Company registration number SC355933 (Scotland)
TRAC ENERGY LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
TRAC ENERGY LIMITED
COMPANY INFORMATION
Directors
K D Hawthorn
A C Petersen
Secretary
K R Stephen
Company number
SC355933
Registered office
37 Albyn Place
Aberdeen
Aberdeen City
United Kingdom
AB10 1YN
Auditor
Azets Audit Services
37 Albyn Place
Aberdeen
United Kingdom
AB10 1JB
Business address
3 Thistle Road
Dyce
Aberdeen
United Kingdom
AB21 0NN
TRAC ENERGY LIMITED
CONTENTS
Page
Strategic report
1 - 2
Directors' report
3
Directors' responsibilities statement
4
Independent auditor's report
5 - 7
Statement of income and retained earnings
8
Balance sheet
9
Notes to the financial statements
10 - 25
TRAC ENERGY LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 MARCH 2024
- 1 -
The directors present the strategic report for the year ended 31 March 2024.
Principal activities and business review
The principal activity of the company during the year was the provision of engineering support services for inspection and maintenance of offshore and onshore assets in the energy sector.
The results for the year reflect a continuation of the challenging trading conditions being experienced across the group last year. We continued to be faced with a variety of different pressures; most notably supply chain disruption, project award delays and labour shortages. In addition, we saw significant raw material cost inflation.
Our strategy is to concentrate on providing excellent customer service in the markets in which we operate. Constant focus on our cost base continues to benefit operating profits, margins and cash flow. We continue to seek opportunities to grow the business and believe that we are well placed to deliver consistent long-term growth.
In the year ended 31 March 2024 the company achieved a turnover of £20.8m (2023: £17.9m) and a loss before tax of £0.23m loss (2023: £0.03m profit). Net assets at the balance sheet date were £4.5m (2023: £4.7m). This was in line with the expectations of the directors.
Principal risks and uncertainties
Competition
The company has a number of large customers with which it maintains very good working relationships. There are regular project management meetings which ensure all matters are addressed timeously and customer satisfaction is maintained.
Employees
The future success of the company depends on the skills and efforts of our employees and the ability to retain and develop these individuals. The company emphasises accountability and responsibility at the local level and encourages an entrepreneurial approach to running operations. The company constantly reviews its remuneration packages to make sure they remain competitive and also maintains development and succession planning programmes.
Suppliers
The company has a widespread supplier database due to its operations in multiple areas throughout the United Kingdom and abroad.
Regulation
Certain aspects of the company's activities mean that some employees can be exposed to hazardous environments. The company is committed to maintaining a safe working environment and a culture of zero tolerance to accidents. The company has in place quality and safety processes which are regularly audited by professional bodies and customers.
Apart from the above the directors are not aware of any major risks or uncertainties facing the company with the Balance Sheet continuing to be strong.
Key performance indicators
The directors consider the key performance indicators of the business to be turnover (2024: £20.8m; 2023: £17.9m), operating profit or loss (2024: £0.21m loss; 2023: £0.04m profit), operating profit or loss % (2024: (1.01)%; 2023: 0.22%), net assets (2024: £4.5m; 2023: £4.7m) and cash position (2024: £0.05m; 2023: £0.02m). The directors believe that there are no significant non-financial key performance indicators.
TRAC ENERGY LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 2 -
Financial instruments
Liquidity risk
The company manages its cash and borrowing requirements in order to maximise interest income and minimise interest expense, whilst ensuring the company has sufficient liquid resources to meet the operating needs of the business.
Interest rate risk
The company monitors interest rates closely in order to minimise the potential exposure risk it has to any interest rate movements.
Foreign currency risk
The company’s principal foreign currency exposures arise from trading with overseas companies. Company policies of regular conversion meets its objectives of managing exposure to currency risk. No financial instruments are in place to remove the effect of fluctuations in exchanges rates on the company.
Credit risk
Investments of cash surpluses, borrowings and derivative instruments are made through banks and companies which must fulfil credit rating criteria approved by the Board.
All customers who wish to trade on credit terms are subject to credit verification procedures. Trade debtors are monitored on an ongoing basis and provision is made for doubtful debts where necessary.
A C Petersen
Director
23 December 2024
TRAC ENERGY LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 MARCH 2024
- 3 -
The directors present their annual report and financial statements for the year ended 31 March 2024.
Principal activities
The principal activity of the company continued to be that of the provision of engineering support services for inspection and maintenance of offshore and onshore assets in the energy sector.
Results and dividends
The results for the year are set out on page 8.
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:
K D Hawthorn
A C Petersen
Post reporting date events
In accordance with normal practice, fixed assets acquired post year end and fixed assets purchased during the year are considered by management for financing by the company’s lender of choice in line with the existing facility in place at the year end. Subsequent to the year end £659,026 of finance has been received.
Future developments
The directors do not foresee any changes in the company's activities in the immediate future.
Auditor
The auditor, Azets Audit Services, is deemed to be reappointed under section 487(2) of the Companies Act 2006.
Disclosure of information in the strategic report
The company has chosen in accordance with Companies Act 2006, s. 414C(11) to set out in the company's strategic report information required by Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008, Sch. 7 to be contained in the directors' report. It has done so in respect of company's results and activities.
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
A C Petersen
Director
23 December 2024
TRAC ENERGY LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 MARCH 2024
- 4 -
The directors are responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to:
select suitable accounting policies and then apply them consistently;
make judgements and accounting estimates that are reasonable and prudent;
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company’s transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
TRAC ENERGY LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF TRAC ENERGY LIMITED
- 5 -
Opinion
We have audited the financial statements of TRAC Energy Limited (the 'company') for the year ended 31 March 2024 which comprise the statement of income and retained earnings, the balance sheet and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).
In our opinion the financial statements:
give a true and fair view of the state of the company's affairs as at 31 March 2024 and of its loss for the year then ended;
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
have been prepared in accordance with the requirements of the Companies Act 2006.
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of our audit:
the information given in the strategic report and the directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the strategic report and the directors' report have been prepared in accordance with applicable legal requirements.
TRAC ENERGY LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF TRAC ENERGY LIMITED
- 6 -
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 strategic report or the directors' report.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:
adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
the financial statements are not in agreement with the accounting records and returns; or
certain disclosures of remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.
Responsibilities of directors
As explained more fully in the directors' responsibilities statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.
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.
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.
TRAC ENERGY LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF TRAC ENERGY LIMITED
- 7 -
Extent to which the audit was considered capable of detecting irregularities, including fraud
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above and on the Financial Reporting Council’s website, to detect material misstatements in respect of irregularities, including fraud.
We obtain and update our understanding of the entity, its activities, its control environment, and likely future developments, including in relation to the legal and regulatory framework applicable and how the entity is complying with that framework. Based on this understanding, we identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. This includes consideration of the risk of acts by the entity that were contrary to applicable laws and regulations, including fraud.
In response to the risk of irregularities and non-compliance with laws and regulations, including fraud, we designed procedures which included:
Enquiry of management and those charged with governance around actual and potential litigation and claims as well as actual, suspected and alleged fraud;
Assessing the extent of compliance with the laws and regulations considered to have a direct material effect on the financial statements or the operations of the company through enquiry and inspection;
Reviewing financial statement disclosures and testing to supporting documentation to assess compliance with applicable laws and regulations;
Performing audit work over the risk of management bias and override of controls, including testing of journal entries and other adjustments for appropriateness, evaluating the business rationale of significant transactions outside the normal course of business and reviewing accounting estimates for indicators of potential bias.
Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
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.
Matthew Allan
Senior Statutory Auditor
For and on behalf of Azets Audit Services
23 December 2024
Chartered Accountants
Statutory Auditor
37 Albyn Place
Aberdeen
United Kingdom
AB10 1JB
TRAC ENERGY LIMITED
STATEMENT OF INCOME AND RETAINED EARNINGS
FOR THE YEAR ENDED 31 MARCH 2024
- 8 -
2024
2023
Notes
£
£
Turnover
3
20,831,512
17,872,156
Cost of sales
(17,237,849)
(14,910,952)
Gross profit
3,593,663
2,961,204
Administrative expenses
(3,806,391)
(2,962,525)
Other operating income
3,225
36,583
Operating (loss)/profit
4
(209,503)
35,262
Interest receivable and similar income
7
813
Interest payable and similar expenses
8
(25,180)
(620)
Amounts written off investments
9
-
(625)
(Loss)/profit before taxation
(234,683)
34,830
Tax on (loss)/profit
10
40,636
(23,456)
(Loss)/profit for the financial year
(194,047)
11,374
Retained earnings brought forward
4,655,111
4,643,737
Retained earnings carried forward
4,461,064
4,655,111
The profit and loss account has been prepared on the basis that all operations are continuing operations.
TRAC ENERGY LIMITED
BALANCE SHEET
AS AT
31 MARCH 2024
31 March 2024
- 9 -
2024
2023
Notes
£
£
£
£
Fixed assets
Tangible assets
11
1,159,387
809,102
Investments
12
82,400
1,241,787
809,102
Current assets
Stocks
15
309,041
363,808
Debtors
16
8,138,724
6,120,270
Cash at bank and in hand
49,115
18,854
8,496,880
6,502,932
Creditors: amounts falling due within one year
17
(5,022,017)
(2,498,644)
Net current assets
3,474,863
4,004,288
Total assets less current liabilities
4,716,650
4,813,390
Creditors: amounts falling due after more than one year
18
(151,674)
Provisions for liabilities
Deferred tax liability
20
102,912
157,279
(102,912)
(157,279)
Net assets
4,462,064
4,656,111
Capital and reserves
Called up share capital
22
1,000
1,000
Profit and loss reserves
4,461,064
4,655,111
Total equity
4,462,064
4,656,111
The financial statements were approved by the board of directors and authorised for issue on 23 December 2024 and are signed on its behalf by:
A C Petersen
Director
Company Registration No. SC355933
TRAC ENERGY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
- 10 -
1
Accounting policies
Company information
TRAC Energy Limited SC355933 is a private company limited by shares incorporated in Scotland. The registered office is 37 Albyn Place, Aberdeen, Aberdeen City, United Kingdom, AB10 1YN. The address of its principal place of business is 3 Thistle Road, Dyce, Aberdeen, United Kingdom, AB21 0NN.
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 £.
The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.
This company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group. The company has therefore taken advantage of exemptions from the following disclosure requirements:
Section 7 ‘Statement of Cash Flows’: Presentation of a statement of cash flow and related notes and disclosures;
Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instrument Issues’: Interest income/expense and net gains/losses for each category of financial instrument; basis of determining fair values; details of collateral, loan defaults or breaches, details of hedges, hedging fair value changes recognised in profit or loss and in other comprehensive income;
Section 26 ‘Share based Payment’: Share-based payment expense charged to profit or loss, reconciliation of opening and closing number and weighted average exercise price of share options, how the fair value of options granted was measured, measurement and carrying amount of liabilities for cash-settled share-based payments, explanation of modifications to arrangements;
Section 33 ‘Related Party Disclosures’: Compensation for key management personnel.
The financial statements of the company are consolidated in the financial statements of TRAC International Limited. These consolidated financial statements are available from its registered office, 37 Albyn Place, Aberdeen, Aberdeen City, Scotland, AB10 1YN.
The company has taken advantage of the exemption under section 400 of the Companies Act 2006 not to prepare consolidated accounts. The financial statements present information about the company as an individual entity and not about its group.
TRAC Energy Limited is a subsidiary undertaking of TRAC International Limited and the results of TRAC Energy Limited are included in the consolidated financial statements of TRAC International Limited which are available from 37 Albyn Place, Aberdeen, Scotland, AB10 1YN.
TRAC ENERGY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
1
Accounting policies
(Continued)
- 11 -
1.2
Going concern
Atruet the time of approving the financial statements, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.
Based on their assessment of the company's prospects and viability the Directors have formed a judgement, at the time of approving the financial statements, that there are no material uncertainties that cast doubt on the company's going concern status and that there is a reasonable expectation that the company has adequate resources to continue in operational existence for at least twelve months from the date of approval of the financial statements. The Directors therefore consider it appropriate to adopt the going concern basis of accounting in preparing its financial statements.
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.
Revenue from the rendering of services is measured by reference to the stage of completion of the service transaction at the end of the reporting period provided that the outcome can be reliably estimated. When the outcome cannot be reliably estimated, revenue is recognised only to the extent that expenses recognised are recoverable.
1.4
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:
Tenants improvements
10% straight line
Plant, machinery and equipment
10% to 50% straight line
Motor vehicles
20% straight line
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.
1.5
Fixed asset investments
Interests in subsidiaries, associates and jointly controlled entities are initially measured at cost and subsequently measured at cost less any accumulated impairment losses. The investments are assessed for impairment at each reporting date and any impairment losses or reversals of impairment losses are recognised immediately in profit or loss.
A subsidiary is an entity controlled by the company. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.
TRAC ENERGY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
1
Accounting policies
(Continued)
- 12 -
1.6
Impairment of fixed assets
At each reporting period 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. 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.
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
Stocks
Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the stocks to their present location and condition.
Stocks held for distribution at no or nominal consideration are measured at the lower of cost and replacement cost, adjusted where applicable for any loss of service potential.
At each reporting date, an assessment is made for impairment. Any excess of the carrying amount of stocks over its estimated selling price less costs to complete and sell is recognised as an impairment loss in profit or loss. Reversals of impairment losses are also recognised in profit or loss.
1.8
Cash and cash equivalents
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.
TRAC ENERGY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
1
Accounting policies
(Continued)
- 13 -
1.9
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.
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.
TRAC ENERGY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
1
Accounting policies
(Continued)
- 14 -
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.
Derecognition of financial liabilities
Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.
1.10
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.
1.11
Taxation
The taxation expense represents the aggregate amount of current and deferred tax recognised in the reporting period. Tax is recognised in the profit and loss account, except to the extent that it relates to items recognised in other comprehensive income or directly in equity, respectively.
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.
TRAC ENERGY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
1
Accounting policies
(Continued)
- 15 -
1.12
Provisions
Provisions are recognised when the Company has an obligation at the reporting date as a result of a past result, it is probable that the Company will be required to transfer economic benefits in settlement and the amount of the obligation can be settled and the amount of the obligation can be estimated reliably. Provisions are recognised as a liability in the statement of financial position and the amount of the provision as an expense.
Provisions are initially measured at the best estimate of the amount required to settle the obligation at the reporting date and subsequently reviewed at each reporting date and adjusted to reflect the current best estimate of the amount that would be required to settle the obligation. Any adjustments to the amounts previously recognised are recognised in profit or loss unless the provision was originally recognised as part of the cost of an asset. When a provision is measured at the present value of the amount expected to be required to settle the obligation, the unwinding of the discount is recognised as a finance cost in profit or loss in the period it arises.
1.13
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.
1.14
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.15
Leases
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessees. All other leases are classified as operating leases.
Assets held under finance leases are recognised as assets at the lower of the assets fair value at the date of inception and the present value of the minimum lease payments. The related liability is included in the balance sheet as a finance lease obligation. Lease payments are treated as consisting of capital and interest elements. The interest is charged to profit or loss so as to produce a constant periodic rate of interest on the remaining balance of the liability.
1.16
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.
TRAC ENERGY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 16 -
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.
3
Turnover and other revenue
2024
2023
£
£
Turnover analysed by class of business
Sale of services
20,831,512
17,872,156
2024
2023
£
£
Turnover analysed by geographical market
United Kingdom
19,413,889
16,848,697
Overseas
1,417,623
1,023,459
20,831,512
17,872,156
2024
2023
£
£
Other revenue
Interest income
-
813
4
Operating (loss)/profit
2024
2023
Operating (loss)/profit for the year is stated after charging/(crediting):
£
£
Exchange losses/(gains)
5,013
(2,037)
Fees payable to the company's auditor for the audit of the company's financial statements
28,950
26,250
Depreciation of owned tangible fixed assets
284,007
269,775
Depreciation of tangible fixed assets held under finance leases
48,655
-
Loss/(profit) on disposal of tangible fixed assets
60,221
(11,367)
Operating lease charges
3,645
3,640
TRAC ENERGY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 17 -
5
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2024
2023
Number
Number
Management and administrative staff
58
48
Operations staff
96
97
Total
154
145
Their aggregate remuneration comprised:
2024
2023
£
£
Wages and salaries
13,173,661
12,302,177
Social security costs
1,576,714
1,570,531
Pension costs
363,098
294,728
15,113,473
14,167,436
6
Directors' remuneration
2024
2023
£
£
Remuneration for qualifying services
124,974
113,765
Company pension contributions to defined contribution schemes
312
17,529
125,286
131,294
The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 1 (2023 - 1).
7
Interest receivable and similar income
2024
2023
£
£
Interest income
Other interest income
813
TRAC ENERGY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 18 -
8
Interest payable and similar expenses
2024
2023
£
£
Interest payable to group undertakings
19,208
Interest on finance leases and hire purchase contracts
5,972
-
Other interest
620
25,180
620
9
Amounts written off investments
Impairment tests have been carried out where appropriate and the following impairment losses have been recognised in the profit and loss in respect of amounts written off fixed asset investments.
2024
2023
£
£
Amounts written off investments
-
625
TRAC ENERGY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 19 -
10
Taxation
2024
2023
£
£
Current tax
Adjustments in respect of prior periods
(92)
Total UK current tax
(92)
Foreign current tax on profits for the current period
13,731
23,868
Total current tax
13,731
23,776
Deferred tax
Origination and reversal of timing differences
(54,367)
(320)
Total tax (credit)/charge
(40,636)
23,456
The actual (credit)/charge for the year can be reconciled to the expected (credit)/charge for the year based on the profit or loss and the standard rate of tax as follows:
2024
2023
£
£
(Loss)/profit before taxation
(234,683)
34,830
Expected tax (credit)/charge based on the standard rate of corporation tax in the UK of 25.00% (2023: 19.00%)
(58,671)
6,618
Tax effect of expenses that are not deductible in determining taxable profit
8,045
3,947
Adjustments in respect of prior years
(92)
Effect of change in corporation tax rate
(77)
Permanent capital allowances in excess of depreciation
35
(16,716)
Other permanent differences
(2,659)
6,631
Deferred tax adjustments in respect of prior years
155
Foreign tax suffered
13,731
23,867
Foreign PE exemption
(1,272)
(722)
Taxation (credit)/charge for the year
(40,636)
23,456
The main rate of corporation tax increased from 19% to 25% on 1 April 2023. This increase in rate will have an impact on the company’s future tax charges. The company’s deferred tax balances as at 31 March 2024 have been calculated based on the rate of 25%.
TRAC ENERGY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 20 -
11
Tangible fixed assets
Tenants improvements
Plant, machinery and equipment
Motor vehicles
Total
£
£
£
£
Cost
At 1 April 2023
138,806
1,642,170
103,722
1,884,698
Additions
682,495
71,922
754,417
Disposals
(128,039)
(15,704)
(143,743)
At 31 March 2024
138,806
2,196,626
159,940
2,495,372
Depreciation and impairment
At 1 April 2023
138,806
912,990
23,800
1,075,596
Depreciation charged in the year
261,298
71,364
332,662
Eliminated in respect of disposals
(70,441)
(1,832)
(72,273)
At 31 March 2024
138,806
1,103,847
93,332
1,335,985
Carrying amount
At 31 March 2024
1,092,779
66,608
1,159,387
At 31 March 2023
729,180
79,922
809,102
The net carrying value of tangible fixed assets includes the following in respect of assets held under finance leases or hire purchase contracts.
2024
2023
£
£
Plant, machinery and equipment
238,186
49,417
TRAC ENERGY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 21 -
12
Fixed asset investments
2024
2023
Notes
£
£
Investments in subsidiaries
13
82,400
Impairment losses recognised in the profit or loss account in the year were £nil (2023 - £625).
Movements in fixed asset investments
Shares in subsidiaries
£
Cost or valuation
At 1 April 2023
-
Additions
82,400
At 31 March 2024
82,400
Carrying amount
At 31 March 2024
82,400
At 31 March 2023
-
13
Subsidiaries
Details of the company's subsidiaries at 31 March 2024 are as follows:
Name of undertaking
Address
Class of
% Held
shares held
Direct
TRAC Oil & Gas PTY Ltd
1
Ordinary
100.00
TRAC Petroleo e Gas Ltda
2
Ordinary
99.00
TRAC Oil & Gas Limited
3
Ordinary
100.00
Registered office addresses:
1
Unit 5, 48 Hardey Road, Belmont, Perth, WA 6104, Australia
2
Rue Itacolomi, 213, Quadra G, lote 21, CEP:27977-340, Cabiunas-Macae-RJ, Brazil
3
1st Floor, Air Burkina Sales Office, Osu Re, Dr Esther Ocloo St, Ghana
The aggregate capital and reserves and the result for the year of the subsidiaries noted above was as follows:
Name of undertaking
Capital and Reserves
Profit/(Loss)
£
£
TRAC Oil & Gas PTY Ltd
(1,401)
TRAC Petroleo e Gas Ltda
(295,302)
(96,070)
TRAC Oil & Gas Limited
(436,848)
(23,756)
TRAC ENERGY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 22 -
14
Joint ventures
Details of the company's joint ventures at 31 March 2024 are as follows:
Name of undertaking
Registered office
Interest
% Held
held
Direct
TRAC Oil & Gas Services Ghana Limited
HSE No ADP Block 1 Office No 5 Free Zone Enclave Tema Kpone Katamanso PO Box CE12034 Tema Ghana
Ordinary
90.00
15
Stocks
2024
2023
£
£
Raw materials and consumables
309,041
363,808
Impairment losses recognised in the profit or loss account in the year were £nil (2023: £nil).
16
Debtors
2024
2023
Amounts falling due within one year:
£
£
Trade debtors
4,788,102
4,172,384
Corporation tax recoverable
20,064
Amounts owed by group undertakings
1,488,347
1,267,115
Amounts owed by undertakings in which the company has a participating interest
528,297
514,452
Other debtors
20,684
77,935
Prepayments and accrued income
1,313,294
68,320
8,138,724
6,120,270
Amounts owed by group undertakings and undertakings in which the company has a participating interest are unsecured, interest free, have no fixed date of repayment and are repayable upon demand.
17
Creditors: amounts falling due within one year
2024
2023
Notes
£
£
Obligations under finance leases
19
107,413
26,929
Trade creditors
1,220,781
348,750
Amounts owed to group undertakings
2,444,044
1,050,693
Taxation and social security
552,917
499,235
Other creditors
696,862
573,037
5,022,017
2,498,644
Amounts owed to group undertakings are unsecured, interest free, have no fixed date of repayment and are repayable upon demand.
TRAC ENERGY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 23 -
18
Creditors: amounts falling due after more than one year
2024
2023
Notes
£
£
Obligations under finance leases
19
151,674
19
Finance lease obligations
2024
2023
Future minimum lease payments due under finance leases:
£
£
Within one year
121,997
28,781
In two to five years
166,258
288,255
28,781
Less: future finance charges
(29,168)
(1,852)
259,087
26,929
Finance lease payments represent rentals payable by the company or group for certain items of plant and machinery. Leases include purchase options at the end of the lease period, and no restrictions are placed on the use of the assets. The average lease term is three years. All leases are on a fixed repayment basis and no arrangements have been entered into for contingent rental payments.
20
Deferred taxation
The following are the major deferred tax liabilities and assets recognised by the company and movements thereon:
Liabilities
Liabilities
2024
2023
Balances:
£
£
Fixed asset timing differences
280,840
188,947
Tax losses
(168,170)
(23,364)
Short term timing differences
(9,758)
(8,304)
102,912
157,279
2024
Movements in the year:
£
Liability at 1 April 2023
157,279
Credit to profit or loss
(54,367)
Liability at 31 March 2024
102,912
TRAC ENERGY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 24 -
21
Retirement benefit schemes
2024
2023
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
363,098
294,728
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.
As at the reporting date, amounts payable of £87,407 (2023: £70,891) had not been paid over to the schemes.
22
Share capital
2024
2023
2024
2023
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of 0.1p each
1,000,000
1,000,000
1,000
1,000
23
Operating lease commitments
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:
2024
2023
£
£
Within one year
5,600
5,600
Between two and five years
6,327
11,927
11,927
17,527
TRAC ENERGY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 25 -
24
Related party transactions
Transactions with related parties
During the year the company entered into the following transactions with related parties:
Sales
Sales
2024
2023
£
£
Entities over which the entity has control, joint control or significant influence
71,569
14,890
Management charges
Donations
2024
2023
2024
2023
£
£
£
£
Entities with control, joint control or significant influence over the company
543,169
428,055
-
-
Other related parties
-
-
-
42,662
The following amounts were outstanding at the reporting end date:
2024
2023
Amounts due to related parties
£
£
Entities with control, joint control or significant influence over the company
2,296,329
899,846
Other related parties
147,716
150,847
The following amounts were outstanding at the reporting end date:
2024
2023
Amounts due from related parties
£
£
Entities over which the entity has control, joint control or significant influence
528,297
514,452
Other related parties
1,488,347
1,267,115
25
Ultimate controlling party
The ultimate parent company is TRAC International Limited, a company incorporated in Scotland whose registered office is 37 Albyn Place, Aberdeen, Aberdeen City, Scotland, AB10 1YN. TRAC International Limited is controlled by D H Hawthorn who owns 100% of that company’s issued share capital.
26
Events after the reporting date
In accordance with normal practice, fixed assets acquired post year end and fixed assets purchased during the year are considered by management for financing by the company’s lender of choice in line with the existing facility in place at the year end. Subsequent to the year end £659,026 of finance has been received.
2024-03-312023-04-01falseCCH SoftwareCCH Accounts Production 2024.210K D HawthornA C PetersenK R StephenfalsefalseSC3559332023-04-012024-03-31SC355933bus:Director12023-04-012024-03-31SC355933bus:Director22023-04-012024-03-31SC355933bus:CompanySecretary12023-04-012024-03-31SC355933bus:RegisteredOffice2023-04-012024-03-31SC3559332024-03-31SC3559332022-04-012023-03-31SC355933core:RetainedEarningsAccumulatedLosses2023-03-31SC355933core:RetainedEarningsAccumulatedLosses2022-03-31SC355933core:ShareCapital2024-03-31SC355933core:ShareCapital2023-03-31SC355933core:RetainedEarningsAccumulatedLosses2024-03-31SC355933core:RetainedEarningsAccumulatedLosses2023-03-31SC3559332023-03-31SC355933core:LeaseholdImprovements2024-03-31SC355933core:PlantMachinery2024-03-31SC355933core:MotorVehicles2024-03-31SC355933core:LeaseholdImprovements2023-03-31SC355933core:PlantMachinery2023-03-31SC355933core:MotorVehicles2023-03-31SC355933core:CurrentFinancialInstrumentscore:WithinOneYear2024-03-31SC355933core:CurrentFinancialInstrumentscore:WithinOneYear2023-03-31SC355933core:Non-currentFinancialInstrumentscore:AfterOneYear2024-03-31SC355933core:Non-currentFinancialInstrumentscore:AfterOneYear2023-03-31SC355933core:CurrentFinancialInstruments2024-03-31SC355933core:CurrentFinancialInstruments2023-03-31SC355933core:LeaseholdImprovements2023-04-012024-03-31SC355933core:PlantMachinery2023-04-012024-03-31SC355933core:MotorVehicles2023-04-012024-03-31SC355933dpl:CostSales2023-04-012024-03-31SC355933dpl:CostSales2022-04-012023-03-31SC35593312023-04-012024-03-31SC35593312022-04-012023-03-31SC355933core:UKTax2023-04-012024-03-31SC355933core:UKTax2022-04-012023-03-31SC355933core:ForeignTax2023-04-012024-03-31SC355933core:ForeignTax2022-04-012023-03-31SC35593322023-04-012024-03-31SC35593322022-04-012023-03-31SC35593332023-04-012024-03-31SC35593332022-04-012023-03-31SC355933core:LeaseholdImprovements2023-03-31SC355933core:PlantMachinery2023-03-31SC355933core:MotorVehicles2023-03-31SC3559332023-03-31SC355933core:Non-currentFinancialInstruments2024-03-31SC355933core:Non-currentFinancialInstruments2023-03-31SC355933core:Subsidiary12023-04-012024-03-31SC355933core:Subsidiary22023-04-012024-03-31SC355933core:Subsidiary32023-04-012024-03-31SC35593312023-04-012024-03-31SC355933core:Subsidiary212023-04-012024-03-31SC355933core:Subsidiary12024-03-31SC355933core:Subsidiary22024-03-31SC35593312023-04-012024-03-31SC355933core:WithinOneYear2024-03-31SC355933core:WithinOneYear2023-03-31SC355933core:BetweenTwoFiveYears2024-03-31SC355933core:BetweenTwoFiveYears2023-03-31SC355933core:AllSubsidiariescore:SaleOrPurchaseGoods2023-04-012024-03-31SC355933core:AllSubsidiariescore:SaleOrPurchasePropertyOrOtherAssets2022-04-012023-03-31SC355933core:EntitiesWithJointControlOrSignificantInfluenceOverReportingEntity2024-03-31SC355933bus:PrivateLimitedCompanyLtd2023-04-012024-03-31SC355933bus:FRS1022023-04-012024-03-31SC355933bus:Audited2023-04-012024-03-31SC355933bus:FullAccounts2023-04-012024-03-31xbrli:purexbrli:sharesiso4217:GBP