Solent Towage Limited - Accounts to registrar (filleted) - small 23.1.5

REGISTERED NUMBER: 02789253 (England and Wales)

SOLENT TOWAGE LIMITED

FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2022

Page

Company Information

1

Balance Sheet

2

Notes to the Financial Statements

3

DIRECTOR:

J Ostensjo

REGISTERED OFFICE:

Second Floor, Testwood House

Testwood Park

Salisbury Road

Totton

Hampshire

SO40 2RW

REGISTERED NUMBER:

02789253 (England and Wales)

BANKERS:

HSBC Bank plc

165 High Street

Southampton

Hampshire

SO14 2NZ

FIXED ASSETS

Tangible assets

4

527,270

65,764

CURRENT ASSETS

Debtors

5

1,947,841

1,261,456

Cash at bank and in hand

1,858,769

2,595,162

3,806,610

3,856,618

CREDITORS

Amounts falling due within one year

6

(2,849,457

)

(2,105,765

)

NET CURRENT ASSETS

957,153

1,750,853

TOTAL ASSETS LESS CURRENT LIABILITIES

1,484,423

1,816,617

CAPITAL AND RESERVES

Called up share capital

100,000

100,000

Retained earnings

1,384,423

1,716,617

1,484,423

1,816,617

The financial statements have been prepared and delivered in accordance with the provisions applicable to companies subject to the small companies regime.

In accordance with Section 444 of the Companies Act 2006, the Statement of Income and Retained Earnings has not been delivered.

The financial statements were approved by the director and authorised for issue on 21 March 2023 and were signed by:

J Ostensjo - Director

1.	STATUTORY INFORMATION

Solent Towage Limited is a private company, limited by shares , registered in England and Wales. The company's registered number and registered office address can be found on the Company Information page.

2.	ACCOUNTING POLICIES

Basis of preparing the financial statements

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 amounts in these financial statements are rounded to the nearest £1.

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 small companies exemption not to prepare consolidated accounts.

Going concern

In June 2023, the company's contract with Esso Petroleum Company Limited comes to an end. The company, along with other operators, has tendered for the contract renewal. As of the date of signing of these accounts, Esso has not yet come to a decision on who will be selected as their towage operator at the Fawley Terminal. Without the Esso contract, and the significant proportion of income it provides the company, the future of the company comes into doubt. If the contract is not awarded to Solent Towage, other opportunities will be explored. It is possible that the company may cease trading sometime in the next 12 months if no suitable opportunities are identified.

The company meets its day to day working capital requirements through financial support received from the parent undertaking. On this basis, the director considers it appropriate to prepare the financial statements on the going concern basis. The financial statements do not include any adjustments that would result from a withdrawal of this financial support. The group have indicated that this support will continue until at least 12 months post the date of signing these accounts.

Turnover

Turnover is measured at the fair value of consideration received or receivable and represents amounts receivable for the construction of tugs and the provision of towage facilities provided in the normal course of business, net of discounts, VAT and other sales related taxes, recognised once the service has been provided.

Tangible fixed assets

Dry / wet dock costs are estimated and capitalised and included within additions, at cost. These costs relate to expenses that are required to comply with the lease legal obligations. These costs are expensed to the profit and loss over the period until the next required dry / wet dock or end of the current towage facilities contract, whichever is earlier.

Tangible fixed assets are stated at cost less accumulated depreciation and any impairment losses. Depreciation is provided at rates calculated to write off the cost less estimated residual value of each asset over its expected useful life, as follows:

Dry / wet dock

Over shorter of the term to the next dry / wet dock or end of towage contract

The director will consider asset valuations and consider if an asset requires impairment.

Impairment of fixed assets

At each reporting end date, the company reviews the carrying amounts of its tangible assets to determine whether there is any indication that those assets have suffered an impairment loss or there has been a change in market value of the Norwegian krone. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.

Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.

If the recoverable amount of an asset (or cash generating unit) is estimated to be less than its carrying amount, the carrying amount of an asset (or cash generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in the profit or loss.

Cash and cash equivalents

Cash and cash equivalents are basic financial instruments and include cash in hand and deposits held at call with banks.

Financial instruments

The company has elected to apply the provisions of Section 11 'Basic Financial Instruments' of FRS 102 to all of its financial instruments.

Financial instruments are recognised 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.

Basic financial assets

Basic financial assets, which include trade, other debtors, amounts due from group undertakings and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the financial asset is measured at the present value of the future receipts discounted at a market rate of interest.

Basic financial liabilities

Basic financial liabilities, including trade, other creditors and amounts due to group undertakings, are initially recognised at transaction price unless the arrangement constitutes a financing transaction where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest.

Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.

Equity instruments

Equity instruments issued by the company are recorded at the fair value of proceeds received, net of direct issue costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.

Taxation

The tax expense represents the sum of the current tax expense and deferred tax expense. Current tax assets are recognised when tax paid exceeds the tax payable.

Current and deferred tax is charged or credited to profit or loss, except when it relates to items charged or credited to other comprehensive income or equity, when the tax follows the transaction for event it relates to and is also charged or credited to other comprehensive income, or equity.

Current tax assets and current tax liabilities and deferred tax assets and deferred tax liabilities are offset, if and only if, there is a legally enforceable right to set off the amounts and the entity intends either to settle on the net basis or to realise the asset and settle the liability simultaneously.

Current tax is based on taxable profit for the year. Current tax assets and liabilities are measured using tax rates that have been enacted or substantively enacted by the reporting date.

Deferred tax

Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the balance sheet date where transactions or events that result in an obligation to pay more tax in the future or a right to pay less tax in the future have occurred at the balance sheet date. Timing differences are differences between the company's taxable profits and its results as stated in the financial statements that arise from the inclusion of gains and losses in tax assessments in periods different from those in which they are recognised in the financial statements.

Deferred tax is measured at the average tax rates that are expected to apply in the periods in which timing differences are expected to reverse, based on tax rates and laws that have been enacted or substantively enacted by the balance sheet date. Deferred tax is measured on a non-discounted basis.

Foreign currencies

Transactions in currencies other than the functional currency (foreign currency) are initially recorded at the exchange rate prevailing on the date of the transaction.

Monetary assets and liabilities denominated in foreign currencies are translated at the rate of exchange ruling at the reporting date. Non-monetary assets and liabilities denominated in foreign currencies are translated at the rate ruling at the date or the transaction, or, if the asset or liability is measured at fair value, the rate when that fair value was determined.

Employee benefits

The costs of employee benefits are recognised as a liability and an expense.

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

Leasing commitments

Rentals applicable to operating leases where substantially all of the benefits and risks of ownership remain with the lessor are charged against profits on a straight line basis over the period of the lease.

3.	EMPLOYEES AND DIRECTORS

The average number of employees during the year was 1 (2021 - 1 ) .

4.	TANGIBLE FIXED ASSETS

Wet / dry

dock costs

£

COST

At 1 January 2022

109,053

Additions

782,281

At 31 December 2022

891,334

DEPRECIATION

At 1 January 2022

43,289

Charge for year

320,775

At 31 December 2022

364,064

NET BOOK VALUE

At 31 December 2022

527,270

At 31 December 2021

65,764

Sale and leaseback

During the prior year, the vessels were sold to a third party under a sale and leaseback agreement. There are no unique or unusual provisions included in this agreement. Rental payments have been recorded in line with the leasing commitments accounting policy. Details of the operating lease commitments in relation to this agreement are disclosed in note 10.

5.

DEBTORS: AMOUNTS FALLING DUE WITHIN ONE YEAR

2022

2021

£

£

Trade debtors

1,761,451

1,116,275

Other debtors

-

66,413

Tax

66,916

-

Prepayments and accrued income

119,474

78,768

1,947,841

1,261,456

6.

CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR

2022

2021

£

£

Trade creditors

2,003,658

1,260,035

Amounts owed to group undertakings

71,436

70,186

Corporation tax

-

66,916

Social security and other taxes

92,871

83,761

Other creditors

590,380

555,848

Accruals and deferred income

91,112

69,019

2,849,457

2,105,765

7.	DISCLOSURE UNDER SECTION 444(5B) OF THE COMPANIES ACT 2006

The Report of the Auditors was unqualified.

G Brown FCCA (Senior Statutory Auditor)

for and on behalf of Hopper Williams & Bell Limited

We draw attention to note 2 in the financial statements, which indicates that the contract with Esso Petroleum Company Limited to provide waterborne services at the Fawley Marine Terminal Southampton is due to expire on 30 June 2023. A decision has not yet been announced as to whether a new contract has been awarded to the company. Should a contract not be awarded, the parent undertaking has indicated that it would explore alternative revenue streams and opportunities, and provide continued financial support to the company. However, the director has indicated that the company may cease trading sometime in the next 12 months if no suitable opportunities are identified. As stated in note 2, these events or conditions, along with the other matters as set forth in note 2, indicate that a material uncertainty exists that may cast significant doubt on the company's ability to continue as a going concern. Our opinion is not modified in respect of this matter.

8.	LEASING AGREEMENTS

Total operating lease commitments as at 31 December 2022 were £750,551 (2021 - £2,253,327) comprising £658 (2021 - £3,649) in relation to motor vehicles and £749,893 (2021 - £2,249,678) in relation to bareboat charters.

9.	CONTINGENT ASSET

Following a salvage operation in August 2022, the company is in the process of negotiating a salvage claim. It is expected that this will be of sizable benefit to the company. As at 31 December 2022, the value of this claim and the costs associated with it cannot be accurately estimated and as such are not included in the accounts. However, it is expected that the claim will be settled sometime within 2023.

10.	PARENT COMPANY

Verteks AS is regarded by the directors as being the company's ultimate parent company, a company incorporated in Norway.

The smallest group for which consolidated accounts are drawn up of which the company is a member is BT Holding AS.

The consolidated accounts can be obtained from the parent company's registered office of Smedasundet 97B, 5525 Haugesund, Norway.