Registered number:
For the Year Ended
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BURCKHARDT COMPRESSION (UK) LIMITED
COMPANY INFORMATION
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BURCKHARDT COMPRESSION (UK) LIMITED
CONTENTS
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BURCKHARDT COMPRESSION (UK) LIMITED
STRATEGIC REPORT
For the Year Ended 31 March 2021
The Company continues to build on its previous success in securing aftermarket work on non-Burckhardt compressors in line with the Group’s reciprocating compressor aftermarket business strategy and is still recognised as being one of the leading Group subsidiaries in this business area. This business is varied and often complex and the competitive nature of the market requires a high level of customer interaction and service quality delivered in a short timeframe with high attention to detail.
The Company continued to partner with KompressorTeknik ML AB of Ludvika for its Nordic Countries business expansion and the Service Centre in Landvetter near Gothenburg. The service business is commercially managed and administered by the Company, however, technical management and administration is done locally as far as possible with support from the UK and Switzerland. Sales for the services are delivered by a team drawn from the Company in the UK and the parent in Switzerland with a local sales manager employed by the business partner. This region has real potential for market share growth on Burckhardt compressors and on other brands of compressors and the venture has moved from a "start-up" phase through to an early growth stage with well trained staff and developing relationships with existing and potential customers. The growth required to get to a sustainable business level and be clearly profitable including commissions is expected to take another year. In December 2020 the Burckhardt Compression Group Main Board approved the business plan developed to follow the pre-agreed option with the Swedish partner that Burckhardt Compression AG would establish its own subsidiary as the parent company transferring the facilities and staff to the new entity. This went live as of 1st April 2021. Considering the global situation regarding the Covid-19 pandemic the 3rd party sales turnover in FY20 year were down on earlier targets/forecasts but still acceptable for both the UK and the Nordic Countries as they showed a growth trend overall. Sales were also complemented by good commissions from direct parent company Services Division after-market business to the UK and the Nordic Countries with the largest part due to the growing LNG marine business. Lastly, Sales were supplemented by commissions from the Systems Division which is accounted for mostly by the sales of LPG marine compressors to Key Accounts in the UK and Nordic Countries, however, we did not have any new land-based compressor installations and commissioning projects. The Company made a loss this year largely due to the field service and workshop under-recovery and a continued high level of warranty or rework costs. The results compared with measured financial objectives were as follows: • EBIT Local (After Centralized Services) – -£787k achieved vs pre-Covid-19 target £541k • Local Sales Turnover for compressor aftermarket, excluding commissions, in UK and Nordic Countries territory - £6.117 million achieved vs pre-Covid-19 target of £7.370 million • Total Sales Turnover in UK and Nordic Countries territory – CHF17.416 million achieved vs pre-Covid-19 target of CHF17.936 million Going forward, despite the continuing influence of the Covid-19 pandemic, the results in FY21 for the overall sales turnover were comparable to FY20 with another good year for spare parts sales experienced to offset any potential increases in field service or workshop variance. There were some important projects delivered in both areas and a slight increase in works through the Nordic Countries. For both the UK and Nordic Countries key staff have been hired and/or replaced which has shown some upturn in capabilities and efficiency.
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BURCKHARDT COMPRESSION (UK) LIMITED
STRATEGIC REPORT (CONTINUED)
For the Year Ended 31 March 2021
The potential uncertainties for the Compressor Services business to grow are evident in FY21 are as follows:
• Continuing postponement or cancellation by customers of maintenance and plant improvements due to the Covid-19 pandemic, • Potential supply-chain delays, deficiencies or complete interruptions for spare parts which may affect our ability to provide a full-service offer due to global shortages, Brexit or the Covid-19 pandemic • Restriction of movement of staff to deliver onsite services due to the Covid-19 pandemic, especially in the Nordic Countries due to travel restrictions. • Postponement or cancellation of investment for maintenance and plant improvement in existing UK process plants due to continued uncertainty regarding Brexit, • Recruitment, retention, availability and utilisation of key technical staff and trained and experienced field service and workshop technicians, • Qualification and availability of suitable sub-contractors in UK and the Nordic Countries as and when required, • End-users may close their process plants where we service compressors or replace them with different machinery or decide to reinvest in maintenance teams and chose not to outsource. • Few sales of Compressor Systems in UK and Nordic Countries – less installation and maintenance work, • Low level Oil & Gas sector business in the UK and Norway • Local competition from other UK and Nordic Countries service and component companies, Sales turnover for Compressor Systems orders through the UK and Nordic Countries territories have been buoyant in FY20 in the Transport and Storage industry sector for LNG and LPG compressors with orders received for several newbuild gas carriers. This is expected to continue in FY21. One new process compressor was ordered for a chemical plant in the UK and three standard compressors have been ordered for industrial gas plants, one in Finland and two in the UK. A further order for a process compressor for a refinery in Sweden has been pushed back into FY21 although early engineering works have been previously ordered. There are more opportunities for compressor systems in the pipeline at present for industrial gases and the new Hydrogen for Mobility and Energy market segment. The potential uncertainties for the new compressors business to continue or grow are as follows: • Postponement or cancellation of orders in UK due to uncertainty regarding Brexit, • new construction projects onshore or at sea are deferred or cancelled due to continuing low oil and gas prices, • loss of orders to competition on technical or commercial grounds, • the orders are placed outside this territory thus reducing the commissions Overall the Company continued to out-perform the sales turnover that is desired by the Group under the Mid-Range Plan.
This report was approved by the board
and signed on its behalf.
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BURCKHARDT COMPRESSION (UK) LIMITED
DIRECTORS' REPORT
For the Year Ended 31 March 2021
The directors present their report and the financial statements for the year ended 31 March 2021.
The directors are responsible for preparing theAnnual 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 prepared the financial statements in accordance United Kingdom Generally Accepted Accounting Practice, (United Kingdom Accounting Standards, comprising FRS 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland', 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 judgments and accounting estimates that are reasonable and prudent;
∙
state whether applicable United Kingdom Accounting Standards, comprising FRS102, have been followed, subject to any material departures disclosed and explained in the financial statements;
∙
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 to 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.
The profit for the year, after taxation, amounted to £
660,026
(2020 -
loss
£
300,333
)
.
The company has not recommended a dividend.
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BURCKHARDT COMPRESSION (UK) LIMITED
DIRECTORS' REPORT (CONTINUED)
For the Year Ended 31 March 2021
The directors who served during the year were:
As mentioned above Burckhardt Compression has established a new subsidiary as of 1st April 2021, Burckhardt Compression (Sweden) AB in Landvetter near Gotheburg. This means that as of that date company reporting will be segregated fully and reported separately in the UK and Sweden. Both entities will be managed by one Northwest Europe management team and certain job functions in the UK will have duel responsibility still for the Nordic Countries. Intercompany arrangements have been made to ensure all operational costs and overheads charges are correctly charged to each entity. This will mean that the revenue for FY21 in the UK will be less than FY20.
Since the Year End the Company has developed quality, environmental and occupational health and safety (EOHS) systems with assistance from an external consultant for ISO9001, ISO14001 and OHSAS18001 respectively following the last successful audit in June 2018. A full-time QEOHS Manager has been recruited in September 2020 to develop our systems further for the next audit due in September and October 2021 for the UK and Nordic Countries respectively. The Company has also upgraded its accounting system to allow for financial control of both operating centres in the UK and Sweden and is introducing an accompanying web-based mini-ERP system for business control and transparency for sales, operations, finance and management. This is now being developed again to take into account the two separate entities. The Company has not engaged in any research and development activities but continues to invest in engineering design for key non-Burckhardt compressor components and developing a responsive and quality-led supply chain for the same.
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BURCKHARDT COMPRESSION (UK) LIMITED
DIRECTORS' REPORT (CONTINUED)
For the Year Ended 31 March 2021
Price risk
The Company is largely shielded from commodity price risk since it is primarily a service company. A large proportion of the components required are sourced from the immediate parent company in Switzerland, which due to its size and standing enjoys significant global purchasing power and increasing access to low-cost sourcing opportunities both within the Group and outside. Credit risk The Company is exposed to credit related losses in the event of non-performance by counterparties to financial instruments. Credit risk is mitigated by having a core long-standing customer base which has generated a good credit record with the Company over time, and in selecting new business counterparties selecting those companies that are large players in the industry. Liquidity risk Through regular cash forecasts and a commitment by the Parent Company to maintain and grow the Company which manifests in internal extended-payment terms on current account and flexibility of loan repayment, the Company maintains a situation of sufficient available funding for both operations and any planned expansion. Interest rate cash flow risk The Company has no material interest bearing liabilities other than a parent company loan, which is reviewed/renegotiated every five years.
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BURCKHARDT COMPRESSION (UK) LIMITED
DIRECTORS' REPORT (CONTINUED)
For the Year Ended 31 March 2021
There have been no significant events affecting the Company since the year end. As mentioned above Burckhardt Compression AG has established a new subsidiary as of 1st April 2021, Burckhardt Compression (Sweden) AB in Landvetter near Gotheburg. This means that as of that date company reporting will be segregated fully and reported separately in the UK and Sweden.
This report was approved by the board and signed on its behalf.
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BURCKHARDT COMPRESSION (UK) LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF BURCKHARDT COMPRESSION (UK) LIMITED
We have audited the financial statements of Burckhardt Compression (UK) Limited (the 'Company') for the year ended 31 March 2021, which comprise the Statement of Comprehensive Income, the Statement of Financial Position, the Statement of Changes in Equity
and the related notes, 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).
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 Auditors' 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 United Kingdom, including the Financial Reporting Council'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.
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.
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BURCKHARDT COMPRESSION (UK) LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF BURCKHARDT COMPRESSION (UK) LIMITED (CONTINUED)
The other information comprises the information included in the Annual Report other than the financial statements and our Auditors' 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.
In our opinion, based on the work undertaken in the course of the 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.
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.
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BURCKHARDT COMPRESSION (UK) LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF BURCKHARDT COMPRESSION (UK) LIMITED (CONTINUED)
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 Auditors' 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:
We gained an understanding of the legal and regulatory framework applicable to the company and the industry in which it operates, and considered the risk of acts by the company that were contrary to applicable laws and regulations, including fraud. We designed audit procedures to respond to the risk, recognising that the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentations, or through collusion. We focussed on laws and regulations which could give rise to a material misstatement in the financial statements, including, but not limited to, the Companies Act 2006 and UK tax legislation. Our tests included agreeing the financial statement disclosures to underlying supporting documentation, enquiries with management and enquiries of legal counsel. There are inherent limitations in the audit procedures described above and, the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely we would become aware of it. We did not identify any key audit matters relating to irregularities, including fraud. As in all our audits, we also addressed the risk of management override of internal controls, including testing journals and evaluating whether there was evidence of bias by the directors that represented a risk of material misstatement due to fraud.Explanation as to what extent the audit was considered capable of detecting irregularities, including fraud.
A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at:
www.frc.org.uk/auditorsresponsibilities
. This description forms part of our Auditors' Report.
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BURCKHARDT COMPRESSION (UK) LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF BURCKHARDT COMPRESSION (UK) LIMITED (CONTINUED)
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 Auditors' 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.
for and on behalf of
Chartered Accountants and Statutory Auditors
Wey Court West
Union Road
Surrey
GU9 7PT
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BURCKHARDT COMPRESSION (UK) LIMITED
STATEMENT OF COMPREHENSIVE INCOME
For the Year Ended 31 March 2021
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BURCKHARDT COMPRESSION (UK) LIMITED
Registered number:
3966507
STATEMENT OF FINANCIAL POSITION
As at
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BURCKHARDT COMPRESSION (UK) LIMITED
Registered number:
3966507
STATEMENT OF FINANCIAL POSITION
(CONTINUED)
As at
31 March 2021
The financial statements were approved and authorised for issue by the board and were signed on its behalf by
:
The notes on pages 15 to 32 form part of these financial statements.
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BURCKHARDT COMPRESSION (UK) LIMITED
STATEMENT OF CHANGES IN EQUITY
For the Year Ended
31 March 2021
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BURCKHARDT COMPRESSION (UK) LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the Year Ended 31 March 2021
Burckhardt Compression (UK) Limited (03966507) is a private company limited by shares and incorporated in England & Wales. The Registered Office and principal place of business is Units 1 & 2, Arena 14 Bicester Park, Charbridge Lane, Bicester, Oxfordshire OX26 4SS.
2.
Accounting policies
The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Financial Reporting Standard 102, the Financial Reporting Standard applicable in
the UK and the Republic of Ireland and the Companies Act 2006
.
The financial statements are presented in Sterling to whole £s.
The preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires management to exercise judgment in applying the Company's accounting policies (see note 3).
These policies have been consistently applied to all the years presented.
The following principal accounting policies have been applied:
The Company has taken advantage of the following disclosure exemptions in preparing these financial statements, as permitted by the FRS 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland":
∙
the requirements of Section 4 Statement of Financial Position paragraph 4.12(a)(iv);
∙
the requirements of Section 7 Statement of Cash Flows;
∙
the requirements of Section 3 Financial Statement Presentation paragraph 3.17(d);
∙
the requirements of Section 11 Financial Instruments paragraphs 11.41(b), 11.41(c), 11.41(e), 11.41(f), 11.42, 11.44 to 11.45, 11.47, 11.48(a)(iii), 11.48(a)(iv), 11.48(b) and 11.48(c);
∙
the requirements of Section 12 Other Financial Instruments paragraphs 12.26 to 12.27, 12.29(a), 12.29(b) and 12.29A;
∙
the requirements of Section 26 Share-based Payment paragraphs 26.18(b), 26.19 to 26.21 and 26.23;
∙
the requirements of Section 33 Related Party Disclosures paragraph 33.7.
This information is included in the consolidated financial statements of Burckhardt Compression Holdings AG as at 31 March 2020 and these financial statements may be obtained from Burckhardt Compression Holdings AG. Winterthur, CH-8401, Switzerland.
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BURCKHARDT COMPRESSION (UK) LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the Year Ended 31 March 2021
2.
Accounting policies (continued)
Functional and presentation currency
Transactions and balances
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BURCKHARDT COMPRESSION (UK) LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the Year Ended 31 March 2021
2.
Accounting policies (continued)
Grants of a revenue nature are recognised in the Statement of Comprehensive Income in the same period as the related expenditure.
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BURCKHARDT COMPRESSION (UK) LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the Year Ended 31 March 2021
2.
Accounting policies (continued)
The fair value of the award also takes into account non-vesting conditions. These are either factors beyond the control of either party (such as a target based on an index) or factors which are within the control of one or other of the parties (such as the Company keeping the scheme open or the employee maintaining any contributions required by the scheme). Where the terms and conditions of options are modified before they vest, the increase in the fair value of the options, measured immediately before and after the modification, is also charged to Income statement over the remaining vesting period. Where equity instruments are granted to persons other than employees, the Income statement is charged with fair value of goods and services received.
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BURCKHARDT COMPRESSION (UK) LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the Year Ended 31 March 2021
2.
Accounting policies (continued)
All intangible assets are considered to have a finite useful life. If a reliable estimate of the useful life cannot be made, the useful life shall not exceed ten years.
The estimated useful lives range as follows:
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BURCKHARDT COMPRESSION (UK) LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the Year Ended 31 March 2021
2.
Accounting policies (continued)
Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, using the straight-line method.
Depreciation is provided on the following basis:
The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date.
Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in profit or loss.
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BURCKHARDT COMPRESSION (UK) LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the Year Ended 31 March 2021
2.
Accounting policies (continued)
Provisions are charged as an expense to profit or loss in the year that the Company becomes aware of the obligation, and are measured at the best estimate at the reporting date of the expenditure required to settle the obligation, taking into account relevant risks and uncertainties. When payments are eventually made, they are charged to the provision carried in the Statement of Financial Position. The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.
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BURCKHARDT COMPRESSION (UK) LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the Year Ended 31 March 2021
Analysis of turnover by country of destination:
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BURCKHARDT COMPRESSION (UK) LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the Year Ended 31 March 2021
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BURCKHARDT COMPRESSION (UK) LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the Year Ended 31 March 2021
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BURCKHARDT COMPRESSION (UK) LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the Year Ended 31 March 2021
9.
Taxation on profit (continued)
There were no factors that may affect future tax charges.
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BURCKHARDT COMPRESSION (UK) LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the Year Ended 31 March 2021
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BURCKHARDT COMPRESSION (UK) LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the Year Ended 31 March 2021
11.
Tangible assets (continued)
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BURCKHARDT COMPRESSION (UK) LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the Year Ended 31 March 2021
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BURCKHARDT COMPRESSION (UK) LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the Year Ended 31 March 2021
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BURCKHARDT COMPRESSION (UK) LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the Year Ended 31 March 2021
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BURCKHARDT COMPRESSION (UK) LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the Year Ended 31 March 2021
Retained earnings
Retained earnings represent cumulative profits and losses net of other adjustments. Capital contribution reserve This reserve represents the capital contribution made by the parent company on a below market rate loan.
The company operates a defined contributions pension scheme. The assets of the scheme are held separately from those of the company in an independently administered fund. The pension cost charge represents contributions payable by the company to the fund and amounted to £109,491 (2020 - £88,770). At the year end contributions of £16,163 (2020 - £Nil) were payable to the fund and are included within creditors.
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BURCKHARDT COMPRESSION (UK) LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the Year Ended 31 March 2021
The immediate parent company and controlling party is Buckhardt Compression AG.
The ultimate parent company is Burckhardt Compression Holdings AG, a company incorporated in Switzerland. Burckhardt Compression Holdings AG prepares group financial statements which include the results of the company. Copies of the group financial statements are available from Burckhardt Compression Holdings AG. Winterthur, CH-8401, Switzerland.
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