Company Registration No. SC273906 (Scotland)
UNITY WELL INTEGRITY UK LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
UNITY WELL INTEGRITY UK LIMITED
COMPANY INFORMATION
Directors
M Illingworth
C Morrice
G Smart
Company number
SC273906
Registered office
2 Marischal Square
Broad Street
Aberdeen
AB10 1DQ
Auditor
Johnston Carmichael LLP
Bishop's Court
29 Albyn Place
Aberdeen
AB10 1YL
UNITY WELL INTEGRITY UK LIMITED
CONTENTS
Page
Strategic report
1 - 2
Directors' report
3 - 4
Independent auditor's report
5 - 8
Statement of comprehensive income
9
Balance sheet
10
Statement of changes in equity
11
Notes to the financial statements
12 - 25
UNITY WELL INTEGRITY UK LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2024
- 1 -
Introduction
The directors present their strategic report for the year ended 31 December 2024.
Principal activities
The principal activities of Unity Well Integrity UK Limited ("the company") and its subsidiary, Unity Well Integrity Europe Limited (the “subsidiary”), are as a leading provider of well integrity technology and services, and decommissioning services for the oil and gas industry. The company is owned by Unity Well Integrity Limited (the “parent”) and is part of the FrontRow Energy Technology Group Limited (“FETG”).
Results and business review and key performance indicators
The directors consider turnover and EBITDA to be key performance indicators in their ability to monitor the company’s strategic and operational effectiveness. Turnover totalled £12.8M (2023: £12.9M) and adjusted EBITDA £2.1M (2023: £2.2M) after adding back FETG group management fees of £175k (2023: £167k).
On a macro level, 2024 was a year of relatively stable oil prices which remained between $65 and $90, averaging $81 per barrel, closely aligned to $82 average for 2023. Demand for oil weakened in line with a softening in global economic growth, however on supply side geopolitical tensions in Europe and the Middle East, shipping disruption in Red Sea and production cuts from OPEC+ countries maintained the relatively stable price.
The demand for our services remained high, with an increasing focus on decommissioning. We continued our investment in our proprietary products and have seen their utilisation and prospective customer base rise.
At 31 December 2024 the company's net asset position was £11.3M (2023: £9.8M).
Principal risks and uncertainties
The company faces the economic risks associated with the oil and gas sector, particularly the oil price and its impact on industry activity levels, as well as the Energy Price Levy affecting UK activity. The company also faces increasing technology risk as we continue to develop several new products, many of which are innovative and untested in the market. The company continually reviews the macro environment and its technology under development to ensure the business can react appropriately.
Future developments
2025 activity levels to date have been slightly below expectations, primarily due to operator delays in work scopes and budget pressures. However, we are encouraged by growing adoption of our proprietary technology in the UK and overseas, particularly our SIS and CSS technologies. The company has invested in additional assets in 2025 to expand the availability of these proprietary products, with particular focus on entering new geographies which present significant growth opportunities. The company has also expanded its service offering in 2025 to include Thru Tubing Services through creation of an experienced team, with service quality as paramount importance. Thru Tubing Services is expected to be a growing service in years to come for the company, which will enhance the service offering for both wells and decommissioning.
Going concern
The fragility of both the UK and wider global economy means significant focus is placed on the adoption of going concern concept for the preparation of the financial statements. The company, as part of the wider group, has prepared a detailed consolidated forecast for remainder of 2025 and financial year 2026, including profit and loss account, cash flow and balance sheet projections to satisfy its going concern position. The company and its parent and subsidiary will continue to reforecast regularly throughout 2025 and beyond.
The forecasts give confidence to the Board that the company will be able to meet its liabilities as they fall due from its existing facilities.
As a result, the company’s financial statements have been prepared on a going concern basis.
Financial risk management objectives and policies
The company’s activities expose it to a number of financial risks including foreign currency exposure and liquidity risk.
UNITY WELL INTEGRITY UK LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
- 2 -
Foreign currency risk
The company’s technology is being marketed around the world. The company transacts predominately in GBP however overseas sales are also often transacted in USD and occasionally EUR. The company translates any material excess currency holdings back to GBP regularly and does not operate currency hedging. In the management’s view this is an appropriate risk mitigation strategy given the company’s current activity.
Liquidity risk
Our main liquidity risk is from our customers and risk of overruns on technology development. Our team works hard to ensure that payments are received on time, and we closely manage the investment made in each new product, and regularly assess its viability and marketability.
G Smart
Director
30 June 2025
UNITY WELL INTEGRITY UK LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2024
- 3 -
The directors present their annual report and financial statements for the year ended 31 December 2024.
Results and dividends
The results for the year are set out on page 9.
No ordinary dividends were paid (2023: £nil). The directors do not recommend payment of a final dividend (2023: £nil).
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
M Illingworth
C Morrice
G Smart
Qualifying third party indemnity provisions
As permitted by the Articles of Association, the Directors have the benefit of an indemnity which is a qualifying third-party indemnity provision as defined by Section 234 of the Companies Act 2006. The indemnity was in force throughout the last financial year and is currently in force.
Research and development
During the year the company continued to develop its various intellectual property assets, which continue to be important to the company's strategy and the directors are satisfied with the progress made.
Auditor
The auditor, Johnston Carmichael LLP, will be proposed for reappointment in accordance with section 485 of the Companies Act 2006.
Statement of directors' responsibilities
The directors are responsible for preparing the strategic report, directors' report and the financial statements in accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with 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 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; and
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.
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.
UNITY WELL INTEGRITY UK LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
- 4 -
Matters covered in the Strategic Report
The company has chosen, in accordance with section 414C(11) Companies Act 2006, to set out in the company's Strategic Report information required by Schedule 7 of the Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008 to be contained in the Directors’ Report. Any matters required to be included in the directors' report by virtue of Schedule 7 of Sl 2008/410 which are considered by the directors to be of strategic importance are instead included in the strategic report. This includes future developments and financial risk management disclosures.
On behalf of the board
G Smart
Director
30 June 2025
UNITY WELL INTEGRITY UK LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF UNITY WELL INTEGRITY UK LIMITED
- 5 -
Opinion
We have audited the financial statements of Unity Well Integrity UK Limited (the 'company') for the year ended 31 December 2024 which comprise the statement of comprehensive income, the balance sheet, the statement of changes in equity and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).
In our opinion the financial statements:
give a true and fair view of the state of the company's affairs as at 31 December 2024 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.
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 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.
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.
UNITY WELL INTEGRITY UK LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF UNITY WELL INTEGRITY UK LIMITED
- 6 -
Matters on which we are required to report by exception
In the light of our 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 and the directors' report.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:
adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
the financial statements are not in agreement with the accounting records and returns; or
certain disclosures of directors' remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.
Responsibilities of directors
As explained more fully in the statement of directors' responsibilities on page 3, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.
Auditor 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 for the audit of the financial statements is located on the Financial Reporting Council’s website at: http://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.
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, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.
We assessed whether the engagement team collectively had the appropriate competence and capabilities to identify or recognise non-compliance with laws and regulations by considering their experience, past performance and support available.
All engagement team members were briefed on relevant identified laws and regulations and potential fraud risks at the planning stage of the audit. Engagement team members were reminded to remain alert to any indications of fraud or non-compliance with laws and regulations throughout the audit.
We obtained an understanding of the legal and regulatory frameworks that are applicable to company and the sector in which it operates, focusing on those provisions that had a direct effect on the determination of material amounts and disclosures in the financial statements. The most relevant frameworks we identified include:
UNITY WELL INTEGRITY UK LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF UNITY WELL INTEGRITY UK LIMITED
- 7 -
Extent to which the audit was considered capable of detecting irregularities, including fraud (continued)
We gained an understanding of how the company is complying with these laws and regulations by making enquiries of management and those charged with governance. We corroborated these enquiries through our review of submitted returns, external inspections, relevant correspondence with regulatory bodies and board meeting minutes.
We assessed the susceptibility of the financial statements to material misstatement, including how fraud might occur, by meeting with management and those charged with governance to understand where it was considered there was susceptibility to fraud. This evaluation also considered how management and those charged with governance were remunerated and whether this provided an incentive for fraudulent activity. We considered the overall control environment and how management and those charged with governance oversee the implementation and operation of controls. In areas of the financial statements where the risks were considered to be higher, we performed procedures to address each identified risk. We identified a heightened fraud risk in relation to:
In addition to the above, the following procedures were performed to provide reasonable assurance that the financial statements were free of material fraud or error:
Reviewing minutes of meetings of those charged with governance for reference to: breaches of laws and regulation or for any indication of any potential litigation and claims; and events or conditions that could indicate an incentive or pressure to commit fraud or provide an opportunity to commit fraud;
Reviewing the level of and reasoning behind the company’s procurement of legal and professional services;
Performing audit work procedures over the risk of management 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 judgements made by management in their calculation of accounting estimates for potential management bias;
Performing audit work procedures over the risk of revenue recognition, including testing a sample of sales from point of initiation through to recording on the sales ledger, ensuring the sales were appropriately recorded and are valid. We also undertook sales cut-off testing at the company's year end to ensure sales have been recorded in the correct financial period;
Completion of appropriate checklists and use of our experience to assess the company’s compliance with the Companies Act 2006; and
Agreement of the financial statement disclosures to supporting documentation.
Our audit procedures were designed to respond to the risk of material misstatements in the financial statements, recognising that the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve intentional concealment, forgery, collusion, omission or misrepresentation. There are inherent limitations in the audit procedures performed and the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely we are to become aware of it.
UNITY WELL INTEGRITY UK LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF UNITY WELL INTEGRITY UK LIMITED
- 8 -
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 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.
Stephen McIlwaine (Senior Statutory Auditor)
For and on behalf of Johnston Carmichael LLP
30 June 2025
Statutory Auditor
Bishop's Court
29 Albyn Place
Aberdeen
AB10 1YL
UNITY WELL INTEGRITY UK LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2024
- 9 -
2024
2023
Notes
£
£
Turnover
3
12,827,037
12,879,716
Cost of sales
(8,103,971)
(8,458,625)
Gross profit
4,723,066
4,421,091
Administrative expenses
(3,229,356)
(2,837,892)
Operating profit
4
1,493,710
1,583,199
Interest receivable and similar income
7
14,724
12,906
Profit before taxation
1,508,434
1,596,105
Tax on profit
8
(84,145)
(214,625)
Profit and total comprehensive income for the financial year
1,424,289
1,381,480
The statement of comprehensive income has been prepared on the basis that all operations are continuing operations.
UNITY WELL INTEGRITY UK LIMITED
BALANCE SHEET
AS AT
31 DECEMBER 2024
31 December 2024
- 10 -
2024
2023
Notes
£
£
£
£
Fixed assets
Intangible assets
9
141,831
224,413
Tangible assets
10
1,277,193
930,311
Investments
11
3,843,420
3,843,420
5,262,444
4,998,144
Current assets
Stocks
13
269,607
621,776
Debtors
14
6,929,972
6,481,395
Cash at bank and in hand
1,358,429
998,341
8,558,008
8,101,512
Creditors: amounts falling due within one year
15
(2,251,331)
(3,038,969)
Net current assets
6,306,677
5,062,543
Total assets less current liabilities
11,569,121
10,060,687
Provisions for liabilities
Deferred tax liability
16
298,438
214,293
(298,438)
(214,293)
Net assets
11,270,683
9,846,394
Capital and reserves
Called up share capital
18
555
555
Share premium account
19
6,844,532
6,844,532
Profit and loss reserves
19
4,425,596
3,001,307
Total equity
11,270,683
9,846,394
The financial statements were approved by the board of directors and authorised for issue on 30 June 2025 and are signed on its behalf by:
C Morrice
G Smart
Director
Director
Company Registration No. SC273906
UNITY WELL INTEGRITY UK LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2024
- 11 -
Share capital
Share premium account
Profit and loss reserves
Total
£
£
£
£
Balance at 1 January 2023
555
6,844,532
1,619,827
8,464,914
Year ended 31 December 2023:
Profit and total comprehensive income for the year
-
-
1,381,480
1,381,480
Balance at 31 December 2023
555
6,844,532
3,001,307
9,846,394
Year ended 31 December 2024:
Profit and total comprehensive income for the year
-
-
1,424,289
1,424,289
Balance at 31 December 2024
555
6,844,532
4,425,596
11,270,683
UNITY WELL INTEGRITY UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
- 12 -
1
Accounting policies
Company information
Unity Well Integrity UK Limited ("the company") is a private company limited by shares incorporated in Scotland. The registered office is 2 Marischal Square, Broad Street, Aberdeen, AB10 1DQ. The principal place of business is Wellheads Crescent, Wellheads Industrial Estate, Dyce, Aberdeen, AB21 7GA. The principal activities of the company and the nature of the operations are set out in the Strategic Report on page 1.
The company's immediate parent is Unity Well Integrity Limited, which prepares consolidated financial statements.
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 sterling, which is the functional currency of the company. 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.
Financial Reporting Standard 102 - reduced disclosure exemptions
The company has taken advantage of the following disclosure exemptions in preparing these financial statements, as permitted by FRS 102:
the requirements of Section 7 Statement of Cash Flows;
the requirements of Section 3 Financial Statement Presentation paragraph 3.17(d);
the requirements of Section 11 Basic Financial Instruments paragraphs 11.42, 11.44 to 11.45, 11.47, 11.48(a)(iii), 11.48(a)(iv), 11.48(b) and 11.48(c);
the requirements of Section 33 Related Party Disclosures paragraph 33.7.
The company has also taken advantage of the exemptions available under FRS 102, Section 33, and not disclosed transactions with wholly owned members of the Unity Well Integrity Limited group of companies.
Where relevant for the purposes of the reduced disclosure exemptions, appropriate information is included within the consolidated financial statements of Unity Well Integrity Limited and these financial statements may be obtained from the UK Companies House website.
Exemption from preparing consolidated financial statements
The company is a parent company that is also a subsidiary included in the consolidated financial statements of a larger group by a parent undertaking established under the law of any part of the United Kingdom and is therefore exempt from the requirement to prepare consolidated financial statements under section 400 of the Companies Act 2006.
1.2
Going concern
The fragility of both the UK and wider global economy means significant focus is placed on the adoption of going concern concept for the preparation of the financial statements. The company, as part of the wider group, has prepared a detailed consolidated forecast for remainder of 2025 and financial year 2026 including profit and loss account, cash flow and balance sheet projections to satisfy its going concern position. The company and its parent and subsidiary will continue to reforecast regularly throughout 2025 and beyond.true
The forecasts give confidence to the Board that the company will be able to meet its liabilities as they fall due from its existing facilities.
As a result, the company’s financial statements have been prepared on a going concern basis.
UNITY WELL INTEGRITY UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
1
Accounting policies
(Continued)
- 13 -
1.3
Turnover
Revenue is recognised to the extent that it is probable that the economic benefits will flow to the company and the revenue can be reliably measured. Revenue is measured as the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes. The following criteria must also be met before revenue is recognised:
Revenue relating to offshore operations, rentals, storage and training is recognised when the service has taken place.
Revenue related to engineering projects and onshore service operations is recognised when the job is complete or at each billing milestone which aligns with the stage of completion.
Revenue related to sale of goods is recognised when risk and rewards of ownership transfer to the buyer.
Interest income is recognised in the statement of comprehensive income using the effective interest method.
1.4
Research and development expenditure
In the research phase of an internal project it is not possible to demonstrate that the project will generate future economic benefits and hence all expenditure on research shall be recognised as an expense when it is incurred. Intangible assets are recognised from the development phase of a project if and only if certain specific criteria are met in order to demonstrate the asset will generate probable future economic benefits and that its cost can be reliably measured. The capitalised development costs are subsequently amortised on a straight line basis over their useful economic lives.
If it is not possible to distinguish between the research phase and the development phase of an internal project, the expenditure is treated as if it were all incurred in the research phase only.
1.5
Intangible fixed assets other than goodwill
Intangible assets are initially recognised at cost. After recognition, under the cost model, intangible assets are measured at cost less any accumulated amortisation and any accumulated impairment losses.
All intangible assets are considered to have a finite useful life. If a reliable estimate of the useful life cannot be made, the useful life shall not exceed ten years.
Amortisation is recognised so as to write off the cost of assets less their residual values over their useful lives on the following basis:
Intellectual property
20% straight line
1.6
Tangible fixed assets
Tangible fixed assets under the cost model are stated at historical cost less accumulated depreciation and any accumulated impairment losses. Historical cost includes expenditure that is directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management.
Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, using the straight-line method. Depreciation is provided on the following basis:
Tenants improvements
5 years
Plant and machinery
2-8 years
Office equipment
3 years
Computer equipment
2-5 years
Motor vehicles
5 years
UNITY WELL INTEGRITY UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
1
Accounting policies
(Continued)
- 14 -
The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date.
Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in the statement of comprehensive income.
1.7
Fixed asset investments
Investments in subsidiaries are measured at cost less accumulated impairment.
1.8
Impairment of fixed assets
At each reporting period end date, the company 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.
1.9
Stocks
Stocks, which includes work in progress on workshop and engineering projects, are stated at the lower of cost and net realisable value. Net realisable value is calculated as the estimated selling price less costs to complete and sell. Cost is based on the cost of purchase on a first in, first out basis. Work in progress and finished goods include labour and attributable overheads.
At each reporting date, stocks are assessed for impairment. If stock is impaired, the carrying amount is reduced to its selling price less costs to complete and sell. The impairment loss is recognised immediately in the statement of comprehensive income.
1.10
Cash and cash equivalents
Cash is represented by cash in hand and deposits with financial institutions repayable without penalty on notice of not more than 24 hours. Cash equivalents are highly liquid investments that mature in no more than three months from the date of acquisition and that are readily convertible to known amounts of cash with insignificant risk of change in value.
UNITY WELL INTEGRITY UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
1
Accounting policies
(Continued)
- 15 -
1.11
Financial instruments
The company only enters into basic financial instrument transactions that result in the recognition of financial assets and liabilities like trade and other debtors and creditors, loans to and from related parties and investments in ordinary shares.
Debt instruments (other than those wholly repayable or receivable within one year), including loans and other accounts receivable and payable, are initially measured at present value of the future cash flows and subsequently at amortised cost using the effective interest method. Debt instruments that are payable or receivable within one year, typically trade debtors and creditors, are measured, initially and subsequently, at the undiscounted amount of the cash or other consideration expected to be paid or received. However, if the arrangements of a short-term instrument constitute a financing transaction, like the payment of a trade debt deferred beyond normal business terms or in case of an out-right short-term loan that is not at market rate, the financial asset or liability is measured, initially at the present value of future cash flows discounted at a market rate of interest for a similar debt instrument and subsequently at amortised cost.
Financial assets that are measured at cost and amortised cost are assessed at the end of each reporting period for objective evidence of impairment. If objective evidence of impairment is found, an impairment loss is recognised in the statement of comprehensive income.
For financial assets measured at cost less impairment, the impairment loss is measured as the difference between an asset's carrying amount and best estimate of the recoverable amount, which is an approximation of the amount that the company would receive for the asset if it were to be sold at the balance sheet date.
Financial assets and liabilities are offset and the net amount reported in the balance sheet when there is an enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
1.12
Equity instruments
Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs.
1.13
Taxation
Tax is recognised in the statement of comprehensive income except that a charge attributable to an item of income and expense recognised as other comprehensive income or to an item recognised directly in equity is also recognised in other comprehensive income or directly in equity respectively.
The current income tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the balance sheet date in the countries where the company operates and generates income.
Deferred tax balances are recognised in respect of all timing differences that have originated but not reversed by the balance sheet date, except that:
The recognition of deferred tax assets is limited to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits; and
Any deferred tax balances are reversed if and when all conditions for retaining associated tax allowances have been met.
Deferred tax balances are not recognised in respect of permanent differences except in respect of business combinations, when deferred tax is recognised on the differences between the fair values of assets acquired and the future tax deductions available for them and the differences between the fair values of liabilities acquired and the amount that will be assessed for tax. Deferred tax is determined using tax rates and laws that have been enacted or substantively enacted by the balance sheet date.
UNITY WELL INTEGRITY UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
1
Accounting policies
(Continued)
- 16 -
1.14
Provisions
Provisions are made where an event has taken place that gives the company a legal or constructive obligation that probably requires settlement by a transfer of economic benefit, and a reliable estimate can be made of the amount of the obligation.
Provisions are charged as an expense to the statement of comprehensive income in the year that the company becomes aware of the obligation, and are measured at the best estimate at the balance sheet date of the expenditure required to settle the obligation, taking into account relevant risks and uncertainties.
When payments are eventually made, they are charged to the provision carried in the balance sheet.
1.15
Retirement benefits
The company operates a defined contribution plan for its employees. A defined contribution plan is a pension plan under which the company pays fixed contributions into a separate entity. Once the contributions have been paid the company has no further payment obligations.
The contributions are recognised as an expense in the statement of comprehensive income when they fall due. Amounts not paid are shown in accruals as a liability in the balance sheet. The assets of the plan are held separately from the company in independently administered funds.
1.16
Leases
Rentals paid under operating leases are charged to the statement of comprehensive income on a straight-line basis over the lease term
1.17
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.
1.18
Finance costs are charged to the statement of comprehensive income over the term of the debt using the effective interest method so that the amount charged is at a constant rate on the carrying amount. Issue costs are initially recognised as a reduction in the proceeds of the associated capital instrument.
UNITY WELL INTEGRITY UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
- 17 -
2
Judgements and key sources of estimation uncertainty
In the application of the company’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.
Critical judgements
Research and development
Determining when a project moves from research to development requires significant judgment of the commercial opportunities and technical feasibility of the product under development. Management closely monitor project performance and commercial opportunities for impairment. Intangible assets from research and development at the balance sheet date amounted to £141,831 (2023: £224,413).
The directors consider that there are no other judgements or estimates which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities.
3
Turnover
2024
2023
£
£
Turnover analysed by class of business
Sale of goods
1,947,333
2,181,160
Rendering of services
10,879,704
10,698,556
12,827,037
12,879,716
Turnover analysed by geographical market has not been disclosed because in the opinion of the directors, to do so would be seriously prejudicial to the interests of the company.
4
Operating profit
2024
2023
Operating profit for the year is stated after charging/(crediting):
£
£
Exchange differences
2,038
6,801
Research and development costs
236
(4,631)
Fees payable to the company's auditor for the audit of the company's financial statements
17,500
16,275
Depreciation of owned tangible fixed assets
342,102
285,041
Profit on disposal of tangible fixed assets
-
(13,767)
Amortisation of intangible assets
87,096
84,164
Operating lease charges
278,832
276,080
UNITY WELL INTEGRITY UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
- 18 -
5
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2024
2023
Number
Number
Total
82
85
Their aggregate remuneration comprised:
2024
2023
£
£
Wages and salaries
4,893,787
4,895,786
Social security costs
573,172
567,182
Pension costs
327,358
263,282
5,794,317
5,726,250
6
Directors' remuneration
2024
2023
£
£
Remuneration for qualifying services
449,975
440,094
Company pension contributions to defined contribution schemes
34,176
26,406
484,151
466,500
Remuneration disclosed above include the following amounts paid to the highest paid director:
2024
2023
£
£
Remuneration for qualifying services
252,000
247,000
Company pension contributions to defined contribution schemes
16,653
14,820
During the year retirement benefits were accruing to 3 Directors (2023: 3) in respect of defined contribution pension schemes.
7
Interest receivable and similar income
2024
2023
£
£
Interest on bank deposits
14,724
12,906
UNITY WELL INTEGRITY UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
- 19 -
8
Taxation
2024
2023
£
£
Current tax
Adjustments in respect of prior periods
332
Deferred tax
Origination and reversal of timing differences
83,195
214,293
Adjustment in respect of prior periods
950
Total deferred tax
84,145
214,293
Total tax charge
84,145
214,625
The actual charge for the year can be reconciled to the expected charge for the year based on the profit or loss and the standard rate of tax as follows:
2024
2023
£
£
Profit before taxation
1,508,434
1,596,105
Expected tax charge based on the standard rate of corporation tax in the UK of 25.00% (2023: 23.50%)
377,109
375,085
Expenses not deductible for tax purposes
2,617
2,000
Adjustments in respect of prior years
332
Group relief
(295,141)
(139,658)
Deferred tax adjustments in respect of prior years
950
Fixed asset differences
38
Other tax adjustments
(1,428)
(2,924)
Movements in deferred tax not recognised
(32,689)
Remeasurement of deferred tax for changes in tax rates
12,479
Taxation charge for the year
84,145
214,625
UNITY WELL INTEGRITY UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
- 20 -
9
Intangible fixed assets
Intellectual property
£
Cost
At 1 January 2024
465,075
Additions
6,980
Disposals
(14,902)
At 31 December 2024
457,153
Amortisation and impairment
At 1 January 2024
240,662
Amortisation charged for the year
87,096
Disposals
(12,436)
At 31 December 2024
315,322
Carrying amount
At 31 December 2024
141,831
At 31 December 2023
224,413
Amortisation on intangible assets is charged to administrative expenses.
UNITY WELL INTEGRITY UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
- 21 -
10
Tangible fixed assets
Tenants improvements
Assets under construction
Plant and machinery
Office equipment
Computer equipment
Motor vehicles
Total
£
£
£
£
£
£
£
Cost
At 1 January 2024
189,783
2,214,000
48,891
391,525
11,995
2,856,194
Additions
32,290
277,707
348,342
12,158
18,487
688,984
At 31 December 2024
222,073
277,707
2,562,342
61,049
410,012
11,995
3,545,178
Depreciation and impairment
At 1 January 2024
151,612
1,359,813
33,225
373,436
7,797
1,925,883
Depreciation charged in the year
14,297
303,237
7,154
15,015
2,399
342,102
At 31 December 2024
165,909
1,663,050
40,379
388,451
10,196
2,267,985
Carrying amount
At 31 December 2024
56,164
277,707
899,292
20,670
21,561
1,799
1,277,193
At 31 December 2023
38,171
854,187
15,666
18,089
4,198
930,311
UNITY WELL INTEGRITY UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
- 22 -
11
Fixed asset investments
2024
2023
Notes
£
£
Investments in subsidiaries
12
3,843,420
3,843,420
12
Subsidiaries
Details of the company's subsidiaries at 31 December 2024 are as follows:
Name of undertaking
Registered office
Principal Activity
Class of
% Held
shares held
Direct
Unity Well Integrity Europe Limited
Bessemer Way, Great Yarmouth, Norfolk, NR31 0LX
Provider of well integrity technology and services
Ordinary
100.00
13
Stocks
2024
2023
£
£
Work in progress
90,868
489,650
Finished goods and goods for resale
178,739
132,126
269,607
621,776
14
Debtors
2024
2023
Amounts falling due within one year:
£
£
Trade debtors
1,477,502
2,216,482
Amounts owed by group undertakings
5,071,805
3,328,948
Other debtors
11,986
5,426
Prepayments and accrued income
368,679
930,539
6,929,972
6,481,395
Amounts owed by group undertakings are unsecured, interest free and repayable on demand.
UNITY WELL INTEGRITY UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
- 23 -
15
Creditors: amounts falling due within one year
2024
2023
£
£
Trade creditors
404,279
722,062
Amounts owed to group undertakings
1,160,490
1,429,438
Taxation and social security
172,013
119,965
Accruals and deferred income
514,549
767,504
2,251,331
3,038,969
Amounts owed to group undertakings are unsecured, interest free and repayable on demand.
16
Deferred taxation
The following are the major deferred tax liabilities and assets recognised by the company and movements thereon:
Liabilities
Liabilities
2024
2023
Balances:
£
£
Accelerated capital allowances
298,438
214,293
2024
Movements in the year:
£
Liability at 1 January 2024
214,293
Charge to profit or loss
84,145
Liability at 31 December 2024
298,438
17
Retirement benefit schemes
2024
2023
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
327,358
263,282
The company operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the company in an independently administered fund. Contributions: totalling £nil (2023: £30,300) were payable to the fund at the balance sheet date and are included in creditors.
UNITY WELL INTEGRITY UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
- 24 -
18
Share capital
2024
2023
2024
2023
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary A shares of 10p each
12
12
1
1
Ordinary B shares of 10p each
49
49
5
5
Ordinary shares of 10p each
5,488
5,488
549
549
5,549
5,549
555
555
B Ordinary and Ordinary shares have attached to them full voting, dividend and capital distribution rights. A Ordinary shares have no dividend or voting rights and only receive return of capital on liquidation.
19
Reserves
Share premium
The share premium account includes any premiums received on issue of share capital. Any transaction costs associated with the issuing of shares are deducted from share premium.
Profit and loss account
The profit and loss account includes all current and prior period retained profits and losses, less dividends paid.
20
Related party transactions
The table below outlines the transactions with entities for which the company's directors were also directors or transactions with entities which are part of the FrontRow Energy Technology Group.
Transaction value
Balance
Transaction value
Balance
(sales)/purchases
owed by / (owed to)
(sales)/purchases
owed by / (owed to)
2024
2024
2023
2023
£
£
£
£
FrontRow Energy Technology Group Limited
(37,198)
3,827
(41,164)
4,243
Pragma Well Technology Limited
8,833
-
1,359
(1,151)
Pragma Well Technology Limited
(325,760)
198,221
(309,012)
121,386
Well-Sense Technology Limited
(94,726)
29,650
(91,762)
10,103
Well-Sense Technology UK Limited
-
-
339,908
-
Well-Sense Technology UK Limited
(34,815)
5,191
(17,940)
-
Clearwell Energy Holdings Limited
-
-
(180)
216
Clearwell Energy Limited
(750)
192
121,955
(24,391)
Citystage Properties Limited
196,154
-
251,777
-
Downhole Tools International Limited
43,552
722
126,099
(80,467)
(244,710)
237,803
381,040
29,939
UNITY WELL INTEGRITY UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
- 25 -
21
Operating lease commitments
Lessee
At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:
2024
2023
£
£
Within one year
266,888
272,014
Between two and five years
1,081,318
1,007,488
In over five years
1,279,118
1,588,824
2,627,324
2,868,326
The majority of the operating lease commitments relate to long term property leases.
22
Ultimate controlling party
The immediate parent company and the smallest group in which the results of the company are consolidated is Unity Well Integrity Limited, a company registered at 2 Marischal Square, Broad Street, Aberdeen, AB10 1DQ.
The largest group in which the results of the company are consolidated is that headed by FrontRow Energy Technology Group Limited whose group financial statements can be obtained from the UK Companies House website.
In the opinion of the directors, there is no ultimate controlling party.
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