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WSG Provalve Limited
Registered number: 10539031
Annual financial statements
For the year ended 31 December 2020
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10539031
31 December 2020
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WSG PROVALVE LIMITED
REGISTERED NUMBER: 10539031
STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2020
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Debtors: amounts falling due within one year
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Creditors: amounts falling due within one year
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Total assets less current liabilities
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Creditors: amounts falling due after more than one year
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- 1 -
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10539031
31 December 2020
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WSG PROVALVE LIMITED
REGISTERED NUMBER: 10539031
STATEMENT OF FINANCIAL POSITION (CONTINUED)
AS AT 31 DECEMBER 2020
The financial statements have been prepared in accordance with the provisions applicable to companies subject to the small companies regime and in accordance with the provisions of FRS 102 Section 1A - small entities.
The financial statements have been delivered in accordance with the provisions applicable to companies subject to the small companies regime.
The Company has opted not to file the statement of comprehensive income in accordance with provisions applicable to companies subject to the small companies' regime.
The financial statements were approved and authorised for issue by the board and were signed on its behalf on 10 December 2021.
The notes on pages 3 to 16 form part of these financial statements.
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10539031
31 December 2020
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WSG PROVALVE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
WSG Provalve Limited is a private company limited by shares, registered number 10539031, incorporated in the United Kingdom. The address of its registered office is Unit B, Rosie Road, Normanton, West Yorkshire, WF6 1ZB.
The principal activity of the Company is that of a provision of valve repair services.
These financial statements have been presented in pound sterling which is the functional currency of
the company, and rounded to the nearest £.
2.Accounting policies
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Basis of preparation of financial statements
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The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Section 1A of Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UK and the Republic of Ireland and the Companies Act 2006.
The following principal accounting policies have been applied:
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Financial reporting standard 102 - reduced disclosure exemptions
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The company has taken advantage of the following disclosure exemptions in preparing these financial statements, as permitted by the FRS 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland":
∙the requirements of Section 7 Statement of Cash Flows;
∙the requirements of Section 3 Financial Statement Presentation paragraph 3.17(d);
∙the requirements of Section 11 Financial Instruments paragraphs 11.42, 11.44 to 11.45, 11.47, 11.48(a)(iii), 11.48(a)(iv), 11.48(b) and 11.48(c);
∙the requirements of Section 12 Other Financial Instruments paragraphs 12.26 to 12.27, 12.29(a), 12.29(b) and 12.29A;
∙the requirements of Section 33 Related Party Disclosures paragraph 33.7.
This information is included in the consolidated financial statements of Well Service Group BV as at 31 December 2020 and these financial statements may be obtained from the Company Secretary, Phileas Foggstraat 65, 7825 AL Emmen, Netherlands.
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10539031
31 December 2020
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WSG PROVALVE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
2.Accounting policies (continued)
These financial statements have been prepared on a going concern basis. The directors acknowledge that the Company has made a loss in the period of £1.2m (2019: £933k) and is in a position of current liabilities of £457k (2019: £442k) and net liabilities of £2.3m (2019: £1.1m) at the year end. In addition, the Company is dependent on the continuing financial support of its ultimate parent company, Well Services BV, PNS (UK) Limited and on the invoice financing facility in order to meet its financial liabilities as they fall due. The directors have obtained confirmation of financial and other support for a period of no less than twelve months from the date of signing these financial statements from the ultimate parent company.
As set out in the Directors' Report, the Company is benefitting from high customer demand for refinery work, pipeline maintenance and LNG supply, providing a strong reassurance that there is sufficient demand in the market to meet the business plan.
The Company is maintaining a close relationship with its bank and has strong relationships with key suppliers.
The Board prepares detailed budgets to ensure that there is sufficient cash headroom available in line with the continuing financial support as outlined above.
Accordingly, the directors have a reasonable expectation that the Company will continue in operational existence and thus they adopt the going concern basis of accounting in preparing the financial statements.
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Foreign currency translation
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Functional and presentation currency
The Company's functional and presentational currency is GBP.
Transactions and balances
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 profit or loss except when deferred in other comprehensive income as qualifying cash flow hedges.
Foreign exchange gains and losses that relate to borrowings and cash and cash equivalents are presented in the Statement of Comprehensive Income within 'finance income or costs'. All other foreign exchange gains and losses are presented in profit or loss within 'other operating income'.
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10539031
31 December 2020
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WSG PROVALVE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
2.Accounting policies (continued)
Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured. Revenue is measured as the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes. The following criteria must also be met before revenue is recognised:
Rendering of services
Revenue 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 revenue 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.
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Operating leases: the Company as lessee
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Rentals paid under operating leases are charged to profit or loss on a straight line basis over the lease term.
Benefits received and receivable as an incentive to sign an operating lease are recognised on a straight line basis over the lease term, unless another systematic basis is representative of the time pattern of the lessee's benefit from the use of the leased asset.
Grants are accounted under the accruals model as permitted by FRS 102. Grants relating to expenditure on tangible fixed assets are credited to profit or loss at the same rate as the depreciation on the assets to which the grant relates. The deferred element of grants is included in creditors as deferred income.
Grants of a revenue nature are recognised in the Statement of Comprehensive Income in the same period as the related expenditure.
Interest income is recognised in profit or loss using the effective interest method.
Finance costs are charged to profit or loss 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.
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10539031
31 December 2020
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WSG PROVALVE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
2.Accounting policies (continued)
All borrowing costs are recognised in profit or loss in the year in which they are incurred.
Defined contribution pension plan
The Company operates a defined contribution plan for its employees. A defined contribution plan is a pension plan under which the Company pays fixed contributions into a separate entity. Once the contributions have been paid the Company has no further payment obligations.
The contributions are recognised as an expense in profit or loss when they fall due. Amounts not paid are shown in accruals as a liability in the Statement of Financial Position. The assets of the plan are held separately from the Company in independently administered funds.
Goodwill
Goodwill represents the difference between amounts paid on the cost of a business combination and the acquirer’s interest in the fair value of its identifiable assets and liabilities of the acquiree at the date of acquisition. Subsequent to initial recognition, goodwill is measured at cost less accumulated amortisation and accumulated impairment losses. Goodwill is amortised on a straight line basis to the Statement of Comprehensive Income over its useful economic life.
Other intangible assets
Intangible assets are initially recognised at cost. After recognition, under the cost model, intangible assets are measured at cost less any accumulated amortisation and any accumulated impairment losses.
At each reporting date the company assesses whether there is any indication of impairment. If such indication exists, the recoverable amount of the asset is determined which is the higher of its fair value less costs to sell and its value in use. An impairment loss is recognised where the carrying amount exceeds the recoverable amount.
All intangible assets are considered to have a finite useful life. If a reliable estimate of the useful life cannot be made, the useful life shall not exceed ten years.
The estimated useful lives range as follows:
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10539031
31 December 2020
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WSG PROVALVE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
2.Accounting policies (continued)
Tangible fixed assets under the cost model are stated at historical cost less accumulated depreciation and any accumulated impairment losses. Historical cost includes expenditure that is directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management.
At each reporting date the company assesses whether there is any indication of impairment. If such indication exists, the recoverable amount of the asset is determined which is the higher of its fair value less costs to sell and its value in use. An impairment loss is recognised where the carrying amount exceeds the recoverable amount.
Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, using the straight-line method or reducing balance method.
Depreciation is provided on the following basis:
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 profit or loss.
Stocks are stated at the lower of cost and net realisable value, being the estimated selling price less costs to complete and sell. Cost is based on the cost of purchase on a first in, first out basis. Work in progress and finished goods include labour and attributable overheads.
At each reporting date, stocks are assessed for impairment. If stock is impaired, the carrying amount is reduced to its selling price less costs to complete and sell. The impairment loss is recognised immediately in profit or loss.
Work in progress is valued at the lower of cost and net realisable value. Cost represents all expenses attributable to ongoing projects which have not yet reached a milestone for revenue recognition.
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.
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10539031
31 December 2020
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WSG PROVALVE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
2.Accounting policies (continued)
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Cash and cash equivalents
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Cash is represented by cash in hand and deposits with financial institutions repayable without penalty on notice of not more than 24 hours. Cash equivalents are highly liquid investments that mature in no more than three months from the date of acquisition and that are readily convertible to known amounts of cash with insignificant risk of change in value.
Short term creditors are measured at the transaction price. Other financial liabilities, including bank loans, are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method.
The Company only enters into basic financial instrument transactions that result in the recognition of financial assets and liabilities like trade and other debtors and creditors, loans from banks and other third parties and loans to related parties.
Debt instruments (other than those wholly repayable or receivable within one year), including loans and other accounts receivable and payable, are initially measured at present value of the future cash flows and subsequently at amortised cost using the effective interest method. Debt instruments that are payable or receivable within one year, typically trade debtors and creditors, are measured, initially and subsequently, at the undiscounted amount of the cash or other consideration expected to be paid or received. However, if the arrangements of a short-term instrument constitute a financing transaction, like the payment of a trade debt deferred beyond normal business terms or in case of an out-right short-term loan that is not at market rate, the financial asset or liability is measured, initially at the present value of future cash flows discounted at a market rate of interest for a similar debt instrument and subsequently at amortised cost, unless it qualifies as a loan from a director in the case of a small company, or a public benefit entity concessionary loan.
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 reporting date.
Financial assets and liabilities are offset and the net amount reported in the Statement of Financial Position 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.
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10539031
31 December 2020
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WSG PROVALVE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
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Judgments in applying accounting policies and key sources of estimation uncertainty
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Critical judgements in applying the company's accounting policies
The critical judgements that the directors have made in the process of applying the Company's accounting policies that have the most significant effect on the statutory financial statements are discussed below.
Assessing indicators of impairment
In assessing whether there have been any indicators of impairment assets, the directors have considered both external and internal sources of information such as market conditions, counterparty credit ratings and experience of recoverability. There have been no indicators of impairments identified during the current financial year, other than those already recognised.
Key sources of estimation uncertainty
Determining useful economic lives of tangible and intangible fixed assets
The Company depreciates tangible fixed assets and amortises intangible assets over their estimated useful lives. The estimation of the useful lives of assets is based on historic performance as well as expectations about future use and therefore requires estimates and assumptions to be applied by management. The actual lives of these assets can vary depending on variety of factors, including technological innovation, product life cycles and maintenance programmes.
Judgement is applied by management when determining the residual values for tangible and intangible fixed assets. When determining the residual value management aim to assess the amount that the company would currently obtain for the disposal of the asset, if it were already of the condition expected at the end of its useful life. Where possible this is done with reference to external market prices.
Recoverability of debtors
The company establishes a provision for debtors that are estimated not to be recoverable. When assessing recoverability the directors have considered factors such as the aging of the debtors, past experience of recoverability, and the credit profile of individual or groups of customers.
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The operating loss is stated after charging:
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Tangible fixed assets - depreciation
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Intangible fixed assets - amortisation
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Other operating lease rentals
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Other operating lease rentals
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The average monthly number of employees, including directors, during the year was 29 (2019 - 34).
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10539031
31 December 2020
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WSG PROVALVE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
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Charge for the year on owned assets
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- 10 -
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10539031
31 December 2020
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
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Charge for the year on owned assets
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10539031
31 December 2020
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WSG PROVALVE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
7.Tangible fixed assets (continued)
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The net book value of assets held under finance leases or hire purchase contracts, included above, are as follows:
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Raw materials and consumables
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Amounts owed by group undertakings
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Prepayments and accrued income
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Cash and cash equivalents
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10539031
31 December 2020
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WSG PROVALVE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
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Creditors: Amounts falling due within one year
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Amounts owed to group undertakings
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Other taxation and social security
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Invoice financing facility
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Accruals and deferred income
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The bank holds a fixed and floating charge over all assets of the company dated 6 March 2017 and a general letter of pledge and legal assignment of contract monies dated 28 July 2017.
Assets under finance lease and hire purchase contracts are secured on the asset to which they relate.
The invoice financing facility is secured on the Company's trade debtors. The invoice finance provider holds a debenture including a fixed charge over all all present freehold and leasehold property dated 1 October 2019.
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Creditors: Amounts falling due after more than one year
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Amounts owed to group undertakings
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The other loan is secured by a debenture creating fixed and floating charges over all of the assets and undertakings of the Company.
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10539031
31 December 2020
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WSG PROVALVE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
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Analysis of the maturity of loans is given below:
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Amounts falling due within one year
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Amounts falling due 1-2 years
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Allotted, called up and fully paid
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850 (2019 - 850) A Ordinary shares of £0.01 each
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150 (2019 - 150) B Ordinary shares of £0.01 each
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All of the shares rank pari passu in all respects.
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Share premium account
Share premium represents the amount above the nominal value received for issue share capital, less
transaction costs.
Profit & loss account
This reserve includes the cumulative profits or losses less dividends.
The Company has entered into an agreement to guarantee the invoice financing liabilities of PNS UK Limited and WSG Industrial Services UK Limited, fellow subsidiaries, which at the year end amount to £1,094,298.
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10539031
31 December 2020
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WSG PROVALVE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
The Company operates a defined contributions pension scheme. The assets of the scheme are held separately from those of the Company in an independently administered fund. The pension cost charge represents contributions payable by the Company to the fund and amounted to £32,025 before recharges (2019: £34,030). Contributions totalling £9,971 (2019: £10,091) were owing from the fund at the reporting date and are included in debtors.
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Related party transactions
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During the year, the Company made sales of £340,580 (2019: £303,469) and received purchases and recharges of £132,048 (2019; £263,147) with entities under common control.
During the year, the Company had a loan accounts with entities under common control.
Balances due (to)/from related parties are shown below:
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Amounts due from group companies
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Amounts owed to group companies
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The immediate parent undertaking is Well Services Group Holdings UK Limited, a company registered in England and Wales, by virtue of its majority shareholding.
The ultimate parent company and the smallest and largest group to consolidate these financial statements is Well Services BV, a company registered in The Netherlands. Copies of the Well Services BV consolidated financial statements can be obtained from the Company Secretary at Phileas Foggstraat 65, Emmen, 7825 AL, Netherlands.
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10539031
31 December 2020
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WSG PROVALVE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
The auditor's report on the financial statements for the year ended 31 December 2020 was qualified.
The qualification in the audit report was as follows:
Basis for qualified opinion
The financial statements include a carrying value for the goodwill of £3.7m arising from the acquisition of trade and assets in 2017. We consider impairment indicators to be present and an impairment review should be undertaken. However, the directors consider that no impairment of this carrying value is necessary and in the absence of an assessment by the Directors we are unable to obtain sufficient appropriate audit evidence over the carrying value of goodwill.
We conducted our audit in accor dance 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 qualified opinion.
The audit report was signed on 17 December 2021 by Shaun Mullins (Senior Statutory Auditor) on behalf of Mazars LLP.
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