IOT ENERGY SERVICES LTD.
NO. SC561768
DIRECTORS' REPORT
AND
FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
IOT ENERGY SERVICES LTD.
COMPANY INFORMATION
Directors
Stuart Noble
Ulf Eide
Secretary
Stronachs Secretaries Limited
Company number
SC561768
Registered office
Independent Oil Tools Ltd Building
Sir William Smith Road
Kirkton Industrial Estate
Arbroath
DD11 3RD
Business address
Sir William Smith Road
Kirkton Industrial Estate
Arbroath
DD11 3RD
Auditor
Hall Morrice LLP
6 & 7 Queens Terrace
Aberdeen
AB10 1XL
Bankers
Royal Bank of Scotland
40 Albyn Place
Aberdeen
AB10 1YN
Solicitors
Stronachs LLP
28 Albyn Place
Aberdeen
AB10 1YL
IOT ENERGY SERVICES LTD.
CONTENTS
Page
Directors' report
1 - 2
Independent auditor's report
3 - 5
Statement of comprehensive income
6
Balance sheet
7
Statement of changes in equity
8
Statement of cash flows
9
Notes to the financial statements
10 - 21
IOT ENERGY SERVICES LTD.
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 1 -

The directors present their report and audited financial statements for the year ended 31 December 2023.

Principal activities

The company did not trade during the year.

Results and dividends

The results for the year are set out on page 6.

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

Directors

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

Stuart Noble
Ulf Eide
Future developments

The shareholders are actively looking for a buyer for the business or the company's assets. In the meantime operations will remain offline for the foreseeable future.

Auditor

The auditor, Hall Morrice LLP, is deemed to be reappointed under section 487(2) of the Companies Act 2006.

Statement of directors' responsibilities

The directors are responsible for preparing the Directors' 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:

 

 

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.

Strategic report

The company has taken the exemption under Section 414B of the Companies Act 2006 from the requirement to prepare a Strategic report for the financial year.

IOT ENERGY SERVICES LTD.
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 2 -
Statement of disclosure to auditor

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.

On behalf of the board
Stuart Noble
Director
29 March 2024
IOT ENERGY SERVICES LTD.
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF IOT ENERGY SERVICES LTD.
- 3 -
Opinion

We have audited the financial statements of IOT ENERGY SERVICES LTD. (the 'company') for the year ended 31 December 2023 which comprise the statement of comprehensive income, the balance sheet, the statement of changes in equity, the statement of cash flows 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:

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.

Emphasis of matter

Without qualifying our opinion, we draw attention to note 1.2 to the financial statements, which contains further narrative related to the going concern of the company.

Other information

The other information comprises the information included in the Directors' report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the Directors' 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:

Matters on which we are required to report by exception

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 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:

 

IOT ENERGY SERVICES LTD.
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF IOT ENERGY SERVICES LTD.
- 4 -
Responsibilities of directors

As explained more fully in the directors' responsibilities statement, as set out in the Directors' report, 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.

Auditor's 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 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.

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.

In identifying and assessing the risk of material misstatement due to non-compliance with laws and regulations we have:

 

IOT ENERGY SERVICES LTD.
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF IOT ENERGY SERVICES LTD.
- 5 -

In identifying and assessing the risk of material misstatement due to irregularities, including fraud and how it may occur, and the potential for management bias and the override of controls we have:

 

 

We did not identify any matters relating to non-compliance with laws and regulations, or relating to fraud.

 

Because of the inherent limitations of an audit, there is an unavoidable risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. The risk of not detecting a material misstatement due to fraud is inherently more difficult than detecting those that result from error as fraud may involve intentional concealment, forgery, collusion, omission or misrepresentation. In addition, the further removed any non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely we would become aware of it.

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.

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 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.

Derek Petrie MA (Hons) CA
Senior Statutory Auditor
For and on behalf of Hall Morrice LLP
Statutory Auditor
Aberdeen
29 March 2024
IOT ENERGY SERVICES LTD.
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2023
- 6 -
2023
2022
Notes
£
£
Turnover
3
3,996
8,781
Cost of sales
(64,422)
(175,346)
Gross loss
(60,426)
(166,565)
Administrative expenses
(432,718)
(402,779)
Other operating income
144,000
144,000
Operating loss
4
(349,144)
(425,344)
Interest payable and similar expenses
7
(13,413)
(13,542)
Loss before taxation
(362,557)
(438,886)
Tax on loss
8
-
0
-
0
Loss for the financial year
(362,557)
(438,886)

The Statement of comprehensive income has been prepared on the basis that all operations are discontinued operations.

IOT ENERGY SERVICES LTD.
BALANCE SHEET
AS AT 31 DECEMBER 2023
31 December 2023
- 7 -
2023
2022
Notes
£
£
£
£
Fixed assets
Intangible assets
9
-
0
-
0
Tangible assets
10
267,076
330,966
267,076
330,966
Current assets
Debtors
11
27,206
26,807
Cash at bank and in hand
270,580
185,213
297,786
212,020
Creditors: amounts falling due within one year
12
(1,857,111)
(1,467,196)
Net current liabilities
(1,559,325)
(1,255,176)
Total assets less current liabilities
(1,292,249)
(924,210)
Creditors: amounts falling due after more than one year
13
(31,168)
(36,650)
Net liabilities
(1,323,417)
(960,860)
Capital and reserves
Called up share capital
16
131,390
131,390
Share premium account
17
8,749
8,749
Profit and loss reserves
17
(1,463,556)
(1,100,999)
Total equity
(1,323,417)
(960,860)
The financial statements were approved by the board of directors and authorised for issue on 29 March 2024 and are signed on its behalf by:
Stuart Noble
Director
Company Registration No. SC561768
IOT ENERGY SERVICES LTD.
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
- 8 -
Share capital
Share premium account
Profit and loss reserves
Total
£
£
£
£
Balance at 1 January 2022
131,390
8,749
(662,113)
(521,974)
Year ended 31 December 2022:
Loss and total comprehensive income for the year
-
-
(438,886)
(438,886)
Balance at 31 December 2022
131,390
8,749
(1,100,999)
(960,860)
Year ended 31 December 2023:
Loss and total comprehensive income for the year
-
-
(362,557)
(362,557)
Balance at 31 December 2023
131,390
8,749
(1,463,556)
(1,323,417)
IOT ENERGY SERVICES LTD.
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 9 -
2023
2022
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from/(absorbed by) operations
21
95,549
(29,505)
Interest paid
(13,413)
(13,542)
Net cash inflow/(outflow) from operating activities
82,136
(43,047)
Investing activities
Proceeds on disposal of tangible fixed assets
8,000
201,141
Net cash generated from investing activities
8,000
201,141
Financing activities
Repayment of bank loans
(4,769)
(5,163)
Net cash used in financing activities
(4,769)
(5,163)
Net increase in cash and cash equivalents
85,367
152,931
Cash and cash equivalents at beginning of year
185,213
32,282
Cash and cash equivalents at end of year
270,580
185,213
IOT ENERGY SERVICES LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 10 -
1
Accounting policies
1.1
Accounting convention

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 £.

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:

 

IOT Energy Services Ltd. is a majority owned subsidiary of Independent Oil Tools AS and the results of IOT Energy Services Ltd. are included in the consolidated financial statements of Petrolia SE which are available from 205 Christodoulou Chatzipavlou Street, Loulloupis Court, 4th floor, office 401, 3036 Limassol, Cyprus.

1.2
Going concern

The financial statements are not prepared on a going concern basis as the company has ceased to trade. The shareholders continue to search for buyers of the company's assets. true

 

Assurances have been received from the directors of Independent Oil Tools AS and NOCO (UK) Limited that it is their intention to provide such assistance as is required to enable the company to meet its financial commitments.

1.3
Turnover

Turnover is recognised at the fair value of the consideration received or receivable for goods and services provided in the normal course of business, and is shown net of VAT and other sales related taxes. The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.

 

When cash inflows are deferred and represent a financing arrangement, the fair value of the consideration is the present value of the future receipts. The difference between the fair value of the consideration and the nominal amount received is recognised as interest income.

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.

Revenue for the provision of services is recognised by reference to the date on which services were rendered.

IOT ENERGY SERVICES LTD.
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies (continued)
- 11 -
1.4
Intangible fixed assets - goodwill

Goodwill represents the excess of the cost of acquisition of unincorporated businesses over the fair value of net assets acquired. It is initially recognised as an asset at cost and is subsequently measured at cost less accumulated amortisation and accumulated impairment losses. Goodwill is considered to have a finite useful life and is amortised on a systematic basis over its expected life.

 

For the purposes of impairment testing, goodwill is allocated to the cash-generating units expected to benefit from the acquisition. Cash-generating units to which goodwill has been allocated are tested for impairment at least annually, or more frequently when there is an indication that the unit may be impaired. If the recoverable amount of the cash-generating unit is less than the carrying amount of the unit, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro-rata on the basis of the carrying amount of each asset in the unit.

Amortisation 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:

Goodwill
10 years
1.5
Tangible fixed assets

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:

Plant and machinery
7-12 years
Office equipment
3 years
Motor vehicles
4 years

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.

1.6
Impairment of fixed assets

At each reporting period end date, the company reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. 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 the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.

IOT ENERGY SERVICES LTD.
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies (continued)
- 12 -

Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.

1.7
Cash at bank and in hand

Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.

1.8
Financial instruments

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.

Basic financial assets

Basic financial assets, which include debtors 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 transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.

Other financial assets

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.

Impairment of financial assets

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.

IOT ENERGY SERVICES LTD.
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies (continued)
- 13 -
Derecognition of financial assets

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.

Classification of financial liabilities

Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.

Basic financial liabilities

Basic financial liabilities, including creditors, bank loans, loans from fellow group companies and preference shares that are classified as debt, 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. Financial liabilities classified as payable within one year are not amortised.

 

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

 

Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.

Other financial liabilities

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.

Derecognition of financial liabilities

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

1.9
Equity instruments

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

1.10
Taxation

The tax expense represents the sum of the tax currently payable and deferred tax.

IOT ENERGY SERVICES LTD.
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies (continued)
- 14 -
Current tax

The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.

Deferred tax

Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.

 

The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the company has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.

1.11
Provisions

Provisions are recognised when the company has a legal or constructive present obligation as a result of a past event, it is probable that the company will be required to settle that obligation and a reliable estimate can be made of the amount of the obligation.

 

The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the reporting end date, taking into account the risks and uncertainties surrounding the obligation. Where the effect of the time value of money is material, the amount expected to be required to settle the obligation is recognised at present value. When a provision is measured at present value, the unwinding of the discount is recognised as a finance cost in profit or loss in the period in which it arises.

1.12
Employee benefits

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.

1.13
Retirement benefits

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

IOT ENERGY SERVICES LTD.
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies (continued)
- 15 -
1.14
Leases

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.

1.15
Foreign exchange

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.

2
Judgements and key sources of estimation uncertainty

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.

Critical judgements

The following judgements (apart from those involving estimates) have had the most significant effect on amounts recognised in the financial statements.

Useful lives of tangible fixed assets

Depreciation is recognised so as to write off tangible fixed assets over their expected useful lives. Management review the useful lives periodically to ensure they remain appropriate and accurately reflect the diminution in value.

3
Turnover and other revenue
2023
2022
£
£
Turnover analysed by class of business
Sales of goods
3,996
8,781
2023
2022
£
£
Other significant revenue
Other income
144,000
144,000
IOT ENERGY SERVICES LTD.
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 16 -
4
Operating loss
2023
2022
Operating loss for the year is stated after charging/(crediting):
£
£
Exchange differences apart from those arising on financial instruments measured at fair value through profit or loss
(12)
38
Depreciation of owned tangible fixed assets
63,890
89,197
(Profit)/loss on disposal of tangible fixed assets
(8,000)
50,398
Operating lease charges
51,700
54,233
5
Auditor's remuneration
2023
2022
Fees payable to the company's auditor and associates:
£
£
For audit services
Audit of the financial statements of the company
6,500
6,000

In accordance with SI 2008/489 the company has not disclosed the fees payable to the company's auditor for 'Other services' as this information is included in the consolidated financial statements of Petrolia SE.

6
Employees

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

2023
2022
Number
Number
Total
3
3

Their aggregate remuneration comprised:

2023
2022
£
£
Wages and salaries
192,121
206,738
Social security costs
18,206
21,364
Pension costs
9,134
8,873
219,461
236,975
7
Interest payable and similar expenses
2023
2022
£
£
Interest on financial liabilities measured at amortised cost:
Interest on bank overdrafts and loans
988
1,117
Interest payable to group undertakings
12,425
12,425
13,413
13,542
IOT ENERGY SERVICES LTD.
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 17 -
8
Taxation

Changes to the UK corporation tax rates were substantively enacted as part of Finance Act 2023 (on 10 January 2023). These changes include an increase in the main rate to 25% from April 2023. Deferred taxes at the balance sheet date, in relation to UK companies, continue to be measured using tax rates enacted as at the balance sheet date (25%).  

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:

2023
2022
£
£
Loss before taxation
(362,557)
(438,886)
Expected tax credit based on the standard rate of corporation tax in the UK of 24% (2022: 19%)
(85,273)
(83,388)
Tax effect of expenses that are not deductible in determining taxable profit
2,452
11,221
Unutilised tax losses carried forward
74,058
54,816
Effect of change in corporation tax rate
(4,383)
-
0
Permanent capital allowances in excess of depreciation
13,146
17,348
Provisions movement
-
0
3
Taxation charge for the year
-
-
9
Intangible fixed assets
Goodwill
£
Cost
At 1 January 2023 and 31 December 2023
30,000
Amortisation and impairment
At 1 January 2023 and 31 December 2023
30,000
Carrying amount
At 31 December 2023
-
0
At 31 December 2022
-
0
IOT ENERGY SERVICES LTD.
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 18 -
10
Tangible fixed assets
Plant and machinery
Office equipment
Motor vehicles
Total
£
£
£
£
Cost
At 1 January 2023
558,099
13,766
7,315
579,180
Disposals
-
0
(4,591)
(7,315)
(11,906)
At 31 December 2023
558,099
9,175
-
0
567,274
Depreciation and impairment
At 1 January 2023
227,229
13,670
7,315
248,214
Depreciation charged in the year
63,794
96
-
0
63,890
Eliminated in respect of disposals
-
0
(4,591)
(7,315)
(11,906)
At 31 December 2023
291,023
9,175
-
0
300,198
Carrying amount
At 31 December 2023
267,076
-
0
-
0
267,076
At 31 December 2022
330,870
96
-
0
330,966
11
Debtors
2023
2022
Amounts falling due within one year:
£
£
Trade debtors
-
0
5,383
Other debtors
4,791
2,893
Prepayments and accrued income
22,415
18,531
27,206
26,807
12
Creditors: amounts falling due within one year
2023
2022
Notes
£
£
Bank loans
14
5,959
5,246
Trade creditors
18,415
15,979
Amounts owed to group undertakings
1,579,000
1,421,844
Taxation and social security
5,870
9,748
Other creditors
235,753
6,672
Accruals and deferred income
12,114
7,707
1,857,111
1,467,196
IOT ENERGY SERVICES LTD.
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 19 -
13
Creditors: amounts falling due after more than one year
2023
2022
Notes
£
£
Bank loans
14
31,168
36,650
Amounts included above which fall due after five years are as follows:
Payable by instalments
7,991
14,109
14
Loans and overdrafts
2023
2022
£
£
Bank loans
37,127
41,896
Payable within one year
5,959
5,246
Payable after one year
31,168
36,650

The bank loan is repayable in monthly instalments ending in June 2030 with interest being charged at a fixed rate of 2.5%.

15
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
9,134
8,873

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.

IOT ENERGY SERVICES LTD.
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 20 -
16
Share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £1 each
131,390
131,390
131,390
131,390
17
Share premium account

This reserve records the amount above the nominal value received for shares sold, less transaction costs.

Profit and loss account

This reserve records the accumulated distributable profits made by the company net of distributions to shareholders.

18
Operating lease commitments
Lessee

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:

2023
2022
£
£
Within one year
52,527
53,252
Between two and five years
155,100
207,627
In over five years
-
0
4,308
207,627
265,187
Lessor

At the reporting end date the company had contracted with tenants for the following minimum lease payments:

2023
2022
£
£
Within one year
3,996
3,996
Between two and five years
15,984
15,984
In over five years
14,985
18,981
34,965
38,961
19
Related party transactions
Transactions with related parties
2023
2022
Amounts due to related parties
£
£
Entities over which the entity has control, joint control or significant influence
1,579,000
1,421,844
IOT ENERGY SERVICES LTD.
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 21 -
20
Controlling party

The company was majority owned by Independent Oil Tools AS, a company incorporated in Norway.

 

The largest group in which the results of the company are consolidated is that headed by Petrolia SE. The financial statements of Petrolia SE are available from its registered office at 205 Christodoulou Chatzipavlou Street, Loulloupis Court, 4th floor, office 401, 3036 Limassol, Cyprus.

21
Cash generated from/(absorbed by) operations
2023
2022
£
£
Loss for the year after tax
(362,557)
(438,886)
Adjustments for:
Finance costs
13,413
13,542
(Gain)/loss on disposal of tangible fixed assets
(8,000)
50,398
Depreciation and impairment of tangible fixed assets
63,890
89,197
Movements in working capital:
Decrease in stocks
-
0
5,427
(Increase)/decrease in debtors
(399)
54,317
Increase in creditors
389,202
196,500
Cash generated from/(absorbed by) operations
95,549
(29,505)
22
Analysis of changes in net funds
1 January 2023
Cash flows
31 December 2023
£
£
£
Cash at bank and in hand
185,213
85,367
270,580
Borrowings excluding overdrafts
(41,896)
4,769
(37,127)
143,317
90,136
233,453
23
Company information

IOT ENERGY SERVICES LTD. is a private company limited by shares incorporated in Scotland. The registered office is Independent Oil Tools Building Ltd, Sir William Smith Road, Kirkton Industrial Estate, Arbroath, DD11 3RD.

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