Company registration number 03587074 (England and Wales)
ERC EQUIPOISE LIMITED
ANNUAL REPORT AND CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
ERC EQUIPOISE LIMITED
COMPANY INFORMATION
Directors
Dr A Law
Mr D C Wilson
Mr P Nicol
Mr P Dolan
Mrs K J Hall
Mr J A Culley
Dr J N F Hull
Secretary
Mr J A Culley
Company number
03587074
Registered office
Eastbourne House
2 Saxbys Lane
Lingfield
Surrey
RH7 6DN
Auditor
TC Group
3 Acorn Business Centre
Northarbour Road
Cosham
Portsmouth
PO6 3TH
Business address
6th floor
Stephenson House
2 Cherry Orchard Road
Croydon
Surrey
CR0 6BA
ERC EQUIPOISE LIMITED
CONTENTS
Page
Strategic report
1 - 2
Directors' report
3
Directors' responsibilities statement
4
Independent auditor's report
5 - 8
Income statement
9
Group statement of comprehensive income
10
Group statement of financial position
11
Company statement of financial position
12
Group statement of changes in equity
13 - 14
Company statement of changes in equity
15 - 16
Group statement of cash flows
17
Notes to the financial statements
18 - 36
ERC EQUIPOISE LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 30 JUNE 2024
- 1 -
The directors present the strategic report for the year ended 30 June 2024.
Fair review of the business
ERC Equipoise Ltd (ERCE or the Group) is an employee-owned independent energy consultancy with global expertise in resources, carbon auditing, oil and gas analytics and subsurface evaluation, including storage and sequestration. The Group is one of the leading auditors of oil and gas reserves in Europe and offers a wide variety of services from independent reserves reports and expert witness testimonials to technical reservoir consulting including geophysical and geological modelling. The Group is based in London, Singapore, Kuala Lumpur, Perth and Canada and provides services to energy companies, government agencies and financial institutions throughout the world.
The Group turnover was £11,056,533 (2023 - £12,136,988) during the year. The Group returned a loss of £249,416 (2023 - £356,334 profit before taxation). Trading during the year was adversely impacted by lower activity in the UK oil and gas sector resulting from a combination of the Energy Profits Levy, and uncertainty related to the 2024 UK general election and reduced activity by ERCE’s Kurdistan focused clients following the shut-in of the Iraq – Turkey pipeline in March 2023. During the year ERCE has offset these decreased revenues by diversifying into other European geographies, targeting global growth in our Expert Witness Practice and expanding into international energy transition projects.
During the period the Group has continued to invest in the energy transition via ERC Evolution. “Evolution” advises clients that are involved in the energy transition journey, from the decarbonization of petroleum production to investment in renewable energy sources. ERC Evolution maintains ISO 9001 certification for the provision of consultancy and advisory services for Energy Transition projects. The Group’s pre-existing investment in the energy transition has allowed Evolution to become a market leader in the provision of independent advisory services for UK based Carbon Capture and Storage projects. The Group continues to invest in Evolution to further enhance its market leading position in the UK and respond to the increasing levels of international activity in the energy transition.
It is the Group’s intention to build on its position as one of the market leaders in the provision of independent strategic, technical and commercial advice to the global energy sector by continuing investment in staff, facilities and through revenue growth.
During the year, a provision for doubtful debt has been recognised in relation to three outstanding debtor balances. We have recognised this provision as there is sufficient doubt over the recoverability. One debtor has continued to be overdue and no payment has been received in the past 12 months. This has resulted in provision being raised for £235,485. The other debtors owing £182,492 have become overdue during the year. One is due to a significant change in personnel responsible for the payment of the debt and the continued economic difficulties the customer is facing due to the political climate within the country. The other is due to a lack of liquidity. This debt has been fully provided for in the year. The provisions recognised in the previous year remain unchanged.
ERC EQUIPOISE LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2024
- 2 -
Principal risks and uncertainties
The business faces a number of risks, which are reviewed on a regular basis by directors and management as part of their ongoing work. The risks considered by directors are those identified by management as principal risks to the business.
The group looks to reduce its exposure to these risks by servicing a variety of business streams through a multi- disciplinary approach across a number of different geographies and globally distributed operating bases.
Price risk
Recent global economic uncertainty, the energy transition and the war in Ukraine have introduced volatility into global energy prices. This volatility influences current and future demand for the Group’s services.
Credit risk
The Group’s financial assets are trade debtors and bank balances. The Group manages its debtors through regular review and follow-up of outstanding balances. The Group reviews its working capital requirements to ensure that credit risks can be adequately managed.
Foreign Exchange risk
The Group transacts predominately in GBP. The fluctuation of the GBP currency to the USD is not seen as a significant threat to the group.
Key performance indicators
The Group’s management use the following performance indicators to monitor performance:
• Turnover (£11,056,533) as shown on the consolidated profit and loss account;
• Loss before taxation (£249,416) as shown on the consolidated profit and loss account;
• Working capital, as shown on the company’s balance sheet.
Dr J N F Hull
Director
6 December 2024
ERC EQUIPOISE LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 30 JUNE 2024
- 3 -
The directors present their annual report and financial statements for the year ended 30 June 2024.
Principal activities
The principal activity of the company and group is the provision of strategic, technical and commercial consulting to energy businesses globally.
Results and dividends
The results for the year are set out on page 9.
Ordinary dividends were paid amounting to £196,612 relating to financial year ending 30 June 2023. The directors reserve the right to pay a dividend in respect of the financial year ending 30 June 2024.
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
Dr A Law
Mr D C Wilson
Mr P Nicol
Mr P Dolan
Mrs K J Hall
Mr J A Culley
Dr J N F Hull
Acquisition of own shares
During the year, the company purchased 15,905 Ordinary B shares from two previous employees and the shares are held in treasury. This occurred when the employees left the company. The total consideration paid was £341,958.
Auditor
TC Group were appointed as auditor to the group and in accordance with section 485 of the Companies Act 2006, a resolution proposing that they be re-appointed will be put at a General Meeting.
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 auditor of the company 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 auditor of the company is aware of that information.
On behalf of the board
Dr J N F Hull
Director
6 December 2024
ERC EQUIPOISE LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 30 JUNE 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 group and company, and of the profit or loss of the group 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;
state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the ;
prepare the on the going concern basis unless it is inappropriate to presume that the group and company will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the group’s and company’s transactions and disclose with reasonable accuracy at any time the financial position of the group and 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 group and company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
ERC EQUIPOISE LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF ERC EQUIPOISE LIMITED
- 5 -
Opinion
We have audited the financial statements of ERC Equipoise Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 30 June 2024 which comprise the group income statement, the group statement of comprehensive income, the group statement of financial position, the company statement of financial position, the group statement of changes in equity, the company statement of changes in equity, the group 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:
give a true and fair view of the state of the group's and the parent company's affairs as at 30 June 2024 and of the group's 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 group and parent 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 group's and parent 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.
ERC EQUIPOISE LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF ERC EQUIPOISE LIMITED
- 6 -
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.
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the group and the parent company and their 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 by the parent company, or returns adequate for our audit have not been received from branches not visited by us; or
the parent company financial statements are not in agreement with the accounting records and returns; or
certain disclosures of directors' 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 parent 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 parent 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. The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.
Extent to which the audit was considered capable of detecting irregularities, including fraud
The objectives of our audit, in respect to fraud, are: to identify and assess the risks of material misstatement of the financial statements due to fraud; to obtain sufficient appropriate audit evidence regarding the assessed risks of material misstatement due to fraud, through designing and implementing appropriate responses; and to respond appropriately to fraud or suspected fraud identified during the audit. However, the primary responsibility for the prevention and detection of fraud rests with both those charged with governance of the entity and its management.
ERC EQUIPOISE LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF ERC EQUIPOISE LIMITED
- 7 -
Our approach was as follows:
We identified areas of laws and regulations that could reasonably be expected to have a material effect on the financial statements from our general commercial and sector experience, and through discussion with the directors and other management (as required by auditing standards), and discussed with the directors and other management the policies and procedures regarding compliance with laws and regulations;
We considered the legal and regulatory frameworks directly applicable to the financial statements reporting framework (FRS 102 and the Companies Act 2006) and the relevant tax compliance regulations in the UK;
We considered the nature of the industry, the control environment and business performance, including the key drivers for management’s remuneration;
We communicated identified laws and regulations throughout our team and remained alert to any indications of non-compliance throughout the audit;
We considered the procedures and controls that the company and the wider group has established to address risks identified, or that otherwise prevent, deter and detect fraud; and how senior management monitors those programmes and controls.
Based on this understanding we designed our audit procedures to identify non-compliance with such laws and regulations. Where the risk was considered to be higher, we performed audit procedures to address each identified fraud risk. These procedures included: testing manual journals; reviewing the financial statement disclosures and testing to supporting documentation; performing analytical procedures; and enquiring of management,and were designed to provide reasonable assurance that the financial statements were free from fraud or error.
Owing to the inherent limitations of an audit, there is an unavoidable risk that we may not have detected some material misstatements in the financial statements, even though we have properly planned and performed our audit in accordance with auditing standards. For example, the further removed non-compliance with laws and regulations (irregularities) is from the events and transactions reflected in the financial statements, the less likely the inherently limited procedures required by auditing standards would identify it. The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation. We are not responsible for preventing non-compliance and cannot be expected to detect non-compliance with all laws and regulations.
A further description of our responsibilities is available on the Financial Reporting Council’s website at: https:// www.frc.org.uk/Our-Work/Audit/Audit-and-assurance/Standards-and-guidance/Standards-and-guidance-for- auditors/Auditors-responsibilities-for-audit/Description-of-auditors-responsibilities-for-audit.aspx. This description forms part of our auditor’s report.
ERC EQUIPOISE LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF ERC EQUIPOISE LIMITED
- 8 -
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.
James Blake FCA (Senior Statutory Auditor)
For and on behalf of TC Group
19 December 2024
Statutory Auditor
3 Acorn Business Centre
Northarbour Road
Cosham
Portsmouth
PO6 3TH
ERC EQUIPOISE LIMITED
GROUP INCOME STATEMENT
FOR THE YEAR ENDED 30 JUNE 2024
- 9 -
2024
2023
Notes
£
£
Revenue
3
11,056,533
12,136,988
Other operating income
8,805
22,615
Other external expenses
(137,589)
(54,850)
Staff costs
6
(6,928,902)
(7,434,755)
Depreciation
4
(53,640)
(91,058)
Other operating expenses
(4,178,370)
(4,178,678)
Operating profit/(loss)
4
(233,163)
400,262
Investment income
21,276
2,908
Finance costs
8
(37,528)
(46,836)
Profit/(loss) before taxation
(249,415)
356,334
Tax on profit
9
(12,993)
36,892
Profit/(loss) for the year
23
(262,408)
393,226
Profit/(loss) for the financial year is all attributable to the owners of the parent company.
ERC EQUIPOISE LIMITED
GROUP STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2024
- 10 -
2024
2023
£
£
Profit/(loss) for the year
(262,408)
393,226
Other comprehensive income
Currency translation differences
141,354
(97,159)
Total comprehensive income for the year
(121,054)
296,067
Total comprehensive income for the year is all attributable to the owners of the parent company.
ERC EQUIPOISE LIMITED
GROUP STATEMENT OF FINANCIAL POSITION
- 11 -
2024
2023
Notes
£
£
£
£
Non-current assets
Property, plant and equipment
11
79,874
103,487
Investments
12
104
104
79,978
103,591
Current assets
Trade and other receivables
14
3,005,273
2,371,062
Investments
15
500,000
Cash and cash equivalents
2,591,621
3,911,764
5,596,894
6,782,826
Current liabilities
16
(1,559,900)
(1,894,566)
Net current assets
4,036,994
4,888,260
Total assets less current liabilities
4,116,972
4,991,851
Non-current liabilities
17
-
(458,334)
Net assets
4,116,972
4,533,517
Equity
Called up share capital
22
17,017
17,017
Merger Reserve
23
1,030,498
1,030,498
Capital redemption reserve
23
1,561
1,561
Other reserves
23
(254,898)
(526,382)
Retained earnings
23
3,322,794
4,010,823
Total equity
4,116,972
4,533,517
The financial statements were approved by the board of directors and authorised for issue on
6 December 2024
2024-12-06
and are signed on its behalf by:
Dr J N F Hull
Mr D C Wilson
Director
Director
ERC EQUIPOISE LIMITED
COMPANY STATEMENT OF FINANCIAL POSITION
- 12 -
2024
2023
Notes
£
£
£
£
Non-current assets
Property, plant and equipment
11
47,814
59,920
Investments
12
50,511
50,511
98,325
110,431
Current assets
Trade and other receivables
14
3,174,314
3,444,378
Investments
15
500,000
Cash and cash equivalents
2,239,491
3,263,043
5,413,805
7,207,421
Current liabilities
16
(1,165,501)
(1,511,185)
Net current assets
4,248,304
5,696,236
Total assets less current liabilities
4,346,629
5,806,667
Non-current liabilities
17
-
(458,334)
Net assets
4,346,629
5,348,333
Equity
Called up share capital
22
17,017
17,017
Capital redemption reserve
23
1,561
1,561
Other reserves
23
(254,898)
(526,382)
Retained earnings
23
4,582,949
5,856,137
Total equity
4,346,629
5,348,333
As permitted by s408 Companies Act 2006, the company has not presented its own income statement and related notes. The company’s loss for the year was £706,213 (2023 - £347,828 profit).
The financial statements were approved by the board of directors and authorised for issue on
6 December 2024
06 December 2024
and are signed on its behalf by:
Dr J N F Hull
Mr D C Wilson
Director
Director
Company registration No. 03587074
ERC EQUIPOISE LIMITED
GROUP STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2024
- 13 -
Share capital
Merger Reserve
Capital redemption reserve
Other reserves - EBT own share reserve
Other reserves - Share based payment reserve
TOTAL Other reserves
Retained earnings
Total
Notes
£
£
£
£
£
£
£
£
Balance at 1 July 2022
17,017
1,030,498
1,561
(611,397)
21,266
(590,131)
3,925,598
4,384,543
Year ended 30 June 2023:
Profit for the year
-
-
-
-
-
-
393,226
393,226
Other comprehensive income:
Currency translation differences
-
-
-
-
-
(97,159)
(97,159)
Total comprehensive income
-
-
-
-
-
-
296,067
296,067
Dividends
-
-
-
-
-
-
(162,925)
(162,925)
Proceeeds received on execise of share options
-
-
-
36,778
-
36,778
36,778
Net disposal cost to EBT of own shares issued
-
-
-
55,271
-
55,271
(55,271)
-
Share based payment transfer on realisation - EMI options exercised
-
-
-
-
(7,354)
(7,354)
7,354
-
Share based payment transfer on realisation - EMI options lapsed
-
-
-
-
(8,346)
(8,346)
-
(8,346)
Purchase of own shares by EBT
-
-
-
(12,600)
-
(12,600)
-
(12,600)
Balance at 30 June 2023
17,017
1,030,498
1,561
(531,948)
5,566
(526,382)
4,010,823
4,533,517
ERC EQUIPOISE LIMITED
GROUP STATEMENT OF CHANGES IN EQUITY (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2024
Share capital
Merger Reserve
Capital redemption reserve
Other reserves - EBT own share reserve
Other reserves - Share based payment reserve
TOTAL Other reserves
Retained earnings
Total
Notes
£
£
£
£
£
£
£
£
- 14 -
Year ended 30 June 2024:
Loss for the year
-
-
-
-
-
-
(262,408)
(262,408)
Other comprehensive income:
Currency translation differences
-
-
-
-
-
141,354
141,354
Total comprehensive income for the year
-
-
-
-
-
-
(121,054)
(121,054)
Dividends
10
-
-
-
-
-
-
(196,612)
(196,612)
Net disposal cost to EBT of own shares issued
-
-
-
137,835
-
137,835
(137,835)
-
Proceeds received on exercise of share options
-
-
-
139,215
-
139,215
-
139,215
Share based payment transfer on realisation - EMI options exercised
21
-
-
-
-
(109,430)
(109,430)
109,430
-
Share based payment expense
-
-
-
-
103,864
103,864
-
103,864
Purchase of own shares
-
-
-
-
-
-
(341,958)
(341,958)
Balance at 30 June 2024
17,017
1,030,498
1,561
(254,898)
-
(254,898)
3,322,794
4,116,972
ERC EQUIPOISE LIMITED
COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2024
- 15 -
Share capital
Capital redemption reserve
Other reserves - EBT own share reserve
Other reserves - Share based payment reserve
TOTAL Other reserves
Retained earnings
Total
Notes
£
£
£
£
£
£
£
Balance at 1 July 2022
17,017
1,561
(611,397)
21,266
(590,131)
5,719,151
5,147,598
Year ended 30 June 2023:
Profit for the year
-
-
-
-
-
347,828
347,828
Other comprehensive income:
Total comprehensive income for the year
-
-
-
-
-
347,828
347,828
Dividends
-
-
-
-
-
(162,925)
(162,925)
Proceeds received on exercise of share options
-
-
36,778
-
36,778
-
36,778
Net disposal cost to EBT of own shares issued
-
-
55,271
-
55,271
(55,271)
-
Share based payment transfer on realisation - EMI options exercised
-
-
-
(7,354)
(7,354)
7,354
-
Share based payment transfer on realisation - EMI options lapsed
-
-
-
(8,346)
(8,346)
-
(8,346)
Purchase of own shares by EBT
-
-
(12,600)
-
(12,600)
-
(12,600)
Balance at 30 June 2023
17,017
1,561
(531,948)
5,566
(526,382)
5,856,137
5,348,333
ERC EQUIPOISE LIMITED
COMPANY STATEMENT OF CHANGES IN EQUITY (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2024
Share capital
Capital redemption reserve
Other reserves - EBT own share reserve
Other reserves - Share based payment reserve
TOTAL Other reserves
Retained earnings
Total
Notes
£
£
£
£
£
£
£
- 16 -
Year ended 30 June 2024:
Loss for the year
-
-
-
-
-
(706,213)
(706,213)
Other comprehensive income:
-
-
-
-
-
-
-
Total comprehensive income for the year
-
-
-
-
-
(706,213)
(706,213)
Dividends
10
-
-
-
-
-
(196,612)
(196,612)
Net disposal cost to EBT of own shares issued
-
-
137,835
-
137,835
(137,835)
-
Proceeds received on exercise of share options
-
-
139,215
-
139,215
-
139,215
Share based payment transfer on realisation - EMI options exercised
21
-
-
-
(109,430)
(109,430)
109,430
-
Share based payment expense
-
-
-
103,864
103,864
-
103,864
Purchase of own shares
-
-
-
-
-
(341,958)
(341,958)
Balance at 30 June 2024
17,017
1,561
(254,898)
-
(254,898)
4,582,949
4,346,629
ERC EQUIPOISE LIMITED
GROUP STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 JUNE 2024
- 17 -
2024
2023
Notes
£
£
£
£
Cash flows from operating activities
Cash (absorbed by)/generated from operations
28
(758,666)
1,184,831
Interest paid
(37,528)
(46,836)
Income taxes paid
(89,778)
(80,352)
Net cash inflow from operating activities
(885,972)
1,057,643
Investing activities
Purchase of property, plant and equipment
(31,040)
(98,331)
Proceeds from disposal of property, plant and equipment
559
-
Purchase of Investments
-
(500,000)
Proceeds from Investments
500,000
-
Interest received
21,276
2,908
Net cash generated from/(used in) investing activities
490,795
(595,423)
Financing activities
Purchase of treasury shares
(341,958)
(12,600)
Proceeds received on exercise of share options
139,215
36,778
Repayment of borrowings
(678,334)
(219,999)
Payment of finance leases obligations
-
(22,468)
Dividends paid to equity shareholders
(196,612)
(162,925)
Net cash generated from/(used in) financing activities
(1,077,689)
(381,214)
Net increase in cash and cash equivalents
(1,472,866)
81,006
Cash and cash equivalents at beginning of year
3,911,764
3,931,286
Effect of foreign exchange rates
152,723
(100,528)
Cash and cash equivalents at end of year
2,591,621
3,911,764
ERC EQUIPOISE LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
- 18 -
1
Accounting policies
Company information
ERC Equipoise Limited (“the company”) is a private limited company domiciled and incorporated in England and Wales. The registered office is Eastbourne House, 2 Saxbys Lane, Lingfield, Surrey, RH7 6DN.
The group consists of ERC Equipoise Limited and all of its subsidiaries as listed in note 16 to these accounts.
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.
The 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 for parent company information presented within the consolidated financial statements:
Section 7 ‘Statement of Cash Flows’: Presentation of a statement of cash flow and related notes and disclosures;
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.
1.2
Business combinations
In the parent company financial statements, the cost of a business combination is the fair value at the acquisition date of the assets given, equity instruments issued and liabilities incurred or assumed, plus costs directly attributable to the business combination. The excess of the cost of a business combination over the fair value of the identifiable assets, liabilities and contingent liabilities acquired is recognised as goodwill. The cost of the combination includes the estimated amount of contingent consideration that is probable and can be measured reliably, and is adjusted for changes in contingent consideration after the acquisition date. Provisional fair values recognised for business combinations in previous periods are adjusted retrospectively for final fair values determined in the 12 months following the acquisition date. Investments in subsidiaries, joint ventures and associates are accounted for at cost less impairment.
Deferred tax is recognised on differences between the value of assets (other than goodwill) and liabilities recognised in a business combination accounted for using the purchase method and the amounts that can be deducted or assessed for tax, considering the manner in which the carrying amount of the asset or liability is expected to be recovered or settled. The deferred tax recognised is adjusted against goodwill or negative goodwill.
ERC EQUIPOISE LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2024
1
Accounting policies
(Continued)
- 19 -
1.3
Basis of consolidation
The consolidated group financial statements consist of the financial statements of the parent company ERC Equipoise Limited together with all entities controlled by the parent company (its subsidiaries) and the group’s share of its interests in associates.
All financial statements are made up to 30 June 2024. Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by other members of the group.
All intra-group transactions, balances and unrealised gains on transactions between group companies are eliminated on consolidation. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.
Subsidiaries are consolidated in the group’s financial statements from the date that control commences until the date that control ceases.
Entities other than subsidiary undertakings, in which the group has a participating interest and over whose operating and financial policies the group exercises a significant influence, are treated as associates.
Investments in joint ventures and associates are carried in the group statement of financial position at cost plus post-acquisition changes in the group’s share of the net assets of the entity, less any impairment in value. The carrying values of investments in joint ventures and associates include acquired goodwill.
If the group’s share of losses in a joint venture or associate equals or exceeds its investment in the joint venture or associate, the group does not recognise further losses unless it has incurred obligations to do so or has made payments on behalf of the joint venture or associate.
Unrealised gains arising from transactions with joint ventures and associates are eliminated to the extent of the group’s interest in the entity.
1.4
Going concern
At the time of approving the financial statements, the directors have a reasonable expectation that the group 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.
1.5
Revenue
Revenue 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.
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 from contracts for the provision of professional services is recognised by reference to the stage of completion when the outcome can be estimated reliably. Revenue is calculated as a proportion of total contract value, based on the stage of completion.
Amounts recoverable on contracts, which are included in debtors, are stated at the net sales value of the work done after provision for contingencies and anticipated future losses on contracts, less amounts received as progress payments on account. Excess payments on account are included in creditors as payments on account.
ERC EQUIPOISE LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2024
1
Accounting policies
(Continued)
- 20 -
1.6
Property, plant and equipment
Property, plant and equipment 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:
Leasehold land and buildings
over life of lease
Plant and machinery
20% straight line
Fixtures, fittings and equipment
25% straight line
Computer equipment
1.5 - 3 years straight line
Cycles
100% straight line
Office equipment
20%, 25% or 100% 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 recognised in the income statement.
1.7
Non-current investments
Equity investments are measured at fair value through profit or loss, except for those equity investments that are not publicly traded and whose fair value cannot otherwise be measured reliably, which are recognised at cost less impairment until a reliable measure of fair value becomes available.
In the parent company financial statements, investments in subsidiaries, associates and jointly controlled entities are initially measured at cost and subsequently measured at cost less any accumulated impairment losses.
1.8
Impairment of non-current assets
At each reporting period end date, the group 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.
The carrying amount of the investments accounted for using the equity method is tested for impairment as a single asset. Any goodwill included in the carrying amount of the investment is not tested separately for impairment.
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.
ERC EQUIPOISE LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2024
1
Accounting policies
(Continued)
- 21 -
1.9
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.
1.10
Financial instruments
The group 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 group's statement of financial position when the group becomes party to the contractual provisions of the instrument.
Basic financial assets
Basic financial assets, which include trade and other receivables 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.
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.
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 group after deducting all of its liabilities.
Basic financial liabilities
Basic financial liabilities, including trade and other payables, 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 payables 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 payables are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.
ERC EQUIPOISE LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2024
1
Accounting policies
(Continued)
- 22 -
1.11
Equity instruments
Equity instruments issued by the group 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 group.
1.12
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the income statement 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 group’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 income statement, 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 if, and only if, there is 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.
1.13
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 non-current 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
Contributions to employees' personal pension schemes are charged to the profit and loss account in the year to which they relate.
ERC EQUIPOISE LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2024
1
Accounting policies
(Continued)
- 23 -
1.15
Share-based payments
For cash-settled share-based payments, a liability is recognised for the goods and services acquired, measured initially at the fair value of the liability. At the balance sheet date until the liability is settled, and at the date of settlement, the fair value of the liability is remeasured, with any changes in fair value recognised in profit or loss for the year.
Equity-settled share-based payments are measured at fair value at the date of grant by reference to the fair value of the equity instruments granted using the option pricing model. The fair value determined at the grant date is expensed on a straight-line basis over the vesting period, based on the estimate of shares that will eventually vest. A corresponding adjustment is made to equity.
When the terms and conditions of equity-settled share-based payments at the time they were granted are subsequently modified, the fair value of the share-based payment under the original terms and conditions and under the modified terms and conditions are both determined at the date of the modification. Any excess of the modified fair value over the original fair value is recognised over the remaining vesting period in addition to the grant date fair value of the original share-based payment. The share-based payment expense is not adjusted if the modified fair value is less than the original fair value.
Cancellations or settlements (including those resulting from employee redundancies) are treated as an acceleration of vesting and the amount that would have been recognised over the remaining vesting period is recognised immediately.
1.16
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 leased asset are consumed.
1.17
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.
1.18
Intermediate payment arrangements
Shares held by the ERC Equipoise Employee Benefit Trust are classified as an 'Other reserve' within capital and reserves and recognised at cost. Consideration received for the sale of such shares is also recognised in equity with any difference between the proceeds from sale and the original cost taken to the profit and loss reserve. No gain or loss is recognised on the purchase, sale issue or cancellation of equity shares.
ERC EQUIPOISE LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2024
- 24 -
2
Judgements and key sources of estimation uncertainty
In the application of the group’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.
Valuation of share based payments
The share option pricing model used is for the fair value of the options to be 20% of the exercise price.
Provision for doubtful debts
The Group
During the year, a provision for doubtful debt has been recognised in relation to three outstanding debtor balances. We have recognised this provision as there is sufficient doubt over the recoverability. One debtor has continued to be overdue and no payment has been received in the past 12 months. This has resulted in provision being raised for £235,485. The other debtors owing £182,492 have become overdue during the year. One is due to a significant change in personnel responsible for the payment of the debt and the continued economic difficulties the customer is facing due to the political climate within the country. The other is due to a lack of liquidity. This debt has been fully provided for in the year. The provisions recognised in the previous year remain unchanged.
Company
As at 30 June 2024, a provision for doubtful debt has been recognised in relation to the Intercompany debt owing from ERC Evolution Limited and ERC Evolution (Canada) Limited for £812,583. There is sufficient doubt over the recoverability of this debt and it is determined necessary to fully provide for it.
3
Revenue
2024
2023
£
£
Revenue analysed by class of business
Oil and gas evaluation and energy transition services
11,056,533
12,136,988
2024
2023
£
£
Revenue analysed by geographical market
UK
4,124,637
5,456,683
Europe
3,244,506
2,118,141
Rest of World
3,687,390
4,562,164
11,056,533
12,136,988
ERC EQUIPOISE LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2024
- 25 -
4
Operating profit
2024
2023
£
£
Operating profit 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
144,401
47,358
Government grants
-
(9,956)
Depreciation of owned property, plant and equipment
53,640
94,839
Depreciation of property, plant and equipment held under finance leases
-
88,897
Share-based expense
103,864
-
Operating lease charges
195,697
232,952
5
Auditor's remuneration
2024
2023
Fees payable to the company's auditor and associates:
£
£
For audit services
Audit of the financial statements of the group and company
20,750
20,000
6
Employees
The average monthly number of persons (including directors) employed by the group and company during the year was:
Group
Company
2024
2023
2024
2023
Number
Number
Number
Number
Directors
3
4
3
3
Technical
48
52
37
36
Sales
2
2
2
1
Business Support
12
11
9
10
Total
65
69
51
50
Their aggregate remuneration comprised:
Group
Company
2024
2023
2024
2023
£
£
£
£
Wages and salaries
5,912,410
6,409,021
4,678,535
4,521,975
Social security costs
629,325
588,432
589,174
496,708
Pension costs
387,167
437,302
307,338
362,314
6,928,902
7,434,755
5,575,047
5,380,997
ERC EQUIPOISE LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2024
- 26 -
7
Directors' remuneration
2024
2023
£
£
Remuneration for qualifying services
624,406
516,552
Company pension contributions to defined contribution schemes
30,943
24,796
655,349
541,348
The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 3 (2023 - 3).
The number of directors who exercised share options during the year was 2 (2023 - 1).
Remuneration disclosed above includes the following amounts paid to the highest paid director:
2024
2023
£
£
Remuneration for qualifying services
336,163
135,750
Company pension contributions to defined contribution schemes
15,249
9,000
The director’s are also considered to be the Key Management Personnel of the company.
8
Finance costs
2024
2023
£
£
Interest on bank overdrafts and loans
37,316
46,836
Other interest
212
-
Total finance costs
37,528
46,836
9
Taxation
2024
2023
£
£
Current tax
UK corporation tax on profits for the current period
110,573
225,167
R&D Enhanced relief claim
(147,134)
(210,533)
Total UK current tax
(36,561)
14,634
Foreign current tax on profits for the current period
44,316
7,957
Over provision of overseas deferred tax
(12,954)
Total current tax
7,755
9,637
ERC EQUIPOISE LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2024
9
Taxation
2024
2023
£
£
(Continued)
- 27 -
Deferred tax
Origination and reversal of timing differences
5,238
(6,747)
R&D Enhanced relief claim
(39,782)
Total deferred tax
5,237
(46,528)
Total tax charge/(credit)
12,993
(36,892)
The actual charge/(credit) 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
(249,415)
356,334
Expected tax (credit)/charge based on the standard rate of corporation tax in the UK of 25.00% (2023: 20.50%)
(62,354)
73,048
Tax effect of expenses that are not deductible in determining taxable profit
(2,370)
Movement in unrecognised deferred tax assets in relation to overseas tax losses
108,965
91,868
R&D Enhanced relief claim
(147,134)
(250,315)
Over provision of overseas tax
(7,302)
(12,954)
Disallowed expenditure - ineligible expense
134,733
8,388
Effect of overseas tax rate at lower rates
(13,915)
55,443
Taxation charge/(credit)
12,993
(36,892)
10
Dividends
2024
2023
Recognised as distributions to equity holders:
£
£
Interim paid
196,612
162,925
ERC EQUIPOISE LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2024
- 28 -
11
Property, plant and equipment
Group
Leasehold land and buildings
Plant and machinery
Fixtures, fittings and equipment
Computer equipment
Total
£
£
£
£
£
Cost
At 1 July 2023
306,397
84,770
194,493
1,388,645
1,974,305
Additions
13,120
17,920
31,040
Disposals
(3,548)
(44,675)
(48,223)
At 30 June 2024
306,397
84,770
204,065
1,361,890
1,957,122
Depreciation and impairment
At 1 July 2023
306,395
82,330
157,591
1,324,502
1,870,818
Depreciation charged in the year
2,440
14,280
37,374
54,094
Eliminated in respect of disposals
(3,872)
(43,792)
(47,664)
At 30 June 2024
306,395
84,770
167,999
1,318,084
1,877,248
Carrying amount
At 30 June 2024
2
36,066
43,806
79,874
At 30 June 2023
2
2,440
36,902
64,143
103,487
Company
Leasehold land and buildings
Plant and machinery
Fixtures, fittings and equipment
Computer equipment
Total
£
£
£
£
£
Cost
At 1 July 2023
306,397
84,770
159,547
1,313,459
1,864,173
Additions
10,728
12,528
23,256
Assets transferred between group undertakings
3,116
3,116
At 30 June 2024
306,397
84,770
170,275
1,329,103
1,890,545
Depreciation and impairment
At 1 July 2023
306,395
82,330
152,804
1,262,724
1,804,253
Depreciation charged in the year
2,440
5,660
29,100
37,200
Assets transferred between group undertakings
1,278
1,278
At 30 June 2024
306,395
84,770
158,464
1,293,102
1,842,731
Carrying amount
At 30 June 2024
2
11,811
36,001
47,814
At 30 June 2023
2
2,440
6,743
50,735
59,920
ERC EQUIPOISE LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2024
- 29 -
12
Fixed asset investments
Group
Company
2024
2023
2024
2023
Notes
£
£
£
£
Investments in subsidiaries
13
100
100
50,507
50,507
Unlisted investments
4
4
4
4
104
104
50,511
50,511
Movements in non-current investments
Group
Shares in subsidiaries
Other investments
Total
£
£
£
Cost or valuation
At 1 July 2023 and 30 June 2024
100
4
104
Carrying amount
At 30 June 2024
100
4
104
At 30 June 2023
100
4
104
Movements in non-current investments
Company
Shares in subsidiaries
Other investments
Total
£
£
£
Cost or valuation
At 1 July 2021
50,507
4
50,511
Additions
-
-
-
At 30 June 2024
50,507
4
50,511
Impairment
At 1 July 2021
-
-
-
Impairment losses
-
-
-
At 30 June 2024
-
-
Carrying amount
At 30 June 2024
50,507
4
50,511
At 30 June 2023
50,507
4
50,511
ERC EQUIPOISE LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2024
- 30 -
13
Subsidiaries
Details of the company's subsidiaries at 30 June 2024 are as follows:
Name of undertaking
Registered office
Class of
% Held
shares held
Direct
Indirect
Equipoise Solutions Limited
Eastbourne House, 2 Saxbys Lane, Surrey. RH7
6DN
Ordinary
100.00
-
ERC Energy Resource Consultants
Limited
As above
Ordinary
100.00
-
ERC Evolution Limited
As above
Ordinary
100.00
-
ERCE Limited (dormant)
As above
Ordinary
100.00
-
ERC Equipoise PTE. Ltd
32 Pekin Street #5 - 01, Singapore, 048762
Ordinary
100.00
-
ERCE Australia Pty Ltd
Unit 2A, 83 Havelock Street, West Perth, WA 6005
Ordinary
0
100.00
ERCE Malaysia Sdn. Bhd.
D-2-5, Megan Avenue 1, 189 Jalan Tun Razak, 50400 Kuala Lumpur
Ordinary
0
49.00
Other than where indicated as dormant, all companies in the group provide services consistent with the principal activities of the group.
ERC Equipoise Pte. Ltd. holds a 49% interest in ERCE Malaysia Sdn. Bhd., a company registered in Malaysia and has a principal activity of oil and gas consultancy. The remaining 51% shareholding is held by a local trust in the name of Rusli Jusoh, to meet ownership requirements in Malaysia, however in substance the company has exclusive control over the strategic and operating decisions of ERCE Malaysia Sdn. Bhd. and the benefits of the returns generated by ERCE Malaysia Sdn. Bhd. Accordingly, ERCE Malaysia Sdn. Bhd. has been consolidated within these financial statements as if it were a wholly owned subsidiary, with no minority interest recognised.
14
Trade and other receivables
Group
Company
2024
2023
2024
2023
Amounts falling due within one year:
£
£
£
£
Trade receivables
1,914,031
1,659,160
1,314,762
1,031,636
Gross amounts owed by contract customers
123,711
44,782
76,695
38,713
Corporation tax recoverable
214,052
52,386
191,467
52,386
Amounts owed by group undertakings
-
-
890,500
1,778,827
Other receivables
140,173
121,354
126,045
84,129
Prepayments and accrued income
523,056
397,893
484,453
362,804
2,915,023
2,275,575
3,083,922
3,348,495
Deferred tax asset (note 19)
50,610
55,705
50,610
56,101
2,965,633
2,331,280
3,134,532
3,404,596
Amounts falling due after more than one year:
Deferred tax asset (note 19)
39,640
39,782
39,782
39,782
Total debtors
3,005,273
2,371,062
3,174,314
3,444,378
ERC EQUIPOISE LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2024
14
Trade and other receivables
(Continued)
- 31 -
Included in amounts owed by group undertakings to the company are amounts owed to the parent company by group subsidiaries where there is no formal loan agreement in place. The Directors have reviewed the intercompany debts owed to the parent. It is the Directors opinion is that as funds become available these debts are to be reduced via available free cash. Current cash flow forecasts show some or part of the current intercompany debts will remain by the end of the next financial period. This is due to smaller group entities having less consistent revenue streams, consequently intercompany debt will fluctuate from time to time as part of a larger industry business cycle and the fact that most of the intercompany debt comes from group businesses in their start-up phase. The directors foresee that any remaining intercompany debt balance will be recoverable in the longer term.
15
Current asset investments
Group
Company
2024
2023
2024
2023
£
£
£
£
Short term deposits
-
500,000
-
500,000
The fixed deposit matured on 14 February 2024.
16
Current liabilities
Group
Company
2024
2023
2024
2023
Notes
£
£
£
£
Bank loans
18
220,000
220,000
Payments received on account
166,911
89,378
46,667
57,284
Trade payables
379,177
516,416
268,741
400,369
Amounts owed to group undertakings
4,562
Corporation tax payable
79,644
79,644
Other taxation and social security
215,944
212,062
148,430
124,829
Other payables
310,085
426,683
245,492
342,209
Accruals and deferred income
408,139
430,027
376,527
361,932
1,559,900
1,894,566
1,165,501
1,511,185
17
Non-current liabilities
Group
Company
2024
2023
2024
2023
Notes
£
£
£
£
Bank loans and overdrafts
18
458,334
458,334
Amounts included above which fall due after five years are as follows:
Payable by instalments
-
18,333
-
18,333
ERC EQUIPOISE LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2024
(Continued)
- 32 -
18
Borrowings
Group
Company
2024
2023
2024
2023
£
£
£
£
Bank loans
678,334
678,334
Payable within one year
220,000
220,000
Payable after one year
458,334
458,334
The UK parent company applied to Bank of Scotland PLC for a coronavirus business interruption loan of £1.1 million. This loan was fully repaid during the year ended 30 June 2024.
19
Deferred taxation
The following are the major deferred tax liabilities and assets recognised by the group and company, and movements thereon:
Assets
Assets
2024
2023
Group
£
£
Accelerated capital allowances
3,706
2,832
Tax losses
39,782
39,782
Retirement benefit obligations
10,724
16,623
Dilapidation provisions
36,038
36,250
90,250
95,487
Assets
Assets
2024
2023
Company
£
£
Accelerated capital allowances
3,848
3,228
Tax losses
39,782
39,782
Retirement benefit obligations
10,724
16,623
Dilapidation provisions
36,038
36,250
90,392
95,883
ERC EQUIPOISE LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2024
19
Deferred taxation
(Continued)
- 33 -
Group
Company
2024
2024
Movements in the year:
£
£
Asset at 1 July 2023
(95,487)
(95,883)
Credit to profit or loss
5,237
5,491
Asset at 30 June 2024
(90,250)
(90,392)
20
Retirement benefit schemes
2024
2023
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
387,167
437,302
The group operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the group in an independently administered fund.
21
Share-based payment transactions
Number of share options
2024
2023
Number
Number
Outstanding at 1 July 2023
2,478
9,706
Granted
9,290
-
Exercised
(11,768)
(3,512)
Expired
-
(3,716)
Outstanding at 30 June 2024
-
2,478
Exercisable at 30 June 2024
-
2,478
The entity operates a share option scheme to incentivise senior employees, which enables employees to acquire shares held by the ERC Equipoise Limited Employment Benefit Trust. The exercise price of the options is set to the estimated market price of the shares at grant.
Group and company
9,290 options were granted and 11,768 vested during the financial year ended 30 June 2024. The exercise price of the shares granted was £11.99. The share option pricing model used is for the fair value of the options to be 20% of the exercise price.
ERC EQUIPOISE LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2024
- 34 -
22
Share capital
Group and company
2024
2023
2024
2023
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary B shares of 10p each
170,179
170,179
17,017
17,017
All share classes rank equally in respect of rights to capital and income.
9,447 of the Ordinary B shares are held in an employee benefit trust controlled by the entity (2023 - 21,215) and 15,905 are held in Treasury.
During the year, the company purchased 15,905 Ordinary B shares from two previous employees and the shares are held in Treasury. This occurred when the employees left the company. The total consideration paid was £341,958.
23
Reserves
Merger reserve
In the year to June 2012, ERC Energy was acquired and merged with Equipoise into ERC Equipoise Limited. Goodwill on acquisition was calculated and amortised over a useful life of 5 years. The difference between the fair value of the assets acquired and the price paid is represented by the merger reserve account upon consolidation of ERC Energy Resource Consultants Limited.
Capital redemption reserve
The capital redemption reserve was created in May 2019 when the company bought back and cancelled shares from an employee who was retiring.
Other reserves - EBT own share reserve
The own shares reserve comprises the cost of shares held in an employee benefit trust. The employee benefit trust is used to purchase shares from employees when they leave or retire from the company. The shares in the employee benefit trust are used when employees exercise EMI options.
Other reserves - Share based payment reserve
The share option reserve comprises the accumulated share-based payment expenses on unexpired EMI options granted to employees.
24
Financial commitments, guarantees and contingent liabilities
ERC Equipoise Limited holds two guarantees with Lloyd's bank as at 30 June 2024. One guarantee for £118,587 is not 100% cash backed and the other guarantee for US$196,491 is 100% cash backed. No provisions are recognised in relation to these guarantees as it is not probable that a future sacrifice of economic benefits will be required.
ERC EQUIPOISE LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2024
- 35 -
25
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:
Group
Company
2024
2023
2024
2023
£
£
£
£
Within one year
262,495
298,288
243,236
245,066
Between two and five years
83,463
317,908
83,261
317,908
345,958
616,196
326,497
562,974
26
Related party transactions
Transactions with related parties
During the year the group entered into the following transactions with related parties:
Services received
Sales invoices raised
2024
2023
2024
2023
£
£
£
£
Group and Company
Entities controlled by common directors
76,640
120,825
-
-
Other related parties
-
-
6,024
5,847
The following amounts were outstanding at the reporting end date:
Amounts due to related parties
2024
2023
£
£
Group and Company
Other related parties
2,400
2,400
ERC EQUIPOISE LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2024
- 36 -
27
Directors' transactions
Dividends totalling £69,663 (2023 - £43,390) were paid in the year in respect of shares held by the company's directors.
Interest free loans have been granted by the group to its directors as follows:
Description
% Rate
Opening balance
Amounts advanced
Amounts repaid
Closing balance
£
£
£
£
Loan 1
-
11,137
13,914
(4,664)
20,387
Loan 2
-
-
55,694
(12,721)
42,973
11,137
69,608
(17,385)
63,360
28
Cash (absorbed by)/generated from group operations
2024
2023
£
£
Profit/(loss) for the year after tax
(262,408)
393,226
Adjustments for:
Taxation charged/(credited)
12,993
(36,892)
Finance costs
37,528
46,836
Investment income
(21,276)
(2,908)
Depreciation and impairment of property, plant and equipment
54,094
91,057
Equity settled share based payment expense
103,864
-
Movements in working capital:
(Increase)/decrease in trade and other receivables
(477,782)
937,105
Decrease in trade and other payables
(194,310)
(243,593)
Cash (absorbed by)/generated from operations
(747,297)
1,184,831
29
Analysis of changes in net funds - group
1 July 2023
Cash flows
30 June 2024
£
£
£
Cash at bank and in hand
3,911,764
(1,320,143)
2,591,621
Borrowings excluding overdrafts
(678,334)
678,334
-
3,233,430
(641,809)
2,591,621
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