Caseware UK (AP4) 2023.0.135 2023.0.135 The Royal Bank of Scotland International Limited (trading as NatWest International) Gibraltar International BankIn the research phase of an internal project it is not possible to demonstrate that the project will generate future economic benefits and hence all expenditure on research shall be recognised as an expense when it is incurred. Intangible assets are recognised from the development phase of a project if and only if certain specific criteria are met in order to demonstrate the asset will generate probable future economic benefits and that its cost can be reliably measured. The capitalised development costs are subsequently amortised on a straight-line basis over their useful economic lives, which range from 5 to 10 years. If it is not possible to distinguish between the research phase and the development phase of an internal project, the expenditure is treated as if it were all incurred in the research phase only. In the research phase of an internal project it is not possible to demonstrate that the project will generate future economic benefits and hence all expenditure on research shall be recognised as an expense when it is incurred. Intangible assets are recognised from the development phase of a project if and only if certain specific criteria are met in order to demonstrate the asset will generate probable future economic benefits and that its cost can be reliably measured. The capitalised development costs are subsequently amortised on a straight-line basis over their useful economic lives, which range from 5 to 10 years. If it is not possible to distinguish between the research phase and the development phase of an internal project, the expenditure is treated as if it were all incurred in the research phase only.On 24 May 2022, Balaena Alpha Limited and Balaena Bravo Limited, subsidiaries of the Company, entered into an agreement with Cheyne European Strategic Value Credit Fund II, a third party, for a loan facility amounting to £28,300,00 and Junior Loan Notes £6,500,000 (total proceeds of £34,800,000). Balaena Delta Limited and Gibdock Limited, an indirect subsidiary of the Company, guaranteed the loan. The proceeds were then borrowed by Balaena Delta Limited to facilitate the acquisition of Gibdock Limited. The face amount of the loan including interest and redemption premium were settled on May 2024 through a refinancing arrangement with Trusted Novus Bank Limited amounting to £48,000,000 (see note 16). Bank loan amounting to £48,000,000 relates to a loan borrowed by Balaena Propco Limited which were used to refinance the loan and other fees with Cheyne European Strategic Value Credit Fund II. It carries fixed interest of 2.95% plus the prevailing Bank of England base rates payable quarterly. The principal amount of the loan is repayable on May 2036. Gibdock Limited, a subsidiary of the Group, guaranteed the loan.E-tricity Essgee Limited30863099Lemon investments Balaena Ship Management Limited30213268687Wave-Tricity Essgee Limited2582392582394457970123430433043328050142023-07-01Holding companyfalsefalse00false 12030661 2024-06-30 12030661 2023-07-01 2024-06-30 12030661 2022-05-24 2023-06-30 12030661 2023-06-30 12030661 2022-05-24 12030661 1 2023-07-01 2024-06-30 12030661 d:Director1 2023-07-01 2024-06-30 12030661 d:Director2 2023-07-01 2024-06-30 12030661 d:Director3 2023-07-01 2024-06-30 12030661 d:RegisteredOffice 2023-07-01 2024-06-30 12030661 d:Agent1 2023-07-01 2024-06-30 12030661 d:Agent2 2023-07-01 2024-06-30 12030661 d:Agent3 2023-07-01 2024-06-30 12030661 c:Buildings c:LongLeaseholdAssets 2023-07-01 2024-06-30 12030661 c:Buildings c:ShortLeaseholdAssets 2023-07-01 2024-06-30 12030661 c:PlantMachinery 2023-07-01 2024-06-30 12030661 c:PlantMachinery 2024-06-30 12030661 c:PlantMachinery 2023-06-30 12030661 c:PlantMachinery 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c:PatentsTrademarksLicencesConcessionsSimilar c:OwnedIntangibleAssets 2023-07-01 2024-06-30 12030661 f:PoundSterling 2023-07-01 2024-06-30 xbrli:shares iso4217:GBP xbrli:pure

Consolidated Financial Statements
Balaena LTD
For the year ended 30 June 2024





































Registered number: 12030661

 
Balaena LTD
 

Company Information


Directors
Simon James Gillett 
Peter John Andrew Furmston 
Melanie Jane Stringer 




Registered number
12030661



Registered office
The Gaia Energy Centre

Delabole

Cornwall

England

PL33 9DA




Independent auditor
Grant Thornton (NI) LLP
Chartered Accountants & Statutory Auditors

12 - 15 Donegall Square West

Belfast

BT1 6JH




Bankers
The Royal Bank of Scotland International Limited (trading as NatWest International)
NatWest House

57 Line Wall Road

Gibraltar





Trusted Novus Bank Limited (formerly Jyske Bank)

76 Main Street

Gibraltar





Moneycorp Bank Limited

7/b King's Yard Lane

Gibraltar




Gibraltar International Bank
Ince's House

310 Main Street

Gibraltar




Solicitors
Hassans International Law Firm Limited
Madison Building, Midtown

Queensway

Gibraltar





 
Balaena LTD
 

Contents



Page
Group Strategic Report
1 - 2
Directors' Report
3 - 4
Independent Auditor's Report
5 - 8
Consolidated Statement of Comprehensive Income
10
Consolidated Balance Sheet
11
Company Balance Sheet
12
Consolidated Statement of Changes in Equity
13
Company Statement of Changes in Equity
13
Consolidated Statement of Cash Flows
14 - 15
Consolidated Analysis of Net Debt
16
Notes to the Financial Statements
17 - 46


 
Balaena LTD
 

Group strategic report
For the year ended 30 June 2024

Introduction
 
The directors present their strategic report for the period ended 30 June 2024.

Business review
 
Balaena Ltd (‘the Group’) is based in the United Kingdom and its main business activities are the delivery of sustainable engineering solutions for freshwater, wastewater, renewable energy and maritime projects. 
In the year ended 30 June 2024, the Group generated turnover of £36,372,281 (2023: £45,591,948) and made a loss before tax of £12,539,975 (2023: profit of £1,433,971). The Directors were pleased with the turnover of the Group which remains mainly attributable to its ship repair subsidiary.  This entity has remained both profitable and cash generative and has continued trading strongly into the current year. The loss incurred primarily relates to interest and redemption fee costs associated with the loan provided by Cheyne European Strategic Value Credit Fund II to facilitate the acquisition of the ship repair business in 2022.  This loan was refinanced in the year with a £48,000,000 facility from Trusted Novus Bank which is repayable in May 2036. The Group’s ability to secure this funding underlines the long term prospects of the Group.
The Directors are now focused on securing key new business opportunities for the Group and are in discussions with various interested parties regarding funding potential acquisitions. In addition, the Group’s offshore Island Utility Platform development business continues to move forward positively with its initial project now at signed Memorandum of Understanding stage.
In summary, the Group continues to be cash generative with access to finance and fund new projects as required.

Principal risks and uncertainties
 
The main risk to the Group is the loss of clients due to overly competitive pricing by competitors. Secondly, the risk of an ever-changing regulatory environment which require compliance with all of the latest regulatory requirements and guidance. Due to the ongoing conflict in Ukraine, and ongoing global energy crisis, there has also
been a significant increase in the cost of living across the UK and wider areas.

Directors' statement of compliance with duty to promote the success of the Group
 
This section of the Strategic report describes how the directors have had regard to the matters set out in Section 172 (1) (a) to (f), and forms the directors' statement required under section 414CZA of the Companies Act 2006.
A vital component of delivering on the Group’s primary objective which is to deliver long term value for the shareholder is to ensure the board balances short-term and long-term decision making.
The directors take an active interest in the Group’s employee base. The board is involved in setting employee strategy and ensuring that employees’ best interests are kept in mind during all decision-making processes that would have an impact upon employees. Investment in people is a key part of the Group’s strategy; bringing in the right people and developing the skills of the current workforce. Ongoing, regular training is available for all employees. 
The board recognises that the Group’s long-term strategic goals can only be achieved through engagement with, and consideration of, all stakeholders including our employees, customers, suppliers and regulators. The consideration of stakeholder needs and engagement with stakeholders is not new to the Group and a continued focus on building long lasting relationships with stakeholders has been key to the Group’s success to date.
As a UK based Group, the operational impacts on society, community and the environment are at the forefront of directors’ decision making when evaluating the effectiveness and sustainability of the Group’s operations.
 
Page 1

 
Balaena LTD
 

Group strategic report (continued)
For the year ended 30 June 2024

Directors' statement of compliance with duty to promote the success of the Group (continued)

There is a long-held belief amongst the board that the success of the Group is built on its reputational equity which it has built up over a significant period of time. The board insists on a high quality of service to be provided to its customers and has a zero-tolerance policy with regards to activity which could damage this reputation. The board fosters this by creating a culture of putting the customer first in every transaction. Training is also put in place to ensure all employees are aware of activities and behaviours that could risk reputational damage and engagement is encouraged in this process. A testament to this approach is the significant number of repeat customers choosing to renew their products and services with the Group period after period.


This report was approved by the board on 27 March 2025 and signed on its behalf.



Simon James Gillett
Director

Page 2

 
Balaena LTD
 
 
Directors' report
For the year ended 30 June 2024

The directors present their report and the financial statements for the year ended 30 June 2024.

Directors' responsibilities statement

The directors are responsible for preparing the Group strategic report, the Directors' report and the consolidated 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 applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland'. Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Company and the Group 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 for the Group's financial statements and then apply them consistently;

make judgments 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 financial statements;

prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Group will continue in business.

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Company and the Group and to enable them to ensure that the financial statements comply with the Companies Act 2006They are also responsible for safeguarding the assets of the Company and the Group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

The directors are responsible for the maintenance and integrity of the corporate and financial information included on the Group's website. Legislation in the United Kingdom governing the preparation and dissemination of financial statements and other information included in Directors' reports may differ from legislation in other jurisdictions.

Directors

The directors who served during the year were:

Simon James Gillett 
Peter John Andrew Furmston 
Melanie Jane Stringer 

Disclosure of information to auditor

So far as the directors are aware, there is no relevant audit information (as defined by Section 418 of the Companies Act 2006) of which Group's auditors are unaware, and each director has taken all the steps that they ought to have taken as a director in order to make themselves aware of any relevant audit information and to establish that Group's auditors are aware of that information.

Page 3

 
Balaena LTD
 

Directors' report (continued)
For the year ended 30 June 2024

Independent auditor

The auditor, Grant Thornton (NI) LLPwill be proposed for reappointment in accordance with section 485 of the Companies Act 2006.

This report was approved by the board on 27 March 2025 and signed on its behalf.
 





Simon James Gillett
Director

Page 4

 
 
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Independent Auditor's Report to the Members of Balaena LTD
 

Opinion


We have audited the financial statements of Balaena LTD (the 'parent Company') and its subsidiaries (the 'Group'), which comprise the Consolidated Statement of comprehensive income, the Consolidated and Company Balance sheets, the Consolidated Statement of cash flows, the Consolidated and Company Statement of changes in equity for the financial year ended 30 June 2024, and the related notes to the financial statements, including a summary of 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, Balaena LTD's 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 Group's and the Company as at 30 June 2024 and of the Group financial performance and cash flows for the financial year then ended; and


have been prepared in accordance with the requirements of the Companies Act 2006.



Basis for opinion


We conducted our audit in accordance with International Standards on Auditing (UK) ('ISAs (UK)') and applicable law. Our responsibilities under those standards are further described in the '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, namely the FRC's Ethical Standard and the ethical pronouncements established by Chartered Accountants Ireland, applied as determined to be appropriate in the circumstances of 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



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 or the parent 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 directors, with respect to going concern are described in the relevant sections of this report.



Page 5

 
 
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Independent Auditor's Report to the Members of Balaena LTD (continued)


Other information


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 directors are 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 statementsour 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 and the Strategic Report for the financial year for which the financial statements are prepared is consistent with the financial statements, and 
the Directors' report and the Strategic 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 company and its environment we have obtained in the course of the audit, we have not identified material misstatements in the  Directors' report and the Strategic 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.

Page 6

 
 
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Independent Auditor's Report to the Members of Balaena LTD (continued)


Responsibilities of management and those charged with governance for the financial statements
 

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 directors determine 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 Group and 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 intend to liquidate the Group and Company or to cease operations, or has no realistic alternative but to do so.


Those charged with governance are responsible for overseeing the Group and Company's financial reporting process.

Responsibilities of the auditor for the audit of the financial statements
 

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 Group 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. 
Page 7

 
 
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Independent Auditor's Report to the Members of Balaena LTD (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:
inquiries of management board on 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 board and director’s meetings during the year to corroborate inquiries 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 our 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
 

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.
Page 8

 
 
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Independent Auditor's Report to the Members of Balaena LTD (continued)




 
 
Neal Taylor FCA (Senior Statutory Auditor)
for and on behalf of
Grant Thornton (NI) LLP
Chartered Accountants
Statutory Auditors
Belfast
27 March 2025
Page 9

 
Balaena LTD
 

Consolidated statement of comprehensive income
For the year ended 30 June 2024

30 June
Period ended
30 June
2024
2023
Note
£
£

  

Turnover
  
36,372,281
45,591,948

Cost of sales
  
(25,101,175)
(30,417,822)

Gross profit
  
11,271,106
15,174,126

Administrative expenses
  
(11,212,013)
(8,950,988)

Other operating income
  
506,015
115,037

Operating profit
 5 
565,108
6,338,175

Other exceptional items
 9 
(8,125,000)
-

Interest receivable
  
139,377
(4,630,134)

Interest payable
  
(5,119,460)
(274,070)

(Loss)/profit on ordinary activities before taxation
  
(12,539,975)
1,433,971

Tax on profit on ordinary activities
 8 
(493,906)
(1,165,918)

(Loss)/profit for the financial year
  
(13,033,881)
268,053

  

(Loss)/profit for the year and Total comprehensive (loss)/profit attributable to:
  

Owners of the parent Company
  
(13,033,881)
268,053

  
(13,033,881)
268,053

The Group has no discontinued activities in the period, accordingly, the above results for the Group relate solely to continuing activities and include all recognised gains and losses and all items of comprehensive income at arriving at the consolidated loss for the period. The consolidated loss is stated on an historical cost basis.
The notes on pages 17 to 46 form part of these financial statements.

Page 10

 
Balaena LTD
Registered number:12030661

Consolidated balance sheet
As at 30 June 2024

2024
2023
Note
£
£

Fixed assets
  

Intangible assets
 10 
26,035,957
29,289,329

Tangible assets
 11 
5,390,945
4,977,143

  
31,426,902
34,266,472

Current assets
  

Stocks
 12 
1,164,110
1,004,525

Debtors
 14 
8,984,721
6,484,296

Bank and cash balances
  
2,305,056
7,032,606

  
12,453,887
14,521,427

Current liabilities
  

Creditors: amounts falling due within one year
 15 
(8,721,015)
(48,676,847)

Net current assets/(liabilities)
  
 
 
3,732,872
 
 
(34,155,420)

Total assets less current liabilities
  
35,159,774
111,052

Creditors: amounts falling due after more than one year
 16 
(48,082,603)
-

Net (liabilities)/assets
  
(12,922,829)
111,052


Capital and reserves
  

Called up share capital 
 17 
1
1

Profit and loss account
  
(12,922,830)
111,051

Shareholders' (deficit)/funds
  
(12,922,829)
111,052


The financial statements were approved and authorised for issue by the board and were signed on its behalf on 27 March 2025.




Simon James Gillett
Director

The notes on pages 17 to 46 form part of these financial statements.

Page 11

 
Balaena LTD
Registered number:12030661

Company balance sheet
As at 30 June 2024

2024
2023
Note
£
£

Fixed assets
  

Intangible fixed assets
 10 
2,515,989
2,795,543

Tangible fixed assets
 11 
10,178
356,978

Shares in group undertakings
  
33,898,971
33,898,971

  
36,425,138
37,051,492

Current assets
  

Debtors
 14 
1,746,700
1,296,774

Bank and cash balances
  
193,427
194,962

  
1,940,127
1,491,736

Current liabilities
  

Creditors: amounts falling due within one year
 15 
(37,853,037)
(37,990,225)

Net current liabilities
  
 
 
(35,912,910)
 
 
(36,498,489)

Total assets less current liabilities
  
512,228
553,003

  

  

Net assets
  
512,228
553,003


Capital and reserves
  

Called up share capital 
 17 
1
1

Profit and loss account brought forward
  
553,002
(86,968)

Loss/(profit) for the year

  

(40,775)
639,970

Profit and loss account carried forward
  
512,227
553,002

Shareholders' (deficit)/funds
  
512,228
553,003


The financial statements were approved and authorised for issue by the board and were signed on its behalf on 27 March 2025.


Simon James Gillett
Director

The notes on pages 17 to 46 form part of these financial statements.

Page 12

 
Balaena LTD
 

Consolidated statement of changes in equity
For the year ended 30 June 2024


Called up share capital
Profit and loss account
Equity attributable to owners of parent Company
Total equity

£
£
£
£


At 24 May 2022
1
(157,002)
(157,001)
(157,001)



Profit for the period
-
268,053
268,053
268,053



At 1 July 2023
1
111,051
111,052
111,052



Loss for the year
-
(13,033,881)
(13,033,881)
(13,033,881)


At 30 June 2024
1
(12,922,830)
(12,922,829)
(12,922,829)



Company statement of changes in equity
For the year ended 30 June 2024


Called up share capital
Profit and loss account
Total equity

£
£
£


At 24 May 2022
1
(86,968)
(86,967)



Profit for the period
-
639,970
639,970



At 1 July 2023
1
553,002
553,003



Profit for the year
-
(40,775)
(40,775)


At 30 June 2024
1
512,227
512,228


Page 13

 
Balaena LTD
 

Consolidated statement of cash flows
For the year ended 30 June 2024

2024
2023
£
£

Cash flows from operating activities

Profit/(loss) on ordinary activities before taxation
(12,539,975)
1,433,971

Adjustments for:

Amortisation charges
3,253,372
3,229,508

Depreciation charges
895,279
861,066

Loss on disposal of tangible assets
(65,723)
-

Interest payable and other charges
13,244,460
274,070

Interest receivable
(139,377)
4,630,134

Increase in stocks
(159,585)
(253,997)

Increase in debtors
(2,104,819)
(1,821,395)

(Decrease)/increase in creditors
(2,452,582)
3,199,580

Corporation tax paid
(1,241,702)
(177,586)

Foreign currency contract losses
5,963
10,625

Bad debts written off
(254,355)
-

Creditors written off
350,000
-

Net cash (used in)/generated from operating activities

(1,209,044)
11,385,976


Cash flows from investing activities

Acquisitions of intangible fixed assets
-
(34,476)

Acquisitions of tangible fixed assets
(1,243,357)
(1,699,548)

Interest received/(paid)
139,377
(4,630,134)

Acquisition of subsidiary undertakings (net of cash received)
-
(34,994,611)

Net cash from investing activities

(1,103,980)
(41,358,769)

Cash flows from financing activities

Proceeds from issuance of loans
48,109,403
34,800,000

Repayment of loans
(37,279,469)
-

Interest (paid)/received
(13,244,460)
2,205,399

Net cash used in financing activities
(2,414,526)
37,005,399

(Decrease)/increase in cash at bank and in hand
(4,727,550)
7,032,606

Cash and cash equivalents at beginning of year
7,032,606
-

Cash and cash equivalents at the end of year
2,305,056
7,032,606


Cash and cash equivalents at the end of year comprise:
Page 14

 
Balaena LTD
 

Consolidated statement of cash flows (continued)
For the year ended 30 June 2024


2024
2023

£
£



Bank and cash balances
2,305,056
7,032,606

2,305,056
7,032,606


The notes on pages 17 to 46 form part of these financial statements.

Page 15

 
Balaena LTD
 

Consolidated Analysis of Net Debt
For the year ended 30 June 2024





At 1 July 2023
Cash flows
New finance leases
At 30 June 2024
£

£

£

£

Cash at bank and in hand

7,032,606

(4,727,550)

-

2,305,056

Debt due after 1 year

-

(48,000,000)

-

(48,000,000)

Debt due within 1 year

(37,279,469)

37,279,469

-

-

Finance leases

-

-

(109,403)

(109,403)


(30,246,863)
(15,448,081)
(109,403)
(45,804,347)

The notes on pages 17 to 46 form part of these financial statements.

Page 16

 
Balaena LTD
 
 
Notes to the financial statements
For the year ended 30 June 2024

1.


Group information

Balaena LTD is a private company limited by shares incorporated and registered in England. The address of its registered office and principal place of business is The Gaia Energy Centre, Delabole, Cornwall, England.
On 24 May 2022, the company acquired 100% ownership over Blackloch Limited and its underlying subsidiary, Salalah Limited. Balaena Delta Limited, an indirect subsidiary of the Company, acquired 100% ownership over Gibdock Limited. These acquisitions had been accounted for using acquisition accounting.
These consolidated financial statements include the results of the Company and its subsidiary undertakings (collectively referred to as the 'Group'). The Company's subsidiary undertakings, the ultimate ownership percentage of the Company, the subsidiary undertakings' principal activities and country of incorporation are as follows:



Direct Subsidiaries
Principal activity
Shares held class
%
 Country of registration or incorporation

Balaena Alpha Limited
Holding company
Ordinary
100
United Kingdom

Balaena Consulting Limited
Consulting services
Ordinary
100
United Kingdom

Balaena Consulting Limited (Gibraltar)
Consulting services
Ordinary
100
Gibraltar

Blackloch Limited
Holding company
Ordinary
100
Gibraltar



Indirect Subsidiaries
Principal activity
Shares held class
%
 Country of registration or incorporation

Balaena Bravo Limited
Holding company
Ordinary
100
United Kingdom

Balaena Delta Limited
Holding company
Ordinary
100
Gibraltar

Balaena PropCo Limited
Consulting services
Ordinary
100
Gibraltar

Gibdock Limited
Ship repair and conversion
Ordinary
100
Gibraltar

Salalah Limited
Holding company
Ordinary
100
Gibraltar

Page 17

 
Balaena LTD
 
 
Notes to the financial statements
For the year ended 30 June 2024

The registered office address of the subsidiaries are as follows:


Direct Subsidiaries
Registered Office Address

Balaena Alpha Limited
The Gaia Energy Centre, Delabole, Cornwall, England

Balaena Consulting Limited
The Gaia Energy Centre, Delabole, Cornwall, England

Balaena Consulting (Gibraltar) Limited
Madison Building, Midtown, Queensway, Gibraltar.

Blackloch Limited
Main Wharf Road, The Dockyard, Gibraltar



Indirect Subsidiaries
Registered Office Address

Balaena Bravo Limited
The Gaia Energy Centre, Delabole, Cornwall, England

Balaena Delta Limited
Madison Building, Midtown, Queensway, Gibraltar.

Balaena PropCo Limited
Madison Building, Midtown, Queensway, Gibraltar.

Gibdock Limited
Main Wharf Road, The Dockyard, Gibraltar

Salalah Limited
Main Wharf Road, The Dockyard, Gibraltar

Page 18

 
Balaena LTD
 
 
Notes to the financial statements
For the year ended 30 June 2024

2.


Statement of compliance and basis of preparation

The consolidated financial statements have been prepared under the historical cost convention and in accordance with applicable Generally Accepted Accounting Practice.
The consolidated financial statements have been prepared on a going concern basis in accordance with applicable United Kingdom accounting standards, including FRS 102 - The Financial Reporting Standard applicable in the United Kingdom and Republic of Ireland and with the Companies Act 2006.
In the year ended 30 June 2024, the Group generated turnover of £36,372,281 (2023: £45,591,948) and made a loss before tax of £12,539,975 (2023: profit of £1,433,971). The Directors were pleased with the turnover of the Group which remains mainly attributable to its ship repair subsidiary.  This entity has remained both profitable and cash generative and has continued trading strongly into the current year. The loss incurred primarily relates to interest and redemption fee costs associated with the loan provided by Cheyne European Strategic Value Credit Fund II to facilitate the acquisition of the ship repair business in 2022.  This loan was refinanced in the year with a £48,000,000 facility from Trusted Novus Bank which is repayable in May 2036. The Group’s ability to secure this funding underlines the long term prospects of the Group.
The Directors are now focused on securing key new business opportunities for the Group and are in discussions with various interested parties regarding funding potential acquisitions. In addition, the Group’s offshore Island Utility Platform development business continues to move forward positively with its initial project now at signed Memorandum of Understanding stage. In summary, the Group continues to be cash generative with access to finance and fund new projects as required.
Further,  the directors have assessed the Group's ability to continue as a going concern, taking into account the confirmation from the ultimate controlling party, Simon Gillett, that he is committed to providing the necessary ongoing financial support to enable the Group to meet its financial obligations as they fall due for at least 12 months from the date of approval of these financial statements.
Based on this, the directors have a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future.
The consolidated financial statements are presented in Pound Sterling (£) which is the functional currency of the Group. The functional currency is the currency of the primary economic environment in which the Group operates. The amounts presented in the consolidated financial statements have been rounded to the nearest Pound Sterling.

3.Accounting policies

The accounting policies applied in the preparation of these consolidated and separate financial statements are set out below and in the following pages.

 
Basis of consolidation

The Group's financial statements consolidate the financial statements of the Company and all its subsidiary undertakings made up from 1 July 2023 to 30 June 2024.

Page 19

 
Balaena LTD
 

Notes to the financial statements
For the year ended 30 June 2024

3.Accounting policies (continued)

  
Subsidiary

A subsidiary is an entity controlled by the Group. Control is the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities. Where the Group owns less than 50% of the voting powers of an entity but controls the entity by virtue of an agreement with other investors which give it control of the financial and operating policies of the entity it accounts for that entity as a subsidiary.
Where a subsidiary has different accounting policies to the Group, adjustments are made to those subsidiary's financial statements to apply the Group's accounting policies when preparing the consolidated financial statements.
Any subsidiary undertakings sold or acquired during the period are included up to, or from, the dates of change of control or change of significant influence, respectively.
Where control of a subsidiary is lost, the gain or loss is recognised in the consolidated statement of comprehensive income. The cumulative amounts of any exchange differences on translation, recognised in equity, are not included in the gain or loss on disposal and are transferred to retained earnings. The gain or loss also includes amounts included in other comprehensive income that are required to be reclassified to profit or loss but excludes those amounts that are not required to be reclassified.
Where control of a subsidiary is achieved in stages, the initial acquisition that gave the Group control is accounted for as a business combination. Thereafter, where the Group increases its controlling interest in the subsidiary the transaction is treated as a transaction between equity holders. Any difference between the fair value of the consideration paid and the carrying amount of the minority interest acquired is recognised directly in equity. No changes are made to the carrying value of assets, liabilities or provisions for contingent liabilities.
All intra-group transactions, balances, income and expenses are eliminated on consolidation.

Page 20

 
Balaena LTD
 

Notes to the financial statements
For the year ended 30 June 2024

3.Accounting policies (continued)

  
Business combination and goodwill

Business combinations are accounted for by applying the purchase method.
The cost of a business combination is the fair value of the consideration given, liabilities incurred or assumed and of equity instruments issued plus the costs directly attributable to the business combination. Where control is achieved in stages the cost is the consideration at the date of each transaction.
Contingent consideration is initially recognised at estimated amount where the consideration is probable and can be measured reliably. Where (i) the contingent consideration is not considered probable or cannot be reliably measured but subsequently becomes probable and measurable or (ii) contingent consideration previously measured is adjusted, the amounts are recognised as an adjustment to the cost of the business combination.
On acquisition of a business, fair values are attributable to the identifiable assets, liabilities and contingent liabilities unless the fair value cannot be measured reliably, in which case the value is incorporated in goodwill. Where the fair value of contingent liabilities cannot be reliably measured they are disclosed on the same basis as other contingent liabilities.
Goodwill recognised represents the excess of the fair value and directly attributable costs of the purchase consideration over the fair values to the Group's interest in the identifiable net assets, liabilities and contingent liabilities acquired.
On acquisition, goodwill is allocated to cash-generating units that are expected to benefit from the combination.
Goodwill is amortised over its expected useful life. Amortisation is provided at 10 years on a straight line basis. Goodwill is assessed for impairment when there are indicators of impairment and any impairment is charged to the profit and loss.  Reversals of impairment are recognised when the reasons for the impairment no longer apply.

Page 21

 
Balaena LTD
 

Notes to the financial statements
For the year ended 30 June 2024

3.Accounting policies (continued)

 
Turnover and expense recognition

Turnover is the total amount receivable by the Company in the ordinary course of business with outside customers for services provided and contract work performed, net of trade discounts. Turnover is attributable to one continuing activity. 
Turnover is recognised when risks and rewards have passed to the customers and the amount can be measured reliably. Turnover relates solely to income from rendering of services. 
Where the outcome of a project contract can be estimated reliably, revenue and costs are recognised by reference to the stage of completion of the contract activity at the balance sheet date. This is normally measured by the proportion that contract costs incurred for work performed to date bear to the estimated total contract costs, except where this would not be representative of the stage of completion. Variations in contract work, claims and incentive payments are included to the extent that the amount can be measured reliably and its receipt is considered probable. 
Where the outcome of a project contract cannot be estimated reliably, contract revenue is recognised to the extent of contract costs incurred where it is probable they will be recoverable. Contract costs are recognised as expenses in the period in which they are incurred. When it is probable that total contract costs will exceed total contract revenue, the expected loss is recognised as an expense immediately.
Costs and expenses are recognised in the profit and loss account upon utilisation of the related goods or services by the Company. As applicable, they are measured at the invoiced amount.

 
Operating leases: the Group as lessee

Leases in which a significant portion of the risks and rewards of ownership are retained by the lessor are classified as operating leases. Payments made under operating leases net of any incentives received from the lessor are charged to the profit and loss account on a straight line basis over the period of the lease.

 

Research and development

In the research phase of an internal project it is not possible to demonstrate that the project will generate future economic benefits and hence all expenditure on research shall be recognised as an expense when it is incurred. Intangible assets are recognised from the development phase of a project if and only if certain specific criteria are met in order to demonstrate the asset will generate probable future economic benefits and that its cost can be reliably measured. The capitalised development costs are subsequently amortised on a straight-line basis over their useful economic lives, which range from 5 to 10 years.
If it is not possible to distinguish between the research phase and the development phase of an internal project, the expenditure is treated as if it were all incurred in the research phase only.

Page 22

 
Balaena LTD
 

Notes to the financial statements
For the year ended 30 June 2024

3.Accounting policies (continued)

 
Income taxes

The tax charge for the year is calculated using tax rates and laws applicable to the year to which they relate, based in results for the period.
Any current tax assets or liabilities comprise those claims from, or obligations to, tax authorities relating to the current or prior reporting period, that are unallocated or unpaid at the end of the reporting period. All changes to current tax assets or liabilities are recognised as a component of tax payable in the consolidated profit and loss account. 
Deferred tax recognised in respect of all timing differences at the reporting date, except as otherwise indicated. Deferred tax assets are only 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. If and when all conditions for retaining tax allowances for the cost of a fixed asset have been met, the deferred tax is reversed. Deferred tax is calculated using the tax rates and laws that have been enacted or substantively enacted by the reporting date that are expected to apply to the reversal of the timing difference. Deferred tax assets and deferred tax liabilities are offset only if:
- the Group has a legally enforceable right to set off current tax assets against current tax liabilities, and 
- the deferred tax assets and deferred tax liabilities relate to income taxes levied by the same taxation authority on either the same taxable entity or different taxable entities which intend either to settle current tax liabilities and assets on a net basis, or to realise the assets and settle the liabilities simultaneously.

 

Exceptional items

Exceptional items are transactions that fall within the ordinary activities of the Group but are presented separately due to their size or incidence.

 
Intangible assets

Intangible assets are initially recognised at cost. After recognition, under the cost model, intangible assets are measured at cost less any accumulated amortisation and any accumulated impairment losses. All intangible assets are considered to have a finite useful life. If a reliable estimate of the useful life cannot be made, the useful life shall not exceed ten years.

 Amortisation is provided on the following basis:

Intellectual property
-
10%
straight line
Goodwill
-
10%
straight line
IT software
-
20%
straight line
Other intangible fixed assets
-
20%
straight line

The carrying values of intangible assets are reviewed for impairment when events or changes in circumstances indicate the carrying value may not be recoverable.

Page 23

 
Balaena LTD
 

Notes to the financial statements
For the year ended 30 June 2024

3.Accounting policies (continued)

 
Tangible fixed assets

Tangible fixed assets are stated at cost less accumulated depreciation and any accumulated impairment losses. The cost includes all expenditure that is directly attributable to the acquisition of the assets.
The Group adds to the carrying amount of an item of fixed assets the cost of replacing part of such an item when that cost is incurred, if the replacement part is expected to provide incremental future benefits to the Group. The carrying amount of the replaced part is derecognised. Repairs and maintenance are charged to consolidated comprehensive income during the period in which they are incurred.

Depreciation is provided on the following basis:

Leasehold improvements
-
Straight line over the shorter of the duration of the lease or the asset's  useful economic life
Heavy Plant
-
5%
Straight line
Plant and machinery
-
15%
Straight line
Motor vehicles
-
15%
Straight line
Fixtures and fittings
-
25%
Straight line
Office and IT equipment
-
20%
Straight line

The carrying values of tangible fixed assets are reviewed for impairment when events or changes in circumstances indicate the carrying value may not be recoverable.
Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in the consolidated statement of comprehensive income.

 
Investment in shares in group undertakings

The Company’s investment in shares in group undertakings is accounted for in the separate financial statements at cost, less any impairment loss.

Page 24

 
Balaena LTD
 

Notes to the financial statements
For the year ended 30 June 2024

3.Accounting policies (continued)

  
Impairment of non-financial assets

At each reporting date, non-financial assets are reviewed to determine whether there is any indication that those assets have suffered an impairment loss. If there is an indication of possible impairment, the recoverable amount of any affected asset is estimated and compared with its carrying amount. If the estimated recoverable amount is lower, the carrying value is reduced to its estimated recoverable amount and an impairment loss is recognised immediately in profit or loss.
 
If the circumstances that gave rise to the impairment loss subsequently reverse, the carrying amount of the asset is increased to the revised estimate of its recoverable amount, but not in excess of the amount that would have been determined had no impairment loss been recognised for the asset in prior years. A reversal of an impairment loss is recognised immediately in profit or loss.   
 
Goodwill does not generate independent cash inflows and it must therefore be tested for impairment as part of a cash-generating unit (CGU). If impairment is identified in the period, the impairment loss is first allocated to the goodwill within the CGU, then to the other assets of the unit pro rata on the basis of the carrying amount of each of those assets. In doing so, the carrying amount of any asset in a CGU is not reduced below the higher of fair value less costs to sell (where determinable), value in use (where determinable), and zero. Any excess amount of the impairment loss which cannot be allocated to an asset because of the mentioned restriction is allocated to the other assets of the unit pro rata on the basis of the carrying amount of those other assets.   
 
Any impairment losses recognised in respect of goodwill cannot be subsequently reversed, even if the original circumstances giving rise to the impairment cease to apply.

 
Stocks

Stocks are stated at the lower of cost and net realisable value after making due allowances for obsolete and slow-moving stocks. Cost includes all costs incurred in bringing the stock items to their present condition (purchase cost on first in first out basis).
At each reporting date, stocks are assessed for impairment. If stock is impaired, the carrying amount is reduced to its selling price less costs to complete and sell. The impairment loss is recognised immediately in profit or loss.

Page 25

 
Balaena LTD
 

Notes to the financial statements
For the year ended 30 June 2024

3.Accounting policies (continued)

 
Debtors

Debtors consist of trade debtors, amounts due from connected person and connected companies, restricted cash, amounts recoverable on long-term contracts, prepayments and other debtors. Debtors are measured at transaction price, less any impairment.
Trade debtors are recognised and carried at original amounts for goods and services provided as a result of the carrying on the principal activities of the Group less any provision for bad debts. An estimate for bad debt is made when the director considers that collection of the full amount of the invoice is no longer probable and amounts are charged to the consolidated statement of comprehensive income account when identified.
Amounts due from connected person and companies consist of other debtors owned by the Group's related parties.
Prepayments represent the value of goods and services invoiced to the Group that are yet to be provided at the balance sheet date. Prepayments are recognised upon payment of purchase invoices by the Group and are measured by time apportioning the value of the invoices over the period of receipt of the relevant goods or services.
Other debtors relate to amounts owed to the Group that did not arise from the provision of those goods and services as a result of the carrying on of the principal activities of the Group. They are recognised when the directors consider that it is probable that the future economic benefits will flow to the Group and these benefits can be reliably measured. Other debtors are measured at the directors' estimate of the value of the proceeds likely to be received by the Group.
Restricted cash pertains to the blocked account in relation to the loan.
Amounts recoverable on long term contracts are stated at cost plus attributable profit less foreseeable losses and payments on account received in excess of turnover recognised. The value of amounts recoverable on long term contracts is reflected in turnover and in debtors (amounts recoverable on contracts) at cost plus attributable profit. The balance of any payments received on account, in excess of recognised turnover, is separately disclosed within creditors. Cost includes all direct costs incurred in bringing the contract to its present state of completion.

 
Bank and cash balances

Cash at bank and in hand consist of unrestricted cash balances.  
Bank overdrafts that are repayable on demand and form an integral part of the Group's cash management. This is presented as part of Creditors: amounts falling due within one year in the consolidated statement of financial position.

Page 26

 
Balaena LTD
 

Notes to the financial statements
For the year ended 30 June 2024

3.Accounting policies (continued)

 
Creditors

Creditors consist of trade and other creditors, income tax payable, taxation and other taxes and social security costs, accruals, amounts due to connected persons and companies, obligations under finance lease, and loan payable. Creditors are measured at the transaction price. Creditors are derecognised from the consolidated statement of financial position only when the obligation are extinguished either through discharge, cancellation or expiration.
Accruals represent the value of goods and services provided to the Group at the balance sheet date for which no invoice has been received. Accruals are recognised upon receipt of goods and services by the Group and are measured at the directors' estimate of the value of the invoice likely to be received by the Group.
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 Group does not have an unconditional right to defer settlement of the creditor for at least 12 months after the end of the financial year.

 
Foreign currency translation

Transactions in foreign currencies are recorded at the rate ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are translated at the rate of exchange ruling at the balance sheet date. All differences are taken to the consolidated profit and loss account.

 
Employee benefits

The Company provides a range of benefits to employees a discussed below. 
Short-term benefits
Short-term benefits, including holiday pay and other similar non-monetary benefits, are recognised as an expense in the period in which the service is received. 
Defined contribution pension plan
The Group operates a defined contribution plan for its employees. A defined contribution plan is a pension plan under which the Group pays fixed contributions into a separate entity. Once the contributions have been paid the Group has no further payment obligations.
The contributions are recognised as expense in the consolidated statement of comprehensive income when they fall due. Amounts not paid are shown in accruals as a liability in the consolidated statement of financial position. The assets of the plan are held separately from the Group in independently administered funds.

  
Capital and reserves

Called up share capital represents the nominal value of shares that have been issued.
Profit and loss account includes all current and prior period retained profits and losses less declared dividends.
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.

Page 27

 
Balaena LTD
 

Notes to the financial statements
For the year ended 30 June 2024

3.Accounting policies (continued)

  
Related party relationships and transactions

Related party transactions are transfers of resources, services or obligations between the Group and its related parties, regardless whether a price is charged. Parties are considered to be related if one party has direct or indirect control of the other party, the parties are subject to common control from the same sources, 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.

  
Events after the balance sheet date

Any post-year-end event that provides additional information about the Group's consolidated financial position at the end of reporting period (adjusting event) is reflected in the consolidated financial statements. Post-year-end events that are not adjusting events, if any, are disclosed when material to the consolidated financial statements.

  
Provisions and contingencies

Provisions are recognised when present obligations as a result of a past event will probably lead to an outflow of economic resources from the Group and amounts can be estimated reliably. The timing or amount of the outflow may still be uncertain. Contingent liabilities are potential liabilities that may occur as a result of present obligations depending on the outcome of uncertain future events. Contingent liabilities are recognised in the consolidated financial statements if the contingency is probable and the amount of the liability can be reasonably estimated. Contingent assets are potential economic benefits that may be received by the Group depending on the outcome of uncertain future events. Contingent assets are not recognised in the consolidated financial statements.

  
Parent company statement of comprehensive income

The directors have taken advantage of the exemption from including the parent company's statement of comprehensive income account in the consolidated financial statements on the ground that the Group is required to prepare group accounts including a consolidated statement of comprehensive income.

Page 28

 
Balaena LTD
 
 
Notes to the financial statements
For the year ended 30 June 2024

4.



Significant judgments in applying accounting policies and key sources of estimation uncertainty

The presentation of the consolidated financial statements in accordance with FRS 102 requires management to make judgements and estimates that affect amounts reported in the consolidated 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.
Distinguishing operating and finance leases
The Group is a party in a lease agreement as a lessee. Critical judgement is required to be exercised by management in order to distinguish the lease agreements as either an operating or a finance lease by looking at the transfer or retention of the significant risks and rewards of ownership of the properties covered by the agreements. Failure to make the right judgement will result in either overstatement or understatement of assets and liabilities. Based on management's assessment, the Group's leases are operating and finance leases.
Useful lives and residual values of tangible and intangible fixed assets
The Group estimates the useful lives of tangible and intangible fixed assets based on the period over which the assets are expected to be available for use. The Group estimates the residual values of tangible and intangible fixed assets based on the amount expected to be currently obtained from the disposal of the asset, net of estimated costs of disposal, if the assets were already of the age and in the condition expected at the end of its useful life. The estimated useful lives and residual values of tangible and intangible fixed assets are reviewed periodically and are updated if expectations differ from previous estimates due to physical wear and tear, technical or commercial obsolescence and legal or other limits on the use of the assets. The carrying amounts of intangible and tangible fixed assets are analysed in notes 10 and 11, respectively.
Impairment of non-financial assets
An adequate allowance for impairment is provided when objective evidence of impairment exists. Where there are indicators of impairment of individual assets, the Group performs impairment test based on fair value less costs to sell calculation or a value in use calculation. The fair value less costs to sell calculation is based on available data from binding sales transactions in an arm's length transaction on similar assets or observable market prices, if any, less incremental costs for disposing of the asset. The value in use calculation is based on a discounted cash flow model. The recoverable amount is most sensitive to the discount rate used for the discounted cash flow model as well as the expected future cash inflows and the growth rate used for extrapolation purposes. 
No impairment of the Group's non-financial assets was recognised during the period ended 30 June 2024 (2023: £nil). The carrying values of intangible and tangible fixed assets are shown in notes 10 and 11, respectively.
An adequate allowance for impairment of debtors is provided where objective evidence of impairment exists. The Group evaluates the amount of allowance for impairment based on available facts and circumstances affecting the collectability of the accounts, including, but not limited to, the length of the Group's relationship with its customers, the customers' current credit status, average age of accounts, collection experience and historical loss experience. 
The carrying value of debtors is shown in note 14.
Determining realisable amount of deferred tax assets
Management judgement is required in order to determine the amount of deferred tax assets to be recognised. The extent to which deferred tax assets can be recognised is based on an assessment of the Group’s future taxable income against the deductible temporary differences that can be utilised. Deferred tax asset recognised by the Group as at 30 June 2024 and 2023 are shown under debtors in note 14.
 

Page 29

 
Balaena LTD
 
 
Notes to the financial statements
For the year ended 30 June 2024

5.


Consolidated (loss)/profit on ordinary activities before taxation

This is stated after charging:

30 June
Period ended
30 June
2024
2023
£
£

Research and development
40,275
-

Amortisation of intangible fixed assets (see note 10)
3,253,372
3,229,508

Depreciation of tangible assets (see note 11)
895,279
861,066

Operating lease rentals - land buildings
596,050
253,976

Foreign exchange gains
(668,718)
(685,645)

Fees payable to the Group's auditor for the audit of the Company and its subsidiaries
100,250
80,083

Fees for other assurance and non-audit services
-
1,500


6.


Directors' emoluments

2024
2023
£
£



Emoluments and other benefits
316,043
192,081

Other pension costs
24,000
26,500

340,043
218,581


7.


Staff costs (including directors' emoluments)

2024
2023
£
£



Wages and salaries (including salaries of directors, see note 6)
12,593,320
10,805,680

Social security costs
669,737
626,013

Other pension costs
393,774
310,661

13,656,831
11,742,354

2024
2023
Number
Number

Average number of employees during the period


Administration
26
22

Manufacturing
221
215

247
237

Page 30

 
Balaena LTD
 
 
Notes to the financial statements
For the year ended 30 June 2024

8.


Taxation


30 June
Period ended
30 June
2024
2023
£
£

Corporation tax


Current tax on profits for the year
669,931
1,188,095


Total current tax
669,931
1,188,095

Deferred tax


Fixed asset timing differences
(153,740)
42,737

Short term timing differences
(22,285)
(64,914)

Total deferred tax
(176,025)
(22,177)


Tax on profit on ordinary activities
493,906
1,165,918

Factors affecting tax charge for the year/period

The tax assessed for the year/period is higher than (2023 -higher than) the standard rate of corporation tax in the UK of 25% (2023 - 20.28%). The differences are explained below:

30 June
Period ended
30 June
2024
2023
£
£


(Loss)/profit on ordinary activities before tax
(12,539,975)
1,433,971


(Loss)/profit on ordinary activities multiplied by standard rate of corporation tax in the UK of 25% (2023 -20.28%)
(3,134,994)
290,809

Effects of:


Non-deductible expense
111,294
666,836

Adjustments to tax charge in respect of prior periods
-
(55,274)

Non-taxable income
(17,642)
(3,451)

Tax credits
-
3,535

Movement in deferred tax not recognised
(44,683)
10,696

Remeasurement of deferred tax for changes in tax rates
-
4,419

Assessable tax losses carried forward
1,761,006
608,075

Difference between depreciation and capital allowance
(31,074)
(6,586)

Difference in tax rates between Gibraltar and UK
1,107,778
(353,141)

Net eliminated profit and loss transactions
742,221
-

Total tax charge for the year/period
493,906
1,165,918

Page 31

 
Balaena LTD
 
 
Notes to the financial statements
For the year ended 30 June 2024

9.


Other exceptional items

30 June
Period ended
30 June
2024
2023
£
£


Redemption premium
8,125,000
-

8,125,000
-

This includes redemption premium of £8,125,000 as a result of the refinancing of Cheyne loan during the year.


10.


Intangible assets

Group





Intellectual Property
Goodwill
IT software
Other intangibles
Total

£
£
£
£
£



Cost


At 1 July 2023
2,795,543
29,688,818
4,643
29,833
32,518,837



At 30 June 2024

2,795,543
29,688,818
4,643
29,833
32,518,837



Amortisation


At 1 July 2023
-
3,216,269
3,624
9,615
3,229,508


Charge for the period (see note 5) 
279,554
2,968,882
1,019
3,917
3,253,372



At 30 June 2024

279,554
6,185,151
4,643
13,532
6,482,880



Net book value



At 30 June 2024
2,515,989
23,503,667
-
16,301
26,035,957



At 30 June 2023
2,795,543
26,472,549
1,019
20,218
29,289,329



Page 32

 
Balaena LTD
 
 
Notes to the financial statements
For the year ended 30 June 2024
 
           10.Intangible assets (continued)

Company




Intellectual Property

£



Cost


At 1 July 2023
2,795,543



At 30 June 2024

2,795,543



Amortisation


Charge for the year
279,554



At 30 June 2024

279,554



Net book value



At 30 June 2024
2,515,989



At 30 June 2023
2,795,543

Page 33
 

Balaena LTD
 
 
 

Notes to the financial statements
For the year ended 30 June 2024


11.


Tangible fixed assets


Group







Leasehold improve-  ments
Heavy Plant
Light plant and machinery
Office and IT equipment
Motor vehicles
Construction progress
Fixtures and fittings
Total

£
£
£
£
£
£
£
£



Cost


At 1 July 2023
3,604,269
536,615
1,075,714
87,516
215,671
314,572
3,852
5,838,209


Additions
720,851
32,050
175,788
53,610
215,878
385,630
-
1,583,807


Disposals
-
-
(429,259)
-
-
-
-
(429,259)



At 30 June 2024

4,325,120
568,665
822,243
141,126
431,549
700,202
3,852
6,992,757



Depreciation


At 1 July 2023
524,345
40,545
213,321
31,301
50,591
-
963
861,066


Charge for the period (see note 5) 
552,494
36,639
203,150
31,143
71,131
-
722
895,279


Disposals
-
-
(154,533)
-
-
-
-
(154,533)



At 30 June 2024

1,076,839
77,184
261,938
62,444
121,722
-
1,685
1,601,812



Net book value



At 30 June 2024
3,248,281
491,481
560,305
78,682
309,827
700,202
2,167
5,390,945



At 30 June 2023
3,079,924
496,070
862,393
56,215
165,080
314,572
2,889
4,977,143

Motor vehicles with a net carrying value of £94,528 (2023: £44,832) is held under finance leases.

Page 34  
 
Balaena LTD
 
 
Notes to the financial statements
For the year ended 30 June 2024

           11.Tangible fixed assets (continued)


Company






Light plant and machinery
Office and IT equipment
Motor vehicles
Fixtures and fittings
Total

£
£
£
£
£

Cost


At 1 July 2023
429,259
3,743
10,500
3,852
447,354


Disposals
(429,259)
-
-
-
(429,259)



At 30 June 2024

-
3,743
10,500
3,852
18,095



Depreciation


At 1 July 2023
85,852
936
2,625
963
90,376


Charge for the period (see note 5) 
68,681
702
1,969
722
72,074


Disposals
(154,533)
-
-
-
(154,533)



At 30 June 2024

-
1,638
4,594
1,685
7,917



Net book value



At 30 June 2024
-
2,105
5,906
2,167
10,178



At 30 June 2023
343,407
2,807
7,875
2,889
356,978






Page 35

 
Balaena LTD
 
 
Notes to the financial statements
For the year ended 30 June 2024

12.


Stocks

Group
Group
2024
2023
£
£

Raw materials and consumables
1,164,110
1,004,525


Stocks were utilised as follows during the period: 


2024
2023
£
£



Cost of sales
3,182,836
2,942,765

Administrative expenses
173,776
186,276

Tangible fixed assets
30,918
25,037

3,387,530
3,154,078

No impairment loss was recognised during the year (2023: £nil).


13.
Investments

Total fixed asset investments comprise:


Group
Company
Group
Company

2024
2024
2023
2023

£
£
£
£

Investment in shares in group undertakings:

Balaena Alpha Limited
-
1
-
1

Balaena Consulting Limited
-
1
-
1

Balaena Consulting (Gibraltar) Limited
-
3,000
-
3,000

Blackloch Limited
-
33,895,969
-
33,895,969

-
33,898,971
-
33,898,971

Page 36

 
Balaena LTD
 
 
Notes to the financial statements
For the year ended 30 June 2024

13.Investments (continued)

Group:
The capital and reserves and profit/(loss) of each company is stated below:




Capital & reserves
Profit/(loss) for the year
Capital & reserves
Profit/(loss) for the period

2024
2024
2023
2023

£
£
£
£

Direct subsidiaries:

Balaena Alpha Limited
1
13
(12)
(13)

Balaena Consulting Limited
(1,205,583)
(559,912)
(634,463)
(575,638)

Balaena Consulting (Gibraltar) Limited
(150,922)
(87,732)
(63,189)
(66,189)

Blackloch Limited
28,712,665
(38)
28,712,703
-



Indirect subsidiaries:

Balaena Bravo Limited
6,500,001
5,000
6,495,001
(5,000)

Balaena Delta Limited
9,669,999
(11,374,174)
1,704,175
(4,795,826)

Balaena PropCo Limited
(22,933)
(20,352)
(2,581)
(2,582)

Gibdock Limited
17,055,473
4,618,719
15,036,751
8,289,601

Salalah Limited
33,890,320
5,750
33,896,070
-

Page 37

 
Balaena LTD
 
 
Notes to the financial statements
For the year ended 30 June 2024

14.


Debtors

Group
Group
Company
Company
2024
2023
2024
2023
£
£
£
£

Due after more than one year

Deferred taxation
554,732
411,800
63,495
-

Due within one year

Trade debtors
6,393,100
4,806,712
-
-

Amounts owed by group undertakings
-
-
1,300,907
49,289

Amounts due from connected person and companies (see note 20)
302,893
557,922
302,893
557,922

Other debtors
1,215,780
454,248
79,405
74,354

Loans receivables
-
-
-
615,209

Prepayments
293,494
-
-
-

Amounts recoverable on long-term contracts
224,722
253,614
-
-

8,984,721
6,484,296
1,746,700
1,296,774


Other debtors include: restricted cash amounting to £948,001 (2023:£nil) that pertains to to the blocked account in relation to the loan with Trusted Novus Bank Limited (see Note 16).

Page 38

 
Balaena LTD
 
 
Notes to the financial statements
For the year ended 30 June 2024

15.


Creditors: Amounts falling due within one year

Group
Group
Company
Company
2024
2023
2024
2023
£
£
£
£

Loans payables
-
37,279,469
-
-

Trade creditors
4,143,946
876,372
29,874
23,614

Amounts owed to group undertakings
-
-
37,598,768
35,037,792

Amounts due to connected persons and companies (see note 20)
154,431
2,805,884
123,430
2,805,014

Corporation tax
379,811
984,674
-
40,617

Other taxation and social security
280,747
324,843
-
-

Obligations under finance lease and hire purchase contracts
26,800
-
-
-

Other creditors
329,593
1,249,915
80,526
76,880

Accruals
3,405,687
5,155,690
20,439
6,308

8,721,015
48,676,847
37,853,037
37,990,225


On 24 May 2022, Balaena Alpha Limited and Balaena Bravo Limited, subsidiaries of the Company, entered into an agreement with Cheyne European Strategic Value Credit Fund II, a third party, for a loan facility amounting to £28,300,00 and Junior Loan Notes £6,500,000 (total proceeds of £34,800,000). Balaena Delta Limited and Gibdock Limited, an indirect subsidiary of the Company, guaranteed the loan. The proceeds were then borrowed by Balaena Delta Limited to facilitate the acquisition of Gibdock Limited. 
The face amount of the loan including interest and redemption premium were settled on May 2024 through a refinancing arrangement with Trusted Novus Bank Limited amounting to £48,000,000 (see note 16).


16.


Creditors: Amounts falling due after more than one year

Group
Group
2024
2023
£
£

Bank loans
48,000,000
-

Net obligations under finance leases and hire purchase contracts
82,603
-

48,082,603
-


Bank loan  amounting to £48,000,000 relates to  a loan borrowed by Balaena Propco Limited which were used to refinance the loan and other fees with Cheyne European Strategic Value Credit Fund II. It carries fixed interest of 2.95% plus the prevailing Bank of England base rates payable quarterly. The principal amount of the loan is repayable on May 2036. Gibdock Limited, a subsidiary of the Group, guaranteed the loan.

Page 39

 
Balaena LTD
 
 
Notes to the financial statements
For the year ended 30 June 2024

17.


Called up share capital

2024
2023
£
£
Authorised, allotted, called up and fully paid



1 (2023 -1) Ordinary share of £1.00
1
1



18.


Movement in capital and reserves

2024
2023
£
£

Group:


At the beginning of the year
111,052
(157,001)

(Loss)/profit for the year
(13,033,882)
268,053

At the end of the year
(12,922,830)
111,052

2024
2023
£
£

Company:


At the beginning of the year
553,003
(86,967)

(Loss)/profit for the year
(40,775)
639,970

At the end of the year
512,228
553,003


19.Other financial commitments

The following are the significant commitments involving the Group:
Operating lease commitments - Group as lessee
At the year end, the Group had annual commitments under operating leases as set out below:

2024
2023
£
£

Operating leases which expire:


Within one year
400,000
250,000

Within two to five years
1,850,000
1,750,000

More than five years
14,000,000
14,500,000

16,250,000
16,500,000

Balaena PropCo Limited, an indirect subsidiary of the Company, entered into a 35 year operating lease of the dockyard dated 24 May 2023 with rent review dates on 2029 and every third anniversary of it.

Page 40

 
Balaena LTD
 
 
Notes to the financial statements
For the year ended 30 June 2024

Finance lease commitments - Group as lessee
At the year end, the Group had future minimum lease payments under non-cancellable finance leases as set out below:


2024
2023
£
£



Within one year
160,133
144,093

Within two to five years
104,825
194,110

264,958
338,203

Pension commitment
The Group operates a defined contribution pension scheme. The assets of the scheme are held separately from those of the Group in an independently administered fund. There were no contributions outstanding at 30 June 2024 and 2023.
Loan Guarantee
Balaena Propco Limited entered into a loan agreement with Trusted Novus Bank amounting to £48,000,000 and Gibdock Limited, guaranteed the loan (refer to Note 16).


20.


Related party transactions

The following advances were undertaken under the related parties are included within.


2024
2023
£
£



Amounts due from connected person and companies (note 14)
302,893
557,922

Amounts due to connected person and companies (note 15)
(154,431)
(2,805,884)

148,462
(2,247,962)




 Amount of
transaction
2024
 Outstand-
ing
Balance
2024
£
£

Related party under common ownership:
E-tricity
3,073
3,073
Lemon investments
(30,226)
268,674
Simmel Limited
93
106
Essgee Limited
13
26
Balaena Ship Management Limited
13
13

Page 41

 
Balaena LTD
 
 
Notes to the financial statements
For the year ended 30 June 2024
 Amount of transaction 2023
 Outstand-ing Balance 2023
£
£

Related party under common ownership:


Wave-Tricity
258,226
258,226

Lemon investments
298,800
298,800

Simmel Limited
13
13

Essgee Limited
13
13

557,052
557,052

 Amount of
transaction
2024
 Outstand
-ing
Balance
2024
£
£

Directors of the Company and subsidiary undertakings:


Directors' loans
2,681,584
(123,430)

Directors' remuneration
340,043
-

 Amount of transaction 2023
 Outstand
-ing
Balance
2023
£
£

Directors of the Company and subsidiary undertakings:


Directors' loans
2,805,014
(2,805,014)

Directors' remuneration
218,581
-

3,023,595
(2,805,014)

The Group granted loans and paid advances to its directors. The outstanding amount as at 30 June 2024 and 2023 is included within 'Amounts due from connected person & companies'.
Key management compensation of £1,436,343 (2023: £1,306,838) was incurred and £508,402 (2023: £684,932) was accrued at the end of the year.


21.


Controlling party

The directors consider the ultimate controlling party of the Group to be Simon James Gillett.

Page 42

 
Balaena LTD
 
 
Notes to the financial statements
For the year ended 30 June 2024

22.


Financial risk management

The Group's risk management is coordinated with its owner, in close cooperation with the board of directors, and focuses on actively securing the Group's short-to-medium term cash flows.
The Group has exposures to three main areas of risk - market risk (foreign exchange currency), liquidity risk and customer credit exposure.  To a lesser extent, the Group is exposed to interest rate risk.
The Group enters into derivatives, principally for hedging foreign exchange risk; however, hedge accounting is not applied.
The most significant financial risks to which the Group is expected are described below.
Market risk - Foreign exchange transactional currency exposure
The Group is exposed to currency exchange rate risk due to a significant proportion of its cash, creditors and operating expenses being denominated in non-Sterling Pound currencies. To mitigate the Company's exposure to foreign currency risk, non-Sterling Pound cash flows are monitored and hedged.
Not taking into account the Company's hedging activities, foreign currency-denominated financial assets and liabilities at 30 June 2024 translated into Pound Sterling at the closing rate are:


EUR
£



Financial assets
821,678

Financial liabilities
(3,043,736)

Net exposure
(2,222,058)

EUR
£



Sensitivity analysis - 15% (+/- impact on pre-tax profit and shareholders' equity)
(333,309)

Not taking into account the Company's hedging activities, foreign currency-denominated financial assets and liabilities at 30 June 2023 translated into Pound Sterling at the closing rate are:


EUR
USD
£
£



Financial assets
2,117,782
-

Financial liabilities
(2,204,243)
(37,279,469)

Net exposure
(86,461)
(37,279,469)

Page 43

 
Balaena LTD
 
 
Notes to the financial statements
For the year ended 30 June 2024
EUR
USD
£
£



Sensitivity analysis - 15% (+/- impact on pre-tax profit and shareholders' equity)
(12,969)
(5,591,920)

The sensitivity analysis on the above shows the impact on profit of a 15% change between the functional currency and the other main currencies to which there is currency risk exposure. The sensitivity analysis is based on a change in one assumption while holding all other assumptions constant. In practice this is unlikely to occur, and changes in some of the assumptions may be correlated, for example, change in interest rate and change in currency rate. A 15% sensitivity rate is used when reporting foreign currency risk internally to key management personnel and represents management assessment of the reasonably possible change in foreign exchange rates.


Liquidity risk
The objective of the Group in managing liquidity risk is to ensure that it can meet its financial obligations when they fall due.  The Group expects to meet its financial obligations through operating cash flows.
Liquidity risk refers to the availability of sufficient funds to meet fund withdrawals and other financial commitments associated with liabilities as they fall due. In order to manage liquidity risk as part of the asset and liability management process, the directors monitor expected operating cash flows and make available funds to the Group in order to enable it to have sufficient funds available to meet its predicted cash flows. Management obtain additional loans as circumstances needed.
As at 30 June 2024, the Group's financial liabilities have contractual maturities which are presented below.


Current within 12 months
Non-current
£
£



Trade creditors
4,143,946
-

Amounts due to connected persons and companies
154,431
-

Other creditors
329,593
-

Accruals and deferred income
3,405,687
-

Obligations under finance lease and hire purchase contracts
26,800
-

Loans payable
-
48,082,603

8,060,457
48,082,603

Page 44

 
Balaena LTD
 
 
Notes to the financial statements
For the year ended 30 June 2024

As at 30 June 2023, the Group's financial liabilities have contractual maturities which are presented below.


Current within 12 months
Non-current
£
£



Trade creditors
876,372
-

Amounts due to connected persons and companies
2,805,884
-

Other creditors
1,249,915
-

Accruals and deferred income
5,155,690
-

Loans payable
37,279,469
-

47,367,330
-


Customer credit exposure
Credit risk is the risk that a counterparty may fail to discharge an obligation to the Group. The Group is exposed to this risk through various financial instruments arising from the normal course of operations and through placing deposits with banks. The Group monitors the occurrence of defaults by customers and other counterparties. The Group'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. 
Some of the unimpaired trade debtors are past due as at the end of the reporting period. The trade debtors that are past due but not impaired are as follows:


2024
2023
£
£

Overdue by:


Not more than 30 days
6,393,100
4,806,712


Interest rate risk
Interest rate risk is the risk that the value of future cash flows of a financial instrument will fluctuate because of changes in market interest rates.  Interest rate risk arises primarily from the Group's loan.
At 30 June 2024, given the exposure of the group's £48,000,000 loan facility with Trusted Novus Bank, a 1% change in interest rate would have a £480,000 impact an interest payable by the Group

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Balaena LTD
 
 
Notes to the financial statements
For the year ended 30 June 2024

23.


Financial assets and liabilities

The carrying amounts presented in the consolidated statement of financial position relate to the following
categories: 


2024
2023
£
£

Financial assets - at amortised cost


Cash at bank and in hand
2,305,056
7,032,606

Debtors (excluding prepayments)
8,136,495
5,618,248

10,441,551
12,650,854

2024
2023
£
£

Financial liabilities - at amortised cost


Creditors (excluding income tax payable)
8,033,657
10,087,861

Loans payable
48,109,403
37,279,469

56,143,060
47,367,330


24.


Events after the reporting date

There were no subsequent events to the balance sheet date through to the date of the financial statements were signed.


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