Company Registration No. 07056359 (England and Wales)
DOWNHOLE TOOLS INTERNATIONAL LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
DOWNHOLE TOOLS INTERNATIONAL LIMITED
COMPANY INFORMATION
Directors
N S McGuinness
D Stephenson
(Appointed 12 November 2025)
D Smithwhite
(Appointed 12 November 2025)
Secretary
Burness Paull LLP
Company number
07056359
Registered office
2 Allens Lane
Poole
BH16 5DA
Auditor
Johnston Carmichael LLP
Bishop's Court
29 Albyn Place
Aberdeen
AB10 1YL
DOWNHOLE TOOLS INTERNATIONAL LIMITED
CONTENTS
Page
Directors' report
1 - 2
Directors' responsibilities statement
3
Independent auditor's report
4 - 7
Statement of comprehensive income
8
Balance sheet
9
Statement of changes in equity
10
Notes to the financial statements
11 - 20
DOWNHOLE TOOLS INTERNATIONAL LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2024
- 1 -

The directors present their annual report and financial statements for the year ended 31 December 2024.

Principal activities

The principal activity of t he c ompany is the design and manufacture of well intervention, production and abandonment technology for the energy industry.

Results and dividends

The results for the year are set out on page 8.

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 C Manning
(Resigned 31 July 2024)
N S McGuinness
G J Smart
(Resigned 12 November 2025)
N Cameron
(Appointed 30 August 2024 and resigned 12 November 2025)
D Stephenson
(Appointed 12 November 2025)
D Smithwhite
(Appointed 12 November 2025)
Qualifying third party indemnity provisions

The company has made qualifying third party indemnity provisions for the benefit of its directors during the year. These provisions remain in force at the reporting date.

Future developments

The trading environment has remained challenging in 2025, with further funding received from Frontrow Energy Technology Group to allow for continued development of the company and its parent, Pragma Well Technology Limited. The company continued to develop its M-Bubble technology, completing a project to adapt the technology for carbon capture applications which has led to follow on orders. The company also delivered a repeat order for its Annular Safety Valves (“ASVs”) for hydrogen storage application. Combined, these projects firmly position the company in the energy transition space. The company continues to invest in its sales team to further develop its relationship and proximity to its customers.

Auditor

The auditor, Johnston Carmichael LLP, is deemed to be reappointed under section 487(2) of the Companies Act 2006.

Statement of disclosure to auditor

Each of the persons who are directors at the time when this directors' report is approved has confirmed that:

- so far as the directors are aware, there is no relevant audit information of which the company's auditor is unaware, and

- the directors have taken all the steps that ought to have been taken as a director in order to be aware of any relevant audit information and to establish that the company's auditor is aware of that information.

DOWNHOLE TOOLS INTERNATIONAL LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
- 2 -
Small companies exemption

This report has been prepared in accordance with the provisions applicable to companies entitled to the small companies exemption provided by section 415A of the Companies Act 2006.

On behalf of the board
N S McGuinness
Director
4 February 2026
DOWNHOLE TOOLS INTERNATIONAL LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2024
- 3 -

The directors are responsible for preparing the directors' report and the financial statements in accordance with applicable law and regulations.

Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with 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.

DOWNHOLE TOOLS INTERNATIONAL LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF DOWNHOLE TOOLS INTERNATIONAL LIMITED
- 4 -
Opinion

We have audited the financial statements of Downhole Tools International 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 F inancial R eporting S tandard 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 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.

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the 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.

Other information

The other information comprises the information included in the annual report and financial statements other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual report and financial statements. 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, b ased on the work undertaken in the course of the audit:

- t he information given in the d irectors’ r eport for the financial year for which the financial statements are prepared is consistent with the financial statements; and

- t he d irectors’ r eport h as been prepared in accordance with applicable legal requirements.

DOWNHOLE TOOLS INTERNATIONAL LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF DOWNHOLE TOOLS INTERNATIONAL LIMITED
- 5 -
Matters on which we are required to report by exception

In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identifie d material misstatements in the directors' r eport.

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; or

- the directors were not entitled to prepare the financial statements in accordance with the small companies regime and take advantage of the small companies' exemption in preparing the directors' report and from the requirement to prepare a strategic report.

Responsibilities of directors

As explained more fully in the directors' r esponsibilities s tatement set out 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.

A ll 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.

DOWNHOLE TOOLS INTERNATIONAL LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF DOWNHOLE TOOLS INTERNATIONAL LIMITED
- 6 -

Extent to which the audit was considered capable of detecting irregularities, including fraud (continued)

We obtained an understanding of the legal and regulatory frameworks that are applicable to the 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:

- Companies Act 2006;

- Corporation Tax legislation; and

- UK Generally Accepted Accounting Practice.

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, 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:

- Management override of controls; and

- Revenue recognition

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:

- Performing audit work procedures confirming the occurrence of revenue by conducting appropriate testing over these revenue streams and conducting appropriate cut-off testing at year end to ensure sales are recorded in the correct financial year;

- 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 assessin g judgements made by management in their calculation of accounting estimates for potential management bias;

- 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.

DOWNHOLE TOOLS INTERNATIONAL LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF DOWNHOLE TOOLS INTERNATIONAL LIMITED
- 7 -

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.

Lisa Thomson (Senior Statutory Auditor)
For and on behalf of Johnston Carmichael LLP
4 February 2026
Statutory Auditor
Bishop's Court
29 Albyn Place
Aberdeen
AB10 1YL
DOWNHOLE TOOLS INTERNATIONAL LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2024
- 8 -
2024
2023
Notes
£
£
Turnover
4,990,603
4,833,570
Cost of sales
(3,316,986)
(3,312,956)
Gross profit
1,673,617
1,520,614
Administrative expenses
(1,824,600)
(1,594,203)
Other operating income
4,463
9,054
Operating loss
(146,520)
(64,535)
Interest receivable and similar income
330
-
0
Interest payable and similar expenses
(56,851)
(56,160)
Loss before taxation
(203,041)
(120,695)
Tax on loss
4
49,257
28,930
Loss for the financial year
(153,784)
(91,765)

There was no other comprehensive income for 202 4 (202 3: £nil).

DOWNHOLE TOOLS INTERNATIONAL LIMITED
BALANCE SHEET
AS AT
31 DECEMBER 2024
31 December 2024
- 9 -
2024
2023
Notes
£
£
£
£
Fixed assets
Intangible assets
6
51,459
55,513
Tangible assets
7
355,147
348,885
406,606
404,398
Current assets
Stocks
8
870,120
1,158,950
Debtors
9
2,115,202
2,226,304
Cash at bank and in hand
70,574
109,880
3,055,896
3,495,134
Creditors: amounts falling due within one year
10
(935,257)
(1,088,408)
Net current assets
2,120,639
2,406,726
Total assets less current liabilities
2,527,245
2,811,124
Creditors: amounts falling due after more than one year
11
(30,097)
(110,935)
Provisions for liabilities
13
(22,527)
(71,784)
Net assets
2,474,621
2,628,405
Capital and reserves
Called up share capital
14
24
24
Profit and loss reserves
15
2,474,597
2,628,381
Total equity
2,474,621
2,628,405

These financial statements have been prepared in accordance with the provisions applicable to companies subject to the small companies regime under section 415A of the Companies Act 2006.

The financial statements were approved by the board of directors and authorised for issue on 4 February 2026 and are signed on its behalf by:
N S McGuinness
Director
Company Registration No. 07056359
DOWNHOLE TOOLS INTERNATIONAL LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2024
- 10 -
Share capital
Profit and loss reserves
Total
£
£
£
Balance at 1 January 2023
24
2,720,146
2,720,170
Year ended 31 December 2023:
Loss and total comprehensive expense for the year
-
(91,765)
(91,765)
Balance at 31 December 2023
24
2,628,381
2,628,405
Year ended 31 December 2024:
Loss and total comprehensive expense for the year
-
(153,784)
(153,784)
Balance at 31 December 2024
24
2,474,597
2,474,621
DOWNHOLE TOOLS INTERNATIONAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
- 11 -
1
Accounting policies
Company information

Downhole Tools International Limited is a private company limited by shares incorporated and domiciled in England and Wales. The registered office is 2 Allens Lane, Poole, BH16 5DA. The company's principal location of business is 2 Allens Lane, Poole, BH16 5DA. Its principal activities are included within the directors' report on page 1.

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 as applicable to companies subject to the small companies regime. The disclosure requirements of section 1A of FRS 102 have been applied other than where additional disclosure is required to show a true and fair view.

The financial statements are prepared in sterling, which is the functional currency of the company. Monetary a mounts 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 has taken advantage of the exemption under s.33 of FRS 102 to not disclose related party transactions with companies that are part of the Pragma group of companies.

1.2
Going concern

The fragility of both the UK and wider global economy means significant focus is placed on the adoption of the going concern concept for the preparation of the financial statements. The company’s leadership has prepared a long-term strategy plan for the development of the business over the next period, which contains detailed plans and financial projections. As part of this long-term strategy, the parent company’s shareholders have committed to a further investment of £1.75m into the business now, which allows this strategy to be implemented. As part of strong financial management, financial performance will continue to be monitored against the long-term strategy, with delivery of this critical for the business.

The long-term strategy gives confidence to the Board of Directors that the company will be able to meet their liabilities as they fall due for a period of at least 12 months from the date of approval of these financial statements and as such, the Board of Directors have prepared these financial statements on a going concern basi s.

1.3
Turnover

Turnover is measured as the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes.

Sale of goods

Turnover from the sale of goods is recognised when all of the following conditions are satisfied:

- the c ompany has transferred the significant risks and rewards of ownership to the buyer, which is usually when the goods are made available for collection to the buyer (ex-works sales);

- the c ompany retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold;

- the amount of turnover can be measured reliably;

- it is probable that the c ompany will receive the consideration due under the transaction; and

- the costs incurred or to be incurred in respect of the transaction can be measured reliably.

DOWNHOLE TOOLS INTERNATIONAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
1
Accounting policies
(Continued)
- 12 -

Rendering of services

Turnover from a contract to provide services is recognised in the period in which the services are provided in accordance with the stage of completion of the contract when all of the following conditions are satisfied:

- the amount of turnover can be measured reliably;

- it is probable that the company will receive the consideration due under the contract;

- the stage of completion of the contract at the end of the reporting period can be measured reliably; and

- the costs incurred and the costs to complete the contract can be measured reliably.

Interest income

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, which range from 3 to 5 years.

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
Tangible fixed assets

Tangible fixed assets 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 recognised so as to allocate the cost of assets less their residual values over their estimated useful lives on the following bases:

Leasehold improvements
20%-25% straight line
Plant and machinery
25% reducing balance or 25%-33% straight line
Fixtures, fittings and equipment
25% reducing balance or 25% straight line

The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date.

Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in the statement of comprehensive income.

1.6
Finance costs

Finance costs are charged to the s tatement of c omprehensive i ncome 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.

DOWNHOLE TOOLS INTERNATIONAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
1
Accounting policies
(Continued)
- 13 -
1.7
Stocks

Stocks are stated at the lower of cost and net realisable value on a first in, first out basis. Net realisable value is calculated as estimated selling price less costs to complete and sell. Work in progress and finished goods include labour and attributable overheads that have been incurred in bringing the stocks to their present location and condition, based upon an hourly absorption rate.

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

1.8
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.

1.9
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 and loans to related parties.

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.

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

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

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

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

Debtors

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

Creditors

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

1.10
Equity instruments

Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs. Equity dividends are recognised when they become legally payable. Interim equity dividends are recognised when paid. Final equity dividends are recognised when approved by the shareholders at an annual general meeting.

DOWNHOLE TOOLS INTERNATIONAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
1
Accounting policies
(Continued)
- 14 -
1.11
Taxation

The tax expense represents the sum of the tax currently payable and deferred tax.

Current tax

The tax expense for the period comprises current and deferred tax. Tax is recognised in the s tatement of c omprehensive i ncome 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 c ompany operates and generates income.

Deferred tax

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.

1.12
Pensions

The c ompany operates a defined contribution plan for its employees. A defined contribution plan is a pension plan under which the c ompany pays fixed contributions into a separate entity. Once the contributions have been paid the c ompany has no further payment obligations.

The contributions are recognised as an expense in the s tatement of c omprehensive i ncome when they fall due. Amounts not paid are shown in accruals as a liability in the b alance s heet. The assets of the plan are held separately from the c ompany in independently administered funds.

1.13
Operating leases: the company as lessee

Rentals paid under operating leases are charged to the s tatement of c omprehensive i ncome on a straight-line basis over the lease term.

DOWNHOLE TOOLS INTERNATIONAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
1
Accounting policies
(Continued)
- 15 -
1.14
Foreign currency translation

Foreign currency transactions are translated into the functional currency using the spot exchange rates at the dates of the transactions.

At each period end foreign currency monetary items are translated using the closing rate. Non-monetary items measured at historical cost are translated using the exchange rate at the date of the transaction and non-monetary items measured at fair value are measured using the exchange rate when fair value was determined.

Foreign exchange gains and losses resulting from the settlement of transactions and from the translation at period-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the s tatement of c omprehensive i ncome.

Foreign exchange gains and losses that relate to borrowings and cash and cash equivalents are presented in the s tatement of c omprehensive i ncome within 'finance income or costs'. All other foreign exchange gains and losses are recognised in administrative expenses.

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.

Key sources of estimation uncertainty

The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are as follows.

Overhead allocation to stock and work-in-progress

Stock (excluding raw materials) and work-in-progress balances includes an allocation of overheads that have been incurred in bringing the inventories to their present location and condition. The inclusion of overheads within inventory is determined by management, based upon an hourly absorption rate. The proportion of certain costs attributed to production is a key estimate made by management.

Contract accounting

The values recognised in relation to rendering of services that are in progress at the balance sheet date involve estimates on the proportion of work carried out. Profits on these contracts are calculated on a prudent basis to reflect turnover and related costs as the contract progresses. Profit is only recognised when the final outcome is considered to be assessed with reasonable certainty. The company regularly reviews these estimates to ensure they reflect the latest known position.

DOWNHOLE TOOLS INTERNATIONAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
- 16 -
3
Employees

The average monthly number of persons (including directors) employed by the company during the year was:

2024
2023
Number
Number
Total
33
35
4
Taxation
2024
2023
£
£
Deferred tax
Origination and reversal of timing differences
(48,635)
(29,320)
Adjustment in respect of prior periods
(622)
390
Total deferred tax
(49,257)
(28,930)
5
Impairments

Impairment tests have been carried out where appropriate and the following impairment losses have been recognised in profit or loss:

2024
2023
£
£
In respect of:
Intangible assets
-
0
40,276
Recognised in:
Administrative expenses
-
40,276
DOWNHOLE TOOLS INTERNATIONAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
- 17 -
6
Intangible fixed assets
Development costs
£
Cost
At 1 January 2024
235,740
Additions
4,044
At 31 December 2024
239,784
Amortisation and impairment
At 1 January 2024
180,227
Amortisation charged for the year
8,098
At 31 December 2024
188,325
Carrying amount
At 31 December 2024
51,459
At 31 December 2023
55,513
7
Tangible fixed assets
Leasehold improvements
Plant and machinery etc
Total
£
£
£
Cost
At 1 January 2024
87,888
1,135,000
1,222,888
Additions
1,480
124,449
125,929
At 31 December 2024
89,368
1,259,449
1,348,817
Depreciation and impairment
At 1 January 2024
82,310
791,693
874,003
Depreciation charged in the year
1,997
117,670
119,667
At 31 December 2024
84,307
909,363
993,670
Carrying amount
At 31 December 2024
5,061
350,086
355,147
At 31 December 2023
5,578
343,307
348,885
DOWNHOLE TOOLS INTERNATIONAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
- 18 -
8
Stocks
2024
2023
£
£
Raw materials and consumables
59,118
74,553
Work in progress
221,012
253,161
Finished goods and goods for resale
589,990
831,236
870,120
1,158,950
9
Debtors
2024
2023
Amounts falling due within one year:
£
£
Trade debtors
870,684
1,047,716
Amounts owed by group undertakings
841,665
1,022,870
Other debtors
145,507
63,119
Prepayments and accrued income
257,346
92,599
2,115,202
2,226,304

Amounts owed by group undertakings are unsecured, interest free and repayable on demand.

10
Creditors: amounts falling due within one year
2024
2023
Notes
£
£
Invoice financing facility
157,230
280,816
Obligations under hire purchase contracts
12
80,837
73,514
Trade creditors
239,765
447,172
Amounts owed to group undertakings
900
-
0
Taxation and social security
35,509
38,499
Accruals and deferred income
421,016
248,407
935,257
1,088,408

The balance due in respect of invoice financing is secured over the debts to which the amounts relate.

Amounts owed to group undertakings are unsecured, interest free and repayable on demand.

11
Creditors: amounts falling due after more than one year
2024
2023
Notes
£
£
Obligations under hire purchase contracts
12
30,097
110,935
DOWNHOLE TOOLS INTERNATIONAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
- 19 -
12
Hire purchase contracts
2024
2023
Future minimum payments under hire purchase fall due as follows:
£
£
Within one year
80,837
73,514
In two to five years
30,097
110,935
110,934
184,449

The net obligations under hire purchase contracts are secured on those assets to which they relate.

13
Deferred taxation

The following are the major deferred tax liabilities and assets recognised by the company and movements thereon:

Liabilities
Liabilities
2024
2023
Balances:
£
£
Fixed asset timing differences
85,829
94,222
Short term timing differences
(1,317)
(481)
Losses and other deductions
(61,985)
(21,957)
22,527
71,784
2024
Movements in the year:
£
Liability at 1 January 2024
71,784
Credit to profit or loss
(49,257)
Liability at 31 December 2024
22,527
14
Called up share capital
2024
2023
2024
2023
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £1 each
24
24
24
24

There is a single class of ordinary shares. There are no restrictions on dividends and the repayment of capital.

15
Profit and loss reserves

The profit and loss re serve includes all current and prior periods retained profits and losses, net of any dividends paid.

DOWNHOLE TOOLS INTERNATIONAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
- 20 -
16
Operating lease commitments
Lessee

At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, as follows:

2024
2023
£
£
Within one year
78,836
78,724
Between two and five years
126,525
198,825
205,361
277,549
17
Parent company

The immediate parent company is Pragma Well Technology Limited. The smallest group in which the results of the company are consolidated is that of Pragma Well Technology Limited, registered at Wellheads Crescent, Wellheads Industrial Estate, Aberdeen, AB21 7GA.

The largest group in which the results of the company are consolidated is that headed by Front r ow Energy Technology Group Limited, registered at 2 Marischal Square, Broad Street, Aberdeen, AB10 1DQ.

The group financial statements of Pragma Well Technology Limited and Frontrow Energy Technology Group Limited 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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