Company registration number SC443569 (Scotland)
ALLRIG LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
ALLRIG LIMITED
COMPANY INFORMATION
Director
R McInnes
Company number
SC443569
Registered office
c/o Regus Berry Street
1 Berry Street
Aberdeen
UK
AB25 1HF
Auditor
Consilium Audit Limited
169 West George Street
Glasgow
G2 2LB
ALLRIG LIMITED
CONTENTS
Page
Director's report
1 - 3
Independent auditor's report
4 - 6
Income statement
7
Statement of financial position
8
Statement of changes in equity
9
Notes to the financial statements
10 - 22
Detailed profit and loss account
ALLRIG LIMITED
DIRECTOR'S REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 1 -
The directors present their annual report and financial statements for the year ended 31 December 2023. This report has been prepared in accordance with the special provisions relating to small-sized companies under section 415A of the Companies Act 2006. The directors have taken advantage of the small companies' exemption provided by section 414B of the Companies Act 2006 not to provide a Strategic Report.
Principal activities
The principal activity of the Company is to deliver services to meet the technical and commercial challenges of oil and gas drilling companies both directly to third party customers and also indirectly via other companies within Allrig Holdco Limited.
Results and dividends
The results for the year are set out on page 7.
No dividends were paid. The director does not recommend payment of a final dividend.
Going concern
The director is required to state whether it is appropriate to adopt the going concern basis of accounting in preparing the financial statements, and to identify any material uncertainties to the Company's ability to continue as a going concern over a period of at least 12 months from the date of approval of the financial statements.
The unaudited management accounts for the seven months to 31 July 2024 for both the Company and Group show operating profits.
The director has considered this position and the trading outlook for the Company and wider Group, and has taken account of reasonably possible changes in trading performance by preparing financial projections that cover the period to at least 30 September 2025. Based on assumptions that the director regards as reasonable, these financial projections demonstrate that it is expected that both the Company and Group will continue to trade profitably over this period, continuing to meet financial obligations as they fall due.
It should be noted that, due to the nature of the markets in which the Company and Group operate and the type of contracts that the Company and Group are able to tender for, there is a short lead time in potential contract awards. The financial projections for the 12 month period assumes revenues and cash flows from new sales contracts which have not yet been awarded. If these contracts were not awarded as the Company and Group have forecast, this could result in a position where the Company would not have sufficient resources to meet its obligations over the forecast period.
The company continues to be reliant on the wider group for financial support. The director of the ultimate holding company, Allrig Holdco Limited, has confirmed in writing that the Group will continue to provide such financial support as is necessary to enable Allrig Limited to meet its financial obligations as they fall due for a period of at least 12 months from the date of signing these financial statements.
As a consequence of the above, there remains material uncertainties that may cast significant doubt on the Company's ability to continue as a going concern. The financial statements do not include the adjustments that would result if the Company was unable to continue as a going concern. However, it is the director's intention that financial support from other group companies will be provided if the Company was to have insufficient funds to make payments as they fall due.
Directors
The directors who held office during the year and up to the date of signature of the financial statements was as follows:
Mr R McInnes
ALLRIG LIMITED
DIRECTOR'S REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 2 -
Employees
The Company places considerable value on the involvement of its employees and has continued to keep them informed on matters affecting them as employees and on the various factors affecting the performance of the Company. This is achieved through formal and informal meetings.
The Company gives full and fair consideration to applications for employment from disabled persons. Company policy supports the further training, career development and promotion of any disabled persons with the Company, including those persons who may have become disabled whilst employed with the Company.
Health and safety
Our goal is to integrate best practice health and safety into all our operations as we strive to eliminate injury and ill health and to manage any higher risk activities.
We are equally committed to providing a healthy and safe working environment for all employees, contractors and visitors.
Future developments
The Company will continue to focus on the delivery of its services to meet the technical and commercial challenges of oil and gas drilling companies, as well as offshore and onshore wind companies, both directly to third party customers but also indirectly via other companies within the Allrig Holdco Group.
Auditor
Consilium Audit Limited are deemed to be reappointed under section 487(2) of the Companies Act 2006.
Directors' liabiltiies
During the period, the Company had in force an indemnity provision in favour of all the directors of the Company against liability in respect of proceedings brought by third parties, subject to the conditions set out in section 234 of the Companies Act 2006. Such qualifying third-party indemnity provision remains in force as at the date of approving the director's report.
Statement of director's responsibilities
The director is responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.
Company law requires the director to prepare financial statements for each financial year. Under that law the director has elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law), including Financial Reporting Standard 101 Reduced Disclosure Framework ("FRS 101"). Under company law the director must not approve the financial statements unless he is 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 director is required to:
select suitable accounting policies and then apply them consistently;
make judgements and accounting estimates that are reasonable and prudent;
state whether applicable UK Accounting Standards have been followed, including FRS101, subject to any material departures disclosed and explained in the financial statements; and
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.
The director is responsible for keeping adequate accounting records that are sufficient to show and explain the company’s transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. He is 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.
ALLRIG LIMITED
DIRECTOR'S REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 3 -
Statement of disclosure to auditor
So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the company’s auditor is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the company’s auditor is aware of that information.
So far as the director at the date of approving this report is aware, there is no relevant audit information, being information needed by the auditor in connection with preparing its report, of which the auditor is unaware. Having made enquiries of the Company's auditor, the director has taken all the steps that he is obliged to take as a director in order to make them aware of any relevant audit information and to establish that the auditor is aware of that information.
This confirmation is given and should be interpreted in accordance with the provisions of Section 418 of the Companies Act 2006.
On behalf of the board
Mr R McInnes
Director
23 September 2024
ALLRIG LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBER OF ALLRIG LIMITED
- 4 -
Opinion
We have audited the financial statements of Allrig Limited (the 'company') for the year ended 31 December 2023 which comprise the income statement, the statement of financial position, the statement of changes in equity and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 101 Reduced Disclosure Framework (United Kingdom Generally Accepted Accounting Practice).
In our opinion the financial statements:
give a true and fair view of the state of the company's affairs as at 31 December 2023 and of its loss for the year then ended;
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
have been prepared in accordance with the requirements of the Companies Act 2006.
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Material uncertainty relating to going concern
In forming our opinion, which is not qualified, we have considered the adequacy of the disclosures made in note 1.2 to the financial statements concerning the company's ability to continue as a going concern. The company are reliant on revenue throughout the group from work that has not yet been confirmed into 2025 to provide ongoing cashflow support. These conditions, along with the other matters explained in note 1.2 to the financial statements, indicate the existence of a material uncertainty which may cast significant doubt about the company's ability to continue as a going concern. The financial statements do not include the adjustments that would result if the company were unable to continue as a going concern.
The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The director is responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
Because of the significance of the matter described in the basis for disclaimer of opinion section of our report, we have been unable to form an opinion, whether based on the work undertaken in the course of the audit:
the information given in the directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the directors' report have been prepared in accordance with applicable legal requirements.
ALLRIG LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBER OF ALLRIG LIMITED
- 5 -
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 director's report.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:
adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
the financial statements are not in agreement with the accounting records and returns; or
certain disclosures of remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.
Responsibilities of director
As explained more fully in the director's responsibilities statement, the director is 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 director determines 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 director is 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 director either intends to liquidate the company or to cease operations, or has no realistic alternative but to do so.
Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.
Our approach to identifying and assessing the risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, was as follows:
We ensured that the engagement team collectively had the appropriate competence, capabilities and skills to identify or recognise non-compliance with applicable laws and regulations.
We identified the laws and regulations applicable to the company through discussions with directors and management and from our knowledge of the regulatory environment relevant to the company.
We assessed the extent of compliance with laws and regulations through making enquiries of management and inspecting legal correspondence.
We assessed the susceptibility of the company's financial statements to material misstatement, including obtaining an understanding of how fraud might occur, by making enquiries of management as to where they considered there was susceptibility to fraud and their knowledge of actual, suspected and alleged fraud.
To address the risk of fraud through management bias and override of controls, we tested journal entries to identify unusual transactions, we assessed whether judgements and assumptions made in determining the accounting estimates were indicative of potential bias and we investigated the rationale behind significant or unusual transactions.
There are inherent limitations in our audit procedures described above. The more removed that laws and regulations are from financial transactions, the less likely it is that we would become aware of non-compliance. Auditing standards also limit the audit procedures required to identify non-compliance with laws and regulations to enquiry of the directors and other management and the inspection of regulatory and legal correspondence.
ALLRIG LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBER OF ALLRIG LIMITED
- 6 -
Material misstatements that arise due to fraud can be harder to detect than those that arise from error as they may involve deliberate concealment or collusion.
A further description of our responsibilities is available on the Financial Reporting Council's website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.
This report is made solely to the company’s member in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company’s member, those matters we are required to state to the member in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company’s member, for our audit work, for this report, or for the opinions we have formed.
Brian Thomson BA(Hons) CA (Senior Statutory Auditor)
For and on behalf of Consilium Audit Limited
Statutory Auditor
169 West George Street
Glasgow
Scotland
G2 2LB
23 September 2024
ALLRIG LIMITED
INCOME STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 7 -
2023
2022
Notes
£
£
Revenue
3
2,577,233
2,226,684
Cost of sales
(2,008,360)
(2,892,143)
Gross profit/(loss)
568,873
(665,459)
Administrative expenses
(577,556)
(507,305)
Other operating income
1,830,146
Operating (loss)/profit
5
(8,683)
657,382
Finance costs
8
(9,129)
5,041
(Loss)/profit before taxation
(17,812)
662,423
Tax on (loss)/profit
9
(Loss)/profit and total comprehensive income for the financial year
(17,812)
662,423
The notes on pages 10 to 22 form part of these financial statements.
(Loss)/profit is wholly attributable to the equity holder of Allrig Limited.
ALLRIG LIMITED
STATEMENT OF FINANCIAL POSITION
AS AT
31 DECEMBER 2023
31 December 2023
- 8 -
2023
2022
Notes
£
£
£
£
Non-current assets
Property, plant and equipment
10
261
803
Investments
11
42,538
44,753
42,799
45,556
Current assets
Trade and other receivables
13
1,117,570
1,778,637
Cash and cash equivalents
47,576
29,863
1,165,146
1,808,500
Current liabilities
14
(2,340,957)
(2,241,647)
Net current liabilities
(1,175,811)
(433,147)
Total assets less current liabilities
(1,133,012)
(387,591)
Non-current liabilities
14
(15,998)
(25,860)
Provisions for liabilities
Other provisions
17
(717,747)
Net liabilities
(1,149,010)
(1,131,198)
Equity
Called up share capital
19
1
1
Retained earnings
(1,149,011)
(1,131,199)
Total equity
(1,149,010)
(1,131,198)
The notes on pages 10 to 22 form part of these financial statements.
The financial statements were approved and signed by the director and authorised for issue on 23 September 2024
Mr R McInnes
Director
Company registration number SC443569 (Scotland)
ALLRIG LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
- 9 -
Share capital
Retained earnings
Total
£
£
£
Balance at 1 January 2022
1
(1,793,622)
(1,793,621)
Year ended 31 December 2022:
Profit and total comprehensive income
-
662,423
662,423
Balance at 31 December 2022
1
(1,131,199)
(1,131,198)
Year ended 31 December 2023:
Loss and total comprehensive income
-
(17,812)
(17,812)
Balance at 31 December 2023
1
(1,149,011)
(1,149,010)
The notes on pages 10 to 22 form part of these financial statements.
ALLRIG LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 10 -
1
Accounting policies
Company information
Allrig Limited is a private company limited by shares incorporated in Scotland. The registered office is c/o Regus Berry Street, 1 Berry Street, Aberdeen, UK, AB25 1HF. The company's principal activities and nature of its operations are disclosed in the director's report. The company's registration number is SC443569.
1.1
Accounting convention
The financial statements have been prepared in accordance with Financial Reporting Standard 101 Reduced Disclosure Framework (FRS 101) and in accordance with applicable accounting standards.
The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £ and in accordance.
The financial statements have been prepared under the historical cost convention in accordance with the Companies Act 2006. The principal accounting policies adopted are set out below.
As permitted by FRS 101, the company has taken advantage of the following disclosure exemptions from the requirements of IFRS:
(a) the requirements of paragraphs 45(b) and 46-52 of IFRS 2 Share based Payment, because the share-based payment arrangement concerns the instruments of another group entity;
(b) the requirements of IFRS 7 Financial Instruments: Disclosures
(c) the requirements of paragraphs 91-99 of IFRS 13 Fair Value Measurement
(d) the requirement in paragraph 38 of IAS 1 'Presentation of Financial Statements' to present comparative information in respect of:
(i) paragraph 79(a)(iv) of IAS 1;
(ii) paragraph 73(e) of IAS 16 Property, Plant and Equipment; and
(e) the requirements of paragraphs lO(d), l0(f), 39(c) and 134-136 of IAS 1 Presentation of Financial Statements;
(f) the requirements of IAS 7 Statement of Cash Flows;
(g) the requirements of paragraph 17 of IAS 24 Related Party Disclosures;
(h) the requirements in IAS 24 Related Party Disclosures to disclose related party transactions entered into between two or more members of a group, provided that any subsidiary which is a party to the transaction is wholly owned by such a member;
(i) the requirements of paragraphs 130(f)(ii), 130(f)(iii), 134(d)-134(f) and 135 (c)-135(e) of IAS 36 Impairment of Assets; and
(j) the disclosure exemptions as permitted in respect of the implementation of IFRS 7, IFRS 9 and IFRS 15.
(k) the effects of new but not yet effective IFRS pronouncements
ALLRIG LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 11 -
1.2
Going concern
The director is required to state whether it is appropriate to adopt the going concern basis of accounting in preparing the financial statements, and to identify any material uncertainties to the Company's ability to continue as a going concern over a period of at least 12 months from the date of approval of the financial statements.true
The unaudited management accounts for the seven months to 31 July 2024 for both the Company and Group show operating profits.
The director has considered this position and the trading outlook for the Company and wider Group, and has taken account of reasonably possible changes in trading performance by preparing financial projections that cover the period to at least 30 September 2025. Based on assumptions that the director regards as reasonable, these financial projections demonstrate that it is expected that both the Company and Group will continue to trade profitably over this period, continuing to meet financial obligations as they fall due.
It should be noted that, due to the nature of the markets in which the Company and Group operate and the type of contracts that the Company and Group are able to tender for, there is a short lead time in potential contract awards. The financial projections for the 12 month period assumes revenues and cash flows from new sales contracts which have not yet been awarded. If these contracts were not awarded as the Company and Group have forecast, this could result in a position where the Company would not have sufficient resources to meet its obligations over the forecast period.
The company continues to be reliant on the wider group for financial support. The director of the ultimate holding company, Allrig Holdco Limited, has confirmed in writing that the Group will continue to provide such financial support as is necessary to enable Allrig Limited to meet its financial obligations as they fall due for a period of at least 12 months from the date of signing these financial statements.
As a consequence of the above, there remains material uncertainties that may cast significant doubt on the Company's ability to continue as a going concern. The financial statements do not include the adjustments that would result if the Company was unable to continue as a going concern. However, it is the director's intention that financial support from other group companies will be provided if the Company was to have insufficient funds to make payments as they fall due.
ALLRIG LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 12 -
1.3
Revenue
Turnover 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, regardless of when the payment is made. Turnover is measured at the fair value of consideration received or receivable, taking into account contractually defined terms of payment and excluding value added tax.
Turnover is measured based on the consideration to which the Company expects to be entitled in exchange for transferring promised goods or services to a customer, excluding amounts collected on behalf of third parties.
Turnover is recognised when the Company satisfies a performance obligation by transferring a promised good or service to the customer, which is when the customer obtains control of the good or service. A performance obligation may be satisfied at a point in time or over time. The amount of revenue recognised is the amount allocated to the satisfied performance obligation.
The Company repair and service machinery and parts for customers under fixed-price contracts. For these contracts, turnover is recognised over time by reference to the Company's progress towards completing the repair or installation of machinery and parts. The measure of progress is determined based on the proportion of contract costs incurred to date to the estimated total contract costs. Costs incurred that are not related to the contract or that do not contribute towards satisfying a performance obligation are excluded from the measure of progress and instead are expensed as incurred.
For certain contracts where the Company does not have enforceable right to payment, turnover is recognised only when customers have accepted the services and project completion in accordance with the sales contract.
Turnover may be recognised over time following the timing of satisfaction of the PO. If a PO is satisfied over time, turnover is recognised based on the percentage of completion reflecting the progress towards complete satisfaction of that PO.
1.4
Property, plant and equipment
All items of IT equipment are initially recorded at cost. Subsequent to recognition IT equipment is measured at cost less accumulated depreciation and any accumulated impairment losses.
Depreciation is computed on a straight-line basis over the estimated useful lives of the assets as follows:
Computers
3 years
The carrying values of IT equipment are reviewed for impairment when events or changes in circumstances indicate that the carrying value may not be recoverable.
The residual value, useful life and depreciation method are reviewed at each financial year end, and adjusted prospectively, if appropriate.
An item of IT equipment is derecognised upon disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss on de-recognition of the asset is included in profit or loss in the year the asset is derecognised.
1.5
Non-current investments
Interests in subsidiaries, associates and jointly controlled entities are initially measured at cost and subsequently measured at cost less any accumulated impairment losses. The investments are assessed for impairment at each reporting date and any impairment losses or reversals of impairment losses, and any exchange gains/losses are recognised immediately in profit or loss.
ALLRIG LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 13 -
1.6
Impairment of tangible and intangible assets
At each reporting end date, the company reviews the carrying amounts of its tangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.
Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.
1.7
Financial assets
Financial assets are recognised in the company's statement of financial position when the company becomes party to the contractual provisions of the instrument. Financial assets are classified into specified categories, depending on the nature and purpose of the financial assets.
At initial recognition, financial assets classified as fair value through profit and loss are measured at fair value and any transaction costs are recognised in profit or loss. Financial assets not classified as fair value through profit and loss are initially measured at fair value plus transaction costs.
Financial assets at fair value through profit or loss
When any of the above-mentioned conditions for classification of financial assets is not met, a financial asset is classified as measured at fair value through profit or loss. Financial assets measured at fair value through profit or loss are recognized initially at fair value and any transaction costs are recognised in profit or loss when incurred. A gain or loss on a financial asset measured at fair value through profit or loss is recognised in profit or loss, and is included within finance income or finance costs in the statement of income for the reporting period in which it arises.
Financial assets held at amortised cost
Financial instruments are classified as financial assets measured at amortised cost where the objective is to hold these assets in order to collect contractual cash flows, and the contractual cash flows are solely payments of principal and interest. They arise principally from the provision of goods and services to customers (eg trade receivables). They are initially recognised at fair value plus transaction costs directly attributable to their acquisition or issue, and are subsequently carried at amortised cost using the effective interest rate method, less provision for impairment where necessary.
ALLRIG LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 14 -
Financial assets at fair value through other comprehensive income
Debt instruments are classified as financial assets measured at fair value through other comprehensive income where the financial assets are held within the company’s business model whose objective is achieved by both collecting contractual cash flows and selling financial assets, and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
A debt instrument measured at fair value through other comprehensive income is recognised initially at fair value plus transaction costs directly attributable to the asset. After initial recognition, each asset is measured at fair value, with changes in fair value included in other comprehensive income. Accumulated gains or losses recognised through other comprehensive income are directly transferred to profit or loss when the debt instrument is derecognised.
The company has made an irrevocable election to recognize changes in fair value of investments in equity instruments through other comprehensive income, not through profit or loss. A gain or loss from fair value changes will be shown in other comprehensive income and will not be reclassified subsequently to profit or loss. Equity instruments measured at fair value through other comprehensive income are recognized initially at fair value plus transaction cost directly attributable to the asset. After initial recognition, each asset is measured at fair value, with changes in fair value included in other comprehensive income. Accumulated gains or losses recognized through other comprehensive income are directly transferred to retained earnings when the equity instrument is derecognized or its fair value substantially decreased. Dividends are recognized as finance income in profit or loss.
Impairment of financial assets
Financial assets carried at amortised cost and FVOCI are assessed for indicators of impairment at each reporting end date.
The expected credit losses associated with these assets are estimated on a forward-looking basis. A broad range of information is considered when assessing credit risk and measuring expected credit losses, including past events, current conditions, and reasonable and supportable forecasts that affect the expected collectability of the future cash flows of the instrument.
Derecognition of financial assets
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire, or when it transfers the financial asset and substantially all the risks and rewards of ownership to another entity.
1.8
Financial liabilities
The company recognises financial debt when the company becomes a party to the contractual provisions of the instruments. Financial liabilities are classified as either 'financial liabilities at fair value through profit or loss' or 'other financial liabilities'.
Other financial liabilities
Other financial liabilities, including borrowings, trade payables and other short-term monetary liabilities, are initially measured at fair value net of transaction costs directly attributable to the issuance of the financial liability. They are subsequently measured at amortised cost using the effective interest method. For the purposes of each financial liability, interest expense includes initial transaction costs and any premium payable on redemption, as well as any interest or coupon payable while the liability is outstanding.
Derecognition of financial liabilities
Financial liabilities are derecognised when, and only when, the company’s obligations are discharged, cancelled, or they expire.
1.9
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
ALLRIG LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 15 -
Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the income statement because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
Deferred tax
Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit, and is accounted for using the balance sheet liability method. Deferred tax liabilities are generally recognised for all taxable temporary differences and deferred tax assets are recognised to the extent that it is probable that taxable profits will be available against which deductible temporary differences can be utilised. Such assets and liabilities are not recognised if the temporary difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the income statement, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the company has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.
1.10
Provisions
Provisions are recognised when the company has a legal or constructive present obligation as a result of a past event and it is probable that the company will be required to settle that obligation, and a reliable estimate can be made of the amount of the obligation.
The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the reporting end date, taking into account the risks and uncertainties surrounding the obligation. Where a provision is measured using the cash flows estimated to settle the present obligation, its carrying amount is the present value of those cash flows.
When some or all of the economic benefits required to settle a provision are expected to be recovered from a third party, a receivable is recognised as an asset if it is virtually certain that reimbursement will be received and the amount of the receivable can be measured reliably.
1.11
Employee benefits
The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of inventories or non-current assets.
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
1.12
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
ALLRIG LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 16 -
1.13
Foreign exchange
Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation in the period are included in profit or loss.
2
Critical accounting estimates and judgements
Critical judgements
Judgements and key sources of estimation uncertainty
The preparation of the 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 for revenues and expenses during the year. However, the nature of estimation means that actual outcomes could differ from those estimates. The following judgements (apart from those involving estimates) have had the most significant effect on amounts recognised in the financial statements:
3
Turnover
2023
2022
£
£
Revenue analysed by class of business
Revenue from external third parties
1,554,248
282,158
Revenue recognition of long term contract
1,022,985
1,942,188
Revenue from intercompany
-
2,338
2,577,233
2,226,684
4
Exceptional item
2023
2022
£
£
Amounts previously due to intercompany entities now written off
-
1,830,146
-
1,830,146
In the prior year, as part of the acquisition of the group by Allrig Holdco Limited, all balances with the previous Hive Investments Group were forgiven. This represents the exceptional credit recognised in the prior year in relation to this forgiveness.
ALLRIG LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 17 -
5
Operating (loss)/profit
2023
2022
Operating (loss)/profit for the year is stated after charging/(crediting):
£
£
Exchange (gains)/losses
(8,573)
29,601
Auditor's remuneration- audit of Company's financial statements
16,640
17,000
Tax services
1,000
3,600
6
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2023
2022
Number
Number
Sales and administration
4
4
Their aggregate remuneration comprised:
2023
2022
£
£
Wages and salaries
374,999
261,585
Social security costs
42,083
36,832
Pension costs
20,108
11,408
437,190
309,825
7
Director's remuneration
There was no director's remuneration paid during the year (2022: £nil).
8
Finance costs
2023
2022
£
£
Interest on financial liabilities measured at amortised cost:
Interest on bank overdrafts and loans
8,343
7,038
Interest on other loans
786
(12,079)
9,129
(5,041)
During 2020, Allrig Limited received a £50,000 Bounce Back Loan from HSBC Bank UK. Interest on this loan is charged at 2.5%. Repayments of £887 per month over 5 years began in August 2021. The loan interest above relates to the Bounce Back Loan.
ALLRIG LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 18 -
9
Taxation
2023
2022
£
£
Current tax
UK corporation tax on profits for the current period
-
-
Deferred tax
Origination and reversal of temporary differences
Total tax charge
The charge for the year can be reconciled to the (loss)/profit per the income statement as follows:
2023
2022
£
£
(Loss)/profit before taxation
(17,812)
662,423
Expected tax (credit)/charge based on a corporation tax rate of 25.00% (2022: 19.00%)
(4,453)
125,860
Effect of expenses not deductible in determining taxable profit
1,822
176
Income not taxable
(346,191)
Unutilised tax losses carried forward
3,802
Permanent capital allowances in excess of depreciation
(1,171)
Deferred tax asset not recognised
-
291,251
Deferred tax provided at different rate
-
(69,900)
Net capital allowance
-
(1,196)
Taxation charge for the year
-
-
Legislation was enacted on 10 June 2021 under the Finance Act 2021 that increased the UK Corporation Tax rate to 25% from 1 April 2023.
The Company has estimated gross tax losses carried forward of £2,985,654 (2022: £2,970,447), which are available for offset against future profits of the Company. A deferred tax asset has not been recognised in respect of these losses as it is not currently foreseeable that future taxable profits will be available in the next two financial years against which such assets could be utilised.
ALLRIG LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 19 -
10
Property, plant and equipment
Computers
£
Cost
At 1 January 2023
2,972
At 31 December 2023
2,972
Accumulated depreciation and impairment
At 1 January 2023
2,169
Charge for the year
542
At 31 December 2023
2,711
Carrying amount
At 31 December 2023
261
At 31 December 2022
803
11
Investments
Current
Non-current
2023
2022
2023
2022
£
£
£
£
Investments in subsidiaries
-
-
42,538
44,753
Fair value of financial assets carried at amortised cost
The directors consider that the carrying amounts of financial assets carried at amortised cost in the financial statements approximate to their fair values.
Movements in non-current investments
Shares in subsidiaries
£
Valuation
At 1 January 2023
44,753
Exchange rate gain/(loss)
(2,215)
At 31 December 2023
42,538
Carrying amount
At 31 December 2023
42,538
At 31 December 2022
44,753
ALLRIG LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 20 -
12
Subsidiaries
Details of the company's subsidiaries at 31 December 2023 are as follows:
Name of undertaking
Registered office
Class of
% Held
shares held
Direct
Allrig Middle East DMCC
Dubai
Ordinary
100.00
13
Trade and other receivables
2023
2022
£
£
Trade receivables
160,810
164,445
Amounts recoverable on contracts
-
920,846
VAT recoverable
-
380,137
Amounts owed by fellow group undertakings
762,726
80,062
Other receivables
148,259
207,710
Prepayments and accrued income
45,775
25,437
1,117,570
1,778,637
14
Liabilities
Current
Non-current
2023
2022
2023
2022
Notes
£
£
£
£
Borrowings
15
10,648
10,648
15,998
25,860
Trade and other payables
16
2,330,309
2,230,999
2,340,957
2,241,647
15,998
25,860
15
Borrowings
Current
Non-current
2023
2022
2023
2022
£
£
£
£
Borrowings held at amortised cost:
Bank loans
10,648
10,648
15,998
25,860
The repayment amount and timing of each instalment is based on a fixed interest rate of 2.5% payable on the outstanding principal amount of the Loan and applicable until the Final Repayment Date.
ALLRIG LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 21 -
16
Trade and other payables
2023
2022
£
£
Trade payables
53,878
637,520
Amounts owed to fellow group undertakings
2,211,508
1,101,268
Accruals and deferred income
30,997
83,308
Other payables
33,926
408,903
2,330,309
2,230,999
17
Provisions for liabilities
2023
2022
£
£
Loss making provision for the EA1 Contract
-
717,747
Movements on provisions:
Loss making provision for the EA1 Contract
£
At 1 January 2023
717,747
Utilisation of provision
(717,747)
At 31 December 2023
-
18
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
20,108
11,408
The company operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the company in an independently administered fund.
19
Share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
1 issued share capital of £1 each
1
1
1
1
The Company has one ordinary share of £1 nominal value, which has 100% voting rights attached.
ALLRIG LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 22 -
20
Related party transactions
The Company has taken advantage of exemption, under the terms of FRS 101, not to disclose related party transactions with wholly owned subsidiaries within the group.
No further transactions with related parties were undertaken such as are required to be disclosed under the provision of FRS 101.
21
Ultimate controlling party
Allrig Holdco Limited is both the immediate and ultimate parent undertaking. The share capital of Allrig Holdco Limited is 100% owned by Robert McInnes, a director of Allrig Limited. Copies of the Allrig Holdco Limited consolidated financial statements can be obtained from the UK Companies House.
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