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Registered number: 04742766
Deep Sea Recovery Limited
Unaudited
Financial statements
Information for filing with the registrar
For the year ended 31 October 2019
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Deep Sea Recovery Limited
Registered number: 04742766
Balance sheet
As at 31 October 2019
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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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The directors consider that the Company is entitled to exemption from audit under section 477 of the Companies Act 2006 and members have not required the Company to obtain an audit for the year in question in accordance with section 476 of the Companies Act 2006.
The directors acknowledge their responsibilities for complying with the requirements of the Companies Act 2006 with respect to accounting records and the preparation of financial statements.
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 26 October 2020.
The notes on pages 2 to 7 form part of these financial statements.
Page 1
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Deep Sea Recovery Limited
Notes to the financial statements
For the year ended 31 October 2019
The Company is a private limited company, incorporated and domiciled in England and Wales. The Company's registered office is Third Floor, 24 Chiswell Street, London, EC1Y 4YX. The principal activity of the company is that of researching and developing novel engineering technologies for sub-sea flotation devices to be used for the lifting, lowering and handling of heavy equipment and materials for the offshore oil and gas, and renewable energy markets.
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:
The financial statements have been prepared on a going concern basis despite the company reporting a loss of £13,445 (2018: £12,287) for the year ended 31 October 2019 and net liabilities of £459,738 (2018: £446,293) at that date due to the factors listed below. Furthermore, while the impact of the Covid-19 virus has been assessed by the directors, so far as reasonably possible, due to its unprecedented impact on the wider economy, it is difficult to evaluate with any certainty the potential outcomes on the company's trade, its customers and suppliers. However, taking into consideration the UK Government's response and the company's planning, the directors have a reasonable expectation that the company will continue in operational existence for the foreseeable future.
Amounts falling due after more than one year, which are due to related parties and previously related parties, have been subordinated in favour of other creditors of the company. The relevant parties have agreed that repayment is flexible, at the discretion of the directors and dependent upon the company having surplus cash flow from trading over and above its day to day requirements. It is the directors' current expectation, and that of the creditors, that these balances will not be paid within the next 12 months.
Amounts falling due within 12 months and which are due to the directors, have been subordinated in favour of other short-term creditors. Informal arrangements have been reached with those creditors, to the satisfaction of the directors, such that they will only demand payment once the company has been properly capitalised.
As previously reported the company entered into an agreement in August 2016 with a specialist group under which their obligations are to provide investment and leadership resources to implement a ‘targeted markets’ strategic plan. Due to some further mitigating factors that arose during the reporting period, not all conditions required of each party have been met to enable the ‘targeted markets’ strategic plan to commence. However, there was continuing dialogue and negotiation during the year under review, and since the balance sheet date, in order to commence and progress formal implementation of the plan as soon as practically possible, although risks of further delay remain. The directors will continue taking action to mitigate these risks but will also remain active in evaluating alternative short term strategies to progress the company.
Pending commencement of the ‘target markets’ strategic plan, the directors confirm that they will continue to provide the necessary financial support to the company in order for it to meet its liabilities as and when they fall due and, if necessary, for a period of at least 12 months from the date of approval of these financial statements.
Page 2
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Deep Sea Recovery Limited
Notes to the financial statements
For the year ended 31 October 2019
2.Accounting policies (continued)
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.
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.
The company recognises internally generated intangible fixed assets at cost less accumulated amortisation and impairment losses.
Expenditure on the development of engineering technologies for sub-sea flotation devices is recognised as an internally generated intangible asset on the basis that an identifiable asset has been created and it is probable that this asset will generate future economic benefits.
All qualifying development expenditure is amortised on a straight-line basis over its useful economic life of ten years starting with the date from which development of the technology is complete and starts generating commercial revenue.
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.
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.
Depreciation is provided on the following basis:
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25% per annum straight line
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33%per annum straight line
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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.
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.
Page 3
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Deep Sea Recovery Limited
Notes to the financial statements
For the year ended 31 October 2019
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, loans to related parties and investments in non-puttable ordinary shares.
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The average monthly number of employees, including directors, during the year was 2 (2018 - 2).
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Page 4
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Deep Sea Recovery Limited
Notes to the financial statements
For the year ended 31 October 2019
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Charge for the year on owned assets
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Prepayments and accrued income
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Creditors: Amounts falling due within one year
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Page 5
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Deep Sea Recovery Limited
Notes to the financial statements
For the year ended 31 October 2019
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Creditors: Amounts falling due after more than one year
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Share capital classified as debt
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Shares classified as equity
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Allotted, called up and fully paid
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1,000 (2018 - 1,000) Ordinary shares of £0.01 each
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Shares classified as debt
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Allotted, called up and fully paid
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87,879 (2018 - 87,879) 3% Non-cumulative Redeemable Preference Shares shares of £1.00 each
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On 13th October 2020 the Articles of Association were amended by special resolution of the company’s members, including the holders of the Preference Shares, to extend the earliest redemption date of the Preference Shares to 31st October 2023.
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Profit & loss account
The profit and loss account comprises all current and prior period retained profits and losses.
Share capital
This represents the nominal value of shares that have been issued by the company.
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Related party transactions
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During the year P Pritchard advanced the company £Nil (2018: £200) as a short-term loan and incurred expenses of £1,423 (2018: £1,257). At 31 October 2019 £43,440 remains due for repayment within 12 months (2018: £42,017).
During the year R Stevens advanced the company £7,125 (2018: £9,245) as a short-term loan and incurred expenses of £3,449 (2018: £4,059). At 31 October 2019 £96,082 remains due for repayment within 12 months (2018: £85,508).
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Page 6
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Deep Sea Recovery Limited
Notes to the financial statements
For the year ended 31 October 2019
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Post balance sheet events
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There has been a significant event affecting the Company since the year end, namely Covid-19. While the impact of the Covid-19 virus has been assessed by the directors, so far as reasonably possible, due to its unprecedented impact on the wider economy, it is difficult to evaluate with any certainty the potential outcomes on the company's trade, its customers and suppliers.
Page 7
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