Registered number: 13538492
Harmony Energy Advisors Limited
Directors' Report and Financial Statements
For the year ended 31 December 2022
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Harmony Energy Advisors Limited
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Company Information
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Peter James Kavanagh (appointed 12 August 2021)
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Paul Stuart Mason (appointed 29 July 2021)
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James Thomas Ritchie-Bland (appointed 12 August 2021)
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Alexander Maxwell Slade (appointed 29 July 2021)
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Harmony Energy Advisors Limited
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Contents
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Independent auditor's report
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Statement of comprehensive income
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Statement of financial position
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Statement of changes in equity
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Notes to the financial statements
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Harmony Energy Advisors Limited
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Directors' Report
For the year ended 31 December 2022
The directors present their report and the financial statements for the year ended 31 December 2022.
Directors' responsibilities statement
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The directors are responsible for preparing 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 directors who served during the year were:
Peter James Kavanagh (appointed 12 August 2021)
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Paul Stuart Mason (appointed 29 July 2021)
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James Thomas Ritchie-Bland (appointed 12 August 2021)
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Alexander Maxwell Slade (appointed 29 July 2021)
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Disclosure of information to auditors
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Each of the persons who are directors at the time when this directors' report is approved has confirmed that:
∙so far as the director is aware, there is no relevant audit information of which the Company's auditors are unaware, and
∙the director has taken all the steps that ought to have been taken as a director in order to be aware of any relevant audit information and to establish that the Company's auditors are aware of that information.
The auditors, Ernst & Young LLP, will be proposed for reappointment in accordance with section 485 of the Companies Act 2006.
Page 1
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Harmony Energy Advisors Limited
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Directors' Report (continued)
For the year ended 31 December 2022
In preparing this report, the directors have taken advantage of the small companies exemptions provided by section 415A of the Companies Act 2006.
This report was approved by the board on 19 October 2023 and signed on its behalf.
Page 2
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Harmony Energy Advisors Limited
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Independent Auditors' Report to the Members of Harmony Energy Advisors Limited
Opinion
We have audited the financial statements of Harmony Energy Advisors Limited (the ‘Company’) for the year ended 31 December 2022 which comprise the Statement of Comprehensive Income, Statement of Financial Position, Statement of Change in Equity and the related notes 1 to 11, 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 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 Company’s affairs as at 31 December 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 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 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.
Other Matter
The financial statements of the Company for the period ended 31 December 2021 were unaudited.
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 12 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. However, because not all future events or conditions can be predicted, this statement is not a guarantee as to the Company’s ability to continue as a going concern.
Other information
The other information comprises the information included in the annual report, other than the financial statements and our auditor’s report thereon. The directors are responsible for the other information contained within the annual report.
Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in this report, we do not express any form of assurance conclusion thereon.
Page 3
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Harmony Energy Advisors Limited
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Independent Auditors' Report to the Members of Harmony Energy Advisors Limited
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 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 the other information, we are required to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of the audit:
∙the information given in the directors’ report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
∙the directors’ report 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 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:
∙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
∙the directors were not entitled to prepare the financial statements in accordance with the small companies’ regime and take advantage of the small companies’ exemptions in preparing the directors’ report and from the requirement to prepare a strategic report.
Responsibilities of directors
As explained more fully in the directors’ responsibilities statement set out on page 1, 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.
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.
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Harmony Energy Advisors Limited
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Independent Auditors' Report to the Members of Harmony Energy Advisors Limited
Explanation as to what extent the audit was considered capable of detecting irregularities, including fraud
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect irregularities, including fraud. The risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentations, or through collusion The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below. However, the primary responsibility for the prevention and detection of fraud rests with both those charged with governance of the entity and management.
Our approach was as follows:
∙We obtained an understanding of the legal and regulatory frameworks that are applicable to the Company and determined that the most significant are those that relate to United Kingdom Generally Accepted Accounting Practice, relevant direct and indirect tax compliance, and the Companies Act.
∙We understood how the Company is complying with those frameworks by making enquiries of management and by seeking representation from those charged with governance to understand how the Company maintains and communicates its policies and procedures in these areas. We corroborated this by reviewing relevant policy and procedures manuals.
∙We assessed the susceptibility of the Company’s financial statements to material misstatement, including how fraud might occur by making enquiries of management and those charged with governance to understand where they considered there was susceptibility to fraud. We performed journal entry testing by specific risk criteria, with a focus on manual journals and journals indicating large or unusual transactions based on our understanding of the Company’s business.
∙Based on this understanding we designed our audit procedures to identify non-compliance with such laws and regulations. Our procedures involved enquiries of management and those charged with governance and review of legal and professional expense.
A further description of our responsibilities for the audit of the financial statements is located on the
Financial Reporting Council’s website at https://www.frc.org.uk /auditorsresponsibilities. This description forms part of our auditor’s report.
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 an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the Company’s members as a body, for our audit work, for this report, or for the opinions we have formed.
Michael Gaylor (Senior statutory auditor)
for and on behalf of Ernst & Young LLP, Statutory Auditor
London
19 October 2023
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Harmony Energy Advisors Limited
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Statement of Comprehensive Income
For the year ended 31 December 2022
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Profit for the financial year
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There was no other comprehensive income for 2022 (2021:£NIL).
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The notes on pages 9 to 16 form part of these financial statements.
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Page 6
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Harmony Energy Advisors Limited
Registered number:13538492
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Statement of Financial Position
As at 31 December 2022
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As restated 2021 (unaudited)
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Debtors: amounts falling due after more than
one year
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Debtors: amounts falling due within one year
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Creditors: amounts falling due within one year
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Total assets less current liabilities
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The Company's financial statements have been prepared in accordance with the provisions applicable to companies subject to the small companies regime.
The financial statements were approved and authorised for issue by the board and were signed on its behalf on 19 October 2023.
The notes on pages 9 to 16 form part of these financial statements.
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Harmony Energy Advisors Limited
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Statement of Changes in Equity
For the year ended 31 December 2022
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Comprehensive income for the year
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Total comprehensive income for the year
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Statement of Changes in Equity (restated and unaudited)
For the period ended 31 December 2021
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Comprehensive income for the period
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Total comprehensive income for the period
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Page 8
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Harmony Energy Advisors Limited
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Notes to the Financial Statements
For the year ended 31 December 2022
The principal activity of the Company is to provide investment advisory services to JTC Global AIFM Solutions Limited (or to any other regulated entity appointed from time to time to act as AIFM to Harmony Energy Income Trust plc (“HEIT”)); and to provide HEIT with certain other services, which are unrelated to investment advice.
These financial statements have been presented in pound sterling which is the functional currency of the company, and rounded to the nearest £.
2.Accounting policies
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Basis of preparation of financial statements
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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 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.
The 2021 financial statements were prepared in accordance with Financial Reporting Standard 105, the UK and the Republic of Ireland and the Companies Act 2006.
The comparative information is the period from 29 July 2021, being the date of incorporation, to 31 December 2021.
In the prior year, accrued income of £154,595 was not recognised resulting in revenue and debtors being understated by that amount. Additionally, the tax on profit and creditors were understated by £48,866. As a result, for 2021 the Statement of Comprehensive Income, Statement of Financial Position and notes 3, 6, 7 and 9 have all been restated.
The table below shows the summary of the 2021 accounts and the related misstatements:
The following principal accounting policies have been applied:
After reviewing the Company’s forecasts, which cover the 12-month period from the date of signing the financial statements, the directors have a reasonable expectation that the Company has adequate resources to continue in operational existence for the foreseeable future. A reasonable downside scenario in revenues has also been considered. Under both the forecast and reasonable downside scenario, the directors are confident that the Company will have sufficient funds for the Company to meet liabilities as they fall due over the next 12 months. The Company therefore continues to adopt the going concern basis in preparing its financial statements.
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Harmony Energy Advisors Limited
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Notes to the Financial Statements
For the year ended 31 December 2022
2.Accounting policies (continued)
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. The following criteria must also be met before revenue is recognised:
Rendering of services
Revenue from a contract to provide services is recognised in the period in which the services are provided in accordance with the stage of completion of the contract when all of the following conditions are satisfied:
∙the amount of revenue can be measured reliably;
∙it is probable that the Company will receive the consideration due under the contract;
∙the stage of completion of the contract at the end of the reporting period can be measured reliably; and
∙the costs incurred and the costs to complete the contract can be measured reliably.
Tax is recognised in profit or loss 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 reporting date in the countries where the Company operates and generates income.
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.
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Cash and cash equivalents
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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.
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.
The Company has elected to apply the provisions of Section 11 “Basic Financial Instruments” of FRS 102 to all of its financial instruments.
The Company has elected to apply the recognition and measurement provisions of IFRS 9 Financial
Page 10
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Harmony Energy Advisors Limited
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Notes to the Financial Statements
For the year ended 31 December 2022
2.Accounting policies (continued)
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Financial instruments (continued)
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Instruments (as adopted by the UK Endorsement Board) with the disclosure requirements of Sections 11 and 12 and the other presentation requirements of FRS 102.
Financial instruments are recognised in the Company's statement of financial position when the Company becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally 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.
Basic financial assets
Basic financial assets, which include trade and other receivables, cash and bank balances, are initially measured at their transaction price including transaction costs and are subsequently carried at their amortised cost using the effective interest method, less any provision for impairment, unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest.
Discounting is omitted where the effect of discounting is immaterial. The Company's cash and cash equivalents, trade and most other receivables due with the operating cycle fall into this category of financial instruments.
Other financial assets
Other financial assets, which includes investments in equity instruments which are not classified as subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the recognised transaction price. Such assets are subsequently measured at fair value with the changes in fair value being recognised in the profit or loss. Where other financial assets are not publicly traded, hence their fair value cannot be measured reliably, they are measured at cost less impairment.
Impairment of financial assets
Financial assets are assessed for indicators of impairment at each reporting date.
Financial assets are impaired when events, subsequent to their initial recognition, indicate the estimated future cash flows derived from the financial asset(s) have been adversely impacted. The impairment loss will be the difference between the current carrying amount and the present value of the future cash flows at the asset(s) original effective interest rate.
If there is a favourable change in relation to the events surrounding the impairment loss then the impairment can be reviewed for possible reversal. The reversal will not cause the current carrying amount to exceed the original carrying amount had the impairment not been recognised. The impairment reversal is recognised in the profit or loss.
Financial liabilities
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instruments any contract that evidences a residual interest in the assets of the Company after the deduction of all its liabilities.
Basic financial liabilities, which include trade and other payables, bank loans and other loans are
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Harmony Energy Advisors Limited
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Notes to the Financial Statements
For the year ended 31 December 2022
2.Accounting policies (continued)
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Financial instruments (continued)
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initially measured at their transaction price after transaction costs. When this constitutes a financing transaction, whereby the debt instrument is measured at the present value of the future receipts discounted at a market rate of interest. Discounting is omitted where the effect of discounting is immaterial.
Debt instruments are subsequently carried at their amortised cost using the effective interest rate method.
Trade payables are obligations to pay for goods and services that have been acquired in the ordinary course of business from suppliers. Trade payables are classified as current liabilities if the payment is due within one year. If not, they represent non-current liabilities. Trade payables are initially recognised at their transaction price and subsequently are measured at amortised cost using the effective interest method. Discounting is omitted where the effect of discounting is immaterial.
Other financial instruments
Derivatives, including forward exchange contracts, futures contracts and interest rate swaps, are not classified as basic financial instruments. These are initially recognised at fair value on the date the derivative contract is entered into, with costs being charged to the profit or loss. They are subsequently measured at fair value with changes in the profit or loss.
Debt instruments that do not meet the conditions as set out in FRS 102 paragraph 11.9 are subsequently measured at fair value through the profit or loss. This recognition and measurement would also apply to financial instruments where the performance is evaluated on a fair value basis as with a documented risk management or investment strategy.
Derecognition of financial instruments
Derecognition of financial assets
Financial assets are derecognised when their contractual right to future cash flow expire, or are settled, or when the Company transfers the asset and substantially all the risks and rewards of ownership to another party. If significant risks and rewards of ownership are retained after the transfer to another party, then the Company will continue to recognise the value of the portion of the risks and rewards retained.
Derecognition of financial liabilities
Financial liabilities are derecognised when the Company's contractual obligations expire or are discharged or cancelled.
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Harmony Energy Advisors Limited
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Notes to the Financial Statements
For the year ended 31 December 2022
The revenue of the Company represents fees for asset management and investment advisory services provided in the United Kingdom.
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During the year, the Company obtained the following services from the Company's auditors:
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Fees payable to the Company's auditors for the audit of the Company's financial statements
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The Company has no employees other than the directors, who did not receive any remuneration (2021 - £NIL).
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Page 13
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Harmony Energy Advisors Limited
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Notes to the Financial Statements
For the year ended 31 December 2022
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Current tax on profits for the year
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Factors affecting tax charge for the year/period
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The tax assessed for the year/period is the same as (2021 - the same as) the standard rate of corporation tax in the UK of 19% (2021 - 19%) as set out below:
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Profit on ordinary activities before tax
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Profit on ordinary activities multiplied by standard rate of corporation tax in the UK of 19% (2021 - 19%)
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Total tax charge for the year/period
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Factors that may affect future tax charges
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Increases in the UK Corporation tax rate from 19% to 25% (19% effective from 1 April 2017, and 25% effective from 1 April 2023) have been substantively enacted. This will impact the company's future tax charge accordingly.
Page 14
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Harmony Energy Advisors Limited
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Notes to the Financial Statements
For the year ended 31 December 2022
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Due after more than one year
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Amounts owed by group undertakings
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Prepayments and accrued income
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Cash and cash equivalents
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Creditors: Amounts falling due within one year
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Accruals and deferred income
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Page 15
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Harmony Energy Advisors Limited
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Notes to the Financial Statements
For the year ended 31 December 2022
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Allotted, called up and fully paid
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100 (2021 - 100) Ordinary shares of £1.00 each
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The ultimate controlling party is Harmony Energy Limited, registered office: Conyngham Hall, Bond End, Knaresborough, North Yorkshire, United Kingdom, HG5 9AY.
The largest and smallest group for which consolidated financial statements are prepared is that headed by Harmony Energy Limited. Consolidated financial statements are available from Companies House, Cardiff, CF14 3UZ.
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