Registered Number:
FOR THE YEAR ENDED 31 JANUARY 2023
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COMPANY INFORMATION
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CONTENTS
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STRATEGIC REPORT
FOR THE YEAR ENDED 31 JANUARY 2023
The directors present their report and the financial statements for the year ended 31 January 2023.
Overall, the group has exceeded Directors’ expectation during the year improving revenues by £4.5m to £24.5m and EBITDA by £1.6m to £4.6m.
This was predominantly achieved with Carbon, Capture and Storage activity increasing by >60% and Decommissioning by >100%. These projects were principally UK based which impacted Axis’ international footprint with the proportion of turnover from overseas markets reducing to 42% from 53% in 2022.
During the year Axis successfully entered an additional low carbon market focusing on Hydrogen (H2) production and storage. Examples of such initiatives include Axis assuming responsibility for:
∙Owners Engineer for H2 infrastructure development
∙Conceptual design of blue and green H2 production facilities onshore and offshore
Looking forward the Directors anticipate the continuing growth in global energy demand, high commodity prices, strong investment incentivisation from many governments looking to maintain energy security, and the increasing interest in carbon lowering technology will position the group to assist its clients in our three key markets:
∙Energy (our traditional oil and gas services) – where current activity is being supported by global economies facing multiple energy security challenges
∙Low Carbon – supported by the Energy Transition with the focus to date having been Carbon, Capture and Storage (CCS) and Hydrogen production and storage which is only expected to benefit from increasing demand both in the UK and Internationally
∙Decommissioning – supported by a stronger regulatory posture regarding mature fields reaching Cessation of Production
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STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 JANUARY 2023
Financial risk management
The company's operations expose it to a variety of financial risks that include the effects of prices and liquidity risk. The Company has in place a risk management process that seeks to limit the potential adverse effects of these risks on the financial performance of the business.
Price Risk The company is exposed to selling rate price risk as a result of its operations. The Company manages this risk by establishing contractual arrangements with clients that specify selling rates. Liquidity Risk The company, with the support of its principal shareholder, actively maintains a mixture of long term shareholder debt finance and committed bank working capital facilities that is designed to ensure the Company has sufficient working capital and funding available to support current and future expansion plans. Operational Risk The Company regularly assesses risks that impact on the business, including our processes and procedures in relation to quality and health and safety. Through our quality management system, we conduct regular risk assessments and audits with management fully committed to maintaining and improving controls and effective processes. The management team regularly reviews such risk assessments together with related health and safety matters. Foreign Currency Risk As the company continues to expand its operations internationally the exposure to the financial risks of changes in foreign currency exchange rates will increase. The company will, where deemed necessary, enter into forward currency contract to mitigate the risk. Fluctuating prices for oil and natural gas Oil, natural gas, oil products and chemical prices rise and fall for various reasons involving supply and demand. These include weather, economic conditions, actions by major oil exporting countries, political instability or conflicts, and natural disasters or global pandemics.
The key performance indicators used by the directors are EBITDA, employee utilisation, gross margins, cash generation and customer satisfaction.
The Company recognises the need for good communication and is committed to involving all employees in its development. Employees are kept informed of, consulted and encouraged to express their views on matters which are likely to affect their interest in and contribution to their Company, its profitability and performance.
It is the Company's policy to give full consideration to suitable applications for employment by disabled persons. Where an employee becomes disabled whilst employed, arrangements are made whenever practicable to continue their employment or provide training for any other suitable position. Disabled persons are eligible to participate in all career development opportunities available to staff. All employees are given opportunities to develop their expertise and knowledge and to qualify for promotion in furtherance of their careers. The Company also has Gold accreditation for Investors in People and is accredited for Investors in Young People, with both renewed until November 2023.
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STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 JANUARY 2023
This report was approved by the board and signed on its behalf.
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DIRECTORS' REPORT
FOR THE YEAR ENDED 31 JANUARY 2023
The directors present their report and the financial statements for the year ended 31 January 2023.
The profit for the year, after taxation, amounted to £3,810,133 (2022 - £2,438,099).
No dividends were paid during the year (2022 - £NIL).
The directors who served during the year were:
All Ordinary and Preference shares in Axis Well Technology Group Limited were acquired on 2 June 2023 by RSK Environment Limited. Axis Well Technology Limited was included in this sale.
No other events have occurred which would change the financial position of the company or require adjustment of, or disclosure in the financial statements.
The auditors, Anderson Anderson & Brown Audit LLP, will be proposed for reappointment in accordance with section 485 of the Companies Act 2006.
This report was approved by the board and signed on its behalf.
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DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 JANUARY 2023
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INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF AXIS WELL TECHNOLOGY LIMITED
We have audited the financial statements of Axis Well Technology Limited (the 'Company') for the year ended 31 January 2023, 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).
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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INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF AXIS WELL TECHNOLOGY LIMITED (CONTINUED)
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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INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF AXIS WELL TECHNOLOGY 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 obtained an understanding of the legal and regulatory frameworks within which the company operates, focusing on those laws and regulations that have a direct effect on the determination of material amounts and disclosures in the financial statements. The laws and regulations we considered in this context were the Companies Act 2006 and Taxation legislation. We identified the greatest risk of material impact on the financial statements from irregularities including fraud to be:
∙Management override of controls to manipulate the company’s key performance indicators to meet targets
∙Timing and completeness of revenue recognition
∙Management judgement applied in calculating provisions
∙Compliance with relevant laws and regulations which directly impact the financial statements and those that the company needs to comply with for the purpose of trading
Our audit procedures to respond to these risks included:
∙Testing of journal entries and other adjustments for appropriateness
∙Evaluating the business rationale of significant transactions outside the normal course of business
∙Reviewing judgments made by management in their calculation of accounting estimates for potential management bias
∙Enquiries of management about litigation and claims and inspection of relevant correspondence
∙Reviewing legal and professional fees to identify indications of actual or potential litigation, claims and any non-compliance with laws and regulations
∙Analytical procedures to identify any unusual or unexpected trends or relationship
∙Reviewing minutes of meetings of those charged with governance to identify any matters indicating actual or potential fraud
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.
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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INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF AXIS WELL TECHNOLOGY 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
Statutory Auditor
Kingshill View
Prime Four Business Park
Kingswells
AB15 8PU
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STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 JANUARY 2023
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STATEMENT OF FINANCIAL POSITION
AS AT 31 JANUARY 2023
The financial statements were approved and authorised for issue by the board and were signed on its behalf by:
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STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 JANUARY 2023
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 JANUARY 2022
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JANUARY 2023
Axis Well Technology Limited is a limited company incorporated in the United Kingdom. The registered address is 65 Sussex Street, Glasgow, G41 1DX.
The principal activity of the company is the provision of subsurface, petroleum and well engineering and operational support consultancy services to the international energy industry.
2.Accounting policies
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).
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 7 Statement of Cash Flows;
∙the requirements of Section 3 Financial Statement Presentation paragraph 3.17(d);
∙the requirements of Section 33 Related Party Disclosures paragraph 33.7.
This information is included in the consolidated financial statements of Axis Well Technology Group Limited as at 31 January 2022 and these financial statements may be obtained from Spring Lodge, 172 Chester Road, Helsby, Cheshire, WA6 0AR.
The directors, having made due and careful enquiry, are of the opinion that the company has adequate working capital to execute its operations over the next 12 months. The directors, therefore, have made an informed judgement, at the time of approving the financial statements, that there is a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future.
As a result, the directors have continued to adopt the going concern basis of accounting in preparing the annual financial statements.
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JANUARY 2023
2.Accounting policies (continued)
Functional and presentation currency
Transactions and balances
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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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JANUARY 2023
2.Accounting policies (continued)
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JANUARY 2023
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.
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.
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JANUARY 2023
Impairment of debtors The Company makes an assessment of the recoverable value of trade and other debtors. When assessing impairment of trade and other debtors, management consider various factors including the ageing profile of debtors and historical experience. Turnover attributable to geographical markets outside the United Kingdom amounted to 42% (2022 - 53%).
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JANUARY 2023
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JANUARY 2023
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JANUARY 2023
11.Taxation (continued)
The Government have announced that the corporation tax main rate will be increased to 25% for profits over £250,000 from 1 April 2023. As this rate has been substantively enacted the deferred tax provision has been based on the rate of 25%.
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JANUARY 2023
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JANUARY 2023
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JANUARY 2023
17.Deferred taxation (continued)
There are no unpaid contributions outstanding at the year end (2022 - £nil).
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JANUARY 2023
No other events have occurred which would change the financial position of the company or require adjustment of, or disclosure in the financial statements. Axis Well Technology Group Limited, the parent company of Axis Well Technology Management Limited, is the only undertaking for which consolidated financial statements that include the results of Axis Well Technology Limited. Until 2 June 2023, the ultimate controlling party was On 2 June 2023, Axis Well Technology Group Limited was acquired by RSK Environment Limited. RSK Group Limited are now deemed to be the ultimate controlling party by virtue of it holding full control of the voting and dividend rights of RSK Environment Limited.
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