Lee Valley Heat Network Operating Co Ltd - Limited company accounts 20.1

REGISTERED NUMBER: 09763702

REPORT OF THE DIRECTORS AND

FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST MARCH 2022

FOR

LEE VALLEY HEAT NETWORK OPERATING

COMPANY LIMITED

Page

Company Information

1

Report of the Directors

2

Report of the Independent Auditors

4

Profit and Loss Account

8

Balance Sheet

9

Statement of Changes in Equity

10

Cash Flow Statement

11

Notes to the Financial Statements

12

DIRECTORS:

Mrs C J Clare

Dr T Groth

Mr I V Guest

Mr M J King

Mr D Taylor

REGISTERED OFFICE:

Enfield Council

Civic Centre

Silver Street

Enfield

EN1 3XA

REGISTERED NUMBER:

09763702

AUDITORS:

Xeinadin Audit Limited

1 City Road East

Manchester

M15 4PN

The directors present their report with the financial statements of the company for the year ended 31st March 2022.

DIRECTORS

The directors shown below have held office during the whole of the period from 1st April 2021 to the date of this report.

Mrs C J Clare

Dr T Groth

Mr I V Guest

Mr M J King

Other changes in directors holding office are as follows:

Mr D Taylor - resigned 21st May 2021

Mr E Erbil - appointed 30th June 2021

Mr D Taylor was appointed as a director after 31st March 2022 but prior to the date of this report.

Mr E Erbil ceased to be a director after 31st March 2022 but prior to the date of this report.

STATEMENT OF DIRECTORS' RESPONSIBILITIES

The directors are responsible for preparing the Report of the Directors 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 United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law), 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 and then apply them consistently;

-	make judgements 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 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.

STATEMENT AS TO DISCLOSURE OF INFORMATION TO AUDITORS

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

AUDITORS

Xeinadin Audit Limited acquired the audit practice of Kay Johnson Gee Limited and has been appointed as auditor in succession. In accordance with section 485 of the Companies Act 2006, Xeinadin Audit Limited will be proposed for reappointment.

This report has been prepared in accordance with the provisions of Part 15 of the Companies Act 2006 relating to small companies.

ON BEHALF OF THE BOARD:

Mrs C J Clare - Director

15th August 2022

Opinion

We have audited the financial statements of Lee Valley Heat Network Operating Company Limited (the 'company') for the year ended 31st March 2022 which comprise the Profit and Loss Account, Balance Sheet, Statement of Changes in Equity, Cash Flow Statement and Notes to the Financial Statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:

-	give a true and fair view of the state of the company's affairs as at 31st March 2022 and of its profit 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 Auditors' 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 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 directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.

Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the 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.

Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.

Other information

The directors are responsible for the other information. The other information comprises the information in the Report of the Directors, but does not include the financial statements and our Report of the Auditors 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 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 Report of the Directors for the financial year for which the financial statements are prepared is consistent with the financial statements; and

-	the Report of the Directors has been prepared in accordance with applicable legal requirements.

Matters on which we are required to report by exception

In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the Report of the Directors.

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, or returns adequate for our audit have not been received from branches not visited by us; or

-	the financial statements are not in agreement with the accounting records and returns; or

-	certain disclosures of directors' remuneration specified by law are not made; or

-	we have not received all the information and explanations we require for our audit; or

-	the directors were not entitled to prepare the financial statements in accordance with the small companies regime and take advantage of the small companies' exemption from the requirement to prepare a Strategic Report or in preparing the Report of the Directors.

Responsibilities of directors

As explained more fully in the Statement of Directors' Responsibilities set out on page two, 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 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.

Auditors' 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 a Report of the Auditors 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 our procedures are capable of detecting irregularities, including fraud is detailed below:

Identifying and assessing potential risks related to irregularities

In identifying and assessing risks of material misstatement in respect of irregularities including fraud and non-compliance with laws and regulations we have considered the following:

-

The nature of the industry and sector, control environment and business performance including the company's remuneration policies, key drivers for directors remuneration, bonus levels and performance targets;

-

Results of the enquiries of management about their own identification and assessment of the risks of irregularities;

-

Any matters we have identified having obtained and reviewed the company's documentation of their policies and procedures relating to:

-

identifying, evaluating and complying with laws and regulations and whether they were aware of any instances of noncompliance;

-

detecting and responding to the risks of fraud and whether they have knowledge of any actual, suspected or alleged fraud;

-

the internal controls established to mitigate risks of fraud or non-compliance with laws and regulations;

-

the matters discussed among the audit engagement team regarding how and where fraud might occur in the financial statements and any potential indicators of fraud.

As a result of these procedures, we considered the opportunities and incentives that may exist within the organisation for fraud and identified the greatest potential for fraud in the following areas: timing of recognition of income, the impact of Covid19 and value of Intangible Fixed Assets. In common with all audits under ISAs (UK), we are also required to perform specific procedures to respond to the risk of management override.

We also obtained an understanding of the legal and regulatory frameworks that the company operates in, focusing on provisions of those laws and regulations that had a direct effect on the determination of material amounts and disclosures in the financial statements. The key laws and regulations we considered in this context included UK Companies Act, environmental laws, employment law, health and safety, pensions legislation and tax legislation.

In addition, we considered provisions of other laws and regulations that do not have a direct effect on the financial statements but compliance with which may be fundamental to the company's ability to operate or to avoid a material penalty.

Audit response to risks identified

Our procedures to respond to risks identified included the following:

-

reviewing the financial statement disclosures and testing to supporting documentation to assess compliance with provisions of relevant laws and regulations described as having a direct effect on the financial statements;

-

enquiring of management concerning actual and potential litigation and claims;

-

performing analytical procedures to identify any unusual or unexpected relationships that may indicate risks of material misstatement due to fraud;

-

reading minutes of meetings of those charged with governance and reviewing correspondence with HMRC; and

-

in addressing the risk of fraud through management override of controls, testing the appropriateness of journal entries and other adjustments; assessing whether the judgements made in making accounting estimates are indicative of a potential bias; and evaluating the business rationale of any significant transactions that are unusual or outside the normal course of business.

We also communicated relevant identified laws and regulations and potential fraud risks to all engagement team members including internal specialists, and remained alert to any indications of fraud or non-compliance with laws and regulations throughout the audit.

No instances of material non-compliance were identified. However, the likelihood of detecting irregularities, including fraud, is limited by the inherent difficulty in detecting irregularities, the effectiveness of the entity's controls, and the nature, timing and extent of the audit procedures performed. Irregularities that result from fraud might be inherently more difficult to detect than irregularities that result from error. As explained above, there is an unavoidable risk that material misstatements may not be detected, even though the audit has been planned and performed in accordance with ISAs (UK).

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 Report of the Auditors.

Use of our report

This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in a Report of the Auditors and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members as a body, for our audit work, for this report, or for the opinions we have formed.

Michael Garrett (Senior Statutory Auditor)

for and on behalf of Xeinadin Audit Limited

1 City Road East

Manchester

M15 4PN

15th August 2022

TURNOVER

2,965,070

997,698

Cost of sales

(360,943

)

(224,803

)

GROSS PROFIT

2,604,127

772,895

Administrative expenses

(1,314,712

)

(646,185

)

OPERATING PROFIT

5

1,289,415

126,710

Interest payable and similar expenses

(637,438

)

(576,399

)

PROFIT/(LOSS) BEFORE TAXATION

651,977

(449,689

)

Tax on profit/(loss)

(544,169

)

77,838

PROFIT/(LOSS) FOR THE FINANCIAL YEAR

107,808

(371,851

)

FIXED ASSETS

Intangible assets

6

7,401,200

6,888,998

Tangible assets

7

23,052,831

5,067,219

30,454,031

11,956,217

CURRENT ASSETS

Debtors

8

3,430,943

778,203

Cash at bank

8,908,972

4,315,755

12,339,915

5,093,958

CREDITORS

Amounts falling due within one year

9

(10,925,185

)

(1,112,022

)

NET CURRENT ASSETS

1,414,730

3,981,936

TOTAL ASSETS LESS CURRENT LIABILITIES

31,868,761

15,938,153

CREDITORS

Amounts falling due after more than one year

10

(14,982,503

)

(12,633,419

)

PROVISIONS FOR LIABILITIES

12

(1,664,081

)

(940,365

)

NET ASSETS

15,222,177

2,364,369

CAPITAL AND RESERVES

Called up share capital

13

17,750,001

5,000,001

Retained earnings

(2,527,824

)

(2,635,632

)

SHAREHOLDERS' FUNDS

15,222,177

2,364,369

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

The financial statements were approved by the Board of Directors and authorised for issue on 15th August 2022 and were signed on its behalf by:

Mrs C J Clare - Director

Called up

share

Retained

Total

capital

earnings

equity

£

£

£

Balance at 1st April 2020

1

(2,263,781

)

(2,263,780

)

Deficit for the year

-

(371,851

)

(371,851

)

Total comprehensive loss

-

(371,851

)

(371,851

)

Issue of share capital

5,000,000

-

5,000,000

Balance at 31st March 2021

5,000,001

(2,635,632

)

2,364,369

Profit for the year

-

107,808

107,808

Total comprehensive income

-

107,808

107,808

Issue of share capital

12,750,000

-

12,750,000

Balance at 31st March 2022

17,750,001

(2,527,824

)

15,222,177

Cash flows from operating activities

Cash generated from operations

16

8,738,209

333,014

Interest paid

(637,438

)

(576,399

)

Tax paid

208,916

261,723

Net cash from operating activities

8,309,687

18,338

Cash flows from investing activities

Purchase of intangible fixed assets

(512,202

)

(846,355

)

Purchase of tangible fixed assets

(18,224,226

)

(1,839,910

)

Net cash from investing activities

(18,736,428

)

(2,686,265

)

Cash flows from financing activities

New loans in year

2,500,000

1,655,000

Loan repayments in year

(230,042

)

(315,609

)

Share issue

12,750,000

5,000,000

Net cash from financing activities

15,019,958

6,339,391

Increase in cash and cash equivalents

4,593,217

3,671,464

Cash and cash equivalents at beginning of year

17

4,315,755

644,291

Cash and cash equivalents at end of year

17

8,908,972

4,315,755

1.	STATUTORY INFORMATION

Lee Valley Heat Network Operating Company Limited, trading as Energetik, is a private company limited by share capital, incorporated in England and Wales, registration number 09763702. The address of the registered office and principal place of business is Civic Centre, Silver Street, Enfield, England, EN1 3XA.

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.

Related party exemption

The company has taken advantage of exemption, under the terms of Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland', not to disclose related party transactions with wholly owned subsidiaries within the group.

Going concern

On the basis that long term funding has been approved for the company by its parent undertaking, the directors have deemed it reasonable to prepare these financial statements on a going concern basis. Large scale, low-carbon infrastructure projects require investment prior to a profit being made, a fact recognised by the Stakeholders. The company remains on target and on budget. This is the first year that a trading profit has been made by the entity and it is expected to remain profitable moving forward.

Turnover

Turnover represents amounts recognised by the company in respect of services supplied, exclusive of Value Added Tax and trade discounts. Turnover principally consists of the provision of energy and heat to commercial and residential clients as well as connection fees received for properties that connect to the heat network. Connection fee income is received in staggered payments up to the point that connections are fully completed.

Intangible assets

Intangible assets are represented by Development expenditure, principally relating to the design and installation of pipework and plant, which is capitalised where there is a clearly defined project, related expenditure is separately identifiable and it has been assessed for technical and commercial viability.

Amortisation of the intangible assets will commence on each project once it has reached full completion, is in use and has started to generate economic benefit to the business. Amortisation will be charged, in line with the associated rates for pipework and other plant as detailed in the tangible fixed asset accounting policy, at the following average rates:

Plant & Underground Piping

Over 42.5 years

The carrying amounts of the company's assets are reviewed for impairment when events or changes in circumstances indicate that the carrying amount of the fixed asset may not be recoverable. If any such indication exists, the asset's recoverable amount is estimated and an impairment provision made if appropriate.

Tangible fixed assets

Tangible fixed assets are stated at cost less accumulated depreciation and accumulated impairment losses.

Depreciation on tangible fixed assets is charged to the profit and loss so as to write off their value, over their estimated useful lives, using the following methods:

Pipework

Over 60 years

Plant & Machinery

Over 25 years

Customer Interface Units

Over 12 years

Tangible fixed assets are depreciated from the date they are utilised in generating income.

At each balance sheet date, the Company reviews the carrying amounts of its property, plant and equipment to determine whether there is any indication that any items of property, plant and equipment have suffered an impairment loss. If any such indication exists, the recoverable amount of an asset is estimated in order to determine the extent of the impairment loss, if any. Where it is not possible to estimate the recoverable amount of the asset, the Company estimates the recoverable amount of the cash-generating unit to which the asset belongs.

Taxation

Taxation for the year comprises current and deferred tax. Tax is recognised in the profit and loss account, except to the extent that it relates to items recognised in other comprehensive income or directly in equity.

Current or deferred taxation assets and liabilities are not discounted.

Current tax is recognised at the amount of tax payable using the tax rates and laws that have been enacted or substantively enacted by the balance sheet date.

Deferred tax

Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the balance sheet date.

Timing differences arise from the inclusion of income and expenses in tax assessments in periods different from those in which they are recognised in financial statements. Deferred tax is measured using tax rates and laws that have been enacted or substantively enacted by the year end and that are expected to apply to the reversal of the timing difference.

Unrelieved tax losses and other deferred tax assets are recognised only to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits.

Foreign currencies

Assets and liabilities in foreign currencies are translated into sterling at the rates of exchange ruling at the balance sheet date. Transactions in foreign currencies are translated into sterling at the rate of exchange ruling at the date of transaction. Exchange differences are taken into account in arriving at the operating result.

Trade and other debtors

Trade and other debtors are initially recognised at fair value and thereafter stated at amortised cost using the effective interest method, less impairment losses for bad and doubtful debts except where the effect of discounting would be immaterial. In such cases, the trade debtors and other debtors are stated at cost less impairment losses for bad and doubtful debts.

Trade and other creditors

Trade and other creditors are initially recognised at fair value and thereafter stated at amortised cost using the effective interest method unless the effect of discounting would be immaterial, in which case they are stated at cost.

Cash and cash equivalents

Cash and cash equivalents comprise cash at bank and in hand.

3.	CRITICAL ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY

In the application of the Company's accounting policies above, management is required to make judgements, estimates and assumptions about the carrying value of assets and liabilities that are not readily 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 ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period.

Provisions

The company accounts for provisions in accordance with FRS 102. Full details are provided in note 12. There are currently the following type of provisions:

Bad Debt Provision

The company provides for bad debts based on 2% of domestic revenue.

Long-term Maintenance Provision

Provisions are recognised for providing long term maintenance where the the company may need to replace assets such as boilers or other components. The provision is recognised based on 5% of the fixed and variable turnover for the year on residential contracts.

Adoption Fee Accrual

The company entered into an agreement with the Council to take ownership of three heat networks, gaining the right to charge the properties connected to them for the heat and hot water they used, and becoming responsible for the heat network's upkeep. In return for this, the company is to pay the Council an adoption fee for every property that connects to the network. A provision has been made based on the number of properties expected to be connected to the heat network.

4.	EMPLOYEES AND DIRECTORS

2022

2021

£

£

Wages and salaries

595,362

231,542

The average number of employees during the year was as follows:

2022

2021

Employees

9

7

Wage costs in the financial statements represent recharges from an umbrella company who operates on behalf of Enfield Council.

5.	OPERATING PROFIT

The operating profit is stated after charging:

2022

2021

£

£

Depreciation - owned assets

238,614

58,401

6.	INTANGIBLE FIXED ASSETS

Developmen

costs

£

COST

At 1st April 2021

6,888,998

Additions

512,202

At 31st March 2022

7,401,200

NET BOOK VALUE

At 31st March 2022

7,401,200

At 31st March 2021

6,888,998

7.	TANGIBLE FIXED ASSETS

Plant,

machinery

and

Assets

underground

under

piping

construction

Totals

£

£

£

COST

At 1st April 2021

5,202,263

-

5,202,263

Additions

527,651

17,696,575

18,224,226

Reclassification/transfer

(2,439,025

)

2,439,025

-

At 31st March 2022

3,290,889

20,135,600

23,426,489

DEPRECIATION

At 1st April 2021

135,044

-

135,044

Charge for year

238,614

-

238,614

At 31st March 2022

373,658

-

373,658

NET BOOK VALUE

At 31st March 2022

2,917,231

20,135,600

23,052,831

At 31st March 2021

5,067,219

-

5,067,219

8.

DEBTORS: AMOUNTS FALLING DUE WITHIN ONE YEAR

2022

2021

£

£

Trade debtors

1,172,455

151,761

Amounts owed by participating interests

-

260,503

Other debtors

2,258,488

365,939

3,430,943

778,203

9.

CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR

2022

2021

£

£

Trade creditors

10,286,895

552,401

Amounts owed to group undertakings

422,936

426,610

Amounts owed to participating interests

1,220

-

Other creditors

214,134

133,011

10,925,185

1,112,022

10.

CREDITORS: AMOUNTS FALLING DUE AFTER MORE THAN ONE YEAR

2022

2021

£

£

Trade creditors

27,967

27,969

Amounts owed to group undertakings

14,954,536

12,605,450

14,982,503

12,633,419

11.	LEASING AGREEMENTS

Minimum lease payments under non-cancellable operating leases fall due as follows:

2022

2021

£

£

Within one year

200,409

200,409

Between one and five years

342,953

356,542

In more than five years

5,276,052

5,547,811

5,819,414

6,104,762

12.	PROVISIONS FOR LIABILITIES

2022

2021

£

£

Deferred tax

1,028,265

275,180

Other provisions

635,816

665,185

1,664,081

940,365

Deferred

Other

tax

provisions

£

£

Balance at 1st April 2021

275,180

665,185

Provided during year

753,085

-

Utilised during year

-

(29,369

)

Balance at 31st March 2022

1,028,265

635,816

Provisions include a long term maintenance provision and a provision for asset adoption which represents the future cost of connecting properties to the Heat Network. A proportion of the plant and machinery additions within the year have then reflected this cost of adoption.

The recognition of this asset adoption provision has no impact on the overall net assets of the business as at the end of the accounting period and no impact on the profit and loss account in the period.

13.	CALLED UP SHARE CAPITAL

Allotted, issued and fully paid:

Number:

Class:

Nominal

2022

2021

value:

£

£

5,000,001

Ordinary

£1.00

17,750,001

5,000,001

During the year, 12,750,000 Ordinary £1 shares were issued.

14.	CAPITAL COMMITMENTS

2022

2021

£

£

Contracted but not provided for in the

financial statements

14,000,000

24,000,000

15.	ULTIMATE CONTROLLING PARTY

The ultimate parent entity is Enfield Council which is the next senior parent for which publicly available consolidated financial statements are prepared which include the results of Lee Valley Heat Network Operating Company Limited. Enfield Council is the parent of the smallest and largest group for which consolidated financial statements are prepared, The parent's company's registered office is Civic Centre, Silver Street, Enfield, England, EN1 3XA. The consolidated financial statements can be obtained from Companies House.

The ultimate controlling party are the The Mayor and Burgesses of the London Borough of Enfield by virtue of their controlling interest in the ultimate parent, Enfield Council.

16.	RECONCILIATION OF PROFIT/(LOSS) BEFORE TAXATION TO CASH GENERATED FROM OPERATIONS

2022

2021

£

£

Profit/(loss) before taxation

651,977

(449,689

)

Depreciation charges

238,614

58,401

Movement in provisions

(29,369

)

659,487

Finance costs

637,438

576,399

1,498,660

844,598

Increase in trade and other debtors

(2,652,740

)

(343,634

)

Increase/(decrease) in trade and other creditors

9,892,289

(167,950

)

Cash generated from operations

8,738,209

333,014