GUARDIAN_GLOBAL_TECHNOLOG - Accounts

The directors present the strategic report for the year ended 31 December 2021.

Guardian Global Technologies Limited (also referred to as the "company") is one of the entities within the "Core Laboratories Group". In this context the term "Core Laboratories Group" and "Companies of the Core Laboratories Group" or "Group companies" means companies in which Core Laboratories N.V., either directly or indirectly, has control either through a majority of the voting rights or the right to exercise a controlling influence or to obtain the majority of the benefits and be exposed to the majority of the risks.

Following the spread of COVID in 2020, and the continued sporadic lockdowns imposed during 2021, 2021 was a year of consolidation for Guardian, where instead of focusing on growth, we focused on maintaining the same level of revenue and GM% as per 2020, whilst completing all of the development projects that were delayed in 2020 due to Covid. Guardian also focused on the safety and retention of all of its employees throughout 2021, so that we retained all of the tacit knowledge ready for 2022, and the potential growth we would see due to the lockdowns being lifted.

Despite the oil price recovering in 2021 from 2020 levels, Guardian’s clients were still reticent to invest in the capital equipment that Guardian manufactures, as there was still a great deal of uncertainty throughout 2021 due to the random emergence of new strains of COVID and the potential for large scale lockdowns which could directly affect the price of oil and gas in a negative way. Therefore, Guardian’s clients decided to reduce their CAPEX spend and instead rely on the equipment they already had in service.

Throughout 2021, Guardian continued to strengthen its working relationship with the other business units within the Core Laboratories Group, and we have been actively collaborating on several projects that will run through 2021 and 2022.

Guardian Global Technologies’ reputation is highly regarded as a technical value-added provider whereby we gain and maintain string working relationships based on honest and trust rather than being though of as just another supplier of equipment used in the oil and gas industry.

The continuing presence of COVID throughout 2021, and the corresponding global uncertainty, resulted in a very small increase in year on year revenue compared to 2020, and the actions we took to resize the company in 2020 helped protect the business during 2021. Guardian also continued to promote working from home for those employees that were able to do so that the effects of COVID in 2021 were minimised as much as possible.

The management of the business and the execution of the company’s strategy are subject to a number of risks.

The oil and gas industry is highly cyclical and demand for our services is substantially dependent upon the level of expenditure by the oil and gas industry for the exploration, development and production of crude oil and natural gas reserves, which in turn are sensitive to oil and natural gas prices and generally dependent upon the industry’s view of future oil and gas prices. There are a number of factors affecting the supply of and demand for our services as follows:

• Covid-19 and the impact on workforce health and wellbeing;

• general and economic business conditions;

• market prices of oil and gas and expectations about future prices;

• cost of producing and ability to deliver oil and natural gas;

• the level of drilling and production activity;

• mergers, consolidations and downsizing among our clients;

• coordination by OPEC;

• the impact of commodity prices on the expenditure levels of our clients;

• financial condition of our client base and their ability to fund capital expenditures;

• the physical effects of climate change, including adverse weather or geological/geophysical conditions;

• the adoption of legal requirements or taxation that lowers the demand for petroleum-based fuels;

• civil unrest or political uncertainty in oil producing or consuming countries;

• level of consumption of oil, gas and petrochemicals by consumers;

• changes in existing laws, regulations, or other governmental actions, including temporary or permanent moratoria on hydraulic fracturing or offshore drilling;

• the business opportunities (or lack thereof) that may be presented to and pursued by us;

• availability of services and materials for our clients to grow their capital expenditures;

• ability of our clients to deliver products to market;

• availability of materials and equipment from key suppliers; and

• cyber-attacks on our network that disrupt operations or result in lost or compromised critical data.

The company’s directors monitor progress and strategy by reference to the following KPIs:

On behalf of the board

The directors present their annual report and financial statements for the year ended 31 December 2021.

The principal activity of the company continued to be that of the design and manufacture of equipment predominantly in the oil and gas industry.

The results for the company show a loss before taxation of £1,316,490 (2020: £1,430,141) and turnover of £2,280,087 (2020: £2,331,851). The company had cash at bank and in hand of £44,272 (2020: £82,620) at 31 December 2021.

The loss for the financial year amounted to £1,316,490 (2020: £1,430,141) and was transferred to reserves.

The financial position of the company is set out on page 9.

No ordinary dividends were paid. The directors do not recommend payment of a final dividend.

The directors who held office during the year and up to the date of signature of the financial statements were as follows:

UHY Hacker Young have expressed their willingness to continue in office as auditor and appropriate arrangements have been put in place for them to be deemed reappointed as auditor in the absence of an Annual General Meeting.

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 company’s auditor 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 company’s auditor is aware of that information.

The company’s results show a loss after tax of £1.32m (2020: £1.43m).

The company had net current liabilities of £562,925 at 31 December 2021 (31 December 2020: net current assets £662,420) including cash of £44,272 (31 December 2020: £82,620).

The company remains reliant on its parent company and shareholders for support. The directors have confirmed that the support will be continued for the foreseeable future, being at least twelve months from the date of approval of these financial statements. The directors have prepared forecasts for the years ending 31 December 2022 and 2023 and are confident that the company will have sufficient cash to meet its debts as they fall due for the foreseeable future and hence they have concluded that it remains appropriate to prepare the accounts on a going concern basis.

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

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

•     select suitable accounting policies and then apply them consistently;

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

•     prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company’s transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

We have audited the financial statements of Guardian Global Technologies Limited (the 'company') for the year ended 31 December 2021 which comprise the profit and loss account, 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 2021 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's 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

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 company’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 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.

In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the 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 remuneration specified by law are not made; or

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

As explained more fully in the directors' responsibilities statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the 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.

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

A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.

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.

The profit and loss account has been prepared on the basis that all operations are continuing operations.

Guardian Global Technologies Limited is a private company limited by shares incorporated in England and Wales. The registered office is Merlin House, Brunel Court, Village Farm Industrial Estate, Pyle, Bridgend, United Kingdom, CF33 6BL.

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.

This company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group. The company has therefore taken advantage of exemptions from the following disclosure requirements:

• Section 7 ‘Statement of Cash Flows’: Presentation of a statement of cash flow and related notes and disclosures;

• Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instrument Issues’: Interest income/expense and net gains/losses for each category of financial instrument; basis of determining fair values; details of collateral, loan defaults or breaches, details of hedges, hedging fair value changes recognised in profit or loss and in other comprehensive income;

• Section 26 ‘Share based Payment’: Share-based payment expense charged to profit or loss, reconciliation of opening and closing number and weighted average exercise price of share options, how the fair value of options granted was measured, measurement and carrying amount of liabilities for cash-settled share-based payments, explanation of modifications to arrangements;

• Section 33 ‘Related Party Disclosures’: Compensation for key management personnel.

The financial statements of the company are consolidated in the financial statements of Core Laboratories N.V.. These consolidated financial statements are available from its registered office, Core Laboratories N.V., Stoomloggerweg 12 3133KT, Vlaardingen.

The company has taken advantage of the exemption under section 399 of the Companies Act 2006 not to prepare consolidated accounts, on the basis that the group of which this is the parent qualifies as a small group. The financial statements present information about the company as an individual entity and not about its group.

The company’s results show a loss after tax of £1.true32m (2020: £1.43m).

The company had net current liabilities of £562,925 at 31 December 2021 (31 December 2020: net current assets £662,420) including cash of £44,272 (31 December 2020: £82,620).

The company remains reliant on its parent company and shareholders for support. The directors have confirmed that the support will be continued for the foreseeable future, being at least twelve months from the date of approval of these financial statements. The directors have prepared forecasts for the years ending 31 December 2022 and 2023 and are confident that the company will have sufficient cash to meet its debts as they fall due for the foreseeable future and hence they have concluded that it remains appropriate to prepare the accounts on a going concern basis.

Turnover represents net invoiced sales of goods, excluding value added tax.

Turnover is recognised as earned when, and to the extent that, the company obtains the right to consideration in exchange for goods or services provided. Turnover represents amounts receivable for goods and services provided in the normal course of business, net of trade discounts, VAT and other sales-related taxes.

Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer (usually on dispatch of the goods), the amount of revenue can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the entity and the costs incurred or to be incurred in respect of the transaction can be measured reliably.

Patents and trademarks are included at cost and depreciated in equal annual installments over a period of 5 years which is their estimated useful economic life. Provision is made for any impairment.

Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.

Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:

The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is credited or charged to profit or loss.

Stocks are stated at the lower of cost and net realisable value, after making due allowance for obsolete and slow moving items. Cost comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the stocks to their present location and condition.

At each reporting date, an assessment is made for impairment. Any excess of the carrying amount of stocks over its estimated selling price less costs to complete and sell is recognised as an impairment loss in profit or loss. Reversals of impairment losses are also recognised in profit or loss.

The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.

Financial instruments are recognised in the company's balance sheet when the company becomes party to the contractual provisions of the instrument.

Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.

Debtors and creditors with no stated interest rate and receivable or payable within one year are recorded at transaction price. Any losses arising from impairment are recognised in the profit and loss account in other administrative expenses.

Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.

Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.

Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.

If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.

Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the company transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.

Derivatives, including interest rate swaps and forward foreign exchange contracts, are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.

Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as being measured at fair value through profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.

Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.

The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.

The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.

Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.

Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.

Rental income from operating leases is recognised on a straight line basis over the term of the relevant lease. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognised on a straight line basis over the lease term.

Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leases asset are consumed.

Government grants are recognised at the fair value of the asset received or receivable when there is reasonable assurance that the grant conditions will be met and the grants will be received.

A grant that specifies performance conditions is recognised in income when the performance conditions are met. Where a grant does not specify performance conditions it is recognised in income when the proceeds are received or receivable. A grant received before the recognition criteria are satisfied is recognised as a liability.

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.

Research and development

Expenditure on research and development is written off in the year in which it is incurred.

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.

An analysis of the company's turnover is as follows:

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

Their aggregate remuneration comprised:

The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 1 (2020 - 2).

As total directors' remuneration was less than £200,000 in the current year, no disclosure is provided for that year.

The actual charge for the year can be reconciled to the expected credit for the year based on the profit or loss and the standard rate of tax as follows:

The company has approximately £5.7m (31 December 2020 £4.6m) of tax losses carried forward; no deferred tax asset has been recognised.

These financial statements are separate company financial statements for Guardian Global Technologies Limited.

Details of the company's subsidiaries at 31 December 2021 are as follows:

The registered office of GGT Guardian Texas LLC is 6316 Windfern Road, Houston, TX 77040, USA.

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.

Only one class of shares, therefore all shares rank pari passu.

Amounts contracted for but not provided in the financial statements:

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:

Remuneration of key management personnel is £311,674 (2020: £329,785).

Key management personnel are remunerated by the company for their services to the Guardian Holdings Limited group as a whole. It is not practicable to allocate their remuneration between services to the company and other entities in the group,

During the year the company entered into the following transactions with related parties:

During the period the company incurred interest of £173,367 (2020: £13,052) from Core Laboratories NV and £1,833 (2020: £45,955) from Core Laboratories Cooperatief UA as per note 8,

During the period the company incurred £230,462 (2020: £230,254) of rental costs from APC International Limited, a company of which Iain Maxted (who was a director of Guardian Global Technologies until 30 April 2021) is a director and shareholder.

During the period the company incurred £95,027 (2020: £76,750) of rental costs from Chalfont Consulting, a company which Iain Maxted (who was a director of Guardian Global Technologies until 30 April 2021) owns.

The immediate parent company is Guardian Global Technology Group Limited, a company incorporated in England and Wales. The intermediate parent companies are Guardian Holdings Limited, a company incorporated in England and Wales and Core Laboratories Coop B.V. a company incorporated in the Netherlands. The ultimate parent company is Core Laboratories Sales N.V., a company incorporated in the Netherlands.

The group is not considered to have a single controlling party.

Core Laboratories N.V. is the parent of the smallest and largest group of which the company is a member and for which consolidated accounts are prepared. Consolidated accounts of Core Laboratories N.V. are available to the public and may be obtained from Core Laboratories N.V., Stoomloggerweg 12 3133KT, Vlaardingen.