## **Society of Petroleum Engineers Europe Limited**
Consolidated financial statements for the year ended 31 March 2021
Registered number: 2778741
Registered charity number: 1017482
Annual report and financial statements for the year ended 31 March 2021
## **Society of Petroleum Engineers Europe Limited**
Registered number: 2778741
Registered charity number: 1017482
## **Trustees**
Stephen Graham (Resigned 9th April 2021) James Rawes Karl Ludvig Heskestad John Joseph Healy Michelle Boyd (Appointed 9th April 2021)
## **Company Secretary**
John Joseph Healy
## **Registered Office**
Fourth Floor West America House 2 America Square London EC3N 2LU
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Trustees’ report
## **Independent Auditors**
RSM UK Audit LLP 25 Farringdon Street London, EC4A 4AB
## **Bankers**
Barclays Bank Pall Mall Corporate Group 50 Pall Mall London SW1A 1QA
## **Solicitors**
Lee Bolton Monier-Williams 1 The Sanctuary Westminster London SW1P 3JT
## **Investment Advisors**
UBS AG 1 Finsbury Avenue London EC2M 2AN
Fidelity International 4 Cannon Street London EC4M 5AB
## **Internal Auditors**
Grant Thornton UK LLP 30 Finsbury Square London EC2A 1AG
2 SOCIETY OF PETROLEUM ENGINEERS EUROPE LIMITED
## Trustees’ report (continued)
For the year ended 31 March 2021
The Trustees, who are also the Directors, present their report for the purposes of Company Law together with the consolidated financial statements and independent auditor’s report for the year ended 31 March 2021.
## **Trustees and their Interests**
The Trustees, who are also the Directors, who served during the year were as follows:
Stephen Graham (Resigned 9th April 2021) James Rawes Karl Ludvig Heskestad John Joseph Healy Michelle Boyd (Appointed 9th April 2021)
The Trustees are appointed on the recommendation of the Board of Directors of the parent undertaking and the existing Trustees and in accordance with the Companies Act 2006.
## **Principal Officer and Company Secretary**
John Joseph Healy – Human Resources Director and Company Secretary Philip Chandler – Director, European and Caspian Events, Sales & Marketing James Rawes – VP Sales, Marketing and Business Development
## **Structure, Governance and Management**
## **Governing Document**
Society of Petroleum Engineers Europe Limited, company registration number: 2778741 and charity registration number: 1017482, is a company limited by shares, which was incorporated on 6 January 1993 and commenced trading on 1 March 1993. It is a subsidiary undertaking of Society of Petroleum Engineers (SPE) Inc, tax identification number 75-2001539, a charitable company incorporated and operating in the USA. The objects of the Company are set out in its Memorandum and Articles of Association. In February 1993, the Company was registered as a charity, with the purpose of aiding the dissemination of petroleum engineering knowledge through a variety of programmes including publications, specialist meetings, scholarships and internet based services.
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Trustees’ report (continued) For the year ended 31 March 2021
## **Appointment of Trustees**
## **Trustees, Induction and Training**
New Trustees are recruited from the Society’s membership and are identified by peer review. A Trustee induction handbook is provided to new Trustees. This handbook is divided into four units, designed to (1) safeguard the values and mission of the organisation; (2) determine the strategy and structure of the organisation; (3) ensure the organisation operates in a responsible and accountable manner; and (4) ensure the effective functioning of the board. Trustees are provided with ongoing training and support as required to enable them to fulfil their duties effectively.
The Trustees of the board are not remunerated for the service that they provide to the Charity as Trustees of the board but where they fulfil other employment activities for the SPE group, they will receive remuneration from the Group. In such cases, remuneration is benchmarked against appropriate external data and reviewed by senior management, and if appropriate, the remuneration committee of SPE Inc on a regular basis.
## **Organisation**
The SPE Inc Board is comprised of the SPE International officers. The SPE Inc Board is responsible for broad financial and operational oversight for the organisation.
Each regional board, including the Board of Trustees of the Society of Petroleum Engineers Europe Limited, is comprised of Directors selected at-large from within the region. Having at-large Directors serving on those boards gives a broad-based representation that enhances the decisions of those boards. The regional subsidiary boards have general fiduciary and operational oversight responsibility for the subsidiary operations.
In summary, the responsibilities of the various governing bodies are as follows:
- The SPE International Board is responsible for policy and programme development for the Society’s worldwide activities.
- The SPE Inc Board has fiduciary and operational oversight responsibility for the entire organisation; and
- The regional subsidiary boards have fiduciary and operational oversight responsibility for the subsidiary operations.
The SPE Chief Executive Officer (CEO) together with the Chief Operations Officer (COO) manages the worldwide staff operations. Each subsidiary has an Events Director who oversees the regional operations. The Events Directors report to the Chief Operations Officer. The Chief Executive Officer and Chief Operations Officer work closely with the Society officers and each of the governing bodies in making decisions and setting direction. Generally, the SPE International Board sets strategic direction and establishes policies after consultation with staff. Additionally, staff consult with the appropriate governing body on major operational issues, but staff have responsibility for operational decisions and execution of board-approved programmes.
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Trustees’ report (continued)
For the year ended 31 March 2021
## **Strategic Report**
## **Objectives and Activities**
The objectives and principal activities of Society of Petroleum Engineers Europe Limited continue to be in line with the vision of SPE International, which is to “enable the global oil and gas E&P industry to share technical knowledge needed to meet the world’s energy needs in a safe and environmentally responsible manner”, which guides the overall mission “to collect, disseminate, and exchange technical knowledge concerning the exploration, development and production of oil and gas resources, and related technologies for the public benefit; and to provide opportunities for professionals to enhance their technical and professional competence”.
The Group achieves its objectives through a variety of programmes including publications, technical meetings, scholarships, educational programmes, training courses and web based services.
## **Public Benefit**
In planning our activities to meet our objectives our Trustees have given careful consideration to the Charity Commission’s general guidance on public benefit.
The Society believes that the key aspects of public benefit will be achieved by:
Development of the Exploration and Production (E&P) Industry workforce. SPE is the technical and professional home for those engaged in all aspects of the upstream oil and gas industry. All charitable activities focus on sharing of knowledge that keeps the E&P industry sustainable and are undertaken to further our charitable purpose to collect, disseminate, and exchange technical knowledge concerning the exploration, development and production of oil and gas resources, and related technologies for the public benefit.
By addressing technical challenges, as the largest upstream professional society, SPE provides a worldwide forum for sharing technology, knowledge and the latest solutions for overcoming the technical challenges of finding and producing more oil and natural gas. SPE also helps address critical issues of the future such as sustainability of energy supplies and carbon sequestration.
By preparing the next generation of energy professionals for careers in our industry, SPE’s programmes help by offering both professional and skill development through workshops, training courses, publications, Section activities and online mentoring.
By working with schools and universities to attract more young people to our profession with scholarships, our global energy multilingual education outreach programme, Energy4me, the SPE Ambassador programme and teacher workshops and education events aimed at students and school children.
By maintaining high professional standards by offering members continuing education options globally. SPE Petroleum Engineering Certification offers an international credential recognising petroleum engineering expertise.
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Trustees’ report (continued) For the year ended 31 March 2021
## **Distinguished Lecturer Programme**
The Distinguished Lecturer Programme, available to Sections throughout the world, is one of the most popular SPEadministered programmes. This annual programme began in 1961 with three highly regarded "Distinguished Lecturers." Currently SPE sends 30 to 35 lecturers to 191 Sections providing three lectures per season, which averages 550 presentations per programme year.
The programme is a key component of SPE's technology dissemination mission. The programme is designed to provide Sections with outstanding, expert speakers for Section meetings. It also recognises the professional contributions of those selected as Distinguished Lecturers.
Every compliant SPE Section is now entitled to up to two Distinguished Lecturer presentations each year. The programme runs from September through June. Rising travel costs and the reduced number of flights to some of the more remote locations continue to provide challenges in scheduling lecturer visits as we add new Sections.
The Distinguished Lecturer Committee selects topics and individual lecturers each year. Each lecturer chosen by the Distinguished Lecturer Committee is an authority in his or her field and a competent public speaker. Potential lecturers are selected in May and finalised in September/October for the following programme year. The cost of this programme continues to grow annually due to increases in travel expenses worldwide. This trend is compounded by our increasing number of new Sections in remote locations, which adds to the airline and travel expenses required to send our lecturers there. Recognising the importance of the programme to the industry globally this is one of the programmes which SPE Europe funds.
## **Current Position and Future Strategy**
The main objectives for the forthcoming year, as well as the Trustees’ assessment of the Group’s actual performance for this year, are set out below:
## **Technical Meetings**
The Group conducts its trading activities through its two trading subsidiaries, SPE Ventures Limited and SPE Trading Limited. These companies organise and hold workshops, training courses and conferences to further the aims of the charitable organisation.
The overall aim of the Group is to disseminate technical information through technical conferences and meetings:
In FY21, 13 events were held in Europe, Russia and the Caspian, which were attended by SPE professional members, students and non-members compared to 17 which were held in FY20. This figure includes conferences, workshops and Symposiums. FY21 was an unusual year due to the pandemic and the movement of our events from in-person to Virtual. The lower figure of produced events was unusually low as some events chose to postpone to the end of the year and even the next FY to make sure that they could be held in-person. The focus for FY21 was moving as many of our events to virtual events and mastering the new medium to make sure that the events were delivered in the most appropriate way and the SPE mission was maintained.
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Trustees’ report (continued) For the year ended 31 March 2021
In FY22, SPE Europe will continue to sustain its core objective of the dissemination of technical knowledge with 19 events scheduled across the region. During the COVID-19 situation, the main emphasis for FY22 will be making sure as many of the planned events will take place either as in-person or as virtual events.
## **Educational Programmes**
SPE continues to maintain and add information to the Society’s online resources and educational publications and services.
## OnePetro
OnePetro, a multi-society online library, contains over 160,000 technical papers from SPE as well as 18 other publishing partners. OnePetro is supported by subscriptions from academic and corporate institutions as well as individual paper sales. The technical resources available on OnePetro continue to grow with peer-reviewed journal articles as well as proceedings from conferences held worldwide being added monthly. The majority of papers are in the English language; however, there are also papers available in the Russian language.
## Energy4Me
The Energy4me (e4me) programme to educate school aged children and their teachers and parents about the industry also continues to grow with materials now available in seven languages and used globally by schools. Regional websites allow easy access to SPE’s information. The programme is particularly strong in Scotland championed by the Aberdeen section and was again featured in the Caspian event in Kazakhstan (60 teachers attended virtually)
## Training Courses
Training courses are still very much in the recovery phase and being hit again with budget constraints. Only 1 course was held and that was delivered virtually.
## Scholarships and Fellowships
5 Scholarships and Fellowships are continuing to be awarded each year which are operated by staff in the SPE London Office and award students around the world. This includes the SPE Foundation Gus Archie Scholarship (one winner receiving USD 5,000 for up to 4 years), SPE Foundation Nico van Wingen Graduate Fellowship (one winner receiving USD 5,000 for up to 4 years), Henry DeWitt Smith Memorial Fellowship (one winner single payment of USD 5,000) and the Imomoh Scholarship (four winners with a single payment of USD 2,000). In November 2019 applications also opened for a new Scholarship called the Donald G. Russell Scholarship which gives 2 recipients a one time payment of USD 4,000 and the first payment went out in the summer of 2020.
From 2016, the Scholarships programme is administered by a coordinator in the London Office representing the Young Member Programs, prior to this it was managed by the Membership Team based in the Dallas Office with additional coordination for applications from regional office staff.
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Trustees’ report (continued)
For the year ended 31 March 2021
## Student Paper Contests
In 2019 14 regional contests continued to be run annually with the winners offered an expenses paid trip to compete internationally at the SPE Annual Meeting in October 2019, with other regional winners. Up to 42 winners (three per 14 regional contests). The winners are awarded funding to cover return flights, four nights’ accommodation, event registration and VISA costs if required. Where possible these costs are paid for directly but in some situations, reimbursements are made directly to students who have already covered the costs themselves. Winners of this international competition are awarded a financial prize of USD 1,000 utilizing sponsorship gained for the program. This is processed by the Young Member Programs Team in the London Office.
Given the travel restrictions of COVID-19 the winners of the 2020 and 2021 contests will not be offered paid travel to ATCE. A nominal prize of USD 500 will be given to students in the meantime through regional programme budgets.
## Distinguished Lecture Programme
This programme, outlined above, remains a great success being extremely valued by the membership globally. SPE Europe will continue to fund this important programme.
## Awards Programme
With awards presented at a regional and international level SPE members achieve recognition amongst their peers within the industry.
## Certification Programme
Certification exams continue to be run to give a qualification for those who choose to study hard for and take this multidisciplinary open book exam. High value is placed by the industry on those who can claim achievement of this qualification.
## **Sections**
SPE members are all affiliated to a local Section. Sections are located around the world and provide an operating framework for all major society activities. Sections are semi-autonomous units and self-governing within the framework of SPE policies. Section members elect officers and directors annually. Sections are organized into regions, and each region has representation on the SPE Board of Directors.
This structure allows for members based geographically close to each other the opportunity to network with other members through meetings and events at a local level. Some Sections are larger and some more active than others. In FY21 we saw the establishment of a new Section in this region in Dakar. In FY22 new Sections will continue to be established as the membership continues to grow across the regions.
## **Student Chapters**
Student Chapters are all affiliated with an academic establishment offering a relevant petroleum engineering related course. In FY21 there were six new Student Chapters established within our Region. The universities were based in Nigeria and Kenya. In the coming year, new Chapters will continue to be established allowing SPE to continue the connection between students and our professional membership to secure the future of the industry workforce. There continues to be a strong growth in Student Chapters, however the criteria for establishing Student Chapter have been tightened.
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Trustees’ report (continued) For the year ended 31 March 2021
SPE Europe will continue to work in the year ahead to identify programmes and projects that meet our mission. The Trustees review new programmes regularly, which they can support and new projects are regularly assessed for their value.
## **Achievements and Performance**
All of SPE’s initiatives and activities are directed and organised by its members, with staff support. All such initiatives and activities are regularly reviewed and assessed by the membership, by use of membership and non-membership surveys. In addition, rigorous Key Performance Indicators set by the SPE Board of Directors regularly review and measure performance in all areas of the Society’s work, including Publications and Periodicals, Technical Meetings and Conferences, Audit and Administration, Internet-Based Services and Member Services.
## **Risk Management**
The Trustees have continued their overview during the year to examine the major strategic, business and operational risks which the charity faces. Society of Petroleum Engineers Europe and its related entities face multiple risks. These various risks are normal and customary as they relate to Society of Petroleum Engineers Europe’s business. In addition to management’s assessment of these risks, SPE’s internal audit function has been actively auditing SPE’s operations in London for over five years as well as more recently in Moscow. Throughout this timeframe, internal audit has observed, and reports that, the risks listed below are effectively managed in accordance with standard SPE and industry practices.
## **Strategic Risks (External)**
- Political unrest – political issues/changes, e.g. Russia, Middle East, Africa
- Economic environment – ‘Great Recession’, banking issues, stagnant economic growth
- Social activism – oil spill(s), public perception/image of oil industry
- Cultural factors – diversity of religion(s), migration, aging of customer base
## **Business Operating and Financial Risks (Internal)**
- Processes – support SPE’s mission; membership growth, event management
- Personnel – hiring, retention/attrition, training, growth
- Compliance – FCPA, UK Bribery Act, Charity Commission for England and Wales, Data Protection and privacy laws
- Sanctions – observing legal restrictions applicable to designated countries
- Traditional financial risks – addressed by the internal audit department; risk assessment, audit planning, systems and processes, evaluation of internal control(s) design, substantive testing of all major classes and categories of financial transactions, fraud awareness
## **External risks**
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Trustees’ report (continued) For the year ended 31 March 2021
SPE Europe’s management has remained aware of the primary external risks and has taken measures, such as cancelling, moving and rescheduling of events that might present security or safety risks to attendees, sponsors and staff. There are no examples where any known significant risk was ignored.
Without doubt the current situation with COVID19 has had a major effect on the ability to run in person events. It has not been possible to run any of the scheduled in person events to date in 2021. It is highly unlikely we will be running any in person events in the 2021 calendar year. No events have been cancelled and will be run as virtual events. Due to the nature of virtual events we will see an upturn in attendees, but due to pricing variations, we will see an overall drop in total revenues.
## **Internal risks**
SPE Europe’s management has identified and improved its primary business processes consistently over time. Personnel levels are expanded or reduced as necessary and properly trained. Management has taken steps to ensure compliance with all applicable regulations promulgated by the governing bodies such as the Charity Commission for England and Wales and has acted proactively to ensure compliance with current regulations. Management has complied with all legal sanctions imposed by all governments involved. Financial risks have been assessed and evaluated by SPE’s Internal Audit department. Management has responded positively to recommendations made by Internal Audit.
## **Financial risk management objectives and policies**
The Trustees constantly monitor the risks and uncertainties facing the Group with particular reference to the exposure on price, exchange rates, credit, liquidity and cash flow risks. Management has procedures in place whereby forward contracts may be used to hedge against foreign exchange risks and credit control procedures are tightly monitored in order to minimise liquidity and cash flow risks. They are confident that there are suitable policies in place and there are no material risks and uncertainties which have not been considered.
## **Reserves policy**
The SPE Europe board regularly reviews the financial position and performance of the charity and its trading subsidiaries and is confident that, despite the current global downturn in oil prices, the organisation has sufficient resources to continue trading as a going concern for the foreseeable future.
The primary purpose of the Reserve Fund (the Fund) for the Society of Petroleum Engineers Europe (SPEU) and the aim of the Trustees' reserves policy is to make available a source of revenues to be used by SPEU or other subsidiaries of SPE Inc to:
- ensure the continuation of normal business activities should SPEU's operating revenues be insufficient to meet expenses during a period of sustained economic distress;
- provide risk funds for the development of member service programmes as approved by the SPE Inc Board of Directors; and
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Trustees’ report (continued) For the year ended 31 March 2021
- accommodate minor annual operating surpluses and deficits that may occur from time to time.
The corpus of the SPEU Reserve Fund shall be determined by the total resources expended as reported in the SPEU annual consolidated financial statement, as approved by the SPEU Board of Directors, averaged over a two-year period. Funds in the amount of one-half (6 months) the annual total resources expended should be accumulated for use in future capital expenditures and new ventures. Any amount over the target level for the Reserve Fund balance can be used for any purpose consistent with the Society’s charitable status and objects and as approved by the SPEU Board of Directors.
SPE International has instituted an Advantage Programme which allocated 4% of its global reserve funds towards new initiatives, including Public Energy Education, Dedicated Programmes for the Young, complimentary Meeting Attendance for Academics and Additional Distinguished Lecturer Visits to Local Sections.
||**2021**|**2020**|**2019**|
|---|---|---|---|
|**Unrestricted funds**|**7,694,188**|**7,997,812**|**7,206,781**|
|**Less:**Tangible fixed assets|**(211,823)**|**(235,153)**|**(238,832)**|
|**Less:**Programme related investment (subject to|**-**|-|**(400,000)**|
|annual board approval the intention is to designate||||
|funds to the support of the Star scholarship and||||
|Distinguished lecture programme administered by the||||
|Society of Petroleum Engineers, in line with the 2017||||
|strategic plan)||||
|**Level of reserves available for purpose consistent**|**7,482,365**|**7,762,659**|**6,567,949**|
|**with the Society’s charitable status**||||
In line with our reserves policy, the target amount for the SPEU reserves fund for the financial year ending 31 March 2021 is calculated to be equivalent to £2.8m (2020: £3.8m). When compared to the target reserve fund balance of £2.8m, a surplus of £4.7m (2020: £4m) remains in the level of reserves available for charitable purposes.
## **Investment Policy and Performance**
The charity's policy is to invest in funds whose risk profile is considered to be low to moderate. The aim is to achieve over a period of several years better returns than those achieved by funds with a similar risk profile. The charity’s portfolio has performed well for the financial year ending 31 March 2021 giving the charity as gain of £1.1m.
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Trustees’ report (continued) For the year ended 31 March 2021
## **Financial Review**
Details of the results of activity of the Society of Petroleum Engineers Europe itself are set out in the Statement of Financial Activities.
During the year the Society of Petroleum Engineers Europe consolidated Group had incoming resources from charitable activities of £742k (2020: £4.5m) and investment gains of £1.1m (2020: loss of £273k), the Group has expended resources of £2.1m (2020: £3.4m). Taken together with gains on investment assets, there was a loss for the year of £304k (2020: gain of £791k). Operating income overall performance of SPE Europe consolidated group was better than budget by £200k for FY2021. Operating expenses were lower than budget by £503k while program performance came in slightly under budget by £291k. Major financial achievements during the year can be attributed to the holding of the Russian Petroleum Conference, the Drilling Conference and the Caspian Technical Conference and Exhibition, all of which took place virtually within this financial year. In addition, as the Group enters into the new fiscal year, the impact of the COVID-19 pandemic is still being felt with the anticipation of returning to in-person events in 2022.
This year the Group’s income receivable from the joint ventures amounted to £56k (2020: £2.5m). Over the two-year period Offshore Europe and Engineous (Formerly Intelligent Energy) have historically contributed over £2.7m in profits to SPE, this is forecast to slightly decrease in future periods, due to continued tough trading conditions. The partnership with Reed Exhibitions continues to be of critical importance both to SPE Europe and to SPEI’s ability to deliver membership programmes such as the Distinguished Lecturer Programme.
At the end of the financial year the Society of Petroleum Engineers Europe consolidated Group carries forward net assets of £7,695,188 (2020: £7,998,812). Listed investments plus cash and bank deposits totalled £7,901,177 (2020: £7,786,750) at the financial year end, comfortably sufficient to meet the Group’s short-term obligations to creditors.
## **Operations**
SPE Europe conducts its trading activities though its two trading subsidiaries, SPE Ventures Limited and SPE Trading Limited. During the year ended 31 March 2021, SPE Ventures Limited made an operating loss of £333,949. The company’s main operations relate to the staging of conferences, workshops and training courses for professionals who are employed in the oil and gas industry. During the year ended 31 March 2021, SPE Trading Limited made an operating loss of £36,045. The company’s main operations relate to the staging of joint venture conferences for professionals who are employed in the oil and gas industry.
The principal source of funding during the year continues to be income from conferences and workshops. In FY21, every effort has been made to keep costs as low as possible to ensure that events are not only relevant to the membership but also affordable. Local advice and recommendations continue to drive the programmes being produced in the emerging regions where events can act as a shop window on the Society and support our growth initiatives in these areas.
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Trustees’ report (continued) For the year ended 31 March 2021
Highlights of this year’s event programme are as follows:
## **Russian Petroleum Technology Conference**
RPTC was held virtually for the first time. Opening Panel session and the "New Materials: Towards the Future“ special session and 4 round tables were broadcasted from studio. All technical sessions (35) went live with simulations translation. 241 presentations during 4 days. 196 video broadcasts on SPE resources.
## **Regional Webinars in Russia**
A new initiative was launched from May 2020 to help with the sections as many people could not meet in person. 26 free webinars were held. Speakers were regional lecturers, the best speakers of SPE conferences, as well as speakers from sections. In total, 1,805 participants took part in the webinars from 26 countries and were employees of 26 companies.
## **SPE Annual Caspian Technical Conference (CTC) and SPE Symposium: Caspian Health, Safety, Security,**
## **Environment and Social Responsibility (HSSE&S)**
NC JSC Kazmunaigas hosted the Annual CTC along with a special one day HSSE&S to maintain the momentum from FY20. Both events were held Virtually with simultaneous translation in three languages. The technical papers went live 1 week before the conference dates so the delegates could review all the content before the live Q&A sessions over the event two days. The two day ‘event’ had 7 panel sessions and 36 technical presentations Q&A sessions over three streams with a registered attendance of over 500.
## **SPE/IADC International Drilling Conference and Exhibition**
The international biennial drilling event was held virtual and hosted by Equinor with the keynote from Arne Sigve Nylund, Executive Vice President Technology, Projects and Drilling. Over 5 days the event had an attendance of over 1000 people attending the special sessions from DSATS and the Diversity & Inclusion committees, the plenary panels, technical programme and virtual exhibition.
## **Plans for Future Periods**
The key elements of the Charity’s medium to long-term strategy are:
- Capability Development
- Knowledge Transfer
- Promoting Professional and Social Responsibility
- Public Education about the Petroleum Engineering profession and industry issues
SPE’s programmes all strive to meet these strategic priorities fitting with the overall mission.
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Trustees’ report (continued) For the year ended 31 March 2021
## **Statement of Trustees’ responsibilities**
The Trustees (who are also Directors of Society of Petroleum Engineers (Europe) Limited for the purposes of company law) are responsible for preparing the Trustees’ Annual Report and the financial statements in accordance with applicable law and United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards).
Company law requires the Trustees to prepare financial statements for each financial year. Under company law the Trustees 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 charitable Company and the Group and of the incoming resources and application of resources, including the income and expenditure, of the charitable Company and the Group for that period. In preparing these financial statements, the Trustees are required to:
- select suitable accounting policies and then apply them consistently;
- observe the methods and principles in the Charities SORP;
- make judgments and 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; and
- prepare the financial statements on the going concern basis unless it is inappropriate to presume that the charitable Company will continue in business.
The Trustees are responsible for keeping adequate accounting records that are sufficient to show and explain the charitable Company’s transactions, disclose with reasonable accuracy at any time the financial position of the charitable Company and enable them to ensure that the financial statements comply with the Companies Act 2006 and the provisions of the charity’s constitution. They are also responsible for safeguarding the assets of the charity and the Group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
Insofar as each of the trustees of the charity at the date of approval of this report is aware there is no relevant audit information (information needed by the charity’s auditor in connection with preparing the audit report) of which the charity’s auditor is unaware. Each trustee has taken all of the steps that he/she should have taken as a trustee in order to make himself/herself aware of any relevant audit information and to establish that the charity’s auditor is aware of that information.
The Report of the Trustees, which includes the Strategic Report and the Directors’ Report required by company law (included therein), was approved by the Board and signed on their behalf by:
James Rawes
**Trustee 31 August 2021**
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Independent auditor’s report
## **INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF SOCIETY OF PETROLEUM ENGINEERS EUROPE LIMITED**
## **Opinion**
We have audited the financial statements of Society of Petroleum Engineers Europe Limited (the ‘parent charitable company’) and its subsidiaries (the ‘group’) for the year ended 31 March 2021 which comprise the Consolidated Statement of Financial Activities, the Consolidated and Company Balance Sheets, the Consolidated Cash Flow Statement and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (United Kingdom Generally Accepted Accounting Practice).
In our opinion the financial statements:
- give a true and fair view of the state of the group’s and the parent charitable company’s affairs as at 31 March 2021 and of the group’s incoming resources and application of resources, including its income and expenditure, for the year then ended;
- have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
- have been prepared in accordance with the requirements of the Companies Act 2006.
## **Basis for opinion**
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the financial statements section of our report. We are independent of the group and parent charitable company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
## **Conclusions relating to going concern**
In auditing the financial statements, we have concluded that the trustees’ 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 parent charitable company’s ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
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Independent auditor’s report (continued)
Our responsibilities and the responsibilities of the trustees with respect to going concern are described in the relevant sections of this report.
## **Other information**
The other information comprises the information included in the Trustees’ Report other than the financial statements and our auditor’s report thereon. The trustees are responsible for the other information contained within the Trustees’ Report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.
Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
## **Opinions on other matters prescribed by the Companies Act 2006**
In our opinion, based on the work undertaken in the course of the audit:
- the information given in the Trustees’ Report, which includes the Directors’ Report and the Strategic Report prepared for the purposes of company law, 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 included within the Trustees’ Report have been prepared in accordance with applicable legal requirements.
## **Matters on which we are required to report by exception**
In the light of the knowledge and understanding of the group and the parent charitable company and their environment obtained in the course of the audit, we have not identified material misstatements in the Directors’ Report or the Strategic Report included within the Trustees’ Report.
We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion:
- adequate accounting records have not been kept by the parent charitable company, or returns adequate for our audit have not been received from branches not visited by us; or
16 SOCIETY OF PETROLEUM ENGINEERS EUROPE LIMITED
## Independent auditor’s report (continued)
- the parent charitable company financial statements are not in agreement with the accounting records and returns; or
- certain disclosures of trustees’ remuneration specified by law are not made; or
- we have not received all the information and explanations we require for our audit.
## **Responsibilities of trustees**
As explained more fully in the Statement of Trustees’ responsibilities set out on page 14, the trustees (who are also the directors of the charitable company for the purposes of company law) are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the trustees determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the trustees are responsible for assessing the group’s and parent charitable company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the trustees either intend to liquidate the group or parent charitable company or to cease operations, or have no realistic alternative but to do so.
## **Auditor’s responsibilities for the audit of the financial statements**
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
## **The extent to which the audit was considered capable of detecting irregularities, including fraud**
Irregularities are instances of non-compliance with laws and regulations. The objectives of our audit are to obtain sufficient appropriate audit evidence regarding compliance with laws and regulations that have a direct effect on the determination of material amounts and disclosures in the financial statements, to perform audit procedures to help identify instances of non-compliance with other laws and regulations that may have a material effect on the financial statements, and to respond appropriately to identified or suspected non-compliance with laws and regulations identified during the audit.
In relation to fraud, the objectives of our audit are to identify and assess the risk of material misstatement of the financial statements due to fraud, to obtain sufficient appropriate audit evidence regarding the assessed risks of material misstatement due to fraud through designing and implementing appropriate responses and to respond appropriately to fraud or suspected fraud identified during the audit.
17 SOCIETY OF PETROLEUM ENGINEERS EUROPE LIMITED
Independent auditor’s report (continued)
However, it is the primary responsibility of management, with the oversight of those charged with governance, to ensure that the entity's operations are conducted in accordance with the provisions of laws and regulations and for the prevention and detection of fraud.
In identifying and assessing risks of material misstatement in respect of irregularities, including fraud, the group audit engagement team:
- obtained an understanding of the nature of the sector, including the legal and regulatory framework that the group and parent charitable company operates in and how the group and parent charitable company are complying with the legal and regulatory framework;
- inquired of management, and those charged with governance, about their own identification and assessment of the risks of irregularities, including any known actual, suspected or alleged instances of fraud;
- discussed matters about non-compliance with laws and regulations and how fraud might occur including assessment of how and where the financial statements may be susceptible to fraud.
As a result of these procedures we consider the most significant laws and regulations that have a direct impact on the financial statements are FRS 102, Charities SORP (FRS 102), Companies Act 2006, Charities Act 2011, the parent charitable company’s governing document and Charities (Protection and Social Investment) Act 2016. We performed audit procedures to detect non-compliances which may have a material impact on the financial statements which included reviewing the financial statements including the Trustees’ Report, remaining alert to new or unusual transactions which may not be in accordance with the governing documents and evaluating advice received from internal/external advisors.
The most significant laws and regulations that have an indirect impact on the financial statements are those in relation to data protection. We performed audit procedures to inquire of management whether the group is in compliance with these law and regulations.
The group audit engagement team identified the risk of management override of controls as the area where the financial statements were most susceptible to material misstatement due to fraud. Audit procedures performed included but were not limited to testing manual journal entries and other adjustments, evaluating the business rationale in relation to significant, unusual transactions and transactions entered into outside the normal course of business and challenging judgments and estimates.
A further description of our responsibilities for the audit of the financial statements is provided on the Financial Reporting Council’s website at http://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.
18 SOCIETY OF PETROLEUM ENGINEERS EUROPE LIMITED
Independent auditor’s report (continued)
## **Use of our report**
This report is made solely to the charitable 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 charitable 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 charitable company and the charitable company’s members as a body, for our audit work, for this report, or for the opinions we have formed.
##
NICHOLAS SLADDEN (Senior Statutory Auditor)
For and on behalf of RSM UK AUDIT LLP, Statutory Auditor
Chartered Accountants 25 Farringdon Street London EC4A 4AB
Date.
19 SOCIETY OF PETROLEUM ENGINEERS EUROPE LIMITED
## Consolidated statement of financial activities
(Incorporating an income and expenditure account)
For the year ended 31 March 2021
|**Notes**
**Income from**
**Charitable activities**
**2**
**Income from joint ventures**
**7**
Investment income – Bank interest, dividends and
interest
**Total**
**Expenditure on:**
**Raising funds**
Investment management costs
Management fee
Charitable activities
**4**
**Total**
**Gains/(Loss) on investments**
**(Expenditure)/Net Income**
**Reconciliation of funds**
Total funds brought forward
**Total funds carried forward**|**2021**
**£**
**685,054**
**56,597**
**-**
**741,651**
**6,383**
**115,740**
**2,012,095**
**2,134,218**
**1,088,943**
**(303,624)**
**7,997,812**
**7,694,188**|2020
£
1,842,447
2,508,113
127,275|
|---|---|---|
|||4,477,835|
|||21,443
72,663
3,320,308|
|||3,414,414|
|||(272,390)|
|||791,031
7,206,781|
|||7,997,812|
The accompanying accounting policies and notes form an integral part of the financial statements
20 SOCIETY OF PETROLEUM ENGINEERS EUROPE LIMITED
## Consolidated balance sheet
for the year ended 31 March 2021 Registered number: 2778741
|**Notes**
**Fixed assets**
Tangible assets
**9**
Fixed asset investments
**10**
**Current assets**
Debtors
**11**
Cash at bank and in hand
**Creditors:**amounts falling due
within one year
**12**
**Net current assets**
**Net assets**
**Capital and funds**
Called-up share capital
**13**
_Unrestricted funds_
General fund
**14**
Designated fund
**14**
**Total capital and funds**|**2021**
**£**
**309,510**
**2,059,362**|**2021**
**£**
**211,823**
**5,841,817**|2020
£
**643,679**
**3,024,298**|2020
£
**235,153**
**4,762,452**|
|---|---|---|---|---|
|||**6,053,640**
**1,641,548**||**4,997,605**
**3,001,207**|
||**2,368,872**
**(727,324)**||**3,667,977**
**(666,770)**||
||||||
|||**7,695,188**||**7,998,812**|
|||**1,000**
**7,694,188**
**-**||**1,000**
**7,997,812**
**-**|
|||**7,695,188**||**7,998,812**|
The financial statements were approved by the board and authorised for issue on 31[st] August 2021.
James Rawes **Trustee** 31 August 2021
The accompanying accounting policies and notes form an integral part of the financial statements
21 SOCIETY OF PETROLEUM ENGINEERS EUROPE LIMITED
## Company balance sheet
for the year ended 31 March 2021 Registered number: 2778741
|**Notes**
**Fixed assets**
Tangible assets
**9**
Investments
**10**
**Current assets**
Debtors
**11**
Cash at bank and in hand
**Creditors:**amounts falling due within one
year
**12**
**Net current assets**
**Net assets**
**Capital and funds**
Called-up equity share capital
**13**
_Unrestricted funds_
General fund
**14**
Designated fund
**14**
**Total capital and funds**|**2021**
**£**
**211,823**
**5,841,819**
**6,053,642**
**2,183,877**
**1,439,204**
**3,623,081**
**(1,511,764)**
**2,111,317**
**8,164,959**
**1,000**
**8,163,959**
**-**
**8,164,959**|2020
£
235,153
4,762,456|
|---|---|---|
|||4,997,609|
|||1,472,565
603,640|
|||2,076,205
(1,419,957)|
|||656,248|
|||5,653,857|
|||1,000
5,652,857
-|
|||5,653,857|
No separate statement of financial activities is presented for Society of Petroleum Engineers Europe Limited as provided by Section 408 of the Companies Act 2006. The surplus for the year for Society of Petroleum Engineers Europe Limited for Companies Act 2006 purposes was £2,591,958 (2020: £1,619,056 loss).
The financial statements were approved by the board and authorised for issue on 31[st] August 2021.
James Rawes **Trustee** 31 August 2021
The accompanying accounting policies and notes form an integral part of the financial statements
22 SOCIETY OF PETROLEUM ENGINEERS EUROPE LIMITED
## Consolidated cash flow statement
for the year ended 31 March 2021 Registered number: 2778741
|**Notes**
**Cash flows from operating activities:**
**Net cash provided by operating activities**
(a)
**Cash flows from investing activities:**
Dividends
Purchase of property, plant and equipment
Proceeds from sale of investments
Purchase of investments
**Net cash used in investing activities**
**Change in cash and cash equivalents in the reporting**
**period**
**Cash and cash equivalents at the beginning of the**
**reporting period**
**Cash and cash equivalents at the end of the reporting**
**period**
**Note (a) – Reconciliation of cash flows from operating activities**
**Net income/(expenditure) for the reporting period**
**Net cash (used in)/ provided by operating activities**
**Adjustments for:**
Depreciation charges
Gains/(Losses) on investments
Dividends, interest and rent from investments
Decrease in debtors
Decrease in creditors
**Net cash provided by/(used in) by operating activities**
**Analysis of cash and cash equivalents**
Cash in hand
Notice deposits (less than 3 months)
**Cash and cash equivalents**|**2021**
**£**
**(955,752)**
**(6,383)**
**(5,996)**
**9,679**
**-**
**(2,700)**
**(958,452)**
**3,026,551**
**2,068,099**
**2021**
**£**
**(303,624)**
**29,326**
**(1,082,560)**
**6,383**
**334,169**
**60,554**
**(955,752)**
**2,059,362**
**8,737**
**2,068,099**||2020
£
1,701,961
95,853
(25,993)
6,806,931
(7,021,481)|
|---|---|---|---|
||||(144,690)|
||||1,557,271|
||||1,469,280|
||||3,026,551|
||||2020
£
791,031
29,672
1,443,783
(95,853)
199,900
(666,572)|
||||1,701,961|
||||3,024,298
2,253|
||||3,026,551|
23 Society of Petroleum Engineers Europe Limited
Notes to the financial statements (continued)
for the year ended 31 March 2021
## **1. Accounting policies**
A summary of the Group's principal accounting policies, all of which have been applied consistently throughout the year and the preceding year, is set out below.
## _a) Basis of preparation_
The financial statements have been prepared in accordance with the Charities SORP (FRS102) (second edition effective 1 January 2019) applicable to charities preparing their accounts in accordance with the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS102) and the Charities Act 2011 and UK Generally Accepted Practice.
Society of Petroleum Engineers (Europe) Limited meets the definition of a public benefit entity under FRS 102.
Assets and liabilities are initially recognised at historical cost or transaction value unless otherwise stated in the relevant accounting policy notes.
The individual entity accounts of Society of Petroleum Engineers Europe Limited have taken advantage of the disclosure exemption under FRS 102 to separately disclose categories of financial instruments and items of income, expenses, gains or losses relating to instruments as these have been presented on a Group basis in the notes to the accounts.
Income received in foreign currency is translated at the month end exchange rate to GBP. The Russian branch’s functional currency is Rubles.
## _b) Going concern_
As highlighted in the report of the Trustees, having assessed the Group’s financial position, its plans for the foreseeable future and the risks to which it is exposed, the Trustees are satisfied that it remains appropriate to prepare the financial statements on the going concern basis.
The directors have reviewed the Group and Company’s financial position, its plans for the foreseeable future and the risks to which it is exposed. The directors have taken into account the impact of COVID-19 for in-person events for FY22. Taking into account future cash flows, group support will also be available to the Company from the ultimate parent entity, SPE Inc. if the need arises. On the above basis, the directors remain satisfied that it continues to be appropriate to prepare the financial statements on the going concern basis.
Since the World Health Organization declared Covid-19 a pandemic on March 11, 2020, SPE continues to face challenges and uncertainties. The continued mutations of COVID-19 are slowing the anticipated return of support from the Company’s members and supporting companies. The extent to which COVID-19 affects the Company’s results will depend on future world-wide vaccine acceptance and reducing the severity of future COVID-19 outbreaks. The Company continues to expect challenges going forward as the industry begins to recover from the pandemic. The Company is currently developing a Virtual Program strategy that will incorporate many of the different ways the Company collects technical information and provide a platform for members to access the information. The Company
24 SOCIETY OF PETROLEUM ENGINEERS EUROPE LIMITED
Notes to the financial statements (continued)
for the year ended 31 March 2021
will continue to review planning progress for upcoming events and future events, such as offering hybrid events, which include both in-person and digital options. The Company is continually managing its operating expenditures and reserves effectively to safeguard the Company’s ability to continue as a going concern.
In May of 2021, the Company and the American Association of Petroleum Geologists (AAPG) made an announcement that the two organizations would begin exploring a potential merger. If the merger is approved by both societies, it is anticipated that the merger will occur in the summer of 2022.
## _c) Basis of consolidation_
The Group financial statements consolidate the accounts of Society of Petroleum Engineers Europe Limited and all its subsidiary undertakings up to 31 March 2021. In the Company’s accounts, investments in subsidiary undertakings are stated at cost, less amounts written off.
The Group financial statements incorporate joint ventures under the equity method of accounting, supplemented by additional disclosures for joint ventures.
The Group’s results for the year are shown on page 20.
## _d) Fund accounting_
Unrestricted funds comprise general funds where monies are available for use at the discretion of the Trustees in furtherance of the general objectives of the charity and designated funds where monies are unrestricted but they have been designated by the Trustees for a specific purpose.
## _e) Income_
## _Investment income_
Investment income relates to dividends and interest realised on investments and bank interest receivable. Investment income is accounted for on the accruals basis, other than dividend income, which is recognised on receipt.
## _Charitable activities_
Income from charitable activities relates to conference income and represents amounts receivable (exclusive of VAT) from visitors to, and exhibitors at, petroleum conferences organised by the Group, together with donations from sponsor companies and other contributions. Conference and associated income is only recognised at the point at which the event is held and is deferred for events which occur in the next accounting period.
## _f) Expenditure_
## _Raising Funds_
Fundraising trading costs relate to management fees paid during the year. These costs are accounted for on an accruals basis.
25 Society of Petroleum Engineers Europe Limited
## Notes to the financial statements (continued)
for the year ended 31 March 2021
## _Investment management fee_
These costs relate to fees charged by investment managers for managing the investment portfolio. These costs are accounted for on an accruals basis.
## _Charitable activities_
Charitable activities comprise expenditure, including staff costs, directly attributable to the activity. Where costs cannot be directly attributed they have been allocated to activities on a basis consistent with the use of resources. These costs are accounted for on the accruals basis.
## _Governance costs_
Governance costs relate to expenditure, including Board expenses, attributable to the costs of running the Board. These costs are accounted for on an accruals basis.
## _Support Costs_
Support costs are broken down into two difference categories, Support Costs-Management and Support Costs-Other.
Support costs-Management covers Overhead expenses adjusted downward for management time for Due and Member Programs and Governance Costs. Support costs – Other covers Operating expenses plus Audit, Legal and Board Expenses.
## _g) Tangible fixed assets_
Tangible fixed assets are shown at original historical cost. Depreciation is provided on a straight line basis on all tangible fixed assets at rates designed to write off costs, less estimated residual values, over their expected useful lives, as follows:
Computer equipment - 3 years Fixtures, fittings and equipment - 5 to 10 years
## _h) Investments_
Investments are stated at market value. Initial recognition of investments are at cost. It is the Group’s policy to keep valuations up to date such that when investments are sold, there is no gain or loss arising. As a result, the Statement of Financial Activities includes those unrealised gains and losses arising from the revaluation of the investment portfolio throughout the year, and realised gains and losses of investments disposed during the year. Disclosure is made in note 9 of the difference between the historical cost and the sale proceeds of the investments sold during the year.
## _i) Joint ventures_
An entity is treated as a joint venture where the Group holds a long term interest and shares control under a contractual agreement.
26 Society of Petroleum Engineers Europe Limited
for the year ended 31 March 2021
## Notes to the financial statements (continued)
In the Group accounts, interests in joint ventures are accounted for using the equity method of accounting. The consolidated statement of financial activities indicates the Group’s share of the net interest in the joint ventures. In the consolidated balance sheet notes, amounts owing from the joint venture are disclosed.
## _j) Operating lease commitments_
Rentals paid under operating leases are charged on a straight line basis over the lease term.
## _k) Foreign currency_
In the accounts of individual undertakings, transactions denominated in foreign currencies are recorded in GBP at actual exchange rates as of the date of the transaction. Monetary assets and liabilities denominated in foreign currencies at the balance sheet date are reported at the rates of exchange prevailing at that date. Any gain or loss arising from a change in exchange rates subsequent to the date of the transaction is included as an exchange gain or loss in the statement of financial activities.
The results of overseas operations are translated at the average rate of exchange during the period. Balance sheet accounts are translated at the rate ruling at the balance sheet date.
## _l) Financial instruments_
The Group has financial assets and financial liabilities of a kind that qualify as basic financial instruments. Basic financial instruments are initially recognised at transaction value and subsequently measured at amortised cost using the effective interest method. Financial assets held at amortised cost comprise cash and bank and in hand, together with trade and other debtors. Financial liabilities held at amortised cost comprise bank loans and overdrafts, trade, other creditors and accruals.
Investments, including bonds held as part of an investment portfolio are held at fair value at the Balance Sheet date, with gains and losses being recognised within income and expenditure. Investments in subsidiary undertakings are held at cost less impairment.
## _m) Pension costs_
The Group provides pensions to all employees through a funded defined contribution scheme. The amount expended in the statement of financial activities is the contributions payable in the year.
## _n) Company information_
The charity is a private limited company, registered by shares (registered number 2778741), which is incorporated and domiciled in the England and Wales. The address of the registered office is Fourth Floor West, America House, 2 America Square, London EC3N 2LU.
## _o) Critical accounting judgements and key sources of estimation uncertainty_
In the application of the Group’s accounting policies, which are described in note 1, Trustees are required to make judgements, estimates and assumptions about the carrying values of assets and liabilities that are not readily
27 Society of Petroleum Engineers Europe Limited
Notes to the financial statements (continued)
for the year ended 31 March 2021
apparent from other sources. The estimates and underlying assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an on-going basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects the current and future periods.
In the view of the Trustees, no assumptions concerning the future or estimation uncertainty affecting assets and liabilities at the balance sheet date are likely to result in a material adjustment to their carrying amounts in the next financial year.
## **2. Income from charitable activities**
|Conference income
The geographic split of the turnover is as follows:
**Geographic Region**
UK
Europe
Russia and Caspian
Africa||**Total**
**2021**
£
**685,054**
**2021**
**£**
**260,049**
**94,590**
**329,747**
**668**
**685,054**||Total
2020
£
1,842,447
2020
£
520,511
320,599
999,608
1.729|
|---|---|---|---|---|
||||||
|||||1,842,447|
28 Society of Petroleum Engineers Europe Limited
Notes to the financial statements (continued)
for the year ended 31 March 2021
## **3. Net income/expenditure for the year**
Net income/expenditure for the year are stated after charging:
|Staff costs (see note 5)
Depreciation
Rent
Auditors’ remuneration
Non-audit services (tax compliance)|**2021**
**£**
**862,768**
**29,326**
**193,794**
**51,000**
**6,750**
**1,143,638**|2020
£
1,168,809
29,672
196,044
41,538
6,923|
|---|---|---|
|||1,442,986|
## **4. Expenditure in respect of charitable activities**
|**Activity**
Conferences
Members’
Programmes
Activity
Conferences
Members’
Programmes|**Activities**
**undertaken**
**directly**
**265,443**
**-**
**265,443**
Activities
undertaken
directly
759,962
400,000
1,159,962|**Support costs**
**management**
**813,659**
**136,850**
**950,509**
Support costs
management
871,594
449,922
1,321,516|**Support**
**costs**
**other**
**796,143**
**-**
**796,143**
Support
costs
other
838,830
-
838,830|**Total**
**2021**
**1,875,245**
**136,850**|
|---|---|---|---|---|
|||||**2,012,095**|
|||||Total
2020
2,470,386
849,922|
|||||3,320,308|
Support costs are analysed as follows:
|Support costs:
Staff costs
Other operating expenses
Governance costs
Administration costs|**2021**
**£**
**883,220**
**17,017**
**157,540**
**688,875**
**1,746,652**|2020
£
**1,199,949**
**72,657**
**157,891**
**729,849**|
|---|---|---|
|||**2,160,346**|
29 Society of Petroleum Engineers Europe Limited
## Notes to the financial statements (continued)
for the year ended 31 March 2021
## **5. Governance costs**
Governance costs are stated in respect of:
|External audit and taxation services
Other financial services and consultancy
Board expenses
Management salaries
**6. Staff costs**
Wages and salaries
Social security costs
Other pension costs (note 14c)||**2021**
**£**
**57,750**
**49,518**
**-**
**50,273**
**157,541**
**2021**
**£**
**714,663**
**104,328**
**43,777**
**862,768**||2020
£
48,462
60,023
497
48,909
157,891
2020
£
**941,044**
**163,005**
**64,760**
**1,168,809**|
|---|---|---|---|---|
||||||
Staff costs exclude the salaries for 7 individuals totalling £536,837 (2020: £489,702) who are employed by the Group but work primarily for Society of Petroleum Engineers Inc and whose time has been re-charged to that entity.
The average number of employees, including Directors (who are Trustees), employed by the Group during the year was:
|Members programme
Conference organisation
Support
Sales
Management and administration|**2021**
**Number**
**5**
**12**
**4**
**4**
**6**
**31**|**2020**
**Number**
**5**
**12**
**4**
**4**
**6**|
|---|---|---|
|||**31**|
The number of employees earning over £60,000 during the year, excluding pension contributions, was as follows _:_
||||**2021**|2020|
|---|---|---|---|---|
||||**Number**|Number|
|Income band £100,000|- £|109,999|**-**|1|
|Income band £80,000|- £|89,999|**1**|-|
|Income band £60,000|- £|69,999|**1**|1|
30 Society of Petroleum Engineers Europe Limited
Notes to the financial statements (continued)
for the year ended 31 March 2021
Pension contributions to money purchasing pension scheme in respect of the above employees during the year were £7,468 (2020: £8,698)
In addition to the Trustees, Key management personnel of the charity comprise the Human Resources Director, the Events Director for Europe, Caspian and Sub-Saharan Africa, the Senior Manager for Sales and Business Development, the VP Sales, Marketing and Business Development and the Senior Finance Manager. The costs for the Human Resources Director and the VP Sales, Marketing and Business Development are re-charged to Society of Petroleum Inc.
The total employee benefits of the key management personnel of the charity were £536,243 (2020: £523,210). _Trustees' remuneration_
The following Trustees received the following remuneration as employees of SPE Europe and/or the parent entity SPE Inc during the year:
|James Rawes
John Joseph Healy
Total|Basic
Benefits
Total
142,729
9,085
151,814
124,548
9,273
133,821|
|---|---|
||267,277
18,358
285,635|
None of the Trustees were remunerated for their services as Trustees. The Trustees expenses for the year amounted to £Nil (2019: £Nil).
## **7. Income from joint venture**
The geographical analysis of the share of the Group’s profits from the joint ventures is as follows:
|United Kingdom|**2021**
2020
**56,597**
2,508,113|
|---|---|
||**56,597**
2,508,113|
## **8. Taxation**
Society of Petroleum Engineers Europe Limited is a registered charity and is not subject to UK corporation tax on profits from its charitable activities. The subsidiaries are not charities and are therefore subject to corporation tax on their profits.
31 Society of Petroleum Engineers Europe Limited
## Notes to the financial statements (continued)
for the year ended 31 March 2021
## **9. Tangible fixed assets**
|**9. Tangible fixed assets**|||||||
|---|---|---|---|---|---|---|
|||**Computer**||**Fixtures, fittings**|||
|||**equipment**||**and equipment**||**Total**|
|**Group and Company**|||||||
|||£||£||£|
|**Cost**|||||||
|At beginning of year||209,970||503,902||713,872|
|Additions||5,996||-||5,996|
|At end of year||**215,966**||**503,902**||**719,868**|
|**Depreciation**|||||||
|At beginning of year||171,656||307,063||478,719|
|Charge for the year||9,688||19,638||29,326|
|At end of year||**181,344**||**326,701**||**508,045**|
|**Net book value**|||||||
|At 1 April 2020||**38,313**||196,839||235,153|
|**At 31 March 2021**||**34,622**||**177,201**||**211,823**|
|All of the Company’s fixed assets are held for use on a continuing basis for the organisation of conferences.|||||||
|**10. Fixed asset investments**|||||||
||**Group**||||**Company**||
||**2021**||2020||**2021**|2020|
||**£**||£||**£**|£|
|Listed investments|**5,833,078**|4,760,199||**5,833,078**||4,760,199|
|Cash awaiting|||||||
|investment|**8,739**||2,253|**8,737**||2,253|
|Subsidiary|||||||
|undertakings|**-**||-||**4**|4|
||**5,841,817**|4,762,452||**5,841,819**||4,762,456|
32 Society of Petroleum Engineers Europe Limited
Notes to the financial statements (continued)
for the year ended 31 March 2021
The Group has a 50% interest in two joint ventures E&P Events LLP, registered in England and Wales, and Offshore Europe Partnership. The partnerships hold biennial conferences for petroleum engineers. Audited accounts are prepared for the Offshore Europe Partnership every two years. The last Offshore Europe Partnership conference was held during the year ending 31 December 2019, and audited accounts are available for the 24 months ended 31 December 2019. The E&P Events LLP audited accounts are available for the year ended 31 December 2019.
The Group is entitled to draw the whole of its share of the profit of both Offshore Europe Partnership and E&P Events LLP. The Group has received, as part of its entitlement under the Offshore Europe Partnership agreement, an amount of £25,316 (2020; £2,508,113), and under the E&P Events LLP agreement, an amount of £31,281 (2020: £Nil) in the year ending 31 March 2021.
|The Group’s aggregate interests in the joint ventures are as follows;
Turnover
Tangible fixed assets
Current assets
Liabilities due within one year
Net assets|**2021**
2020
£
£
**-**
4,748,299|
|---|---|
||**190,001**
2,999,046
**(127,439)**
(2,245,567)|
||**62,652**
753,479|
Included in incoming resources from charitable activities, in addition to conference programming income receivable, there are cost reimbursements, sponsorship and management fees from the two joint ventures amounting to £Nil (2020 £144,004).
## _Principal Group investments_
The Company has two wholly-owned subsidiary undertakings at the year end: SPE Trading Limited and SPE Ventures Limited, both of which are registered in England and Wales (see note 15).
33 Society of Petroleum Engineers Europe Limited
## Notes to the financial statements (continued)
for the year ended 31 March 2021
## **10. Fixed asset investments (continued)**
_Listed investments_
|Market value as at beginning of year
Additions
Disposal proceeds
Net investment gain in year
Market value at end of year
Historical cost at end of year
Unrealised gain at end of year
Realised gain on historical cost basis|**2021**
**£**
**4,760,199**
**-**
**(16,064)**
**1,088,943**
**5,833,078**
**5,285,764**
**547,315**
**(1,615)**|2020
£
5,989,433
7,021,485
(7,978,329)
(272,390)|
|---|---|---|
|||4,760,199|
|||5,293,863|
|||(533,664)|
|||1,181,372|
Listed investments comprise investments listed on the UK Stock Exchange.
## **11. Debtors: Amounts falling due within one year**
|Trade debtors
Amount owed by related
entities
Amounts owed by
subsidiary undertakings
Other debtors
Social security and
other taxes
Prepayments and
accrued income|Group
**2021**
2020
**£**
£
**72,945**
384,026
**92,867**
74,849
**932**
15,954
**1,242**
4,283
**-**
6,910
**141,524**
157,657
**309,510**
643,679|**Company**
**2021**
2020
**£**
£
**24,769**
11,577
**92,867**
35,461
**1,933,574**
1,312,990
**11,824**
4,283
**-**
10,582
**120,843**
97,672
**2,183,877**
1,472,565|**Company**
**2021**
2020
**£**
£
**24,769**
11,577
**92,867**
35,461
**1,933,574**
1,312,990
**11,824**
4,283
**-**
10,582
**120,843**
97,672
**2,183,877**
1,472,565|
|---|---|---|---|
||||1,472,565|
34 Society of Petroleum Engineers Europe Limited
## Notes to the financial Statements (continued)
for the year ended 31 March 2021
## **12. Creditors: amounts falling due within one year**
|Trade Creditors
Amounts owed to related group
entities
Amount owed to subsidiary
undertakings
Taxation and social security
Other Creditors
Accruals and deferred income|**Group**
**2021**
2020
**£**
£
**192,802**
97,781
**293,186**
186,554
**-**
-
**43,274**
-
**898**
-
**197,164**
382,435
**727,324**
666,770|**Company**
**2021**
2020
**£**
£
**61,462**
73,715
**237,831**
186,488
**1,021,714**
948,080
**39,973**
-
**-**
-
**150,784**
211,674
**1,511,764**
1,419,957|**Company**
**2021**
2020
**£**
£
**61,462**
73,715
**237,831**
186,488
**1,021,714**
948,080
**39,973**
-
**-**
-
**150,784**
211,674
**1,511,764**
1,419,957|
|---|---|---|---|
||||1,419,957|
## **Deferred Income**
Income deferred in the current year relates to advanced conference registrations, exhibition and sponsorship income for conferences taking place after 31 March 2021.
|Balance as at 1 April 2020
Amount released to incoming resources
Amount deferred in year
Balance as at 31 March 2021|**Group**
**Company**
**£**
**£**
**118,139**
**-**
**(118,139)**
**-**
**20,565**
**-**|
|---|---|
||**20,565**
**-**|
35 SOCIETY OF PETROLEUM ENGINEERS EUROPE LIMITED
## Notes to the financial Statements (continued)
for the year ended 31 March 2021
## **13. Called-up equity share capital**
|**13. Called-up equity share capital**|||
|---|---|---|
||**2021**|2020|
|Group and Company|**£**|£|
|_Allotted, called-up and fully-paid_|||
|1,000 ordinary shares of £1 each|**1,000**|1,000|
## **14. Reconciliation of movements in capital and funds**
|**2021**
**Group**
Called-up equity share capital
Unrestricted general funds
Total capital and funds
**Company**
Called-up equity share capital
Unrestricted general funds
Total capital and funds|Balance 1
April 2020
**Income**
**Net gains on**
**investment**
**Expenditure**
**Balance 31**
**March 2021**
£
**£**
**£**
**£**
**£**
1,000
**-**
-
-
**1,000**
7,997,812
741,651
1,088,943
(2,134,218)
**7,694,188**|
|---|---|
||7,998,812
741,651
1,088,943
(2,134,218)
**7,695,188**|
||£
£
£
£
**£**
1,000
**-**
-
-
**1,000**
5,652,857
3,055,084
1,088,943
(1,632,925)
**8,163,959**|
||5,653,857
3,055,084
1,088,943
(1,632,925)
**8,164,959**|
|**2020**
**Group**
Called-up equity share
capital
Unrestricted general funds
SPE Members Program
fund
Total capital and funds
**Company**
Called-up equity share
capital
Unrestricted general funds
Members Program fund
Total capital and funds|**Balance 1**
**April 2019**
**Income**
**Net gains/**
**(losses) on**
**investment**
**Expenditure**
**Balance 31**
**March 2020**
**£**
**£**
**£**
**£**
**£**
1,000
**-**
-
-
**1,000**
6,806,781
4,477,835
(272,390)
(3,014,414)
**7,997,812**
400,000
-
-
(400,000)
**-**|
|---|---|
||7,207,781
4,477,835
(272,390)
(3,414,414)
**7,998,812**|
||£
£
£
£
**£**
1,000
**-**
-
-
**1,000**
6,871,912
1,070,960
(272,390)
(2,017,625)
**5,652,857**
400,000
-
-
(400,000)
**-**|
||7,272,912
1,070,960
(272,390)
(2,417,625)
**5,653,857**|
36 SOCIETY OF PETROLEUM ENGINEERS EUROPE LIMITED
## Notes to the financial Statements (continued)
for the year ended 31 March 2021
The Members Programme fund comprises funds designated by the Trustees to support the Members Programme, both of which are administered by the Company in line with the funding programme set out in the 2017 strategic plan. The level of funding made available to these programmes will be reviewed annually by the Board.
Transfers represent the intercompany funds transfer between SPE Europe Limited and its subsidiaries, SPE Trading Limited and SPE Ventures Limited.
## **15. Guarantees and financial commitments**
## _a. Capital commitments_
At the end of the year, there were no capital commitments (2020: £Nil).
## _b. Lease commitments_
At 31 March 2021 the Group and Company had aggregate minimum lease payment commitments under noncancellable operating leases as follows:
|Operating leases for land and
buildings, which expire:
In less than one year
one to 5 years|**Group**
**2021**
**£**
**182,650**
**369,040**|2020
£
180,430
527,200|**Company**
**2021**
2020
**£**
£
**158,160**
158,160
**369,040**
527,200|
|---|---|---|---|
## _c. Pension arrangements_
The Group provides defined contribution pension schemes for all employees.
The amount charged to the statement of financial activities is the contributions payable in the year and amounted to £43,777 (2020: £64,760).
## _d. Contingent liabilities_
As a partner in Offshore Europe Partnership and E & P Events LLP, SPE Trading Limited is jointly and severally liable, without limit, for the debts of the partnerships. In the event that either partnership fails to pay any debt for which it has primary liability or is unable to pay amounts due, creditors may look directly to SPE Trading Limited for settlement of their debts or obligations.
37 SOCIETY OF PETROLEUM ENGINEERS EUROPE LIMITED
## Notes to the financial Statements (continued)
for the year ended 31 March 2021
## **16. Subsidiary undertakings**
|Turnover
Income from joint venture
Costs
Net Profit/(loss)
Interest receivable
Profit/(loss) before tax
Tax charge
Profit/(loss) after tax
Retained earnings at start of year
Gift Aid payment
Retained earnings at end of year
Net assets/(liabilities)|**SPE Ventures**
**Limited**
**£**
684,121
-
(1,018,070)
(333,949)
-
(333,949)
-
(333,949)
(135,821)
-
(469,770)
(469,770)|**SPE Trading**
**Limited**
**£**
-
56,597
(92,642)|
|---|---|---|
|||(36,045)
-|
|||(36,045)
-|
|||(36,045)|
|||2,480,777|
|||(2,444,732)|
|||-|
|||-|
The Company owns the whole of the issued ordinary share capital of SPE Ventures Limited and SPE Trading Limited, both companies being registered in England (company no. 02538982 and 02365974) and sharing the same registered office as SPE Europe (see note 1).
The Group conducts its trading activities through its two trading subsidiaries, SPE Ventures Limited and SPE Trading Limited. These companies organise and hold workshops, training courses and conferences to further the aims of the charitable organisation.
The value of the parent Company’s investment in each of its subsidiary companies is £2. SPE Ventures Limited and SPE Trading Limited are registered at the Company's offices at 4[th] Floor West, America House, 2 America Square, London EC3N 2LU.
The 2017 Charity SORP Triennial Review (effective 1 January 2017) amended the accounting requirements for gift aid to stipulate that a gift aid payment shall not be accrued unless a legal obligation to make the payment exists at the reporting date.
38 SOCIETY OF PETROLEUM ENGINEERS EUROPE LIMITED
Notes to the financial Statements (continued) for the year ended 31 March 2021
## **17. Ultimate parent undertaking**
The ultimate parent company and controlling related party is Society of Petroleum Engineers (SPE) Inc, registered at 222 Palisades Creek Drive, Richardson, Texas 75080 USA.
At year end, the Group had the following related party transactions and year end balances with Group entities:
|**2021**
SPE International
SPE Canada
SPE Foundation
SPE Middle East
SPE Asia Pacific
SPE sections and
chapters
**2020**
SPE International
SPE Canada
SPE Foundation
SPE Middle East
SPE Asia Pacific
SPE sections and
chapters|**Transactions**
**charged to**
**related parties**
**in the year**
**Transactions**
**charged from**
**related parties**
**in the year**
**Receivable**
**from related**
**party at year**
**end**
**Payable to related**
**party at year end**
**£**
**£**
**£**
**£**
-
(97,414)
92,867
(223,954)
-
-
-
-
-
-
-
-
932
(23,750)
932
(7,190)
-
-
-
-
-
-
-
(62,042)|
|---|---|
||932
(121,164)
93,799
(293,186)|
||195,080
(72,663)
74.849
(125,137)
-
-
-
-
-
-
-
-
13,996
-
15,954
-
-
-
-
-
-
-
-
(61,417)|
||209,076
(72,663)
90,803
(186,554)|
## **18. Financial instruments**
The charity held assets at fair value through income and expenditure of £5,833,078 (2020: £4,760,199). Movements in the year through the statement of financial activities comprised income of £Nil (2020: £127,275) and gain of £1,088,943 (2020: loss of £272,390).
39 SOCIETY OF PETROLEUM ENGINEERS EUROPE LIMITED