Wester Kerrowgair Farm Energy Limited - Accounts to registrar (filleted) - small 18.2

REGISTERED NUMBER: 09205081 (England and Wales)

FINANCIAL STATEMENTS

FOR THE YEAR ENDED 5 APRIL 2020

FOR

WESTER KERROWGAIR FARM ENERGY LIMITED

Page

Company Information

1

Balance Sheet

2

Notes to the Financial Statements

3

DIRECTORS:

Mr N A Forster

Mr D M Reid

SECRETARY:

FLB Company Secretarial Services Ltd

REGISTERED OFFICE:

250 Wharfedale Road

Winnersh Triangle

Wokingham

Berkshire

RG41 5TP

REGISTERED NUMBER:

09205081 (England and Wales)

INDEPENDENT AUDITORS:

Shipleys LLP, Statutory Auditor

10 Orange Street

Haymarket

London

WC2H 7DQ

FIXED ASSETS

Tangible assets

5

4,385,488

4,595,417

CURRENT ASSETS

Stocks

178,075

331,157

Debtors

6

950,251

643,891

Cash at bank

236,172

508,399

1,364,498

1,483,447

CREDITORS

Amounts falling due within one year

7

(8,487,253

)

(7,904,416

)

NET CURRENT LIABILITIES

(7,122,755

)

(6,420,969

)

TOTAL ASSETS LESS CURRENT LIABILITIES

(2,737,267

)

(1,825,552

)

CAPITAL AND RESERVES

Called up share capital

8

1

1

Retained earnings

9

(2,737,268

)

(1,825,553

)

SHAREHOLDERS' FUNDS

(2,737,267

)

(1,825,552

)

The financial statements have been prepared and delivered in accordance with the provisions applicable to companies subject to the small companies regime.

In accordance with Section 444 of the Companies Act 2006, the Income Statement has not been delivered.

The financial statements were approved by the Board of Directors and authorised for issue on 18 November 2020 and were signed on its behalf by:

Mr N A Forster - Director

1.	STATUTORY INFORMATION

Wester Kerrowgair Farm Energy Limited is a private company, limited by shares , registered in England and Wales. The company's registered number and registered office address can be found on the Company Information page.

The principal activities of the Company are the construction and operation of an anaerobic digestion plant for the generation of gas and electricity from renewable energy sources on site in Dalcross, Inverness.

2.	ACCOUNTING POLICIES

Basis of preparing the financial statements

These financial statements have been prepared in accordance with Financial Reporting Standard 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland" including the provisions of Section 1A "Small Entities" and the Companies Act 2006. The financial statements have been prepared under the historical cost convention.

Going concern

We draw attention to the current Covid-19 pandemic and the potential economic impact the virus will have in the coming months. The directors have considered the cash balance held by the company, and the projected administrative and other costs for the forthcoming 12 months from the date of signing of the financial statements, and consider there to be adequate resources in place. On this basis, the company is considered to be a going concern.

The Company received a substantial loan from its parent in order to invest in renewable energy assets. The Company has received written confirmation from the directors of Potestas Power Limited, its parent entity, that it will not demand repayment of amounts owed to it for a period of at least 12 months from the date of approval of these accounts.

The company incurred a loss for the period of £911,715 (2019: £881,522) and had net liabilities of £2,737,267 (2019: £1,825,552).

Significant judgements and estimates

In the application of the Company's accounting policies, the directors are required to make judgments, estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period or in the period of the revision and future periods if the revision affects both current and future periods.No significant judgements and estimates have been made in the year.

Turnover

Turnover derives from the generation and sale of renewable electricity, and is stated net of Value Added Tax. Turnover is derived from activities in the United Kingdom. Turnover is recognised at the fair value of the right to consideration and is not recognised until there is certainty over the right to consideration. Turnover which has been recognised but not invoiced by the balance sheet date is included within accrued income.

Tangible fixed assets

Depreciation is provided at the following annual rates in order to write off each asset over its estimated useful life.

Plant and machinery etc

-

Straight line over 20 years

Stocks

Stocks are valued at the lower of cost and net realisable value after making due allowance for obsolete and slow-moving stocks. Stocks relate to feedstock purchased prior to its use in the energy generation process.

Financial instruments

The Company enters into basic financial instruments transactions that result in the recognition of financial assets and liabilities like trade and other debtors and creditors, loans from banks and other third parties, loans to related parties and investments in non-puttable ordinary shares.

Derivatives, including interest rate swaps and forward foreign exchange contracts, are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or income as appropriate. The company does not currently apply hedge accounting for interest rate and foreign exchange derivatives.

Short term debtors are measured at transaction price, less any impairment.

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.

Taxation

Tax is recognised in the Income Statement, except that a charge attributable to an item of income and expense recognised as other comprehensive income or to an item recognised directly in equity is also recognised in other comprehensive income or directly in equity respectively.

The current income tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the balance sheet date in the countries where the Company operates and generates income.

Deferred tax balances are recognised in respect of all timing differences that have originated but not reversed by the Balance sheet date, except that:

The recognition of deferred tax assets is limited to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits; and

Any deferred tax balances are reversed if and when all conditions for retaining associated tax allowances have been met.

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.

Foreign currencies

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 Profit and loss account except when deferred in other comprehensive income as qualifying cash flow hedges.

Hire purchase and leasing commitments

Rentals paid under operating leases are charged to profit or loss on a straight line basis over the period of the lease.

Loans

Non-derivative financial liabilities with fixed or determinable repayments that are not quoted in an active market are classified as loans. Loans are initially recognised at fair value of the consideration received plus directly related transaction costs. They are subsequently measured at amortised cost using the effective interest method. Arrangement fees and interest payable on financial liabilities that are classified as loans, are charged to the profit and loss account.

The effective interest method is a method of calculating the amortised cost of a financial liability and of allocating the interest payable over the expected life of the liability. The effective interest rate is the rate that exactly discounts estimated future cashflows to the instrument's initial carrying amount. Calculation of the effective interest rate takes into account fees payable, that are an integral part of the instrument yield and transaction costs. All contractual terms of a financial instrument are considered when estimating future cash flows.

A financial liability is removed from the balance sheet when the obligation is discharged, or cancelled, or expires.

3.	EMPLOYEES AND DIRECTORS

The average number of employees during the year was NIL (2019 - NIL).

4.	AUDITORS' REMUNERATION

2020

2019

£

£

Fees payable to the company's auditors for the audit of the company's financial statements

2,750

2,750

5.	TANGIBLE FIXED ASSETS

Plant and

machinery

etc

£

COST

At 6 April 2019

5,371,904

Additions

61,244

At 5 April 2020

5,433,148

DEPRECIATION

At 6 April 2019

776,487

Charge for year

271,173

At 5 April 2020

1,047,660

NET BOOK VALUE

At 5 April 2020

4,385,488

At 5 April 2019

4,595,417

6.

DEBTORS

2020

2019

£

£

Amounts falling due within one year:

Trade debtors

-

940

Amounts owed by group undertakings

105,212

-

Other debtors

377,122

358,895

482,334

359,835

Amounts falling due after more than one year:

Other debtors

467,917

284,056

Aggregate amounts

950,251

643,891

7.

CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR

2020

2019

£

£

Trade creditors

44,812

51,997

Amounts owed to group undertakings

8,226,002

7,759,161

Other creditors

216,439

93,258

8,487,253

7,904,416

8.	CALLED UP SHARE CAPITAL

Allotted, issued and fully paid:

Number:

Class:

Nominal

2020

2019

value:

£

£

100

Ordinary

£0.01

1

1

9.

RESERVES

Retained

earnings

£

At 6 April 2019

(1,825,553

)

Deficit for the year

(911,715

)

At 5 April 2020

(2,737,268

)

Profit and loss account

The Profit and Loss Account represents the cumulative profits or losses, net of dividends paid and other adjustments.

10.	DISCLOSURE UNDER SECTION 444(5B) OF THE COMPANIES ACT 2006

11.	CONTINGENT LIABILITIES

The Company has a potential obligation to restore the operational site which houses the anaerobic digestion asset at the end of the lease agreement (39 years from and including the term commencement date). No provision is included in the accounts as the amount cannot be measured reliably.

12.	CONTROLLING PARTY

Potestas Power Limited, a company registered in England and Wales, is an immediate and ultimate parent company.