REGISTERED NUMBER: |
OCEAN KINETICS LIMITED |
STRATEGIC REPORT, |
REPORT OF THE DIRECTORS AND |
FINANCIAL STATEMENTS |
FOR THE YEAR ENDED 31ST DECEMBER 2023 |
REGISTERED NUMBER: |
OCEAN KINETICS LIMITED |
STRATEGIC REPORT, |
REPORT OF THE DIRECTORS AND |
FINANCIAL STATEMENTS |
FOR THE YEAR ENDED 31ST DECEMBER 2023 |
OCEAN KINETICS LIMITED (REGISTERED NUMBER: SC171923) |
CONTENTS OF THE FINANCIAL STATEMENTS |
FOR THE YEAR ENDED 31ST DECEMBER 2023 |
Page |
Company Information | 1 |
Strategic Report | 2 |
Report of the Directors | 4 |
Report of the Independent Auditors | 6 |
Income Statement | 10 |
Other Comprehensive Income | 11 |
Balance Sheet | 12 |
Statement of Changes in Equity | 13 |
Cash Flow Statement | 14 |
Notes to the Cash Flow Statement | 15 |
Notes to the Financial Statements | 17 |
OCEAN KINETICS LIMITED |
COMPANY INFORMATION |
FOR THE YEAR ENDED 31ST DECEMBER 2023 |
DIRECTORS: |
SECRETARY: |
REGISTERED OFFICE: |
REGISTERED NUMBER: |
AUDITORS: |
Chartered Accountants & Registered Auditors |
505 Great Western Road |
Glasgow |
G12 8HN |
OCEAN KINETICS LIMITED (REGISTERED NUMBER: SC171923) |
STRATEGIC REPORT |
FOR THE YEAR ENDED 31ST DECEMBER 2023 |
The directors present their strategic report for the year ended 31st December 2023. |
REVIEW OF BUSINESS |
As shown in the profit and loss account on page 9 the profit for the year before taxation is £2,496,941 (£1,632,813 in 2022) mainly due to a 37% increase in turnover to £17,252,607 (£12,598,468 in 2022). |
All sectors have experienced growth this year, particularly Marine and Aquaculture sectors where turnover has doubled. Large contracts successfully completed include decommissioning work, salvage works, cathodic protection and pier maintenance. Contracts include fitting out factor ships and works on decommissioning an oil rig. |
The acquisition of Hamnavoe Engineering during the year provides us with a strategic base in Orkney. Our Orkney base has generated new customers as well as put us in a position to better serve existing customers. |
We acquired 25% share capital of MMG Ocean Limited, a company based in Ireland, this year. MMG Ocean is performing well and has already generated several mutually beneficial contracts. |
The company continues to invest in looking for work in alternative markets and to benefit from its ongoing investment in maintaining accreditations and training its employees to the highest standard. |
The company's future work position is encouraging, and the directors are confident of a profitable future. |
PRINCIPAL RISKS AND UNCERTAINTIES |
The principal risks and uncertainties affecting the company include the following: |
Liquidity Risk |
The company manages its liquidity risk by managing cash generated by its operations and having access to adequate working capital borrowing facilities, as required. |
Business Risk |
- | Scottish Independence poses a threat, although it is difficult to quantify. |
- | Much of the existing and new business we are targeting is in England. If Scotland becomes independent it would threaten our ability to bid and win this work. |
- | Fluctuations in salmon prices and also uncertainty in the Oil and Gas market continue to be a threat. |
Financial risks |
- | Lack of local skilled labour and expensive accommodation keeps our labour costs high. |
- | Shortages and delays in getting some materials and increased material costs because of Brexit. |
- | High Inflation and its effect on material and labour costs. |
OCEAN KINETICS LIMITED (REGISTERED NUMBER: SC171923) |
STRATEGIC REPORT |
FOR THE YEAR ENDED 31ST DECEMBER 2023 |
FUTURE DEVELOPMENTS |
The Directors are confident we will continue to win business in oil and gas, marine, renewable, and utility sectors as well as increase our presence in decommissioning projects. Renewable Energy is a growth industry in Shetland, and we are strategically placed to take advantage. The Space industry is developing in the islands, and we are already achieving contracts. |
The company will continue to expand the business by exploring new markets and services both in the UK and abroad and look at the possible future acquisitions of companies as well as organic growth. |
Our continued investment in new equipment, machinery and training will allow us to continue to provide new services at cost effective prices. This will help the drive into new markets and allow us to offer a more complete service. |
ON BEHALF OF THE BOARD: |
OCEAN KINETICS LIMITED (REGISTERED NUMBER: SC171923) |
REPORT OF THE DIRECTORS |
FOR THE YEAR ENDED 31ST DECEMBER 2023 |
The directors present their report with the financial statements of the company for the year ended 31st December 2023. |
PRINCIPAL ACTIVITY |
The principal activity of the company in the year under review was that of the provision of engineering and fabrication services. |
DIVIDENDS |
The total interim dividends for the year ended 31st December, 2023 is £325,000. |
RESEARCH AND DEVELOPMENT |
During the period the company continued to design, develop and implement engineering solutions for the oil and gas industry. |
DIRECTORS |
The directors shown below have held office during the whole of the period from 1st January 2023 to the date of this report. |
Other changes in directors holding office are as follows: |
DONATIONS |
The company made charity donations during the year totalling £25,748. |
STATEMENT OF DIRECTORS' RESPONSIBILITIES |
The directors are responsible for preparing the Strategic Report, the Report of the Directors and the financial statements in accordance with applicable law and regulations. |
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to: |
- | select suitable accounting policies and then apply them consistently; |
- | make judgements and accounting estimates that are reasonable and prudent; |
- | prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business. |
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company's transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. |
OCEAN KINETICS LIMITED (REGISTERED NUMBER: SC171923) |
REPORT OF THE DIRECTORS |
FOR THE YEAR ENDED 31ST DECEMBER 2023 |
STATEMENT AS TO DISCLOSURE OF INFORMATION TO AUDITORS |
So far as the directors are aware, there is no relevant audit information (as defined by Section 418 of the Companies Act 2006) of which the company's auditors are unaware, and each director has taken all the steps that he or she ought to have taken as a director in order to make himself or herself aware of any relevant audit information and to establish that the company's auditors are aware of that information. |
ON BEHALF OF THE BOARD: |
REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF |
OCEAN KINETICS LIMITED |
Opinion |
We have audited the financial statements of Ocean Kinetics Limited (the 'company') for the year ended 31st December 2023 which comprise the Income Statement, Other Comprehensive Income, Balance Sheet, Statement of Changes in Equity, Cash Flow Statement and Notes to the Cash Flow Statement, Notes to the Financial Statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice). |
In our opinion the financial statements: |
- | give a true and fair view of the state of the company's affairs as at 31st December 2023 and of its profit for the year then ended; |
- | have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and |
- | have been prepared in accordance with the requirements of the Companies Act 2006. |
Basis for opinion |
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the 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 UK, including the FRC's Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. |
Conclusions relating to going concern |
In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate. |
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the financial statements 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 directors are responsible for the other information. The other information comprises the information in the Strategic Report and the Report of the Directors, but does not include the financial statements and our Report of the Auditors thereon. |
Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. |
In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether 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 |
In our opinion, based on the work undertaken in the course of the audit: |
- | the information given in the Strategic Report and the Report of the Directors for the financial year for which the financial statements are prepared is consistent with the financial statements; and |
- | the Strategic Report and the Report of the Directors have been prepared in accordance with applicable legal requirements. |
REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF |
OCEAN KINETICS LIMITED |
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 Report of the Directors. |
We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion: |
- | adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or |
- | the financial statements are not in agreement with the accounting records and returns; or |
- | certain disclosures of directors' remuneration specified by law are not made; or |
- | we have not received all the information and explanations we require for our audit. |
- the directors were not entitled to prepare the financial statements in accordance with the small companies regime |
and take advantage of the small companies' exemption from the requirement to prepare a Strategic Report or in |
preparing the Report of the Directors. |
Responsibilities of directors |
As explained more fully in the Statement of Directors' Responsibilities set out on page four, 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 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. |
REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF |
OCEAN KINETICS LIMITED |
Auditors' responsibilities for the audit of the financial statements |
We have been appointed as auditor under section 485 of the Companies Act 2006 and report in accordance with the Acts and relevant regulations made or having effect thereunder. |
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 a Report of the Auditors 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. |
The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below: |
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outline above, to detect material misstatements in respect of irregularities, including fraud. The extent to which these can detect irregularities, including fraud is detailed below. |
To assess the susceptibility of the company's financial statements to material misstatement, including how fraud may occur. |
- We enquired of the directors of the companies policies and procedures to detect fraud as well as whether they have knowledge of any actual, suspected or alleged fraud |
- Reading Board minutes |
- Using analytical procedures to identify any unusual or unexpected transactions |
We communicated identified fraud risks throughout the audit team and remained alert to any indications of fraud within the company. |
As required by auditing standards we perform procedures to address the risk of management override of controls and in particular that the company's management may be in a position to make inappropriate accounting entries and the risk of bias in accounting estimates and judgements such as prepayments, accruals, depreciation and valuation of contracts. |
We did not identify any additional fraud risks. |
In determining the audit procedures, we took into account the results of our evaluation and testing of the operating effectiveness of the company's fraud risk management controls. |
We also performed procedures including: |
- Identifying journal entries to test for all full scope components based on risk criteria and comparing the identified entries to supporting documentation. These included, as relevant, those posted to unusual accounts |
- Assessing significant accounting estimates for bias |
- Reviewing large and unusual transactions outside the ordinary course of the company's business. |
- Identifying undisclosed related parties |
We discussed with management matters related to actual or suspected fraud and considered any implications for our audit. |
We ensured that the audit team collectively had the necessary competence and skills to recognise non-compliance with laws and regulations. |
We identified areas of laws and regulations that could reasonably be expected to have a material effect on the financial statements and through discussion with the directors (as required by auditing standards). |
As the company is regulated our assessment of risks involved gaining an understanding of the control environment including the company's procedures for complying with regulatory requirements. |
We communicated identified laws and regulations throughout our team and remained alert to any indications of non-compliance throughout the audit. |
REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF |
OCEAN KINETICS LIMITED |
The potential effect of these laws and regulations on the financial statement varies considerably. |
Firstly, the entity is subject to very strict laws and regulations that directly affect the financial statements including financial reporting legislation, including the Companies Act 2006, FRS102, UK Corporate tax laws and UK Vat laws. We assessed the extent of the compliance with these laws and regulations by carrying out a review of the financial statement disclosures and a review of correspondence with the tax authorities. |
Secondly the entity is subject to many other laws and regulations including Environmental Waste regulations, the AML regulations, GDPR, Employment law, and Health and Safety, where the consequences of non-compliance could have a material effect on amounts or disclosures in the financial statements. |
Auditing standards limit the required audit procedures to identify non-compliance with these laws and regulations to enquiry of the directors and management and inspection of regulatory and legal correspondence, if any. |
Therefore if a breach of operational regulations is not disclosed to us or evident from the relevant correspondence, an audit will not detect that breach. |
Context of the ability of the audit to detect fraud or breaches of laws and regulations |
Owing to the inherent limitations of an audit, there is an unavoidable risk that we may not have detected some material misstatement in the financial statements, even though we had properly planned and performed our audit in accordance with accounting standards. For example, the further removed non-compliance with laws and regulations from the events and transactions reflected in the financial statements, the less likely the inherently limited procedures required by auditing standard would identify it. |
In addition, with any audit, there remained a higher risk of non-detection of fraud, as these may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal controls. Our audit procedures are designed to detect material misstatement. We are not responsible for preventing non-compliance or fraud and cannot be expected to detect non-compliance with all laws and regulations. |
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 Report of the Auditors. |
Use of our report |
This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in a Report of the Auditors and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members as a body, for our audit work, for this report, or for the opinions we have formed. |
for and on behalf of |
Chartered Accountants & Registered Auditors |
505 Great Western Road |
Glasgow |
G12 8HN |
OCEAN KINETICS LIMITED (REGISTERED NUMBER: SC171923) |
INCOME STATEMENT |
FOR THE YEAR ENDED 31ST DECEMBER 2023 |
31.12.23 | 31.12.22 |
Notes | £ | £ |
TURNOVER | 3 |
Cost of sales |
GROSS PROFIT |
Operating and administrative expenses |
2,565,076 | 1,673,072 |
Other operating income |
OPERATING PROFIT | 6 |
Interest payable and similar expenses | 7 |
PROFIT BEFORE TAXATION |
Tax on profit | 8 |
PROFIT FOR THE FINANCIAL YEAR |
OCEAN KINETICS LIMITED (REGISTERED NUMBER: SC171923) |
OTHER COMPREHENSIVE INCOME |
FOR THE YEAR ENDED 31ST DECEMBER 2023 |
31.12.23 | 31.12.22 |
Notes | £ | £ |
PROFIT FOR THE YEAR |
OTHER COMPREHENSIVE INCOME | - | - |
TOTAL COMPREHENSIVE INCOME FOR THE YEAR |
OCEAN KINETICS LIMITED (REGISTERED NUMBER: SC171923) |
BALANCE SHEET |
31ST DECEMBER 2023 |
31.12.23 | 31.12.22 |
Notes | £ | £ | £ | £ |
FIXED ASSETS |
Intangible assets | 10 |
Tangible assets | 11 |
Investments | 12 |
CURRENT ASSETS |
Stocks | 13 |
Debtors | 14 |
Cash at bank and in hand |
CREDITORS |
Amounts falling due within one year | 15 |
NET CURRENT ASSETS |
TOTAL ASSETS LESS CURRENT LIABILITIES |
CREDITORS |
Amounts falling due after more than one year |
16 |
( |
) |
( |
) |
PROVISIONS FOR LIABILITIES | 21 | ( |
) | ( |
) |
NET ASSETS |
CAPITAL AND RESERVES |
Called up share capital | 22 |
Retained earnings | 23 |
SHAREHOLDERS' FUNDS |
The financial statements were approved by the Board of Directors and authorised for issue on |
OCEAN KINETICS LIMITED (REGISTERED NUMBER: SC171923) |
STATEMENT OF CHANGES IN EQUITY |
FOR THE YEAR ENDED 31ST DECEMBER 2023 |
Called up |
share | Retained | Total |
capital | earnings | equity |
£ | £ | £ |
Balance at 1st January 2022 |
Changes in equity |
Dividends | - | ( |
) | ( |
) |
Total comprehensive income | - |
Balance at 31st December 2022 |
Changes in equity |
Dividends | - | ( |
) | ( |
) |
Total comprehensive income | - |
Balance at 31st December 2023 |
OCEAN KINETICS LIMITED (REGISTERED NUMBER: SC171923) |
CASH FLOW STATEMENT |
FOR THE YEAR ENDED 31ST DECEMBER 2023 |
31.12.23 | 31.12.22 |
Notes | £ | £ |
Cash flows from operating activities |
Cash generated from operations | 1 |
Interest paid | ( |
) | ( |
) |
Interest element of hire purchase payments paid |
( |
) |
( |
) |
Tax paid | ( |
) |
Net cash from operating activities |
Cash flows from investing activities |
Purchase of intangible fixed assets | ( |
) |
Purchase of tangible fixed assets | ( |
) | ( |
) |
Purchase of fixed asset investments | (218,065 | ) | (300 | ) |
Sale of tangible fixed assets |
Net cash from investing activities | ( |
) | ( |
) |
Cash flows from financing activities |
New loans in year |
Loan repayments in year | ( |
) | ( |
) |
New HP loans in year | 637,069 | 29,977 |
HP capital repayments in year | ( |
) | ( |
) |
Amount introduced by directors | 80,317 | 721,268 |
Amount withdrawn by directors | (173,542 | ) | (202,478 | ) |
Equity dividends paid | ( |
) | ( |
) |
Government grants |
Net cash from financing activities | ( |
) | ( |
) |
Increase/(decrease) in cash and cash equivalents | ( |
) |
Cash and cash equivalents at beginning of year |
2 |
(247,533 |
) |
131,973 |
Cash and cash equivalents at end of year | 2 | 193,898 | ( |
) |
OCEAN KINETICS LIMITED (REGISTERED NUMBER: SC171923) |
NOTES TO THE CASH FLOW STATEMENT |
FOR THE YEAR ENDED 31ST DECEMBER 2023 |
1. | RECONCILIATION OF PROFIT BEFORE TAXATION TO CASH GENERATED FROM OPERATIONS |
31.12.23 | 31.12.22 |
£ | £ |
Profit before taxation |
Depreciation charges |
(Profit)/loss on disposal of fixed assets | ( |
) |
Government grants | ( |
) | ( |
) |
Finance costs | 138,136 | 93,636 |
3,175,167 | 2,184,728 |
Decrease/(increase) in stocks | ( |
) |
Increase in trade and other debtors | ( |
) | ( |
) |
Increase/(decrease) in trade and other creditors | ( |
) |
Cash generated from operations |
2. | CASH AND CASH EQUIVALENTS |
The amounts disclosed on the Cash Flow Statement in respect of cash and cash equivalents are in respect of these Balance Sheet amounts: |
Year ended 31st December 2023 |
31.12.23 | 1.1.23 |
£ | £ |
Cash and cash equivalents | 193,898 | 13,464 |
Bank overdrafts | ( |
) |
193,898 | (247,533 | ) |
Year ended 31st December 2022 |
31.12.22 | 1.1.22 |
£ | £ |
Cash and cash equivalents | 13,464 | 131,973 |
Bank overdrafts | ( |
) |
(247,533 | ) | 131,973 |
OCEAN KINETICS LIMITED (REGISTERED NUMBER: SC171923) |
NOTES TO THE CASH FLOW STATEMENT |
FOR THE YEAR ENDED 31ST DECEMBER 2023 |
3. | ANALYSIS OF CHANGES IN NET DEBT |
At 1.1.23 | Cash flow | At 31.12.23 |
£ | £ | £ |
Net cash |
Cash at bank and in hand | 13,464 | 180,434 | 193,898 |
Bank overdrafts | (260,997 | ) | 260,997 | - |
(247,533 | ) | 193,898 |
Debt |
Finance leases | (175,859 | ) | (415,257 | ) | (591,116 | ) |
Debts falling due within 1 year | (298,372 | ) | (8,816 | ) | (307,188 | ) |
Debts falling due after 1 year | (1,520,877 | ) | 307,227 | (1,213,650 | ) |
(1,995,108 | ) | (116,846 | ) | (2,111,954 | ) |
Total | (2,242,641 | ) | 324,585 | (1,918,056 | ) |
OCEAN KINETICS LIMITED (REGISTERED NUMBER: SC171923) |
NOTES TO THE FINANCIAL STATEMENTS |
FOR THE YEAR ENDED 31ST DECEMBER 2023 |
1. | STATUTORY INFORMATION |
Ocean Kinetics Limited is a |
The presentation currency of the financial statements is the Pound Sterling (£). |
2. | ACCOUNTING POLICIES |
Basis of preparing the financial statements |
Going Concern Basis |
The financial statements have been prepared on the going concern basis. The directors believe that the company has adequate resources and support to continue to operate for the foreseeable future. |
Turnover |
The turnover shown in the profit and loss account represents the sales value of work done during the year, exclusive of Value Added Tax. |
Goodwill |
Goodwill arising on the acquisition of businesses, representing any excess of the fair value of the consideration given over the fair value of the identifiable assets and liabilities acquired, is capitalised and written off on a straight line basis over its useful economic life of 5 years. |
Intangible assets |
Intangible assets are initially measured at cost. After initial recognition, intangible assets are measured at cost less any accumulated amortisation and any accumulated impairment losses. |
Tangible fixed assets |
Freehold Property | - | 2% straight line |
Leasehold Property | - | 2% straight line |
Boats | - | 8-25% straight line |
Plant & Machinery | - | 15-33% straight line |
Motor Vehicles | - | 20% straight line |
Investments in associates |
Investments in associate undertakings are recognised at cost. |
Stocks and work in progress |
Stocks are valued at the lower of cost and net realisable value, after making due allowance for obsolete and slow moving items. |
Where the final outcome of a contract cannot be assessed with reasonable certainty the work in progress is valued at the lower of cost and net realisable value. |
Cost includes all direct expenditure and an appropriate proportion of fixed and variable overheads. |
Financial instruments |
Financial instruments are classified and accounted for, according to the substance of the contractual arrangement, as either financial assets, financial liabilities or equity instruments. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities. |
OCEAN KINETICS LIMITED (REGISTERED NUMBER: SC171923) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 31ST DECEMBER 2023 |
2. | ACCOUNTING POLICIES - continued |
Taxation |
Taxation for the year comprises current and deferred tax. Tax is recognised in the Income Statement, except to the extent that it relates to items recognised in other comprehensive income or directly in equity. |
Current or deferred taxation assets and liabilities are not discounted. |
Current tax is recognised at the amount of tax payable using the tax rates and laws that have been enacted or substantively enacted by the balance sheet date. |
Deferred tax |
Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the balance sheet date. |
Timing differences arise from the inclusion of income and expenses in tax assessments in periods different from those in which they are recognised in financial statements. Deferred tax is measured using tax rates and laws that have been enacted or substantively enacted by the year end and that are expected to apply to the reversal of the timing difference. |
Unrelieved tax losses and other deferred tax assets are recognised only to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. |
Research and development |
Expenditure on research and development is included within the profit and loss account in the year in which it is incurred. |
Hire purchase and leasing commitments |
Rentals paid under operating leases are charged to profit or loss on a straight line basis over the period of the lease. |
Assets held under hire purchase agreements are capitalised and disclosed under tangible fixed assets at their fair value. The capital elements of the future payments are treated as a liability and the interest is charged to the profit and loss account on a straight line basis. |
Pension costs and other post-retirement benefits |
The company operates a defined contribution pension scheme. Contributions payable to the company's pension scheme are charged to profit or loss in the period to which they relate. |
Deferred government grants |
Deferred government grants in respect of capital expenditure are treated as deferred income and are credited to the profit and loss account over the estimated useful life of the assets to which they relate. |
Long term contracts |
The company classifies as long term those contracts where the contract activity extends over more than one accounting period. |
The amount recognised as turnover represents the value of work carried out during the year. Where the outcome of a contract can be assessed with reasonable certainty attributable profit is recognised in proportion to the amount of turnover recognised in the financial statements. Full provision is made for any foreseeable losses and these are included in accruals under creditors due within one year. |
Where the amount recognised as turnover exceeds the payments on account received and receivable in respect of that contract, the balance is included in debtors as amounts recoverable on contracts. Retentions and payments on account receivable are included in debtors. Payments on account received in excess of the value of work done are included in creditors. |
OCEAN KINETICS LIMITED (REGISTERED NUMBER: SC171923) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 31ST DECEMBER 2023 |
2. | ACCOUNTING POLICIES - continued |
Exceptional item |
The company defines exceptional items as material items which derive from events or transactions that fall within the ordinary activities of the company and which individually, or, if of a similar type, in aggregate, need to be disclosed by virtue of their size or incidence if the financial statements are to give a true and fair view. |
3. | TURNOVER |
The turnover and profit before taxation are attributable to the one principal activity of the company. |
An analysis of turnover by geographical market is given below: |
31.12.23 | 31.12.22 |
£ | £ |
United Kingdom |
Europe |
United States of America |
4. | EMPLOYEES AND DIRECTORS |
31.12.23 | 31.12.22 |
£ | £ |
Wages and salaries |
Social security costs |
Other pension costs |
The average number of employees during the year was as follows: |
31.12.23 | 31.12.22 |
Production | 66 | 62 |
Admin and management | 14 | 12 |
5. | DIRECTORS' EMOLUMENTS |
31.12.23 | 31.12.22 |
£ | £ |
Directors' remuneration |
Directors' pension contributions to money purchase schemes |
The number of directors to whom retirement benefits were accruing was as follows: |
Money purchase schemes |
OCEAN KINETICS LIMITED (REGISTERED NUMBER: SC171923) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 31ST DECEMBER 2023 |
6. | OPERATING PROFIT |
The operating profit is stated after charging/(crediting): |
31.12.23 | 31.12.22 |
£ | £ |
Hire of equipment |
Other operating leases |
Depreciation - owned assets |
(Profit)/loss on disposal of fixed assets | ( |
) |
Goodwill amortisation |
Auditors' remuneration |
Foreign exchange differences | ( |
) |
Amortisation of government grants re fixed assets | ( |
) | ( |
) |
7. | INTEREST PAYABLE AND SIMILAR EXPENSES |
31.12.23 | 31.12.22 |
£ | £ |
Bank overdraft interest |
Bank loan interest |
Interest on overdue tax, etc |
Hire purchase interest |
8. | TAXATION |
Analysis of the tax charge |
The tax charge on the profit for the year was as follows: |
31.12.23 | 31.12.22 |
£ | £ |
Current tax: |
UK corporation tax | ( |
) |
(Over)/under provision prior year | (19,201 | ) | (14 | ) |
Total current tax | ( |
) | ( |
) |
Deferred tax |
Tax on profit |
OCEAN KINETICS LIMITED (REGISTERED NUMBER: SC171923) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 31ST DECEMBER 2023 |
8. | TAXATION - continued |
Reconciliation of total tax charge included in profit and loss |
The tax assessed for the year is lower than the standard rate of corporation tax in the UK. The difference is explained below: |
31.12.23 | 31.12.22 |
£ | £ |
Profit before tax |
Profit multiplied by the standard rate of corporation tax in the UK of (2022 - |
Effects of: |
Expenses not deductible for tax purposes |
Capital allowances in excess of depreciation | ( |
) | ( |
) |
Utilisation of tax losses | ( |
) | ( |
) |
Adjustments to tax charge in respect of previous periods | ( |
) | ( |
) |
Research and development enhancement | (247,636 | ) | (245,372 | ) |
Research and development expenditure credit | 6,931 | 4,504 |
Refund for R&D tax credits | (21,084 | ) | (19,201 | ) |
Deferred tax movement | 450,803 | 46,130 |
Total tax charge | 410,518 | 46,116 |
The company has trading losses available to carry forward of approximately £994,000 (2022: £1,655,000). These losses have been included in the deferred tax calculation. |
OCEAN KINETICS LIMITED (REGISTERED NUMBER: SC171923) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 31ST DECEMBER 2023 |
9. | DIVIDENDS |
31.12.23 | 31.12.22 |
£ | £ |
A Ordinary shares of £1 each |
Dividends paid on ordinary |
shares |
B Ordinary shares of £1 each |
Dividends paid on ordinary |
shares |
C Ordinary shares of £1 each |
Dividends paid on ordinary |
shares |
D Ordinary shares of £1 each |
Dividends paid on ordinary |
shares |
E Ordinary shares of £1 each |
Dividends paid on ordinary |
shares | - | 10,000 |
F Ordinary shares of £1 each |
Dividends paid on ordinary |
shares | 20,000 | 51,000 |
G Ordinary shares of £1 each |
Dividends paid on ordinary |
shares | 30,000 | 22,000 |
H Ordinary shares of £1 each |
Dividends paid on ordinary |
shares | 30,000 | 22,000 |
I Ordinary shares of £1 each |
Dividends paid on ordinary |
shares | 30,000 | 22,000 |
J Ordinary shares of £1 each |
Dividends paid on ordinary |
shares | 30,000 | 22,000 |
K Ordinary shares of £1 each |
Dividends paid on ordinary |
shares | 30,000 | 22,000 |
L Ordinary shares of £1 each |
Dividends paid on ordinary |
shares | 30,000 | 22,000 |
M Ordinary shares of £1 each |
Dividends paid on ordinary |
shares | 30,000 | 22,000 |
OCEAN KINETICS LIMITED (REGISTERED NUMBER: SC171923) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 31ST DECEMBER 2023 |
10. | INTANGIBLE FIXED ASSETS |
Goodwill |
£ |
COST |
Additions |
At 31st December 2023 |
AMORTISATION |
Amortisation for year |
At 31st December 2023 |
NET BOOK VALUE |
At 31st December 2023 |
11. | TANGIBLE FIXED ASSETS |
Freehold | Short | Long | Plant and |
property | leasehold | leasehold | machinery | Totals |
£ | £ | £ | £ | £ |
COST |
At 1st January 2023 |
Additions |
Disposals | ( |
) | ( |
) |
At 31st December 2023 |
DEPRECIATION |
At 1st January 2023 |
Charge for year |
Eliminated on disposal | ( |
) | ( |
) |
At 31st December 2023 |
NET BOOK VALUE |
At 31st December 2023 |
At 31st December 2022 |
Hire purchase agreements |
Included within the net book value of £7,533,536 is £1,216,271 (2022: £603,576) relating to assets held under hire purchase agreements. The depreciation charged to the financial statements in the year in respect of such assets amounted to £100,806 (2022: £54,196). |
OCEAN KINETICS LIMITED (REGISTERED NUMBER: SC171923) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 31ST DECEMBER 2023 |
12. | FIXED ASSET INVESTMENTS |
Interest |
in |
associate |
£ |
COST |
At 1st January 2023 | 300 |
Additions |
At 31st December 2023 |
NET BOOK VALUE |
At 31st December 2023 |
At 31st December 2022 |
13. | STOCKS |
31.12.23 | 31.12.22 |
£ | £ |
Raw materials |
Work-in-progress |
14. | DEBTORS |
31.12.23 | 31.12.22 |
£ | £ |
Amounts falling due within one year: |
Trade debtors |
Retention receivable | 45,655 | 38,948 |
Amounts recoverable on contracts |
Other debtors |
Corporation tax recoverable |
Prepayments and accrued income |
Amounts falling due after more than one year: |
Retentions receivable | 48,650 | 19,183 |
Aggregate amounts |
Other debtors includes tax payable under CTA 2010 s455 of £63,115 (2022: £63,115) which will be recoverable when the amount owed by J Henderson is repaid. |
OCEAN KINETICS LIMITED (REGISTERED NUMBER: SC171923) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 31ST DECEMBER 2023 |
15. | CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR |
31.12.23 | 31.12.22 |
£ | £ |
Bank loans and overdrafts (see note 17) |
Other loans (see note 17) |
Hire purchase contracts (see note 18) |
Payments on account |
Trade creditors |
PAYE & NIC |
VAT | 591,003 | 195,621 |
Other creditors |
Directors' current accounts | 231,364 | 324,589 |
Accruals and deferred income |
Deferred government grants |
16. | CREDITORS: AMOUNTS FALLING DUE AFTER MORE THAN ONE YEAR |
31.12.23 | 31.12.22 |
£ | £ |
Bank loans (see note 17) |
Other loans (see note 17) |
Hire purchase contracts (see note 18) |
Deferred government grants |
17. | LOANS |
An analysis of the maturity of loans is given below: |
31.12.23 | 31.12.22 |
£ | £ |
Amounts falling due within one year or on demand: |
Bank overdrafts |
Bank loans |
Other loans |
Amounts falling due between two and five years: |
Bank loans - 2-5 years |
Other loans - 2-5 years |
Amounts falling due in more than five years: |
Repayable by instalments |
Bank loans over 5 years | 239,065 | 357,592 |
OCEAN KINETICS LIMITED (REGISTERED NUMBER: SC171923) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 31ST DECEMBER 2023 |
18. | LEASING AGREEMENTS |
Minimum lease payments fall due as follows: |
Hire purchase contracts |
31.12.23 | 31.12.22 |
£ | £ |
Net obligations repayable: |
Within one year |
Between one and five years |
Non-cancellable operating | leases |
31.12.23 | 31.12.22 |
£ | £ |
Within one year |
Between one and five years |
In more than five years |
19. | SECURED DEBTS |
The following secured debts are included within creditors: |
31.12.23 | 31.12.22 |
£ | £ |
Bank overdraft |
Bank loans |
Other loans |
Securities held over the company's assets are as follows: |
1. Bond and floating charge over the company assets. |
2. Standard security over lease of land and buildings at Port Business Park, Gremista, Lerwick, Shetland. |
3. Standard security over lease of land and buildings at Stronachs building at Port Business Park, Gremista, Lerwick, Shetland. |
4. Negative pledge over the lease of Unit 4, Commerce Centre, Aberdeen. |
OCEAN KINETICS LIMITED (REGISTERED NUMBER: SC171923) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 31ST DECEMBER 2023 |
20. | DEFERRED GOVERNMENT GRANTS |
Included in creditors falling due after more than one year are deferred government grants as follows: |
31.12.23 | 31.12.22 |
£ | £ |
Received and receivable: |
At 1st January 2023 | 1,260,228 | 1,169,030 |
Receivable during year | 131,354 | 91,198 |
At 31st December 2023 | 1,391,582 | 1,260,228 |
Amortisation: |
At 1st January 2023 | 312,801 | 241.450 |
Credit to profit and loss account |
83,496 |
71.351 |
At 31st December 2023 | 396,297 | 312,801 |
At 31st December 2023 | 995,285 | 947,427 |
21. | PROVISIONS FOR LIABILITIES |
31.12.23 | 31.12.22 |
£ | £ |
Deferred tax: FA allowances | 666,915 | 216,112 |
Deferred |
tax |
£ |
Balance at 1st January 2023 |
Movement in period | 450,803 |
Balance at 31st December 2023 |
22. | CALLED UP SHARE CAPITAL |
Allotted, issued and fully paid: |
Number: | Class: | Nominal | 31.12.23 | 31.12.22 |
value: | £ | £ |
A Ordinary | £1 | 7,000 | 7,000 |
B Ordinary | £1 | 1,500 | 1,500 |
C Ordinary | £1 | 200 | 200 |
D Ordinary | £1 | 200 | 200 |
200 | E Ordinary | £1 | 200 | 200 |
200 | F Ordinary | £1 | 200 | 200 |
100 | G Ordinary | £1 | 100 | 100 |
100 | H Ordinary | £1 | 100 | 100 |
100 | I Ordinary | £1 | 100 | 100 |
100 | J Ordinary | £1 | 100 | 100 |
100 | K Ordinary | £1 | 100 | 100 |
100 | L Ordinary | £1 | 100 | 100 |
100 | M Ordinary | £1 | 100 | 100 |
10,000 | 10,000 |
OCEAN KINETICS LIMITED (REGISTERED NUMBER: SC171923) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 31ST DECEMBER 2023 |
23. | RESERVES |
Retained |
earnings |
£ |
At 1st January 2023 |
Profit for the year |
Dividends | ( |
) |
At 31st December 2023 |
Dividends proposed after the period end not recognised as a liability amounted to £376,000 (2022: £159,000) |
24. | PENSION COMMITMENTS |
The company operates a defined contribution pension scheme for its employees. The assets of the schemes are held separately from those of the company in independently administered funds. The pension cost charge represents contributions payable by the company to the funds and amounted to £230,198 (2022: £148,403). The unpaid contributions outstanding at the year end included in creditors are £nil (2022: £12,915). |
25. | CONTINGENT LIABILITIES |
There is a contingent liability to repay some of the grants the company received should any of the conditions be breached in the next 2 years. |
26. | OTHER FINANCIAL COMMITMENTS |
As part of its normal trading, the company had outstanding performance bonds at 31st December 2023 and 31st December 2022. |
27. | RELATED PARTY DISCLOSURES |
J Henderson |
Director and shareholder |
During the year the company rented land and property of which the director was a beneficial owner. The rent paid during the period was £32,229 (2022 - £30,200). |
28. | ULTIMATE CONTROLLING PARTY |
The controlling party is J Henderson. |