Report and Financial Statements
Balaena Alpha Limited
For the year ended 30 June 2024
Registered number: 13138877
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Company Information
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12 - 15 Donegall Square West
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Contents
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Independent auditor's report
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Notes to the financial statements
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Independent auditor's report to the members of Balaena Alpha Limited
We have audited the financial statements of Balaena Alpha Limited (the 'Company') , which comprise the balance sheet as at 30 June 2024, the statement of income and retained earnings for the year ended 30 June 2024, and notes to the financial statements, including a summary of significant accounting policies.
The financial reporting framework that has been applied in the preparation of the financial statements is applicable law FRS 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland" (United Kingdom Generally Accepted Accounting Practice).
In our opinion, the accompanying financial statements:
∙give a true and fair view in accordance with United Kingdom Generally Accepted Accounting Practice of the assets, liabilities and financial position of the Company as at 30 June 2024 and its financial performance for the year then ended; and
∙have been prepared in accordance with the requirements of the Companies Act 2006 and other applicable legislation.
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 ‘Responsibilities of the auditor for the audit of the financial statements’ section of our report. We are independent of the group and company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the United Kingdom, including the FRC’s Ethical Standard and the ethical pronouncements established by Chartered Accountants Ireland, applied as determined to be appropriate in the circumstances for the entity. 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
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In auditing the financial statements, we have concluded that the director' 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 the date when the financial statements are authorised for issue.
Our responsibilities, and the responsibilities of the director, with respect to going concern are described in the relevant sections of this report.
Page 1
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Independent auditor's report to the members of Balaena Alpha Limited (continued)
Other information comprises information included in the annual report, other than the financial statements and our auditor’s report thereon, including the Directors’ Report. The director is responsible for the other information. 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.
In connection with our audit of the financial statements, 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 audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies in the financial statements, we are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. 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 the audit:
∙the information given in the Directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements, and
∙the Directors' report has been prepared in accordance with applicable legal requirements.
Matters on which we are required to report by exception
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In the light of the knowledge and understanding of the company and its environment we have obtained in the course of the audit, we have not identified material misstatements in the Directors' report. We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:
∙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 and the part of the Directors' remuneration report to be audited are not in agreement with the accounting records and returns; or
∙certain disclosures of director' remuneration specified by law are not made; or
∙we have not received all the information and explanations we require for our audit; or
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Independent auditor's report to the members of Balaena Alpha Limited (continued)
Responsibilities of management and those charged with governance for the financial statements
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As explained more fully in the Directors' responsibilities statement, management is responsible for the preparation of the financial statements which give a true and fair view in accordance with United Kingdom Generally Accepted Accounting Practice, including FRS 102, and for such internal control as the director determines necessary to enable the preparation of financial statements are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, management is 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 management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.
Those charged with governance are responsible for overseeing the Company's financial reporting process.
Responsibilities of the auditor for the audit of the financial statements
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The objectives of an auditor 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 their 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 an auditor's responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.
Explanation as to what extent 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, to detect material misstatements in respect of irregularities, including fraud. Owing to the inherent limitations of an audit, there is an unavoidable risk that material misstatement in the financial statements may not be detected, even though the audit is properly planned and performed in accordance with ISAs (UK).
The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below:
Based on our understanding of the Company and industry, we identified that the principal risks of non-compliance with laws and regulations related to compliance with Data Privacy law, Employment Law, Environmental Regulations, Health & Safety, and we considered the extent to which non-compliance might have a material effect on the financial statements. We also considered those laws and regulations that have a direct impact on the preparation of the financial statements such as the local law and tax Companies Act 2006 and UK tax legislation.
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Independent auditor's report to the members of Balaena Alpha Limited (continued)
We evaluated management's incentives and opportunities for fraudulent manipulation of the financial statements (including the risk of override of controls), and determined that the principal risks were related to posting inappropriate journal entries to manipulate financial performance and management bias through judgements and assumptions in significant accounting estimates, in particular in relation to significant one-off or unusual transactions. We apply professional scepticism through the audit to consider potential deliberate omission or concealment of significant transactions, or incomplete/inaccurate disclosures in the financial statements.
In response to these principal risks, our audit procedures included but were not limited to:
• enquiries of management board in the policies and procedures in place regarding compliance with laws and regulations, including consideration of known or suspected instances of non-compliance and whether they have knowledge of any actual, suspected or alleged fraud;
• inspection of the group's regulatory and legal correspondence and review of minutes of the board and director's meetings during the year to corrobate inquires made;
• gaining an understanding of the internal controls established to mitigate risk related to fraud;
• discussion amongst the engagement team in relation to the identified laws and regulations and regarding the risk of fraud, and remaining alert to any indications of non-compliance or opportunities for fraudulent manipulation of financial statements throughout the audit;
• identifying and testing journal entries to address the risk of inappropriate journals and management override of controls;
• designing audit procedures to incorporate unpredictability around the nature, timing or extent of out testing;
• challenging assumptions and judgements made by management in their significant accounting estimates, including the estimated useful of tangible assets and the estimated settlement of underwriting-based targets; and
• review of the financial statement disclosures to underlying supporting documentation and inquiries of management.
The primary responsibility for the prevention and detection of irregularities including fraud rests with those charged with governance and management. As with any audit, there remains a risk of non-detection or irregularities, as these may involve collusion, forgery, intentional omissions, misrepresentations or override of internal controls.
The purpose of our audit work and to whom we owe our responsibilities
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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.
Neal Taylor FCA (Senior statutory auditor)
for and on behalf of
Grant Thornton (NI) LLP
Chartered Accountants
Statutory Auditors
Belfast
Northern Ireland
27 March 2025
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Balaena Alpha Limited
Registered number:13138877
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Balance sheet
As at 30 June 2024
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Investment in subsidiary undertaking
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Debtors: amounts falling due within one year
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Creditors: amounts falling due within one year
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Net current (liabilities)
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Total assets less current liabilities
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The financial statements have been prepared and delivered in accordance with the provisions applicable to companies subject to the small companies regime.
The Company has opted not to file the statement of income and retained earnings in accordance with provisions applicable to companies subject to the small companies' regime.
Approved by the board on 27 March 2025 and signed on its behalf by:
The notes on pages 6 to 13 form part of these financial statements.
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Notes to the financial statements
for the year ended from 01 July 2023 to 30 June 2024
Balaena Alpha Limited (the 'Company') is a private company limited by shares incorporated and registered in United Kingdom. The Company is a wholly owned subsidiary of Balaena Limited, a private company limited by shares incorporated and registered in England.
The registered office of the Company and its parent is The Gaia Energy Centre, Delabole, England. The nature of the Company's operations and its principal activities are set out in the director's report.
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Statement of compliance and basis of preparation
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The financial statements of the Company have been prepared under the historical cost convention and in compliance with FRS 102, as modified by section 1A applicable to small entities, as it applies to the financial statements of the Company. The Company has taken advantage certain disclosure exemptions available under this standard including those relating to statement of cash flows and related party transactions. The Company is also subject to the requirements of the Companies Act 2006.
The financial statements are presented in Pound Sterling (£) which is the functional currency of the Company. The functional currency of the Company is the currency of the primary economic environment in which the Company operates. The amounts presented in the financial statements have been rounded to the nearest Pound Sterling.
The director has a reasonable expectation that the Company has adequate resources to continue in operational existence for the foreseeable future. The financial statements have been prepared on a going-concern basis. The ultimate parent of the Company has provided a letter of support which undertakes to provide the financial support necessary in order to enable the Company to meet their financial liabilities as they fall due for a period of a year from the date of approval of the financial statements.
Finance costs are charged to profit or loss over the term of the debt using the effective interest method so that the amount charged is at a constant rate on the carrying amount. Issue costs are initially recognised as a reduction in the proceeds of the associated capital instrument.
Short-term debtors are measured at transaction price, less any impairment. Loans receivable are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method, less any impairment.
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Significant judgements and estimates
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The presentation of the financial statements in accordance with FRS 102, as modified by section 1A applicable to small entities, requires management to make judgements and estimates that affect amounts reported in the financial statements and the related notes. Judgements and estimates are based on different factors, including expectations of future events that are believed to be reasonable under the circumstances. Actual results may ultimately differ from these estimates.
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Notes to the financial statements
for the year ended from 01 July 2023 to 30 June 2024
The significant accounting policies applied in the preparation of these financial statements are summarised below. These policies have been consistently applied to the year presented.
Costs and expenses are recognised in the profit and loss account upon utilisation of the related goods or services by the Company.
Exceptional items are transactions that fall within the ordinary activities of the Company but are presented separately due to their size or incidence.
The tax charge for the year is calculated using the tax rates and laws applicable to the year to which they relate, based on results for the year.
Any current tax assets or liabilities comprise those claims from, or obligations to, tax authorities relating to the current or prior reporting years, that are unallocated or unpaid at the end of the reporting year. All changes to current tax assets or liabilities are recognised as a component of tax payable in the profit and loss account.
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Investment in subsidiary undertaking
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The Company's fixed asset investment is recognised at cost. Where a fixed asset investment has diminished in value the diminution may be provided for in the profit and loss account, thereby reducing the investment to its recoverable amount. Where a diminution in value of a fixed asset investment has been charged to the profit and loss account, but the circumstances giving rise to the diminution have reversed, the provision should be written back to the extent that it is no longer necessary.
Short-term creditors with no stated interest rate and payable within one year are recorded at transaction price. Creditors consist of loans payable and amounts owed to group undertakings.
The loans payable are recognised initially at the transaction price (i.e., the present value of cash payable, including transaction costs, if any). The loans payable are subsequently measured at amortised cost. Interest expense is recognised on the basis of the effective interest method and is recognised as an expense in the profit and loss account.
Amounts owed to group undertakings consist of other creditors owed to a company under the control of the Company's subsidiary.
Creditors are classified as creditors: amounts falling due within one year if payment is due to be settled within one year or less after the end of the financial year or the Company does not have an unconditional right to defer settlement of the creditor for at least twelve months after the end of the financial year.
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Notes to the financial statements
for the year ended from 01 July 2023 to 30 June 2024
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Accounting policies (continued)
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Called-up share capital represents the nominal value of the shares that have been issued.
Profit and loss reserve includes all current and prior periods retained profits and losses, less any dividends declared.
Equity dividends are recognised when they become legally payable. Interim equity dividends are recognised when paid. Final equity dividends are recognised when approved by the shareholders at an annual general meeting.
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Related party relationships and transactions
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Related party transactions are transfers of resources, services or obligations between the Company and its related parties, regardless of whether a price is charged. Parties are considered to be related if one party has direct or indirect control of the party, the parties are subject to common control from the same source, one party has influence over the financial and operating policies of the other party to an extent that the other party might be inhibited from pursuing at all times its own separate interests or the parties, entering a transaction, are subject to influence from the same source to such an extent that one of the parties to the transaction has subordinated its own separate interests.
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Post balance sheet events
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Any post-year-end event that provides additional information about the Company's financial position at the end of the reporting period (adjusting event) is reflected in the financial statements. Post-year-end events that are not adjusting events, if any, are disclosed if material to the financial statements.
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Notes to the financial statements
for the year ended from 01 July 2023 to 30 June 2024
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Investments in subsidiary companies
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Country of registration or incorporation
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Registered Office Address
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The Gaia Energy Centre, Delabole, Cornwall, England
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Madison Building, Midtown, Queensway, Gibraltar
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Madison Building, Midtown, Queensway, Gibraltar
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Ship repair and conversion
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Main Wharf Road, The Dockyard, Gibraltar
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Page 9
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Notes to the financial statements
for the year ended from 01 July 2023 to 30 June 2024
The capital and reserves and profit and loss of the subsidiary undertaking are as follows:
Capital and Reserves Profit (Loss) for the
year
These financial statements include the results of the individual company Balaena Alpha Limited only. The results of the subsidiary undertakings are not included.
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Amounts owed by group undertakings
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Creditors: Amounts falling due within one year
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Amounts owed to group undertakings
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On 24 May 2022, the Company and its subsidiary, Balaena Bravo Limited, entered into a loan agreement with Cheyne European Strategic Value Credit Fund II, a third party, for a loan facility amounting to £28,300,000 and Junior Loan Notes £6,500,000 for a total proceeds of £34,800,000. Balaena Delta Limited and Gibdock Limited, a related party of the Company, guaranteed the loan. The proceeds from Junior Loan Notes were then issued to Balaena Bravo Limited which were then issued to Balaena Delta Limited. Junior loan notes are guaranteed and secured convertible notes.
In May 2024, the loan was repaid along with a redemption premium amounting to £8,125,000 (see Note 5) through a refinancing loan obtained from a bank by Balaena PropCo Limited, a related party, amounting to £48,000,000.
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Page 10
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Notes to the financial statements
for the year ended from 01 July 2023 to 30 June 2024
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Allotted, called up and fully paid
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10,000 (2023 - 10,000) Ordinary shares of £0.0001 each
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There is a single class of ordinary shares. There are no restrictions on the distribution of dividends, voting rights and the repayment of capital.
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Reconciliation of movement in capital and reserves
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Profit/(loss) for the financial year
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Related party transactions
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The Company has taken advantage of exemption, under the terms of Financial Reporting Standard 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland", not to disclose related party transactions with wholly owned subsidiaries within the group.
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Ultimate controlling party
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The Company's ultimate parent is Balaena Limited and is incorporated and registered in UK with a registered address of The Gaia Energy Centre, Delabole, Cornwall, United Kingdom, PL33 9DA. The Company is a member of Balaena Group and for which group accounts are drawn up.
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Financial risk management
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The Company's risk management is coordinated with its ultimate owners, in close cooperation with the board of directors, and focuses on actively securing the Company's short-to-medium term cash flows.
The Company has exposures to two main areas of risk - liquidity risk and customer credit risk.
Liquidity risk
Liquidity risk refers to the availability of sufficient funds to meet fund withdrawals and other financial commitments associated with financial instruments as they fall due. In order to manage liquidity risk as part of the asset and liability management process, the owners monitor expected operating cash flows and make available funds to the Company in order to enable it to have sufficient funds available to meet its predicted cash flows.
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Notes to the financial statements
for the year ended from 01 July 2023 to 30 June 2024
At 30 June 2024 the Company's financial liabilities had expected maturities as follows.
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Amounts owed to group undertakings
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At 30 June 2023 the Company's financial liabilities had expected maturities as follows.
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Amounts owed to group undertakings
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Credit risk
Credit risk is the risk that counterparty may fail to discharge an obligation to the Company. The Company is exposed to the risk for various financial instruments arising from its advances to related party undertaking. The Company monitors the occurrence of defaults by counterparty. The Company's policy is to deal only with creditworthy counterparties.
The maximum credit risk exposure of financial assets is the carrying amount of the financial assets as shown in the balance sheet. None of the Company's financial assets are secured by collateral or other credit enhancements.
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Financial assets and liabilities
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The carrying amounts presented in the balance sheet relate to the following categories of assets and liabilities:
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Financial assets - at cost less impairment
Investment in subsidiary undertaking
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Financial liabilities - at amortised cost
Creditors
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Page 12
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Notes to the financial statements
for the year ended from 01 July 2023 to 30 June 2024
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Events since the balance sheet date
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There were no subsequent events to the balance sheet date through the date of the financial statements were signed.
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