Company registration number SC420928
REACTIVE DOWNHOLE TOOLS LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2024
REACTIVE DOWNHOLE TOOLS LIMITED
COMPANY INFORMATION
Directors
J Webster
N Atkins
Company number
SC420928
Registered office
Claymore Avenue
Bridge of Don
Aberdeen
United Kingdom
AB23 8GW
Auditor
Azets Audit Services
37 Albyn Place
Aberdeen
United Kingdom
AB10 1JB
REACTIVE DOWNHOLE TOOLS LIMITED
CONTENTS
Page
Strategic report
1 - 2
Directors' report
3
Directors' responsibilities statement
4
Independent auditor's report
5 - 7
Group statement of comprehensive income
8
Group balance sheet
9
Company balance sheet
10
Group statement of changes in equity
11
Company statement of changes in equity
12
Group statement of cash flows
13
Notes to the financial statements
14 - 34
REACTIVE DOWNHOLE TOOLS LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 30 SEPTEMBER 2024
- 1 -
The directors present the strategic report for the year ended 30 September 2024.
Review of the business
The principal activity of the company and group continued to be that of the manufacture and sale of downhole tools and equipment.
Our strategy is to concentrate on providing excellent customer service in the markets in which we operate and focus on research and development expenditure to improve existing products and develop others. We continue to seek opportunities to grow the business and believe that we are well placed to deliver consistent long-term growth for the group.
The group's loss after tax for the year ended 30 September 2024 was $581,735 (2023: $503,922).
Principal risks and uncertainties
Competition
The group has a number of large customers with which it maintains very good working relationships. There are regular project management meetings which ensure all matters are addressed timeously and customer satisfaction is maintained.
Employees
The group emphasises accountability and responsibility and encourages an entrepreneurial approach to running operations. The group constantly reviews its remuneration packages to make sure they remain competitive and also maintains development and succession planning programmes.
Suppliers
The group has a widespread supplier database due to its operations in multiple areas throughout the United Kingdom and overseas.
Regulation
The group is committed to maintaining a safe working environment and a culture of zero tolerance to accidents. The group has in place quality and safety processes which are regularly audited by professional bodies and customers.
Financial Instruments
The directors consider there to be an appropriate structure in place to plan for and mitigate risks. The main risks being:
Liquidity risk
The group manages its cash requirements in order to maximise interest income and minimise interest expense, whilst ensuring the group has sufficient liquid resources to meet the operating needs of the business.
Currency risk
The group’s principal foreign currency exposures arise from trading with overseas companies. Group policy permits but does not demand that these exposures may be hedged in order to fix the cost in sterling.
Credit risk
Investments of cash surpluses are made through banks and companies which must fulfil credit rating criteria approved by the Board.
REACTIVE DOWNHOLE TOOLS LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2024
- 2 -
Financial Instruments (Continued)
All customers who wish to trade on credit terms are subject to credit verification procedures. Trade debtors are monitored on an ongoing basis and provision is made for doubtful debts where necessary.
The group's financial instruments comprise cash at bank, trade debtors and trade creditors that arise directly from its operations. The main purpose of these financial instruments is to manage currency risks arising from the group's activities.
Apart from the above the directors are not aware of any major risks or uncertainties facing the group with the group balance sheet continuing to be strong.
Key performance indicators
The management of the group uses a range of financial and non-financial metrics and regards the following to be key performance indicators that are used in order to monitor the group's progress: revenue growth, operating profit and margin, net assets and cash flow as detailed in the attached accounts.
These are monitored closely using monthly management accounts and regular cash and bank review meetings with planned cash flows being used to ensure adequate funds are available.
2024
2023
$
$
Turnover
13,222,170
13,017,457
Operating loss
(444,671)
(69,527)
Operating loss
(3.3%)
(0.5%)
Net assets
1,213,429
1,612,626
Cash position
240,368
386,853
N Atkins
Director
11 June 2025
REACTIVE DOWNHOLE TOOLS LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 30 SEPTEMBER 2024
- 3 -
The directors present their annual report and financial statements for the year ended 30 September 2024.
Results and dividends
The results for the year are set out on page 8.
No ordinary dividends were paid. The directors do not recommend payment of a dividend.
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
J Webster
N Atkins
Future developments
The directors do not foresee any changes in the group's activities in the immediate future.
Auditor
The auditor, Azets Audit Services, is deemed to be reappointed under section 487(2) of the Companies Act 2006.
Disclosure of information in the strategic report
The truegroup has chosen in accordance with Companies Act 2006, s. 414C(11) to set out in the group's strategic report information required by Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008, Sch. 7 to be contained in the directors' report. It has done so in respect of group results, activities, objectives, policies and risks.
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 auditor of the company 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 auditor of the company is aware of that information.
On behalf of the board
N Atkins
Director
11 June 2025
REACTIVE DOWNHOLE TOOLS LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 30 SEPTEMBER 2024
- 4 -
The directors are responsible for preparing the Annual Report and the financial statements in accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with 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 group and company, and of the profit or loss of the group 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;
state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements;
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the group and company will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the group’s and company’s transactions and disclose with reasonable accuracy at any time the financial position of the group and 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 group and company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
REACTIVE DOWNHOLE TOOLS LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF REACTIVE DOWNHOLE TOOLS LIMITED
- 5 -
Opinion
We have audited the financial statements of Reactive Downhole Tools Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 30 September 2024 which comprise the group statement of comprehensive income, the group balance sheet, the company balance sheet, the group statement of changes in equity, the company statement of changes in equity, the group statement of cash flows 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 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 group's and the parent company's affairs as at 30 September 2024 and of the group's 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 group and parent 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 group's and parent 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.
The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of our audit:
the information given in the strategic report and the directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the strategic report and the directors' report have been prepared in accordance with applicable legal requirements.
REACTIVE DOWNHOLE TOOLS LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF REACTIVE DOWNHOLE TOOLS LIMITED
- 6 -
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the group and the parent company and their environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors' report.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:
adequate accounting records have not been kept by the parent company, or returns adequate for our audit have not been received from branches not visited by us; or
the parent company financial statements are not in agreement with the accounting records and returns; or
certain disclosures of directors' remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.
Responsibilities of directors
As explained more fully in the directors' responsibilities statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the parent 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 parent company or to cease operations, or have 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.
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.
REACTIVE DOWNHOLE TOOLS LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF REACTIVE DOWNHOLE TOOLS LIMITED
- 7 -
Extent to which the audit was considered capable of detecting irregularities, including fraud
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above and on the Financial Reporting Council’s website, to detect material misstatements in respect of irregularities, including fraud.
We obtain and update our understanding of the entity, its activities, its control environment, and likely future developments, including in relation to the legal and regulatory framework applicable and how the entity is complying with that framework. Based on this understanding, we identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. This includes consideration of the risk of acts by the entity that were contrary to applicable laws and regulations, including fraud.
In response to the risk of irregularities and non-compliance with laws and regulations, including fraud, we designed procedures which included:
Enquiry of management and those charged with governance around actual and potential litigation and claims as well as actual, suspected and alleged fraud;
Assessing the extent of compliance with the laws and regulations considered to have a direct material effect on the financial statements or the operations of the entity through enquiry and inspection;
Reviewing financial statement disclosures and testing to supporting documentation to assess compliance with applicable laws and regulations;
Performing audit work over the risk of management bias and override of controls, including testing of journal entries and other adjustments for appropriateness, evaluating the business rationale of significant transactions outside the normal course of business and reviewing accounting estimates for indicators of potential bias.
Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
This report is made solely to the company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company’s members those matters we are required to state to them in an 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 members as a body, for our audit work, for this report, or for the opinions we have formed.
Angus Cowie (Senior Statutory Auditor)
For and on behalf of Azets Audit Services
11 June 2025
Chartered Accountants
Statutory Auditor
37 Albyn Place
Aberdeen
United Kingdom
AB10 1JB
REACTIVE DOWNHOLE TOOLS LIMITED
GROUP STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 SEPTEMBER 2024
- 8 -
2024
2023
Notes
$
$
Turnover
3
13,222,170
13,017,457
Cost of sales
(6,965,321)
(6,777,391)
Gross profit
6,256,849
6,240,066
Administrative expenses
(6,711,102)
(6,313,431)
Other operating income
9,582
3,838
Operating loss
4
(444,671)
(69,527)
Interest receivable and similar income
7
13
7
Interest payable and similar expenses
8
(1,779)
(13,101)
Loss before taxation
(446,437)
(82,621)
Tax on loss
9
(135,298)
(421,301)
Loss for the financial year
(581,735)
(503,922)
Other comprehensive income
Currency translation gain taken to retained earnings
182,538
180,751
Total comprehensive income for the year
(399,197)
(323,171)
Loss for the financial year is attributable to:
- Owners of the parent company
(157,260)
442,948
- Non-controlling interests
(424,475)
(946,870)
(581,735)
(503,922)
Total comprehensive income for the year is attributable to:
- Owners of the parent company
25,278
623,699
- Non-controlling interests
(424,475)
(946,870)
(399,197)
(323,171)
REACTIVE DOWNHOLE TOOLS LIMITED
GROUP BALANCE SHEET
AS AT
30 SEPTEMBER 2024
30 September 2024
- 9 -
2024
2023
Notes
$
$
$
$
Fixed assets
Intangible assets
10
1,932
2,773
Tangible assets
11
4,356,752
3,775,749
4,358,684
3,778,522
Current assets
Stocks
14
1,531,827
1,512,017
Debtors
16
3,024,522
4,466,087
Cash at bank and in hand
240,368
386,853
4,796,717
6,364,957
Creditors: amounts falling due within one year
17
(7,530,925)
(8,162,368)
Net current liabilities
(2,734,208)
(1,797,411)
Total assets less current liabilities
1,624,476
1,981,111
Creditors: amounts falling due after more than one year
18
(302,293)
(254,945)
Provisions for liabilities
Deferred tax liability
20
108,754
113,540
(108,754)
(113,540)
Net assets
1,213,429
1,612,626
Capital and reserves
Called up share capital
22
270
270
Profit and loss reserves
3,661,181
3,635,903
Equity attributable to owners of the parent company
3,661,451
3,636,173
Non-controlling interests
(2,448,022)
(2,023,547)
1,213,429
1,612,626
The financial statements were approved by the board of directors and authorised for issue on 11 June 2025 and are signed on its behalf by:
11 June 2025
N Atkins
Director
Company registration number SC420928
REACTIVE DOWNHOLE TOOLS LIMITED
COMPANY BALANCE SHEET
AS AT 30 SEPTEMBER 2024
30 September 2024
- 10 -
2024
2023
Notes
$
$
$
$
Fixed assets
Intangible assets
10
1,932
2,773
Tangible assets
11
12,186
5,740
Investments
12
29,266
29,266
43,384
37,779
Current assets
Debtors
16
8,672,930
7,547,155
Cash at bank and in hand
39,657
84,090
8,712,587
7,631,245
Creditors: amounts falling due within one year
17
(6,754,358)
(5,337,537)
Net current assets
1,958,229
2,293,708
Net assets
2,001,613
2,331,487
Capital and reserves
Called up share capital
22
270
270
Profit and loss reserves
2,001,343
2,331,217
Total equity
2,001,613
2,331,487
As permitted by s408 Companies Act 2006, the company has not presented its own profit and loss account and related notes. The company’s loss for the year was $518,903 (2023 - $453,710 loss).
The financial statements were approved by the board of directors and authorised for issue on 11 June 2025 and are signed on its behalf by:
11 June 2025
N Atkins
Director
Company registration number SC420928
REACTIVE DOWNHOLE TOOLS LIMITED
GROUP STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 SEPTEMBER 2024
- 11 -
Share capital
Profit and loss reserves
Total controlling interest
Non-controlling interest
Total
$
$
$
$
$
Balance at 1 October 2022
270
3,012,204
3,012,474
(1,076,677)
1,935,797
Year ended 30 September 2023:
Loss for the year
-
442,948
442,948
(946,870)
(503,922)
Other comprehensive income:
Currency translation differences
-
180,751
180,751
-
180,751
Total comprehensive income
-
623,699
623,699
(946,870)
(323,171)
Balance at 30 September 2023
270
3,635,903
3,636,173
(2,023,547)
1,612,626
Year ended 30 September 2024:
Loss for the year
-
(157,260)
(157,260)
(424,475)
(581,735)
Other comprehensive income:
Currency translation differences
-
182,538
182,538
-
182,538
Total comprehensive income
-
25,278
25,278
(424,475)
(399,197)
Balance at 30 September 2024
270
3,661,181
3,661,451
(2,448,022)
1,213,429
REACTIVE DOWNHOLE TOOLS LIMITED
COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 SEPTEMBER 2024
- 12 -
Share capital
Profit and loss reserves
Total
$
$
$
Balance at 1 October 2022
270
2,493,016
2,493,286
Year ended 30 September 2023:
Loss for the year
-
(453,710)
(453,710)
Other comprehensive income:
Currency translation differences
-
291,911
291,911
Total comprehensive income
-
(161,799)
(161,799)
Balance at 30 September 2023
270
2,331,217
2,331,487
Year ended 30 September 2024:
Loss for the year
-
(518,903)
(518,903)
Other comprehensive income:
Currency translation differences
-
189,029
189,029
Total comprehensive income
-
(329,874)
(329,874)
Balance at 30 September 2024
270
2,001,343
2,001,613
REACTIVE DOWNHOLE TOOLS LIMITED
GROUP STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 SEPTEMBER 2024
- 13 -
2024
2023
Notes
$
$
$
$
Cash flows from operating activities
Cash generated from operations
27
1,337,473
537,140
Interest paid
(1,779)
(13,101)
Income taxes paid
(661,796)
(31,840)
Net cash inflow from operating activities
673,898
492,199
Investing activities
Purchase of tangible fixed assets
(1,116,864)
(356,072)
Proceeds from disposal of tangible fixed assets
131,480
-
Interest received
13
7
Net cash used in investing activities
(985,371)
(356,065)
Financing activities
Payment of finance leases obligations
(16,684)
(62,323)
Net cash used in financing activities
(16,684)
(62,323)
Net (decrease)/increase in cash and cash equivalents
(328,157)
73,811
Cash and cash equivalents at beginning of year
386,853
120,535
Effect of foreign exchange rates
181,672
192,507
Cash and cash equivalents at end of year
240,368
386,853
REACTIVE DOWNHOLE TOOLS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2024
- 14 -
1
Accounting policies
Company information
Reactive Downhole Tools Limited (“the company”) is a private limited company domiciled and incorporated in Scotland. The registered office is Claymore Avenue, Bridge of Don, Aberdeen, United Kingdom, AB23 8GW. The principal place of business is Unit 4, Howe Moss Crescent, Dyce, Aberdeen, AB21 0GN.
The group consists of Reactive Downhole Tools Limited and all of its subsidiaries.
1.1
Accounting convention
These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.
The financial statements are prepared in United States Dollars, which is the functional currency of the group. Monetary amounts in these financial statements are rounded to the nearest $.
The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.
The company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group. The company has therefore taken advantage of exemptions from the following disclosure requirements for parent company information presented within the consolidated financial statements:
Section 7 ‘Statement of Cash Flows’: Presentation of a statement of cash flow and related notes and disclosures;
Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instrument Issues: Interest income/expense and net gains/losses for financial instruments not measured at fair value; basis of determining fair values; details of collateral, loan defaults or breaches, details of hedges, hedging fair value changes recognised in profit or loss and in other comprehensive income;
Section 26 ‘Share based Payment’: Share-based payment expense charged to profit or loss, reconciliation of opening and closing number and weighted average exercise price of share options, how the fair value of options granted was measured, measurement and carrying amount of liabilities for cash-settled share-based payments, explanation of modifications to arrangements;
Section 33 ‘Related Party Disclosures’: Compensation for key management personnel.
1.2
Business combinations
In the parent company financial statements, the cost of a business combination is the fair value at the acquisition date of the assets given, equity instruments issued and liabilities incurred or assumed, plus costs directly attributable to the business combination. The excess of the cost of a business combination over the fair value of the identifiable assets, liabilities and contingent liabilities acquired is recognised as goodwill. The cost of the combination includes the estimated amount of contingent consideration that is probable and can be measured reliably, and is adjusted for changes in contingent consideration after the acquisition date. Provisional fair values recognised for business combinations in previous periods are adjusted retrospectively for final fair values determined in the 12 months following the acquisition date. Investments in subsidiaries, joint ventures and associates are accounted for at cost less impairment.
Deferred tax is recognised on differences between the value of assets (other than goodwill) and liabilities recognised in a business combination accounted for using the purchase method and the amounts that can be deducted or assessed for tax, considering the manner in which the carrying amount of the asset or liability is expected to be recovered or settled. The deferred tax recognised is adjusted against goodwill or negative goodwill.
REACTIVE DOWNHOLE TOOLS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2024
1
Accounting policies
(Continued)
- 15 -
1.3
Basis of consolidation
The consolidated group financial statements consist of the financial statements of the parent company Reactive Downhole Tools Limited together with all entities controlled by the parent company (its subsidiaries).
All financial statements are made up to 30 September 2024. Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by other members of the group.
All intra-group transactions, balances and unrealised gains on transactions between group companies are eliminated on consolidation. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.
Subsidiaries are consolidated in the group’s financial statements from the date that control commences until the date that control ceases.
Entities in which the group holds an interest and which are jointly controlled by the group and one or more other venturers under a contractual arrangement are treated as joint ventures. Entities other than subsidiary undertakings or joint ventures, in which the group has a participating interest and over whose operating and financial policies the group exercises a significant influence, are treated as associates.
1.4
Going concern
As part of their consideration of going concern the directors have reviewed the group's future cash flow forecasts and profit projections which are based on internal information and recent experience.
As at 30 September 2024 the group has net current liabilities of $2,734,208 (2023: $1,797,411), which includes $5,964,509 (2023: $5,638,405) due to a related party of which are amounts repayable on demand as at 30 September 2024. A letter of support has been provided by the related party which confirms support will be provided to the group if required. Confirmation has been provided that the related party has the ability to provide the necessary support and will not seek repayment of liabilities unless there is freely available cash to do so.
As with any company placing reliance on a related party for financial support, the directors acknowledge that there can be no certainty that this will continue although, at the date of approval of these financial statements, they have no reason to believe that this support will not continue for a period of at least 12 months from the date of approval of the financial statements.
Based on their assessment of the group's prospects and viability the directors have formed a judgement, at the time of approving the financial statements, that there are no material uncertainties that cast doubt on the group's going concern status and that there is a reasonable expectation that the group has adequate resources to continue in operational existence for at least twelve months from the date of approval of the financial statements. The directors therefore consider it appropriate to adopt the going concern basis of accounting in preparing its financial statements.
REACTIVE DOWNHOLE TOOLS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2024
1
Accounting policies
(Continued)
- 16 -
1.5
Turnover
Turnover is recognised at the fair value of the consideration received or receivable for goods and services provided in the normal course of business, and is shown net of VAT and other sales related taxes. The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.
Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer (usually on dispatch of the goods), the amount of revenue can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the entity and the costs incurred or to be incurred in respect of the transaction can be measured reliably.
1.6
Intangible fixed assets other than goodwill
Intangible assets acquired separately from a business are recognised at cost and are subsequently measured at cost less accumulated amortisation and accumulated impairment losses.
Intangible assets acquired on business combinations are recognised separately from goodwill at the acquisition date where it is probable that the expected future economic benefits that are attributable to the asset will flow to the entity and the fair value of the asset can be measured reliably; the intangible asset arises from contractual or other legal rights; and the intangible asset is separable from the entity.
Amortisation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:
Software
20% Straight Line
Use Right
33.3% Straight line
1.7
Tangible fixed assets
Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.
Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:
Freehold land and buildings
2% Straight Line
Leasehold improvements
6% Straight Line
Plant and equipment
15%-20% Straight Line
Fixtures and fittings
20%-25% Straight Line
Computers
25% Straight Line
Motor vehicles
25% Straight Line
Freehold land and assets in the course of construction are not depreciated.
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is recognised in the profit and loss account.
1.8
Fixed asset investments
Equity investments are measured at fair value through profit or loss, except for those equity investments that are not publicly traded and whose fair value cannot otherwise be measured reliably, which are recognised at cost less impairment until a reliable measure of fair value becomes available.
In the parent company financial statements, investments in subsidiaries, associates and jointly controlled entities are initially measured at cost and subsequently measured at cost less any accumulated impairment losses.
REACTIVE DOWNHOLE TOOLS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2024
1
Accounting policies
(Continued)
- 17 -
A subsidiary is an entity controlled by the group. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.
1.9
Impairment of fixed assets
At each reporting period end date, the group reviews the carrying amounts of its tangible and intangible 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.
The carrying amount of the investments accounted for using the equity method is tested for impairment as a single asset. Any goodwill included in the carrying amount of the investment is not tested separately for impairment.
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.
Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. 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.
1.10
Stocks
Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the stocks to their present location and condition.
At each reporting date, an assessment is made for impairment. Any excess of the carrying amount of stocks over its estimated selling price less costs to complete and sell is recognised as an impairment loss in profit or loss. Reversals of impairment losses are also recognised in profit or loss.
1.11
Cash and cash equivalents
Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.
REACTIVE DOWNHOLE TOOLS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2024
1
Accounting policies
(Continued)
- 18 -
1.12
Financial instruments
The group has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the group's balance sheet when the group becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset and the net amounts presented in the financial statements when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
Basic financial assets
Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.
Impairment of financial assets
Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.
Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.
If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.
Derecognition of financial assets
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the group transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.
Classification of financial liabilities
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the group after deducting all of its liabilities.
REACTIVE DOWNHOLE TOOLS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2024
1
Accounting policies
(Continued)
- 19 -
Basic financial liabilities
Basic financial liabilities, including creditors, bank loans, loans from fellow group companies and preference shares that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.
Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.
Derecognition of financial liabilities
Financial liabilities are derecognised when the group's contractual obligations expire or are discharged or cancelled.
1.13
Equity instruments
Equity instruments issued by the group are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the group.
1.14
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account 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 group’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 liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing 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 profit and loss account, 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 if, and only if, there is 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.
REACTIVE DOWNHOLE TOOLS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2024
1
Accounting policies
(Continued)
- 20 -
1.15
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 stock or fixed assets.
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.
1.16
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.17
Leases
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessees. All other leases are classified as operating leases.
Assets held under finance leases are recognised as assets at the lower of the assets fair value at the date of inception and the present value of the minimum lease payments. The related liability is included in the balance sheet as a finance lease obligation. Lease payments are treated as consisting of capital and interest elements. The interest is charged to profit or loss so as to produce a constant periodic rate of interest on the remaining balance of the liability.
Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed.
1.18
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
Judgements and key sources of estimation uncertainty
In the application of the group’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
REACTIVE DOWNHOLE TOOLS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2024
- 21 -
3
Turnover and other revenue
2024
2023
$
$
Turnover analysed by class of business
Sale of goods
12,238,162
12,511,772
Rendering of services
984,008
505,685
13,222,170
13,017,457
2024
2023
$
$
Turnover analysed by geographical market
United Kingdom
-
27,766
Overseas
13,222,170
12,989,691
13,222,170
13,017,457
2024
2023
$
$
Other revenue
Interest income
13
7
4
Operating loss
2024
2023
$
$
Operating loss for the year is stated after charging/(crediting):
Exchange losses
603,240
612,900
Depreciation of owned tangible fixed assets
422,328
414,686
Depreciation of tangible fixed assets held under finance leases
16,856
23,919
Profit on disposal of tangible fixed assets
(34,199)
-
Amortisation of intangible assets
1,103
16,908
Operating lease charges
414,486
338,109
5
Auditor's remuneration
2024
2023
Fees payable to the company's auditor and associates:
$
$
For audit services
Audit of the financial statements of the group and company
14,500
10,000
Audit of the financial statements of the company's subsidiaries
27,250
18,130
41,750
28,130
REACTIVE DOWNHOLE TOOLS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2024
- 22 -
6
Employees
The average monthly number of persons (including directors) employed by the group and company during the year was:
Group
Company
2024
2023
2024
2023
Number
Number
Number
Number
Production staff
32
33
-
-
Administrative staff
25
24
3
3
Total
57
57
3
3
Their aggregate remuneration comprised:
Group
Company
2024
2023
2024
2023
$
$
$
$
Wages and salaries
3,565,799
3,735,613
177,542
191,927
Social security costs
163,373
191,379
18,955
21,991
Pension costs
122,421
171,668
8,205
20,057
3,851,593
4,098,660
204,702
233,975
7
Interest receivable and similar income
2024
2023
$
$
Interest income
Interest on bank deposits
13
7
8
Interest payable and similar expenses
2024
2023
$
$
Other interest
1,779
13,101
REACTIVE DOWNHOLE TOOLS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2024
- 23 -
9
Taxation
2024
2023
$
$
Current tax
Foreign current tax on profits for the current period
216,021
307,761
Deferred tax
Origination and reversal of timing differences
(80,723)
113,540
Total tax charge
135,298
421,301
A change in the UK Corporation tax rate to 25% with effect from 1 April 2023 was announced in the March 2021 budget, and subsequently enacted on 24 May 2021. The group's deferred tax liability and asset have been measured using this rate.
The actual charge for the year can be reconciled to the expected credit for the year based on the profit or loss and the standard rate of tax as follows:
2024
2023
$
$
Loss before taxation
(446,437)
(82,621)
Expected tax credit based on the standard rate of corporation tax in the UK of 25.00% (2023: 22.01%)
(111,609)
(18,185)
Tax effect of expenses that are not deductible in determining taxable profit
14,775
11,125
Change in unrecognised deferred tax assets
123,224
405,292
Adjustments in respect of prior years
10,077
Effect of change in corporation tax rate
-
(12,826)
Depreciation on assets not qualifying for tax allowances
(8,600)
25,158
Other permanent differences
16,183
Effect of overseas tax rates
93,853
417
Foreign exchange differences
7,472
243
Taxation charge
135,298
421,301
REACTIVE DOWNHOLE TOOLS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2024
- 24 -
10
Intangible fixed assets
Group
Software
Use Right
Total
$
$
$
Cost
At 1 October 2023
90,132
185,148
275,280
Exchange adjustments
8,499
17,458
25,957
At 30 September 2024
98,631
202,606
301,237
Amortisation and impairment
At 1 October 2023
87,359
185,148
272,507
Amortisation charged for the year
1,103
1,103
Exchange adjustments
8,237
17,458
25,695
At 30 September 2024
96,699
202,606
299,305
Carrying amount
At 30 September 2024
1,932
1,932
At 30 September 2023
2,773
2,773
Company
Software
Use Right
Total
$
$
$
Cost
At 1 October 2023
90,132
185,148
275,280
Exchange adjustments
8,499
17,458
25,957
At 30 September 2024
98,631
202,606
301,237
Amortisation and impairment
At 1 October 2023
87,359
185,148
272,507
Amortisation charged for the year
1,103
1,103
Exchange adjustments
8,237
17,458
25,695
At 30 September 2024
96,699
202,606
299,305
Carrying amount
At 30 September 2024
1,932
1,932
At 30 September 2023
2,773
2,773
REACTIVE DOWNHOLE TOOLS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2024
- 25 -
11
Tangible fixed assets
Group
Freehold land and buildings
Leasehold improvements
Assets under construction
Plant and equipment
Fixtures and fittings
Computers
Motor vehicles
Total
$
$
$
$
$
$
$
$
Cost
At 1 October 2023
2,696,968
429,300
16,333
4,856,722
161,397
113,955
239,700
8,514,375
Additions
410,573
649,984
30,908
25,399
1,116,864
Disposals
(579,149)
(42,189)
(9,394)
(36,758)
(667,490)
Exchange adjustments
11
70
72
1,317
1,470
At 30 September 2024
2,696,968
429,311
426,906
4,927,627
150,188
131,277
202,942
8,965,219
Depreciation and impairment
At 1 October 2023
525,416
219,423
3,631,652
122,071
53,519
186,545
4,738,626
Depreciation charged in the year
55,307
50,128
268,084
16,303
23,756
25,606
439,184
Eliminated in respect of disposals
(483,961)
(41,550)
(7,940)
(36,758)
(570,209)
Exchange adjustments
6
13
39
808
866
At 30 September 2024
580,723
269,557
3,415,788
96,863
70,143
175,393
4,608,467
Carrying amount
At 30 September 2024
2,116,245
159,754
426,906
1,511,839
53,325
61,134
27,549
4,356,752
At 30 September 2023
2,171,552
209,877
16,333
1,225,070
39,326
60,436
53,155
3,775,749
REACTIVE DOWNHOLE TOOLS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2024
- 26 -
11
Tangible fixed assets (continued)
Company
Fixtures and fittings
Computers
Motor vehicles
Total
$
$
$
$
Cost
At 1 October 2023
728
13,944
20,929
35,601
Additions
11,109
11,109
Disposals
(728)
(3,435)
(20,929)
(25,092)
Exchange adjustments
69
1,315
1,384
At 30 September 2024
69
22,933
23,002
Depreciation and impairment
At 1 October 2023
394
8,538
20,929
29,861
Depreciation charged in the year
100
4,307
4,407
Eliminated in respect of disposals
(494)
(2,874)
(20,929)
(24,297)
Exchange adjustments
38
807
845
At 30 September 2024
38
10,778
10,816
Carrying amount
At 30 September 2024
31
12,155
12,186
At 30 September 2023
334
5,406
5,740
The net carrying value of tangible fixed assets includes the following in respect of assets held under finance leases or hire purchase contracts.
Group
Company
2024
2023
2024
2023
$
$
$
$
Plant and equipment
89,389
Motor vehicles
4,214
4,214
89,389
-
-
REACTIVE DOWNHOLE TOOLS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2024
- 27 -
12
Fixed asset investments
Group
Company
2024
2023
2024
2023
Notes
$
$
$
$
Investments in subsidiaries
13
29,266
29,266
Movements in fixed asset investments
Company
Shares in subsidiaries
$
Cost or valuation
At 1 October 2023 and 30 September 2024
29,266
Carrying amount
At 30 September 2024
29,266
At 30 September 2023
29,266
13
Subsidiaries
Details of the company's subsidiaries at 30 September 2024 are as follows:
Name of undertaking
Registered office
Class of
% Held
shares held
Direct
Reactive Downhole Tools Inc
5847 San Filipe, Suite 2200, Houston, Texas, TX 77057
Ordinary
100.00
Mysteron Properties Inc
5847 San Filipe, Suite 2200, Houston, Texas, TX 77057
Ordinary
100.00
Reactive Downhole Tools Manufacturing Middle East LLC
Office 202 Euro Mechanical Building, 10th Street Al Zahiyah, Tourist Club Area, 46153, Abu Dhabi
Ordinary
49.00
14
Stocks
Group
Company
2024
2023
2024
2023
$
$
$
$
Raw materials and consumables
569,226
500,922
-
-
Work in progress
204,523
255,567
-
-
Finished goods and goods for resale
758,078
755,528
1,531,827
1,512,017
-
-
Impairment losses recognised in the profit and loss account in the year were $129,796 (2023: $227,881).
REACTIVE DOWNHOLE TOOLS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2024
- 28 -
15
Financial instruments
Group
Company
2024
2023
2024
2023
$
$
$
$
Carrying amount of financial assets
Debt instruments measured at amortised cost
2,677,524
4,567,478
n/a
n/a
Carrying amount of financial liabilities
Measured at amortised cost
7,827,561
8,116,995
n/a
n/a
As permitted by the reduced disclosure framework within FRS 102, the company has taken advantage of the exemption from disclosing the carrying amount of certain classes of financial instruments, denoted by 'n/a' above.
16
Debtors
Group
Company
2024
2023
2024
2023
Amounts falling due within one year:
$
$
$
$
Trade debtors
2,370,913
4,094,016
157,957
Corporation tax recoverable
157,589
Amounts owed by group undertakings
-
-
8,418,990
7,445,875
Other debtors
91,206
86,609
60,775
69,117
Prepayments and accrued income
328,885
285,462
35,208
32,163
2,948,593
4,466,087
8,672,930
7,547,155
Amounts falling due after more than one year:
Deferred tax asset (note 20)
75,929
Total debtors
3,024,522
4,466,087
8,672,930
7,547,155
Amounts owed by group undertakings are repayable on demand and interest free.
REACTIVE DOWNHOLE TOOLS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2024
- 29 -
17
Creditors: amounts falling due within one year
Group
Company
2024
2023
2024
2023
Notes
$
$
$
$
Obligations under finance leases
19
4,291
16,684
Trade creditors
1,105,985
1,448,461
407,972
647,124
Amounts owed to group undertakings
2,184,605
993,423
Amounts owed to undertakings in which the group has a participating interest
5,964,509
5,638,405
4,084,509
3,632,405
Corporation tax payable
288,194
Other taxation and social security
5,657
12,124
5,657
6,955
Other creditors
48,330
758,500
57,630
Accruals and deferred income
402,153
71,615
7,530,925
8,162,368
6,754,358
5,337,537
Amounts owed to group undertakings and participating interests are repayable on demand and interest free.
18
Creditors: amounts falling due after more than one year
Group
Company
2024
2023
2024
2023
Notes
$
$
$
$
Obligations under finance leases
19
4,291
Accruals and deferred income
302,293
250,654
302,293
254,945
-
-
19
Finance lease obligations
Group
Company
2024
2023
2024
2023
$
$
$
$
Future minimum lease payments due under finance leases:
Within one year
4,324
17,271
In two to five years
4,322
4,324
21,593
-
-
Less: future finance charges
(33)
(618)
4,291
20,975
Finance lease payments represent rentals payable by the company or group for certain items of motor vehicles and plant and machinery. Leases include purchase options at the end of the lease period, and no restrictions are placed on the use of the assets. The average lease term is 4 years. All leases are on a fixed repayment basis and no arrangements have been entered into for contingent rental payments.
REACTIVE DOWNHOLE TOOLS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2024
- 30 -
20
Deferred taxation
The following are the major deferred tax liabilities and assets recognised by the group and company, and movements thereon:
Liabilities
Liabilities
Assets
Assets
2024
2023
2024
2023
Group
$
$
$
$
Fixed asset timing differences
108,754
113,540
-
-
Tax losses
-
-
75,929
-
108,754
113,540
75,929
-
The company has no deferred tax assets or liabilities.
Group
Company
2024
2024
Movements in the year:
$
$
Liability at 1 October 2023
113,540
-
Credit to profit or loss
(80,715)
-
Liability at 30 September 2024
32,825
-
The deferred tax liability set out above is expected to reverse within 5 years and relates to accelerated capital allowances that are expected to mature within the same period.
The deferred tax asset set out above relates to the utilisation of tax losses against future expected profits of the same period.
Deferred tax is not recognised in respect of tax losses of $1,273,746 as it is not probable that they will be recovered against the reversal of deferred tax liabilities or future taxable profits.
21
Retirement benefit schemes
2024
2023
Defined contribution schemes
$
$
Charge to profit or loss in respect of defined contribution schemes
46,672
71,664
A defined contribution pension scheme is operated for all qualifying employees. The assets of the scheme are held separately from those of the group in an independently administered fund.
2024
2023
Defined benefit schemes
$
$
Charge to profit or loss in respect of defined benefit schemes
75,749
100,004
This represents benefits payable under UAE labour law. As at the reporting date, amounts payable of $302,293 (2023: $250,654) had not been paid over.
REACTIVE DOWNHOLE TOOLS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2024
- 31 -
22
Share capital
Group and company
2024
2023
2024
2023
Ordinary share capital
Number
Number
$
$
Issued and fully paid
A Ordinary shares £1 each
156
156
210
210
B Ordinary shares £1 each
42
42
57
57
C Ordinary shares £1 each
2
2
3
3
200
200
270
270
The group has 3 classes of shares of which class "C" shares do not carry voting rights.
23
Operating lease commitments
Lessee
At the reporting end date the group had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:
Group
Company
2024
2023
2024
2023
$
$
$
$
Within one year
414,486
291,891
-
3,971
Between two and five years
1,094,175
867,106
-
-
1,508,661
1,158,997
-
3,971
24
Capital commitments
Amounts contracted for but not provided in the financial statements:
Group
Company
2024
2023
2024
2023
$
$
$
$
Acquisition of tangible fixed assets
-
171,461
-
-
REACTIVE DOWNHOLE TOOLS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2024
- 32 -
25
Related party transactions
Transactions with related parties
During the year the group entered into the following transactions with related parties:
Sales
Sales
Purchases
Purchases
2024
2023
2024
2023
$
$
$
$
Group
Subsidiary
471,948
422,133
31,400
-
Associates
172,957
-
193,990
209,283
Other related parties
3,436,952
4,602,629
594,622
718,926
Company
Subsidiary
29,522
64,313
-
-
Associates
-
-
5,358
-
Management charges receivable
Management charges payable
2024
2023
2024
2023
$
$
$
$
Group
Subsidiary
249,886
40,435
399,383
-
Associates
-
-
144,562
139,844
Company
Subsidiary
128,710
40,435
123,821
-
Associates
-
-
144,562
139,844
The following amounts were outstanding at the reporting end date:
Amounts due to related parties
2024
2023
$
$
Group
Associates
6,339,168
6,349,004
Other related parties
66,714
78,776
Company
Associates
4,459,168
4,269,753
REACTIVE DOWNHOLE TOOLS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2024
25
Related party transactions
(Continued)
- 33 -
The following amounts were outstanding at the reporting end date:
Amounts due from related parties
2024
2023
Balance
Balance
$
$
Group
Subsidiary
7,199,478
6,074,818
Other related parties
571,131
2,026,253
Company
Subsidiary
6,929,586
5,684,797
26
Controlling party
Throughout the year the group was controlled by the directors.
27
Cash generated from group operations
2024
2023
$
$
Loss for the year after tax
(581,735)
(503,922)
Adjustments for:
Taxation charged
135,298
421,301
Finance costs
1,779
13,101
Investment income
(13)
(7)
Gain on disposal of tangible fixed assets
(34,199)
-
Amortisation and impairment of intangible assets
1,103
16,908
Depreciation and impairment of tangible fixed assets
439,184
438,605
Pension scheme non-cash movement
51,639
90,846
Movements in working capital:
Increase in stocks
(19,810)
(545,361)
Decrease/(increase) in debtors
1,675,083
(4,620)
(Decrease)/increase in creditors
(330,856)
610,289
Cash generated from operations
1,337,473
537,140
REACTIVE DOWNHOLE TOOLS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2024
- 34 -
28
Analysis of changes in net funds - group
1 October 2023
Cash flows
Exchange rate movements
30 September 2024
$
$
$
$
Cash at bank and in hand
386,853
(328,157)
181,672
240,368
Obligations under finance leases
(20,975)
16,684
-
(4,291)
365,878
(311,473)
181,672
236,077
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