ACCOUNTS - Final Accounts preparation
ACCOUNTS - Final Accounts preparation
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Registered number:
FOR THE PERIOD ENDED 31 MAY 2019
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G2 ENERGY LIMITED
COMPANY INFORMATION
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G2 ENERGY LIMITED
CONTENTS
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G2 ENERGY LIMITED
STRATEGIC REPORT
FOR THE PERIOD ENDED 31 MAY 2019
The directors have considered all information available and have prepared the accounts on a Going Concern basis. During December 2018 the Company agreed a capital raising which brought significant external investment from associates of Blandford Capital LLP, who have provided support to the Company to allow it to take advantage of opportunities in the sector.
The period ended 31st May 2019 was a transitional one for the Company as it started to put in the foundations to deliver on the significant changes made throughout the Company. As a result of the restructuring of the business in December 2018, various changes were made at board level, with the appointment of 4 new directors. The Company continues to see massive growth in the sector, especially in Battery Storage, an area we have been highly prevalent in since building out the first two BESS sites in England in 2017-18. Since the beginning of 2020, g2 have quoted in excess of £250m of works of all types, compared with £165m for the same period in 2019. This further enforces the directors view that there is significant traction in the market. The Company continue to diversify within the sector and are currently building out Battery Storage, STOR, IDNO, Bus Depots, Private Network, ICP works and Solar projects. Principal risks and uncertainties The directors of the Company regularly review the Principal risks and uncertainties underlying the trading performance of the Company and the following have been identified and measures taken to mitigate these risks; Covid-19 Covid-19 has had an impact on the Company, as it has on all Companies across the globe. The Company utilised the Coronavirus Job Retention Scheme and furloughed several staff between March and June 2020 because of the UK wide lockdown caused by the pandemic. As of July 2020 there are no staff on furlough and activity has returned to pre-lockdown levels in all departments. The Company acts as Principal Contractor on several sites and ensured all construction sites were closed safely and securely for a period of time. The Company has begun to reopen these over the course of May and June in line with all Government guidance such as Social Distancing and regular cleaning to ensure the safety of everyone on site. Several internal and external audits have been carried out since the reopening the sites and these have all been signed off as compliant. The Company has remained profitable throughout lockdown period and have taken appropriate measures to ensure there is sufficient working capital within the Company to continue trading as normally as possible in these uncertain times. Throughout 2019 the Company had worked on revolutionising processes to make remote working more productive to allow us to be more agile and flexible. This approach has assisted during the lockdown period as productivity has been largely unaffected. The Company continues to monitor developments in respect of the Coronavirus pandemic and have put in place several measures to ensure the safety and wellbeing of all stakeholders. Brexit The Company continues to monitor ongoing Brexit negotiations but are content that there will be minimal impact on currently awarded contracts as all supplies required have been ordered under supply contracts. For all future awards fixed prices are obtained prior to entering into any contract, transferring the risk onto the supplier.
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G2 ENERGY LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE PERIOD ENDED 31 MAY 2019
The Company carries out Pre-Qualification Questionnaires (PQQ) and regular credit checks on key suppliers to mitigate the risk of delay in successful completion of projects.
Supply of goods The Company deals with a number of suppliers of critical supply chain products, either based overseas or UK based companies with overseas manufacturing arms. Supply contracts are entered into prior to raising any purchase orders for the supply of key equipment, which will transfer some of the risk of late delivery from the Company to the Supplier. We work closely with our supply chain partners and ask for weekly reports of progress to ensure progress is as expected and where appropriate capture any details of delays. To date, the Company has only experienced minor delays as a result of Covid-19. Supply of services The Company has an approved list of contractors who carry out works. Constant dialogue is held with these contractors to ensure they can attend site, can access accommodation, and follow all health and safety protocols. Health, Safety, Environmental & Quality The Company is ISO 9001 (Quality Management) ,14001 (Environmental Management System) and 18001 (Health & Safety Management) accredited and is in the accreditation process to transition to ISO 45001. The directors consider Health, Safety, Environment & Quality a key risk given the nature of the works undertaken, the risks are mitigated by: • The Company operates a strict risk management procedure, which is documented and updated regularly. • Regular site visits are undertaken by the dedicated Health and Safety Officer. • Method Statements and Risk Assessments (RAMS) are provided prior to commencement of any works. • Robust training, policies, procedures and monitoring. Toolbox talks are delivered throughout a project lifecycle. • All subcontractors are approved following an extensive Pre-Qualification Questionnaire process. • The Company is registered with several external accreditations and is subject to regular external auditing.
Cash flow for the Company is managed by the board of directors. Detailed cash flow forecasts are prepared by the Company on a regular basis to ensure sufficient working capital at all times.
Technological risk There is a risk of IT failure which during the current circumstances would make remote working very difficult. The Company has mitigated this risk by appointing a new ISO 27001 accredited IT Service provider to maintain the systems and have recently upgraded hardware and software to strengthen the infrastructure. We demonstrated our remote working capabilities were more than sufficient, with our speed of reaction to the pandemic lockdown.
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G2 ENERGY LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE PERIOD ENDED 31 MAY 2019
The Company made an operating loss of £1.37m an improvement of £3.51m on the operating loss in the previous period of £4.9m in the financial period ended 30th September 2018, with an increase in net current assets to just over £904k (2018 - £110k deficit). The directors took decisive and appropriate action and are encouraged that the Company has restructured itself successfully, structuring itself such that it is well positioned to capitalise on the renewed buoyancy in the renewable energy sector.
2019 2018 Gross Profit Margin 8.62% 21.65% Turnover £3.09m £20.9m Net current assets £0.90m £(0.11)m Current ratio 1.313 0.970 There was a reduction in the gross profit margin in the period from 21.65% to 8.62%. In part this was due to the Companies’ Gross Profit Margin in the Period to May 2019 being weaker than expected because of under-utilisation of staff. In addition, due to a change of categorisation from the previous period, project staff are now allocated as a direct cost of sale and had been included as an overhead in the previous periods comparatives. The Company feel this better reflects the working margin. Turnover has decreased in the period from £20.9m (18 month period) to £3.09m (8 month period) as a result of a significant drop in sector activity, the Company has since seen a significant increase in work so are happy that this was a short-term issue. The Company had verbally secured a number of large-scale projects through Q3 2018, which were delayed due to a change in govenrment policy, we are now seeing the return of these projects with a number of them live. Following the Company's results and activity for the period, the Company's net current assets have increased. As a result the Company's abilty to secure long term financing, the current ratio has increased. The Company have considered their Key Performance indicators in a changing work environment and consider the above indicators are more reflective of performance than those used previously.
This report was approved by the board and signed on its behalf.
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G2 ENERGY LIMITED
DIRECTORS' REPORT
FOR THE PERIOD ENDED 31 MAY 2019
The directors present their report and the financial statements for the period ended 31 May 2019.
The directors are responsible for preparing the Strategic Report, the Directors' Report and the financial statements in accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with 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 of the profit or loss of the Company for that period.
In preparing these financial statements, the directors are required to:
∙select suitable accounting policies for the Company's financial statements and then apply them consistently;
∙make judgments and accounting estimates that are reasonable and prudent;
∙prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Company and to enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
The loss for the period, after taxation, amounted to £1,205,111 (2018 - loss £4,057,736).
Dividends of £Nil (2018 - £247,500) were paid during the period.
The directors who served during the period were:
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G2 ENERGY LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE PERIOD ENDED 31 MAY 2019
The directors are excited and confident about the future of the Company with a strong order book of contracted works, with in excess of 400MW due to be built out in 2020 and number of opportunities within the energy sector. The return of solar and boom in battery storage are the exact areas that G2 trade in and therefore it is expected with our current market leading position, with a strong senior and mid-management team, that we are well positioned to take full advantage of these additional opportunities as they arise.
Each of the persons who are directors at the time when this Directors' Report is approved has confirmed that:
There have been no significant events affecting the Company since the year end, other than the impact of COVID-19.
The auditor, MHA MacIntyre Hudson, will be proposed for reappointment in accordance with section 485 of the Companies Act 2006.
This report was approved by the board and signed on its behalf.
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G2 ENERGY LIMITED
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF G2 ENERGY LIMITED
We have audited the financial statements of G2 Energy Limited (the 'Company') for the period ended 31 May 2019, which comprise the Statement of Income and Retained Earnings, the Balance Sheet, the Statement of Cash Flows and the related notes, 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 the financial statements:
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the Company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the United Kingdom, including the Financial Reporting Council'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.
We have nothing to report in respect of the following matters in relation to which the ISAs (UK) require us to report to you where:
∙the directors' use of the going concern basis of accounting in the preparation of the financial statements is not appropriate; or
∙the directors have not disclosed in the financial statements any identified material uncertainties that may cast significant doubt about the Company's ability to continue to adopt the going concern basis of accounting for a period of at least twelve months from the date when the financial statements are authorised for issue.
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G2 ENERGY LIMITED
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF G2 ENERGY LIMITED (CONTINUED)
The directors are responsible for the other information. The other information comprises the information included in the Annual Report, other than the financial statements and our Auditor's Report thereon. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, 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.
In our opinion, based on the work undertaken in the course of the audit:
∙the information given in the Strategic Report and the Directors' Report for the financial period for which the financial statements are prepared is consistent with the financial statements; and
∙the Strategic Report and the Directors' Report have been prepared in accordance with applicable legal requirements.
In the light of the knowledge and understanding of the Company and its environment obtained in the course of the audit, we have not identified material misstatements in the Strategic Report or the Directors' Report.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:
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G2 ENERGY LIMITED
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF G2 ENERGY LIMITED (CONTINUED)
As explained more fully in the Directors' Responsibilities Statement on page 4, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the directors are responsible for assessing the Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the Company or to cease operations, or have no realistic alternative but to do so.
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an Auditor's Report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
A further description of our responsibilities 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.
This report is made solely to the Company's members 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 for our audit work, for this report, or for the opinions we have formed.
for and on behalf of
Chartered Accountants
Statutory Auditors
Peterbridge House
The Lakes
NN4 7HB
Date:
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G2 ENERGY LIMITED
STATEMENT OF INCOME AND RETAINED EARNINGS
FOR THE PERIOD ENDED 31 MAY 2019
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G2 ENERGY LIMITED
REGISTERED NUMBER: 05840192
BALANCE SHEET
AS AT 31 MAY 2019
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G2 ENERGY LIMITED
REGISTERED NUMBER: 05840192
BALANCE SHEET (CONTINUED)
AS AT 31 MAY 2019
The financial statements were approved and authorised for issue by the board and were signed on its behalf by:
The notes on pages 15 to 32 form part of these financial statements.
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G2 ENERGY LIMITED
STATEMENT OF CASH FLOWS
FOR THE PERIOD ENDED 31 MAY 2019
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G2 ENERGY LIMITED
STATEMENT OF CASH FLOWS (CONTINUED)
FOR THE PERIOD ENDED 31 MAY 2019
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G2 ENERGY LIMITED
ANALYSIS OF NET DEBT
FOR THE PERIOD ENDED 31 MAY 2019
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G2 ENERGY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 MAY 2019
G2 Energy Limited is a private company, limited by shares, incorporated in England and Wales, registered number 05840192. The registered office address is Olney Office Park, 1 Osier Way, Olney, Buckinghamshire, MK46 5FP.
2.Accounting policies
The accounting period was shortened to an 8 month period to 31 May 2019 to bring the accounts more into line with the commercial cycle of the entity, therefore the comparative figures will not be entirely comparable.
The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UK and the Republic of Ireland and the Companies Act 2006.
The Company has elected to apply all amendments to FRS 102, as set out in the triennial review published in December 2017, prior to the mandatory adoption for accounting periods beginning on or after 1 January 2019.
The preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires management to exercise judgment in applying the Company's accounting policies (see note 3).
The following principal accounting policies have been applied:
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G2 ENERGY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 MAY 2019
2.Accounting policies (continued)
During the current period the Company has incurred significant losses as a result of a downturn in activity across the sector.
During the period a new group structure has been set up and a new holding company has obtained additional growth funding from the issues of shares and receipt of new loans from investors, which have been passed down to the Company. Covid-19 has had an impact on the Company, as it has on all Companies across the globe. The Company utilised the Coronavirus Job Retention Scheme and furloughed several staff between March and June 2020 because of the UK wide lockdown caused by the pandemic. As of July 2020 there are no staff on furlough and activity has returned to pre-lockdown levels in all departments. The Company acts as Principal Contractor on several sites and ensured all construction sites were closed safely and securely for a period of time. The Company has begun to reopen these over the course of May and June in line with all Government guidance such as Social Distancing and regular cleaning to ensure the safety of everyone on site. Several internal and external audits have been carried out since the reopening the sites and these have all been signed off as compliant. The Company has remained profitable throughout lockdown period and have taken appropriate measures to ensure there is sufficient working capital within the Company to continue trading as normally as possible in these uncertain times. Throughout 2019 the Company had worked on revolutionising processes to make remote working more productive to allow us to be more agile and flexible. This approach has assisted during the lockdown period as productivity has been largely unaffected. The Company continues to monitor developments in respect of the Coronavirus pandemic and have put in place several measures to ensure the safety and wellbeing of all stakeholders. Based on these factors the accounts have been prepared by the directors on a Going Concern basis.
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G2 ENERGY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 MAY 2019
2.Accounting policies (continued)
Functional and presentation currency
The Company's functional and presentational currency is GBP.
Transactions and balances
Foreign currency transactions are translated into the functional currency using the spot exchange rates at the dates of the transactions.
At each period end foreign currency monetary items are translated using the closing rate. Non-monetary items measured at historical cost are translated using the exchange rate at the date of the transaction and non-monetary items measured at fair value are measured using the exchange rate when fair value was determined.
Foreign exchange gains and losses resulting from the settlement of transactions and from the translation at period-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the Statement of Income and Retained Earnings except when deferred in other comprehensive income as qualifying cash flow hedges.
Foreign exchange gains and losses that relate to borrowings and cash and cash equivalents are presented in the Statement of Income and Retained Earnings within 'finance income or costs'. All other foreign exchange gains and losses are presented in the Statement of Income and Retained Earnings within 'other operating income'.
Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured. Revenue is measured as the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes.
Long term contracts Revenue from long term contracts is recognised on a percentage completion method, representing the value of work carried out in the period, including amounts not yet invoiced. The amount by which revenue exceeds amounts invoiced in the period on individual contracts is classified as "Amounts recoverable on contracts" and is seperately disclosed in debtors. The amount by which amounts invoiced in the period exceed revenue recognised on individual contracts is classified as "Payments on account" and is seperately disclosed within creditors.
Rentals paid under operating leases are charged to the Statement of Income and Retained Earnings on a straight line basis over the lease term.
Interest income is recognised in the Statement of Income and Retained Earnings using the effective interest method.
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G2 ENERGY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 MAY 2019
2.Accounting policies (continued)
Finance costs are charged to the Statement of Income and Retained Earnings over the term of the debt using the effective interest method so that the amount charged is at a constant rate on the carrying amount. Issue costs are initially recognised as a reduction in the proceeds of the associated capital instrument.
Defined contribution pension plan
The Company operates a defined contribution plan for its employees. A defined contribution plan is a pension plan under which the Company pays fixed contributions into a separate entity. Once the contributions have been paid the Company has no further payment obligations.
The contributions are recognised as an expense in the Statement of Income and Retained Earnings when they fall due. Amounts not paid are shown in accruals as a liability in the Balance Sheet. The assets of the plan are held separately from the Company in independently administered funds.
Deferred tax balances are recognised in respect of all timing differences that have originated but not reversed by the Balance Sheet date, except that:
Deferred tax balances are not recognised in respect of permanent differences except in respect of business combinations, when deferred tax is recognised on the differences between the fair values of assets acquired and the future tax deductions available for them and the differences between the fair values of liabilities acquired and the amount that will be assessed for tax. Deferred tax is determined using tax rates and laws that have been enacted or substantively enacted by the balance sheet date.
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G2 ENERGY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 MAY 2019
2.Accounting policies (continued)
Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives on the following bases:
Freehold property was not depreciated in the current period as it was in negotiations to be transferred to another company in the group.
The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date. No depreciation has been charged against freehold property during the period as the net book value has reached its residual value. Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in the Statement of Income and Retained Earnings.
Assets that are subject to depreciation or amortisation are assessed at each balance sheet date to determine whether there is any indication that the assets are impaired. Where there is any indication that an asset may be impaired, the carrying value of the asset (or cash-generating unit to which the asset has been allocated) is tested for impairment. An impairment loss is recognised for the amount by which the asset's carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset's (or CGU's) fair value less costs to sell and value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows (CGUs). Non-financial assets that have been previously impaired are reviewed at each balance sheet date to assess whether there is any indication that the impairment losses recognised in prior periods may no longer exist or may have decreased.
Stocks are stated at the lower of cost and net realisable value, being the estimated selling price less costs to complete and sell. Cost is based on the cost of purchase on a first in, first outbasis. Work in progress and finished goods include labour and attributable overheads.
At each balance sheet 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.
Cost for long term contracts is recognised on a percentage completion method, representing the cost of work carried out in the period. Costs consist of direct materials, labour, subcontractor costs and other direct costs. The amount by which recognised costs exceed amounts invoiced is classified as "Payments on account" and is seperately disclosed within creditors.
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G2 ENERGY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 MAY 2019
2.Accounting policies (continued)
Short term debtors are measured at transaction price, less any impairment. Loans receivable are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method, less any impairment.
Cash is represented by cash in hand and deposits with financial institutions repayable without penalty on notice of not more than 24 hours. Cash equivalents are highly liquid investments that mature in no more than three months from the date of acquisition and that are readily convertible to known amounts of cash with insignificant risk of change in value.
In the Statement of Cash Flows, cash and cash equivalents are shown net of bank overdrafts that are repayable on demand and form an integral part of the Company's cash management.
Short term creditors are measured at the transaction price. Other financial liabilities, including bank loans, are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method.
Provisions are made where an event has taken place that gives the Company a legal or constructive obligation that probably requires settlement by a transfer of economic benefit, and a reliable estimate can be made of the amount of the obligation.
Provisions are charged as an expense to the Statement of Income and Retained Earnings in the year that the Company becomes aware of the obligation, and are measured at the best estimate at the Balance Sheet date of the expenditure required to settle the obligation, taking into account relevant risks and uncertainties. When payments are eventually made, they are charged to the provision carried in the Balance Sheet.
Debt instruments (other than those wholly repayable or receivable within one year), including loans and other accounts receivable and payable, are initially measured at present value of the future cash flows and subsequently at amortised cost using the effective interest method. Debt instruments that are payable or receivable within one year, typically trade debtors and creditors, are measured, initially and subsequently, at the undiscounted amount of the cash or other consideration expected to be paid or received. However, if the arrangements of a short-term instrument constitute a financing transaction, like the payment of a trade debt deferred beyond normal business terms or in case of an out-right short-term loan that is not at market rate, the financial asset or liability is measured, initially at the present value of future cash flows discounted at a market rate of interest for a similar debt instrument and subsequently at amortised cost, unless it qualifies as a loan from a director in the case of a small company, or a public benefit entity concessionary loan.
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G2 ENERGY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 MAY 2019
2.Accounting policies (continued)
Financial assets that are measured at cost and amortised cost are assessed at the end of each reporting period for objective evidence of impairment. If objective evidence of impairment is found, an impairment loss is recognised in the Statement of Income and Retained Earnings.
For financial assets measured at amortised cost, the impairment loss is measured as the difference between an asset's carrying amount and the present value of estimated cash flows discounted at the asset's original effective interest rate. If a financial asset has a variable interest rate, the discount rate for measuring any impairment loss is the current effective interest rate determined under the contract.
For financial assets measured at cost less impairment, the impairment loss is measured as the difference between an asset's carrying amount and best estimate of the recoverable amount, which is an approximation of the amount that the Company would receive for the asset if it were to be sold at the balance sheet date.
Financial assets and liabilities are offset and the net amount reported in the Balance Sheet when there is an enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
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.
The amount of profit recognised is a proportion of the total forecast profit on the contract by reference to the percentage completion at the balance sheet date, taking account of agreed claims. The recognition of profit on long term contracts is in accordance with FRS 102 section 23, which unlike the Companies Act 2006 allows unrealised profit to be included in the profit and loss account for the period. This departure from the provisions of the Act is required in order to give a true and fair view.
In the application of the company's accounting policies, which are described in note 2, management have been required to make judgments, estimates and assumptions. These estimates which relate to the carrying values of assets and liabilities, where not readily available from other sources, are based on underlying assumptions and experience. Actual results may differ from these estimates. These estimates and assumptions are reviewed on an on-going basis.
The principal judgments are with regard to the assessment of completion of work on long term contracts, and the recognition of associated costs and revenues. Management closely monitors the progress on these projects with reference to agreed schedules of work and agreed contract amendments and use this in making their informed assessment of completion and profit recognition.
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G2 ENERGY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 MAY 2019
All turnover arose within the United Kingdom and is attributable to the Company's principal activity.
Page 22
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G2 ENERGY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 MAY 2019
Page 23
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G2 ENERGY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 MAY 2019
Page 24
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G2 ENERGY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 MAY 2019
11.Taxation (continued)
Page 25
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G2 ENERGY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 MAY 2019
Page 26
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G2 ENERGY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 MAY 2019
14.Tangible fixed assets (continued)
Page 27
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G2 ENERGY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 MAY 2019
Page 28
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G2 ENERGY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 MAY 2019
Page 29
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G2 ENERGY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 MAY 2019
Page 30
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G2 ENERGY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 MAY 2019
Profit and loss account
The Company operates a defined contributions pension scheme. The assets of the scheme are held separately from those of the Company in an independently administered fund. The pension cost charge represents contributions payable by the Company to the fund and amounted to £42,651 (2018 - £229,528).
Contributions totalling £12,388 (2018 - £11,113) were payable to the fund at the balance sheet date and are included in creditors.
Page 31
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G2 ENERGY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 MAY 2019
The Company was controlled by the director K J Ruck until 21 December 2018. There was a group reconstruction at this date, the immediate parent company being G2 Energy Holdings Limited and the ultimate parent company as G2 Energy Investments Limited. The directors consider there to be no ultimate controlling party.
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