022
No.

Accruing benefits under money purchase pension scheme

1

1

9

Auditors' remuneration

2023
£

2022
£

Audit of the financial statements

14,040

13,000

Other fees to auditors

All other assurance services

6,480

6,000


 

 

Global Tunnelling Experts UK Limited

Notes to the Financial Statements for the Year Ended 31 December 2023

10

Taxation

Tax charged/(credited) in the income statement:

2023
£

2022
£

Current taxation

UK corporation tax

392,986

484,706

UK corporation tax adjustment to prior periods

(282,002)

-

110,984

484,706

The tax on profit before tax for the year is the same as the standard rate of corporation tax in the UK (2022 - the same as the standard rate of corporation tax in the UK) of 23.5% (2022 - 19%).

The differences are reconciled below:

2023
£

2022
£

Profit before tax

1,597,747

2,520,000

Corporation tax at standard rate

399,426

478,800

Increase in UK and foreign current tax from adjustment for prior periods

4,759

-

Tax increase from effect of capital allowances and depreciation

11,909

3,559

Decrease from effect of different UK tax rates on some earnings

(23,637)

-

Effect of expense not deductible in determining taxable profit (tax loss)

529

2,347

Tax decrease from effect of adjustment in research and development tax credit

(282,002)

-

Total tax charge

110,984

484,706

During the year the current tax rate increased to 25% from 19%.

In March 2021, changes to the UK corporation tax rate were announced by the Chancellor of the Exchequer, including an increase in the main rate of corporation tax from 19% to 25% from April 2023 which was substantially enacted in May 2021. The enacted rates at the balance sheet date have been appropriately reflected in the calculation of deferred tax in the company's financial statements.

 

Global Tunnelling Experts UK Limited

Notes to the Financial Statements for the Year Ended 31 December 2023

11

Tangible assets

Leasehold land and buildings
 £

Office equipment
 £

Motor vehicles
 £

Total
£

Cost

At 1 January 2023

82,632

82,502

15,995

181,129

Additions

-

-

4,000

4,000

At 31 December 2023

82,632

82,502

19,995

185,129

Depreciation

At 1 January 2023

54,090

70,992

14,396

139,478

Charge for the year

8,386

4,418

2,066

14,870

At 31 December 2023

62,476

75,410

16,462

154,348

Carrying amount

At 31 December 2023

20,156

7,092

3,533

30,781

At 31 December 2022

28,542

11,510

1,599

41,651

12

Debtors

Current

Note

2023
£

2022
£

Trade debtors

 

1,432,508

1,249,621

Amounts owed by related parties

 

1,074,554

1,150,533

Other debtors

 

11,820

3,970

Prepayments

 

144,829

208,625

Income tax asset

10

193,801

-

   

2,857,512

2,612,749

13

Cash and cash equivalents

2023
£

2022
£

Cash at bank

2,460,368

5,084,903

 

Global Tunnelling Experts UK Limited

Notes to the Financial Statements for the Year Ended 31 December 2023

14

Creditors

Note

2023
£

2022
£

Due within one year

 

Trade creditors

 

131,511

197,118

Amounts due to related parties

 

15,683

15,055

Social security and other taxes

 

731,760

1,492,294

Outstanding defined contribution pension costs

 

28,934

40,320

Other creditors

 

149,454

425,293

Accruals

 

186,108

152,481

Corporation tax liability

10

-

298,294

 

1,243,450

2,620,855

15

Pension and other schemes

Defined contribution pension scheme

The company operates a defined contribution pension scheme. The pension cost charge for the year represents contributions payable by the company to the scheme and amounted to £106,879 (2022 - £181,893).

Contributions totalling £28,934 (2022 - £40,320) were payable to the scheme at the end of the year and are included in creditors.

 

Global Tunnelling Experts UK Limited

Notes to the Financial Statements for the Year Ended 31 December 2023

16

Share capital

Allotted, called up and fully paid shares

2023

2022

No.

£

No.

£

Ordinary shares of £1 each

10,000

10,000

10,000

10,000

       

Rights, preferences and restrictions

Ordinary shares have the following rights, preferences and restrictions:
Ordinary shares have full voting rights, rights to dividends at the discretion of the directors and the rights to assets on winding up.

17

Obligations under leases and hire purchase contracts

Operating leases

The total of future minimum lease payments is as follows:

2023
£

2022
£

Not later than one year

60,000

62,805

Later than one year and not later than five years

92,500

151,981

152,500

214,786

The amount of non-cancellable operating lease payments recognised as an expense during the year was £74,783 (2022 - £86,603).

18

Dividends

   

2023

 

2022

   

£

 

£

Interim dividend of £250.00 (2022 - £100.00) per ordinary share

 

2,500,000

 

1,000,000

         

19

Analysis of changes in net cash

At 1 January 2023
£

Financing cash flows
£

At 31 December 2023
£

Cash and cash equivalents

Cash

5,084,903

(2,624,535)

2,460,368

 

5,084,903

(2,624,535)

2,460,368

 

Global Tunnelling Experts UK Limited

Notes to the Financial Statements for the Year Ended 31 December 2023

20

Related party transactions

Summary of transactions with all subsidiaries

The company has taken advantage of the exemptions in Financial Reporting Standard 102 Section 33 and has not disclosed transactions between wholly owned members of the same group.
 

21

Financial instruments

Categorisation of financial instruments

2023
 £

2022
 £

Financial assets that are debt instruments measured at amortised cost

2,516,561

2,401,804

Financial liabilities measured at amortised cost

482,755

773,296

22

Parent and ultimate parent undertaking

The company's immediate parent is Global Tunnelling Experts B.V, incorporated in The Netherlands.

 The ultimate parent is Herrenknecht AG, incorporated in Germany.

 The most senior parent entity producing publicly available financial statements is Herrenknecht AG. These financial statements are available upon request from Schlehenweg 2, 77963, Schwanau, Germany.