P R Marriott Drilling Limited - Limited company accounts 20.1

REGISTERED NUMBER: 02592487 (England and Wales)

GROUP STRATEGIC REPORT, REPORT OF THE DIRECTORS AND

CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2019

FOR

P R MARRIOTT DRILLING LIMITED

Page

Company Information

1

Group Strategic Report

2

Report of the Directors

4

Report of the Independent Auditors

6

Consolidated Income Statement

8

Consolidated Other Comprehensive Income

9

Consolidated Balance Sheet

10

Company Balance Sheet

11

Consolidated Statement of Changes in Equity

12

Company Statement of Changes in Equity

13

Consolidated Cash Flow Statement

14

Notes to the Consolidated Cash Flow Statement

15

Notes to the Consolidated Financial Statements

17

DIRECTORS:

A J Beswick

J W Hobday

SECRETARY:

D I Jones

REGISTERED OFFICE:

Springwater House

Pilsley Road

Danesmoor

Chesterfield

Derbyshire

S45 9BQ

REGISTERED NUMBER:

02592487 (England and Wales)

AUDITORS:

Hollis and Co Limited

Chartered Accountants

Statutory Auditor

35 Wilkinson Street

Sheffield

South Yorkshire

S10 2GB

The directors present their strategic report of the company and the group for the year ended 31 December 2019.

REVIEW OF BUSINESS

In 2019 the company was awarded a number of long-term overseas contracts. These contracts did not start operations until the latter half of the year, therefore the turnover figure is inclusive of the high mobilization costs related to these projects. The strength of our clients and the long-term nature of these contracts gives the company great comfort in the ability to produce ongoing profits. In addition to the new contracts in hand, the company is still being invited to tender for numerous varied and interesting projects, in both new and existing markets.

Marriott Drilling maintains a strong team working ethos and a proactive approach to ensure its customer's needs are met as well as being competitive with pricing and remaining commercially realistic. Marriott Drilling has successfully maintained a minimal downtime rate for drilling rigs and associated equipment due to comprehensive routine maintenance programmes that have kept project delivery lead times on target.

Over the coming year the group plans to continue consolidating its position in key markets where Marriott Drilling has a market leading position and also seeks to expand into new markets and territories where the right opportunities exist. Marriott Drilling considers the geothermal industry in selected locations as being a key target industry area and as we strive to increase our market share within this part of the deep drilling industry, the group is committed to an expansion of its activities in East Africa through geothermal activities.

PRINCIPAL RISKS AND UNCERTAINTIES

Exchange rate exposure over the long term nature of our contracts can be a concern for the business however a significant natural hedge is created by purchases being made in overseas currencies, this along with our use of exchange rate hedging help reduce risk to the business.

Oil price reductions may not affect the short term prospects of the business but may be an issue long term. The company is actively seeking to expand upon its Geothermal and non Oil & Gas based market to assist in mitigating the long term risk.

Political uncertainty both at home and in various overseas territories in which we are currently operating always mean the company needs to be on its guard for the effects of change.

With regards to employee protection for both health and security, third party services are utilised where necessary.

Default or non-payment by a major customer will always be a risk, but the blue chip and sovereign nature of our customers whilst not fully negating the risk certainly helps to minimise it.

KEY PERFORMANCE INDICATORS

There are a number of key performance indicators ("KPI") that the management team use to monitor the performance of the business. These are as follows:

12 Months ended 31 December 2019

12 Months ended 31December 2018

Turnover

£38.4m

£7.7m

EBITDA

£4.0m

£0.2m

Return on Capital Employed

2.7%

(6.2%

)

FUTURE PROSPECTS

In the UK our groundwater engineering division continues to go from strength to strength by increasing market share within its existing market and diversification.

The Marriott Drilling Group continues to invest in the latest drilling technology to ensure the company has the technical capability providing a quality service. The company will also continue to maintain and extend our ISO standard certification to further increase our business credentials as well as the continuing to offer competitive pricing and innovative contracting solutions.

Due to the number of new and existing contracts in hand the company has strengthened the management team for both the UK and overseas operations, not only does this assist in the operation and governance of the existing workload but it has proven to expand our capacity to tender for new prospects as they arise.

GOING CONCERN MATTERS

At the back end of Q1 2020, the group has had to deal with the effects of the COVID19 pandemic. The directors have put measures in place to mitigate the impact, which includes the use of government schemes introduced. We believe that the group will come through the challenging situation in a stronger position as we have built stronger relationships with clients, our employees and our supply chain.

ON BEHALF OF THE BOARD:

J W Hobday - Director

3 December 2020

The directors present their report with the financial statements of the company and the group for the year ended 31 December 2019.

PRINCIPAL ACTIVITY

The principal activity of the group in the year under review was that of drilling and related services to the oil, gas, gas storage, shale gas, CBM, geothermal, mining and water supply industries.

DIVIDENDS

No dividends will be distributed for the year ended 31 December 2019.

RESEARCH AND DEVELOPMENT

During the year, the group continued to reinvest in the research and development of new and innovative processes to gain a competitive advantage in new and existing markets.

EVENTS SINCE THE END OF THE YEAR

Information relating to events since the end of the year is given in the notes to the financial statements.

DIRECTORS

The directors shown below have held office during the whole of the period from 1 January 2019 to the date of this report.

A J Beswick

J W Hobday

QUALIFYING THIRD PARTY INDEMNITY PROVISION

During the financial year and at the time the directors report is approved, a Qualifying Third Party Indemnity Provision for the benefit of the directors is in force.

DISCLOSURE IN THE STRATEGIC REPORT

As required by Section 414C(11) Companies Act 2006, this statement confirms that certain items that are required to be disclosed in the directors report are set out in the strategic report.

STATEMENT OF DIRECTORS' RESPONSIBILITIES

The directors are responsible for preparing the Group Strategic Report, the Report of the Directors and the financial statements in accordance with applicable law and regulations.

Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and the group and of the profit or loss of the group for that period. In preparing these financial statements, the directors are required to:

-	select suitable accounting policies and then apply them consistently;

-	make judgements and accounting estimates that are reasonable and prudent;

-	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 and the group's transactions and disclose with reasonable accuracy at any time the financial position of the company and the group 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 the group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

STATEMENT AS TO DISCLOSURE OF INFORMATION TO AUDITORS

So far as the directors are aware, there is no relevant audit information (as defined by Section 418 of the Companies Act 2006) of which the group's auditors are unaware, and each director has taken all the steps that he ought to have taken as a director in order to make himself aware of any relevant audit information and to establish that the group's auditors are aware of that information.

AUDITORS

The auditors, Hollis and Co Limited, will be proposed for re-appointment at the forthcoming Annual General Meeting.

ON BEHALF OF THE BOARD:

J W Hobday - Director

3 December 2020

Opinion

We have audited the financial statements of P R Marriott Drilling Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 December 2019 which comprise the Consolidated Income Statement, Consolidated Other Comprehensive Income, Consolidated Balance Sheet, Company Balance Sheet, Consolidated Statement of Changes in Equity, Company Statement of Changes in Equity, Consolidated Cash Flow Statement and Notes to the Consolidated Cash Flow Statement, Notes to the Financial Statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:

-	give a true and fair view of the state of the group's and of the parent company affairs as at 31 December 2019 and of the group's profit for the year then ended;

-	have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and

-	have been prepared in accordance with the requirements of the Companies Act 2006.

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditors' responsibilities for the audit of the financial statements section of our report. We are independent of the group 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

We have nothing to report in respect of the following matters in relation to which the ISAs (UK) require us to report to you where:

-	the directors' use of the going concern basis of accounting in the preparation of the financial statements is not appropriate; or

-

the directors have not disclosed in the financial statements any identified material uncertainties that may cast significant doubt about the group's ability to continue to adopt the going concern basis of accounting for a period of at least twelve months from the date when the financial statements are authorised for issue.

Other information

The directors are responsible for the other information. The other information comprises the information in the Group Strategic Report and the Report of the Directors, but does not include the financial statements and our Report of the Auditors thereon.

Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.

In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Opinions on other matters prescribed by the Companies Act 2006

In our opinion, based on the work undertaken in the course of the audit:

-	the information given in the Group Strategic Report and the Report of the Directors for the financial year for which the financial statements are prepared is consistent with the financial statements; and

-	the Group Strategic Report and the Report of the Directors have been prepared in accordance with applicable legal requirements.

Matters on which we are required to report by exception

In the light of the knowledge and understanding of the group and the parent company and its environment obtained in the course of the audit, we have not identified material misstatements in the Group Strategic Report or the Report of the Directors.

We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion:

-	adequate accounting records have not been kept by the parent company, or returns adequate for our audit have not been received from branches not visited by us; or

-	the parent company financial statements are not in agreement with the accounting records and returns; or

-	certain disclosures of directors' remuneration specified by law are not made; or

-	we have not received all the information and explanations we require for our audit.

Responsibilities of directors

As explained more fully in the Statement of Directors' Responsibilities set out on page four, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, the directors are responsible for assessing the group's and the parent company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the group or the parent company or to cease operations, or have no realistic alternative but to do so.

Auditors' 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 a Report of the Auditors that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at www.frc.org.uk/auditorsresponsibilities. This description forms part of our Report of the Auditors.

Use of our report

This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in a Report of the Auditors and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members as a body, for our audit work, for this report, or for the opinions we have formed.

Peter Hollis (Senior Statutory Auditor)

for and on behalf of Hollis and Co Limited

Chartered Accountants

Statutory Auditor

35 Wilkinson Street

Sheffield

South Yorkshire

S10 2GB

4 December 2020

TURNOVER

4

38,427,702

7,694,806

Cost of sales

28,899,043

5,329,314

GROSS PROFIT

9,528,659

2,365,492

Distribution costs

1,016,709

356,834

Administrative expenses

7,714,704

4,248,853

8,731,413

4,605,687

797,246

(2,240,195

)

Other operating income

5

109,745

133,800

OPERATING PROFIT/(LOSS)

7

906,991

(2,106,395

)

Interest receivable and similar income

77,714

153,038

984,705

(1,953,357

)

Interest payable and similar expenses

8

117,923

225,342

PROFIT/(LOSS) BEFORE TAXATION

866,782

(2,178,699

)

Tax on profit/(loss)

9

215,785

(584,169

)

PROFIT/(LOSS) FOR THE FINANCIAL YEAR

650,997

(1,594,530

)

Profit/(loss) attributable to:

Owners of the parent

1,035,955

(1,249,491

)

Non-controlling interests

(384,958

)

(345,039

)

650,997

(1,594,530

)

PROFIT/(LOSS) FOR THE YEAR

650,997

(1,594,530

)

OTHER COMPREHENSIVE INCOME

Currency translation differences on

foreign currency net investments

(374,931

)

347,530

Income tax relating to other comprehensive income

(22,181

)

140,774

OTHER COMPREHENSIVE INCOME FOR THE YEAR, NET OF INCOME TAX

(397,112

)

488,304

TOTAL COMPREHENSIVE INCOME FOR THE YEAR

253,885

Prior year adjustment

243,678

TOTAL COMPREHENSIVE INCOME SINCE LAST ANNUAL REPORT

(862,548

)

Total comprehensive income attributable to:

Owners of the parent

729,579

(604,391

)

Non-controlling interests

(475,694

)

(258,157

)

253,885

(862,548

)

FIXED ASSETS

Tangible assets

11

27,672,266

27,559,248

Investments

12

-

-

27,672,266

27,559,248

CURRENT ASSETS

Stocks

13

1,005,887

349,700

Debtors

14

13,843,910

6,365,171

Cash at bank and in hand

5,398,463

4,611,365

20,248,260

11,326,236

CREDITORS

Amounts falling due within one year

15

13,992,361

4,788,486

NET CURRENT ASSETS

6,255,899

6,537,750

TOTAL ASSETS LESS CURRENT LIABILITIES

33,928,165

34,096,998

CREDITORS

Amounts falling due after more than one year

16

(17,442,841

)

(17,543,827

)

PROVISIONS FOR LIABILITIES

20

(1,560,031

)

(1,881,762

)

NET ASSETS

14,925,293

14,671,409

CAPITAL AND RESERVES

Called up share capital

21

73,002

73,002

Revaluation reserve

22

2,726,494

3,014,203

Capital redemption reserve

22

73,000

73,000

Other reserves

22

1,039,516

1,323,712

Retained earnings

22

10,224,138

8,922,655

SHAREHOLDERS' FUNDS

14,136,150

13,406,572

NON-CONTROLLING INTERESTS

23

789,143

1,264,837

TOTAL EQUITY

14,925,293

14,671,409

The financial statements were approved by the Board of Directors and authorised for issue on 3 December 2020 and were signed on its behalf by:

J W Hobday - Director

FIXED ASSETS

Tangible assets

11

12,937,564

10,142,980

Investments

12

738

586

12,938,302

10,143,566

CURRENT ASSETS

Stocks

13

1,005,887

349,700

Debtors

14

13,106,312

7,009,485

Cash at bank and in hand

3,718,668

4,416,239

17,830,867

11,775,424

CREDITORS

Amounts falling due within one year

15

9,567,120

3,591,301

NET CURRENT ASSETS

8,263,747

8,184,123

TOTAL ASSETS LESS CURRENT LIABILITIES

21,202,049

18,327,689

CREDITORS

Amounts falling due after more than one year

16

(9,670,472

)

(8,868,278

)

PROVISIONS FOR LIABILITIES

20

(1,393,893

)

(1,144,925

)

NET ASSETS

10,137,684

8,314,486

CAPITAL AND RESERVES

Called up share capital

21

73,002

73,002

Revaluation reserve

2,726,494

3,014,203

Capital redemption reserve

73,000

73,000

Retained earnings

7,265,188

5,154,281

SHAREHOLDERS' FUNDS

10,137,684

8,314,486

Company's profit/(loss) for the financial year

1,845,379

(214,375

)

The financial statements were approved by the Board of Directors and authorised for issue on 3 December 2020 and were signed on its behalf by:

J W Hobday - Director

Called up

Capital

share

Retained

Revaluation

redemption

capital

earnings

reserve

reserve

£

£

£

£

Balance at 1 January 2018

73,002

9,942,974

3,084,800

73,000

Prior year adjustment

-

243,678

-

-

As restated

73,002

10,186,652

3,084,800

73,000

Changes in equity

Deficit for the year

-

(1,249,491

)

-

-

Other comprehensive income

-

(225,877

)

140,774

-

Total comprehensive income

-

(1,475,368

)

140,774

-

Reserve transfer

-

211,371

(211,371

)

-

Balance at 31 December 2018

73,002

8,922,655

3,014,203

73,000

Changes in equity

Profit for the year

-

1,035,955

-

-

Other comprehensive income

-

-

(22,181

)

-

Total comprehensive income

-

1,035,955

(22,181

)

-

Reserve transfer

-

265,528

(265,528

)

-

Balance at 31 December 2019

73,002

10,224,138

2,726,494

73,000

Other

Non-controlling

Total

reserves

Total

interests

equity

£

£

£

£

Balance at 1 January 2018

837,187

14,010,963

1,522,994

15,533,957

Prior year adjustment

-

243,678

-

243,678

As restated

837,187

14,254,641

1,522,994

15,777,635

Changes in equity

Deficit for the year

-

(1,249,491

)

(345,039

)

(1,594,530

)

Other comprehensive income

486,525

401,422

86,882

488,304

Total comprehensive income

486,525

(848,069

)

(258,157

)

(1,106,226

)

Balance at 31 December 2018

1,323,712

13,406,572

1,264,837

14,671,409

Changes in equity

Profit for the year

-

1,035,955

(384,958

)

650,997

Other comprehensive income

(284,196

)

(306,377

)

(90,736

)

(397,113

)

Total comprehensive income

(284,196

)

729,578

(475,694

)

253,884

Balance at 31 December 2019

1,039,516

14,136,150

789,143

14,925,293

Called up

Capital

share

Retained

Revaluation

redemption

Total

capital

earnings

reserve

reserve

equity

£

£

£

£

£

Balance at 1 January 2018

73,002

5,157,285

3,084,800

73,000

8,388,087

Changes in equity

Deficit for the year

-

(214,375

)

-

-

(214,375

)

Other comprehensive income

-

-

140,774

-

140,774

Total comprehensive income

-

(214,375

)

140,774

-

(73,601

)

Reserve transfer

-

211,371

(211,371

)

-

-

Balance at 31 December 2018

73,002

5,154,281

3,014,203

73,000

8,314,486

Changes in equity

Profit for the year

-

1,845,379

-

-

1,845,379

Other comprehensive income

-

-

(22,181

)

-

(22,181

)

Total comprehensive income

-

1,845,379

(22,181

)

-

1,823,198

Reserve transfer

-

265,528

(265,528

)

-

-

Balance at 31 December 2019

73,002

7,265,188

2,726,494

73,000

10,137,684

Cash flows from operating activities

Cash generated from operations

1

2,400,333

1,988,835

Interest paid

(22,498

)

-

Interest element of hire purchase payments paid

(34,475

)

-

Finance costs paid

(60,950

)

-

Tax paid

(327,208

)

(541,088

)

Taxation refund

170,586

-

Net cash from operating activities

2,125,788

1,447,747

Cash flows from investing activities

Purchase of tangible fixed assets

(4,042,253

)

(1,206,350

)

Sale of tangible fixed assets

85,291

158,877

Interest received

77,714

153,038

Net cash from investing activities

(3,879,248

)

(894,435

)

Cash flows from financing activities

New loans in year

2,579,709

206,743

New HP loans in the year

848,822

-

Capital repayments in year

(182,330

)

(115,920

)

Amount withdrawn by directors

(454,106

)

(5,609

)

Bank interest paid

-

(225,342

)

Movement in related party balances

(334,997

)

384,822

Net cash from financing activities

2,457,098

244,694

Increase in cash and cash equivalents

703,638

798,006

Cash and cash equivalents at beginning of year

2

4,611,365

3,813,359

Cash and cash equivalents at end of year

2

5,315,003

4,611,365