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Registered Number:SC402747













ROVOP LIMITED






ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023

 
ROVOP LIMITED
 

COMPANY INFORMATION


Directors
G Park 
N Potter 




Registered number
SC402747



Registered office
Silvertrees Drive
Westhill

Aberdeen

AB32 6BH




Independent auditors
Anderson Anderson & Brown Audit LLP

Kingshill View

Prime Four Business Park

Kingswells

Aberdeen

AB15 8PU





 
ROVOP LIMITED
 

CONTENTS



Page
Strategic report
1 - 3
Directors' report
4
Directors' responsibilities statement
5
Independent auditors' report
6 - 9
Statement of comprehensive income
10
Balance sheet
11
Statement of changes in equity
12
Notes to the financial statements
13 - 25

 
ROVOP LIMITED
 

STRATEGIC REPORT
FOR THE YEAR ENDED 31 MARCH 2023

Introduction
 
The principal activity of the Company is the provision of remotely operated vehicle (ROV) services to the oil & gas, offshore wind and utilities industries.

Business review
 
The Company delivered revenue of £46.2m (2022: £37.0m) and gross profit of £12.0m (2022: £7.4m). This performance reflects another very strong year of demand for the Company’s services as well as a strong performance on operational delivery. Commercial asset utilisation levels were were strong resulting in record operational ROV and personnel days. EBITDA* for the financial period was £6.4m (2022: £2.3m).
The strong EBITDA performance was the main driver of the cash balance of the Company increasing to £8.0m (2022: £2.4m). 
The levels of activity have continued to grow since the end of the financial year resulting in profitability being at record levels on a trailing twelve-month basis. The Company is now benefiting from having several multi-vessel customers with truly global activity which helps reduce, but not eliminate, the traditionally seasonal nature of the northern hemisphere sector. Pricing in the market is also improving and the concepts of minimum contractual days and reservation fees for assets are now widespread. The market for ROV pilots is very tight and the Company has invested in dedicated recruitment resource which, along with our highly skilled crew, has ensured the Company has been able to maintain a high standard of service.
In summary, the financial and operational performance of the Company was the strongest to date and has accelerated again since the end of the financial year. The prospects for the foreseeable future are very strong and the Company continues to make improvements across all areas of the business to ensure it can capitalise on further opportunities for growth. 
*Profit before interest, tax, depreciation, amortisation, foreign exchange and exceptional items.

Energy transition

As reported in last year’s accounts, the Group, in conjunction with shareholders, has continued to focus on Environmental, Social and Governance (ESG) and has now embedded environmental awareness and reporting into its core practices and beliefs.
The Company continues to see strength in Renewables and is actively focusing on securing new opportunities in non oil and gas both in terms of offshore wind construction and, particularly, cable lay. These areas now constitute a significant percentage of the Company’s revenue and it is anticipated that this will continue to be the case based on the current customer and vessel mix. 

Page 1

 
ROVOP LIMITED
 

STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023

Principal risks and uncertainties
 
Market risk
The business primarily operates in the subsea drill support, survey construction, inspection, repair, maintenance and decommissioning markets for oil, gas and offshore wind markets on a worldwide basis. Success is driven by the Company's ability to successfully tender, win and execute projects across these markets. The principal risks and uncertainties arise from the impact on the business of market conditions in its operating markets. Oil prices have historically been a key driver of these conditions and have been impacted significantly over the last twelve months by supply issues, most recently due to the conflict in Ukraine. As noted previously the oil price is a key factor in the levels of capital expenditure by certain customers with consequent impacts on trading levels and market prices. The Company continues to benefit from high levels of sector expenditure. The focus on energy transition over the last 12-18 months has presented the business with both opportunity and risk but the emerging balanced view towards energy security presents a positive outlook for both traditional and new energy and the Group is well positioned to serve both sectors. Further, the impact of the Covid 19 pandemic is lower now than twelve months ago but there clearly remains a risk that it could return impacting the international mobility of the Company’s crews, though the business has shown that it can operate successfully under these conditions.
Liquidity risk
The Company manages its liquidity risk by matching long term assets with long term debt and by maintaining sufficient cash and availability of funding through an adequate amount of committed credit facilities. 
Currency risk
The Company's exposure to the risk of changes in foreign currency rates relates primarily to its operating activities (when revenue or expenses are denominated in a different currency from the Company's functional currency).
The Company's principal exposure arises from income denominated in US Dollars (USD), with costs principally denominated in Sterling (GBP) which are not fully matched. The Group has entered into forward contracts to partially manage the residual USD exposure.
Credit risk
The Company has trade debtors of £9.2m (2022: £8.8m) and bank balances of £8.0m (2022: £2.4m).
The Company has established procedures to minimise the risk of default by trade debtors including detailed credit checks undertaken before a customer is accepted. 

Financial key performance indicators
 
The Company sets a series of Key Performance Indicators (KPIs) related to the financial performance of the business within its annual budget and monitors these throughout the year. 
KPIs are reviewed on a weekly basis and as well as financial KPI's such as revenue, ROV days delivered, project contribution per ROV day and EBITDA, there is also discussion on HSEQ, HR, Operations and ESG data.
A key operational KPI is commercial asset utilisation as this is a key driver of profitability. Return on capital employed is another important metric reviewed on a regular basis, mainly when pricing potential new projects and making capital expenditure decisions.

Page 2

 
ROVOP LIMITED
 

STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023

Directors' statement of compliance with duty to promote the success of the Company
 
Section 172 (1) (a) to (f) requires the Company directors to consider, both individually and collectively, that they have acted in the way that they consider, in good faith, would be most likely to promote the success of the Company for the benefit of its members as a whole in the decisions taken during the current year. 

When making these decisions the directors have given regard to:
The likely consequences of any decisions on the long-term
The interests of the Company’s employees
The need to foster the Company’s business relationships with suppliers, customers and others
The impact of the Company’s operations on the community and environment
The desirability of the Company maintaining a reputation for high standards of business conduct, and
The need to act fairly between shareholders of the Company

The majority of stakeholder engagement is carried out by the Board of directors who meet on a regular basis. The Board considers and discusses information from across the organisation to help it understand the impact of the Company’s operations, and the interests and views of our key stakeholders. It also reviews strategy, financial and operational performance as well as information covering areas such as key risks, and legal and regulatory compliance.
As a result of these activities, the Board has an overview of engagement with stakeholders, and other relevant factors, which enables the directors to comply with their legal duty under section 172 of the Companies Act 2006.


This report was approved by the Board and signed on its behalf.



G Park
Director

Date: 26 September 2023
Page 3

 
ROVOP LIMITED
 
 
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 MARCH 2023

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

Results and dividends

The profit for the year, after tax, amounted to £399k (2022 loss - £943k).

Operating profit before exceptional items was £6.4m (2022 - £2.3m).

Director

The directors who served during the year were:

G Park 
N Potter 

Future developments

The directors are confident that the prospects for the market for the Company’s services, coupled with the wider global customer base that has been built up over the last two years, will continue to drive growth in the business. The Company continues to generate a significant portion of its revenue from offshore wind construction and cable lay. Activity on the vessels on which our assets are placed continues to be strong and looks set to continue for the foreseeable future. As a result of this high commercial utilisation and the improvement in pricing across the market, the Company continues to look at opportunities to increase the size of its fleet through the second-hand market as well as new-build work class ROVs.

Research and development activities

The Group and Company continues to look for innovative systems and processes to ensure a high-quality service delivery.

Disclosure of information to auditors

Each of the persons who are directors at the time when this Directors' report is approved has confirmed that:
 
so far as the director is aware, there is no relevant audit information of which the Company's auditors are unaware, and

the director has taken all the steps that ought to have been taken as a director in order to be aware of any relevant audit information and to establish that the Company's auditors are aware of that information.

Post balance sheet events

There have been no significant events affecting the Company since the year end.

Auditors

The auditorsAnderson Anderson & Brown Audit LLPwill 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.
 



G Park
Director

Date: 26 September 2023
Page 4

 
ROVOP LIMITED
 

DIRECTOR'S RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 MARCH 2023

The directors are responsible for preparing the Strategic report, the Directors' 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 applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland'. 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 for the Company's financial statements and then apply them consistently;

make judgements and accounting estimates that are reasonable and prudent;

state whether applicable UK Accounting Standards 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 2006They 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.

Page 5

 
ROVOP LIMITED
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF ROVOP LIMITED
 

Opinion


We have audited the financial statements of ROVOP Limited (the 'Company') for the year ended 31 March 2023, which comprise the Statement of comprehensive income, the Balance sheet, the Statement of changes in equity and the related notes, including a summary of significant accounting policiesThe 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 March 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 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.


Conclusions relating to going concern


In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.


Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the Company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.


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


Other information


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.


Page 6

 
ROVOP LIMITED
 

INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF ROVOP LIMITED (CONTINUED)

Opinion on other matters 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 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.


Matters on which we are required to report by exception
 

In the light of the knowledge and understanding of the Company and its environment obtained in the course of the audit, we have not identified material misstatements in the Strategic report or the Directors' report.


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


adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
the financial statements are not in agreement with the accounting records and returns; or
certain disclosures of 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 Director's responsibilities statement set out on page 5, 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.


Page 7

 
ROVOP LIMITED
 

INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF ROVOP LIMITED (CONTINUED)

Auditors' 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 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, UK and overseas Taxation legislation.

We considered the opportunities and incentives that may exist within the organisation for fraud and identified the
greatest potential for fraud in the following areas:

timing of revenue recognition
compliance with relevant laws and regulations which may impact on the financial statements and those that the Company needs to comply with for the purpose of trading
management judgements applied in calculating provisions
management override of controls to manipulate the Company’s key performance indicators to meet targets.

We discussed these risks with client management, designed audit procedures to address these risks including:

reviewed internal documentation and correspondence with regulators for evidence or irregularities
testing a sample of sales transactions to source documents and review of recognition of income around the year end
consideration of the assumptions applied whether the judgements applied in calculation of provisions were appropriate
reviewed areas of judgement and tested a sample of journal entries for indicators of management bias
performed analytical procedures to identify any unusual or unexpected relationships which may be an indication of material misstatement due to 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.


Page 8

 
ROVOP LIMITED
 

INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF ROVOP LIMITED (CONTINUED)

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 2006Our 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.





Christopher Masson (Senior statutory auditor)
  
for and on behalf of
Anderson Anderson & Brown Audit LLP
 
Statutory Auditor
  
Kingshill View
Prime Four Business Park
Kingswells
Aberdeen
AB15 8PU

26 September 2023
Page 9

 
ROVOP LIMITED
 

STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 MARCH 2023

2023
Restated 2022
Note
£
£

  

Turnover
 5 
46,224,254
36,991,978

Cost of sales
  
(34,149,205)
(29,542,646)

Gross profit
  
12,075,049
7,449,332

Administrative expenses
  
(5,688,987)
(5,124,369)

Other operating income
 6 
-
13,457

EBITDA
  
6,386,062
2,338,420

Depreciation
 13 
(1,085,213)
(1,143,409)

Exceptional items
      7 
(2,968,606)
(347,100)

Gain on foreign exchange
  
1,238,355
258,557

Interest receivable and similar income
  
541
-

Interest payable and similar expenses
 11 
(1,653,468)
(1,640,339)

Profit/(loss) before tax
  
1,917,671
(533,871)

Tax on profit/(loss)
 12 
(1,518,796)
(409,159)

Profit/(loss) for the financial year
  
398,875
(943,030)

  

There was no other comprehensive income for 2023 (2022: £Nil).

The notes on pages 13 to 25 form part of these financial statements.
Page 10

 
ROVOP LIMITED
REGISTERED NUMBER:SC402747

BALANCE SHEET
AS AT 31 MARCH 2023

2023
2023
Restated 2022
Restated 2022
Note
£
£
£
£

Fixed assets
  

Tangible assets
 13 
3,272,198
4,022,008

  
3,272,198
4,022,008

Current assets
  

Stocks
 14 
197,001
18,534

Debtors: amounts falling due within one year
 15 
27,215,513
26,198,319

Cash at bank and in hand
 16 
8,001,374
2,398,961

  
35,413,888
28,615,814

Creditors: amounts falling due within one year
 17 
(21,690,021)
(17,459,175)

Net current assets
  
 
 
13,723,867
 
 
11,156,639

Total assets less current liabilities
  
16,996,065
15,178,647

Creditors: amounts falling due after more than one year
 18 
(7,941,108)
(6,522,565)

  

Net assets
  
9,054,957
8,656,082


Capital and reserves
  

Called up share capital 
 19 
29,609,914
29,609,914

Share premium account
  
187,064
187,064

Capital redemption reserve
  
353
353

Profit and loss account
  
(20,742,374)
(21,141,249)

  
9,054,957
8,656,082


The financial statements were approved and authorised for issue by the Board and were signed on its behalf by: 




G Park
Director

Date: 26 September 2023

The notes on pages 13 to 25 form part of these financial statements.
Page 11

 
ROVOP LIMITED
 

STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MARCH 2023


Called up share capital
Share premium account
Capital redemption reserve
Profit and loss account
Total equity

£
£
£
£
£

At 1 April 2022 (as previously stated)
29,609,914
187,064
353
(21,566,149)
8,231,182

Prior year adjustment (note 20)
-
-
-
424,900
424,900

At 1 April 2022 (as restated)
29,609,914
187,064
353
(21,141,249)
8,656,082


Comprehensive income for the year

Profit for the year
-
-
-
398,875
398,875


At 31 March 2023
29,609,914
187,064
353
(20,742,374)
9,054,957


The notes on pages 13 to 25 form part of these financial statements.


STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MARCH 2022


Called up share capital
Share premium account
Capital redemption reserve
Profit and loss account
Total equity

£
£
£
£
£

At 1 April 2021
29,609,914
187,064
353
(20,198,219)
9,599,112


Comprehensive income for the year

Loss for the year
-
-
-
(943,030)
(943,030)


At 31 March Restated 2022
29,609,914
187,064
353
(21,141,249)
8,656,082


The notes on pages 13 to 25 form part of these financial statements.

Page 12

 
ROVOP LIMITED
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023

1.


General information

The Company is a private company limited by shares and is incorporated in the UK. The address of the registered office is Silvertrees Drive, Westhill, Aberdeen, AB32 6BH. The principal activity of the Company is the provision of remotely operated vehicle (ROV) services to the oil & gas and offshore wind and utilities industries.

2.


Going concern

The financial statements are prepared on a going concern basis, which assumes that the Company and wider Group that it is a member of will continue to meet its liabilities as they fall due.
The Group is now in a strong position with regards to availability of working capital to meet its ongoing obligations and trade successfully. During the financial year demand for services increased significantly and strong revenue levels post year end are ensuring there continues to be sufficient working capital for the Group to meet its financial obligations.
As a result of the above considerations, the directors have continued to adopt the going concern basis of accounting in preparing the annual financial statements.

3.Accounting policies

 
3.1

Basis of preparation of financial statements

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 preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires management to exercise judgement in applying the Company's accounting policies (see note 4).

The following principal accounting policies have been applied:

 
3.2

Financial Reporting Standard 102 - reduced disclosure exemptions

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 11 Financial Instruments paragraphs 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 ROVOP Holdings Limited as at 31 March 2023 and these financial statements may be obtained from Companies House.

Page 13

 
ROVOP LIMITED
 

NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023

3.Accounting policies (continued)

 
3.3

Revenue

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured. Revenue is measured as the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes. The following criteria must also be met before revenue is recognised:

Rendering of services

Revenue from a contract to provide services is recognised in the period in which the services are provided in accordance with the stage of completion of the contract when all of the following conditions are satisfied:
the amount of revenue can be measured reliably;
it is probable that the Company will receive the consideration due under the contract;
the stage of completion of the contract at the end of the reporting period can be measured reliably; and
the costs incurred and the costs to complete the contract can be measured reliably.

 
3.4

Tangible fixed assets

Tangible fixed assets under the cost model are stated at historical cost less accumulated depreciation and any accumulated impairment losses. Historical cost includes expenditure that is directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management.

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:

Tenants improvements
-
3 - 15 years straight line
Plant & machinery
-
3 - 12 years straight line
Fixtures & fittings
-
3 - 10 years straight line
Computer equipment
-
3 years straight line

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.

 
3.5

Stocks

Stocks are stated at the lower of cost and net realisable value, being the estimated selling price less costs to complete and sell. Cost is based on the cost of purchase on a first in, first out basis. Work in progress and finished goods include labour and attributable overheads.

At each balance sheet date, stocks are assessed for impairment. If stock is impaired, the carrying amount is reduced to its selling price less costs to complete and sell. The impairment loss is recognised immediately in profit or loss.

Page 14

 
ROVOP LIMITED
 

NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023

3.Accounting policies (continued)

 
3.6

Debtors

Short-term debtors are measured at transaction price, less any impairment. Loans receivable are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method, less any impairment.

 
3.7

Cash and cash equivalents

Cash is represented by cash in hand and deposits with financial institutions repayable without penalty on notice of not more than 24 hours. Cash equivalents are highly liquid investments that mature in no more than three months from the date of acquisition and that are readily convertible to known amounts of cash with insignificant risk of change in value.

 
3.8

Financial instruments

The Company only enters into basic financial instrument transactions that result in the recognition of financial assets and liabilities like trade and other debtors and creditors, loans from banks and other third parties, loans to related parties and investments in ordinary shares.

Debt instruments (other than those wholly repayable or receivable within one year), including loans and other accounts receivable and payable, are initially measured at present value of the future cash flows and subsequently at amortised cost using the effective interest method. Debt instruments that are payable or receivable within one year, typically trade debtors and creditors, are measured, initially and subsequently, at the undiscounted amount of the cash or other consideration expected to be paid or received. However, if the arrangements of a short-term instrument constitute a financing transaction, like the payment of a trade debt deferred beyond normal business terms or in case of an out-right short-term loan that is not at market rate, the financial asset or liability is measured, initially at the present value of future cash flows discounted at a market rate of interest for a similar debt instrument and subsequently at amortised cost, unless it qualifies as a loan from a director in the case of a small company, or a public benefit entity concessionary loan.

Financial assets that are measured at cost and amortised cost are assessed at the end of each reporting period for objective evidence of impairment. If objective evidence of impairment is found, an impairment loss is recognised in the Statement of comprehensive income.

For financial assets measured at amortised cost, the impairment loss is measured as the difference between an asset's carrying amount and the present value of estimated cash flows discounted at the asset's original effective interest rate. If a financial asset has a variable interest rate, the discount rate for measuring any impairment loss is the current effective interest rate determined under the contract.

For financial assets measured at cost less impairment, the impairment loss is measured as the difference between an asset's carrying amount and best estimate of the recoverable amount, which is an approximation of the amount that the Company would receive for the asset if it were to be sold at the balance sheet date.

Financial assets and liabilities are offset and the net amount reported in the Balance sheet when there is an enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.

 
3.9

Creditors

Short-term creditors are measured at the transaction price. Other financial liabilities, including bank loans, are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method.

Page 15

 
ROVOP LIMITED
 

NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023

3.Accounting policies (continued)

 
3.10

Government grants

Grants are accounted under the accruals model as permitted by FRS 102. Grants relating to expenditure on tangible fixed assets are credited to profit or loss at the same rate as the depreciation on the assets to which the grant relates. The deferred element of grants is included in creditors as deferred income.
Grants of a revenue nature are recognised in the Statement of comprehensive income in the same period as the related expenditure.

 
3.11

Finance costs

Finance costs are charged to profit or loss over the term of the debt using the effective interest method so that the amount charged is at a constant rate on the carrying amount. Issue costs are initially recognised as a reduction in the proceeds of the associated capital instrument.

 
3.12

Leased assets: the Company as lessee

Assets obtained under hire purchase contracts and finance leases are capitalised as tangible fixed assets. Assets acquired by finance lease are depreciated over the shorter of the lease term and their useful lives. Assets acquired by hire purchase are depreciated over their useful lives. Finance leases are those where substantially all of the benefits and risks of ownership are assumed by the company. Obligations under such agreements are included in creditors net of the finance charge allocated to future periods. The finance element of the rental payment is charged to profit or loss so as to produce a constant periodic rate of charge on the net obligation outstanding in each period.

 
3.13

Pensions

Defined contribution pension plan
The Company contributes to a defined contribution plan for its employees. A defined contribution plan is a pension plan under which the company pays fixed contributions into a separate entity. Once the contributions have been paid the Company has no further payment obligations.
The contributions are recognised as an expense in the Statement of comprehensive income when they fall due. Amounts not paid are shown in accruals as a liability in the Balance sheet. The assets of the plan are held separately from the Company in independently administered funds.

 
3.14

Interest income

Interest income is recognised in profit or loss using the effective interest method.

  
3.15

Provisions for liabilities

Provisions are made where an event has taken place that gives the Company a legal or constructive obligation that probably requires settlement by a transfer of economic benefit, and a reliable estimate can be made of the amount of the obligation.
Provisions are charged as an expense to the Statement of comprehensive income in the year that the Company becomes aware of the obligation, and are measured at the best estimate at the Balance sheet 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 Balance sheet.

Page 16

 
ROVOP LIMITED
 

NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023

3.Accounting policies (continued)

 
3.16

Taxation

Tax is recognised in profit or loss except that a charge attributable to an item of income and expense recognised as other comprehensive income or to an item recognised directly in equity is also recognised in other comprehensive income or directly in equity respectively.

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

Deferred tax balances are recognised in respect of all timing differences that have originated but not reversed by the balance sheet date, except that:
The recognition of deferred tax assets is limited to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits;
Any deferred tax balances are reversed if and when all conditions for retaining associated tax allowances have been met; and
Where they relate to timing differences in respect of interests in subsidiaries, associates, branches and joint ventures and the Company can control the reversal of the timing differences and such reversal is not considered probable in the foreseeable future.

Deferred tax balances are not recognised in respect of permanent differences except in respect of business combinations, when deferred tax is recognised on the differences between the fair values of assets acquired and the future tax deductions available for them and the differences between the fair values of liabilities acquired and the amount that will be assessed for tax. Deferred tax is determined using tax rates and laws that have been enacted or substantively enacted by the balance sheet date.

 
3.17

Exceptional items

Exceptional items are transactions that fall within the ordinary activities of the Company but are presented separately due to their size or incidence.

Page 17

 
ROVOP LIMITED
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023

4.


Judgements in applying accounting policies and key sources of estimation uncertainty

The preparation of financial statements requires management to make judgements, estimates and assumptions that affect the amounts reported for assets and liabilities as at the Balance sheet date and the amounts reported during the year for revenue and costs. However the nature of estimation means that actual outcomes could differ from those estimates. Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.
Useful economic lives of tangible fixed assets
The annual depreciation charge for tangible fixed assets is sensitive to changes in the useful economic lives and residual values of the assets. Useful lives and residual values are reassessed annually. They are assessed where necessary to reflect current estimates based on economic utilisation and physical condition.
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. On this basis, certain overdue balance has been fully provided for. The trade debtors figure in Note 15 is shown net of this provision.
Tax
Management estimation is required to determine the amount of deferred tax assets that can be recognised, based upon likely timing and level of future taxable profits together with an assessment of the effect of future capital investment plans. The deferred tax asset has not been recognised at this stage as the timing of its reversal is uncertain.


5.


Turnover

All turnover has arisen from the provision of services relating to the principal activity.


An analysis of turnover by country of destination is as follows:


2023
2022
£
£

United Kingdom
13,174,193
7,936,417

Rest of Europe
1,646,651
3,657,505

Rest of world
31,403,410
25,398,056

46,224,254
36,991,978



6.


Other operating income

2023
2022
£
£

Government grants receivable
-
13,457

-
13,457


Page 18

 
ROVOP LIMITED
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023

7.


Exceptional items

2023
2022
£
£
Exceptional costs relating to professional fees

-

8,232

Exceptional costs relating to bad debts including intercompany

78,563

338,868

Exceptional costs relating to staff bonus costs

1,500,067

-

Exceptional costs in relation to re-financing

1,389,976

-

2,968,606

347,100



8.


Auditors' remuneration

2023
2022
£
£


Fees payable to the Company's auditor and its associates for the audit of the Company's annual financial statements
22,000
18,500




9.


Employees

Staff costs, including directors' remuneration, were as follows:


2023
2022
£
£

Wages and salaries
18,187,080
15,911,608

Social security costs
1,576,652
1,334,795

Cost of defined contribution scheme
229,691
213,220

19,993,423
17,459,623


The average monthly number of employees, including the directors, during the year was as follows:


        2023
        2022
            No.
            No.







Administration
33
29



Operations
192
172



Management
6
6

231
207

Page 19

 
ROVOP LIMITED
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023

10.


Directors' remuneration

2023
2022
£
£

Directors' emoluments
1,381,174
342,456

Company contributions to defined contribution pension schemes
16,551
36,375

1,397,725
378,831


During the year retirement benefits were accruing to 2 directors (2022 - 2) in respect of defined contribution pension schemes.

The highest paid director received remuneration of £941,436 (2022 - £200,629).

The value of the company's contributions paid to a defined contribution pension scheme in respect of the highest paid director amounted to £10,343 (2022 - £30,000).


11.


Interest payable and similar expenses

2023
2022
£
£


Loans from group undertakings
1,418,543
1,418,544

Other interest payable
234,925
221,795

1,653,468
1,640,339

The group interest payable relates to loan notes which have no cash payments and are rolled-up and accrued with the associated loans (Note 18). The rolled up interest is not scheduled for payment until December 2024.


12.


Tax


2023
2022
£
£


Foreign tax


Foreign tax on income for the year
1,075,304
409,159

Foreign tax in respect of prior periods
443,492
-

Total current tax
1,518,796
409,159

Total deferred tax
 
-
 
-


Tax on profit on ordinary activities
1,518,796
409,159
Page 20

 
ROVOP LIMITED
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023
 
12.Tax (continued)


Factors affecting tax charge for the year

The tax assessed for the year is higher than (2022 - higher than) the standard rate of corporation tax in the UK of 19% (2022 - 19%). The differences are explained below:

2023
Restated 2022
£
£


Profit/(loss) on ordinary activities before tax
1,917,671
(533,871)


Profit/(loss) on ordinary activities multiplied by standard rate of corporation tax in the UK of 19% (2022 - 19%)
364,357
(101,436)

Effects of:


Expenses not deductible for tax purposes
1,220
345

Fixed asset differences
8,925
15,033

Deferred tax not recognised
(118,578)
21,793

Deferred tax rate change
27,137
14,145

Other permanent differences
(283,061)
(77,740)

Foreign tax
1,518,796
409,159

Group relief
-
127,860

Total tax charge for the year
1,518,796
409,159
Page 21

 
ROVOP LIMITED
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023
 
12.Tax (continued)


Factors that may affect future tax charges

The Company has tax losses carried forward of £6,142,572 (2022 - £5,487,738) which are available for use against taxable profits in future years. The associated deferred tax asset has not been recognised due to the uncertainty around the timing of its reversal.


13.


Tangible fixed assets





S/Term Leasehold Property
Plant & machinery
Fixtures & fittings
Computer equipment
Other fixed assets
Total

£
£
£
£
£
£



Cost or valuation


At 1 April 2022
781,348
9,410,086
197,664
714,576
6,525
11,110,199


Additions
70,889
176,758
25,062
65,628
-
338,337


Disposals
-
-
-
-
(2,934)
(2,934)



At 31 March 2023

852,237
9,586,844
222,726
780,204
3,591
11,445,602



Depreciation


At 1 April 2022
379,375
6,021,147
152,242
535,427
-
7,088,191


Charge for the year on owned assets
75,528
870,506
23,666
115,513
-
1,085,213



At 31 March 2023

454,903
6,891,653
175,908
650,940
-
8,173,404



Net book value



At 31 March 2023
397,334
2,695,191
46,818
129,264
3,591
3,272,198



At 31 March 2022
401,973
3,388,939
45,422
179,149
6,525
4,022,008


14.


Stocks

2023
2022
£
£

Raw materials and consumables
197,001
18,534

197,001
18,534


Page 22

 
ROVOP LIMITED
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023

15.


Debtors



2023
2022
£
£


Trade debtors
9,181,019
8,781,330

Amounts owed by group undertakings
11,470,598
12,368,271

Other debtors
2,537,308
777,764

Prepayments and accrued income
4,026,588
4,270,954

27,215,513
26,198,319



16.


Cash and cash equivalents

2023
2022
£
£

Cash at bank and in hand
8,001,374
2,398,961

8,001,374
2,398,961



17.


Creditors: Amounts falling due within one year

2023
Restated 2022
£
£

Trade creditors
2,991,246
1,700,340

Amounts owed to group undertakings
13,020,110
11,055,455

Other tax and social security
1,411,417
718,503

Working capital facility
2,045,152
1,777,148

Other creditors
86,657
253,641

Accruals and deferred income
2,135,439
1,954,088

21,690,021
17,459,175


The working capital facility balance of £2,045,152 (2022 - £1,777,148) is secured over the trade debtors
of the Company.

Page 23

 
ROVOP LIMITED
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023

18.


Creditors: Amounts falling due after more than one year

2023
2022
£
£

Amounts owed to group undertakings
7,941,108
6,522,565

7,941,108
6,522,565


Amounts owed to group undertakings include a loan note of £3,795,652 (2022 - £3,795,652) together with rolled up interest and loan costs of £4,145,456 (2022 - £2,726,913) which are repayable in full on 15 December 2024. This loan bears an interest charge of 10.5% per annum. No interest or capital repayments are scheduled to be made until the redemption date of 15 December 2024.


19.


Share capital

2023
2022
£
£
Allotted, called up and fully paid



296,099,141 (2022 - 296,099,141) Ordinary shares of £0.10 each
29,609,914
29,609,914



20.


Prior year adjustment

The accounts for the prior year have been restated to incorporate an amendment to the revenue recognition policy which has been incorrectly applied across the group. The adjustment has resulted in a reduction in cost of sales in the prior period of £424,900 and therefore a reduction in the loss for the financial year. Net assets and the profit and loss account available for distribution have increased by £424,900. 


21.


Contingent liabilities

The Company had provided a cross corporate guarantee to fellow subsidiaries within the group in regards to loan agreements. These loan agreements were settled during the period and the security discharged.


22.


Pension commitments

The Company contributes to a defined contribution 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 scheme and amounted to £229,691 (2022 - £213,220). Contributions totalling £70,317 (2022 - £60,526) were payable to the fund at the balance sheet date and are included in creditors. 

Page 24

 
ROVOP LIMITED
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023

23.


Commitments under operating leases

At 31 March 2023 the Company had future minimum lease payments due under non-cancellable operating leases for each of the following periods:

2023
2022
£
£

Land & buildings


Not later than 1 year
312,000
312,000

Later than 1 year and not later than 5 years
1,248,000
1,248,000

Later than 5 years
2,132,000
2,444,000

3,692,000
4,004,000


24.


Related party transactions

The Company has taken advantage of the exemption from disclosing transactions with subsidiaries that
are 100% owned under section 33 of FRS 102. 
During the year the Company incurred administrative expenses of £401,303 (2022 - £62,000) from a company which a Director in the parent company is a director.


25.


Controlling party

The immediate parent company at 31 March 2023  is ROVOP Group Limited, a company incorporated in Scotland with its registered office at Silvertrees Drive, Westhill, Aberdeen, United Kingdom, AB32 6BH.
The Company is included in the consolidated financial statements of ROVOP Holdings Limited, a company incorporated in Scotland with its registered office at Silvertrees Drive, Westhill, Aberdeen, United Kingdom, AB32 6BH, for the period ended 31 March 2023. This is the only company in the group to prepare consolidated financial statements.
Copies of the consolidated financial statements of ROVOP Holdings Limited can be requested from Silvertrees Drive, Westhill, Aberdeen, United Kingdom, AB32 6BH.
The ultimate parent company is ROVOP Guernsey Limited, a company incorporated in Guernsey with its registered office at PO Box 656, East Wing, Trafalgar Court, Les Banques, St Peter Port, Guernsey, GY1 3PP.


Page 25