Willington Power Limited is a private company limited by shares incorporated in England and Wales. The registered office is Severn Power Station, West Nash Road, Newport, United Kingdom, NP18 2BZ.
The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £'000.
These financial statements are prepared on the going concern basis. The directors have a reasonable expectation that the company will continue in operational existence for the foreseeable future. However, the directors are aware of certain material uncertainties which may cause doubt on the company's ability to continue as a going concern.
On 24 June 2020 Calon Energy Limited (‘the Group’) – the parent company of Willington Power Limited (‘the Company’) entered administration.
The Directors have prepared a cash flow forecast for the period to 31 March 2025 which represents the Directors’ best estimate of the future development of the Company.
Having consulted with the secured lender, the Directors have put in place a flexible funding arrangement which provideds funding on a month-by-month basis.
Based on the ongoing positive relationship with the secured lender and following preparation of detailed forecasts, the Directors have a reasonable expectation that the Company has adequate resources to continue in operational existence for the foreseeable future and as such believe that it remains appropriate to prepare the financial statements on a going concern basis. In making this judgement, the Directors expect that the company’s principal activity of the development of land at the former Willington gas-fired power station site will continue.
The Directors also recognise that from an accounting perspective the absence of any formal long term funding arrangement creates a small level of uncertainty and therefore risk that the required level of support may not be received for the necessary timescales.
This constitutes a material uncertainty related to the assumptions described above which may cast doubt on the Company’s ability to continue as a going concern. The financial statements do not include the adjustments that would result if the Company were unable to continue as a going concern. In the event the Company ceased to be a going concern, the adjustments would include writing down the carrying value of assets, to their recoverable amount and providing for any further liabilities that might arise.
In addition to the third party funding the directors have confirmation from the Group companies that the intercompany amounts due to them will not be requested within 12 months of the approval date of these accounts. The Group companies have confirmed that it is not currently their intention to demand repayment. Due to the relationship with the Group companies the directors are of the view that the intercompany amounts will not be requested in the next 12 months, however the confirmation received does create a material uncertainty as it is not a guarantee that the intercompany creditors will not be recalled within 12 months from the approval dates of these accounts.
Notwithstanding the material uncertainties described above, on the basis of sensitivities applied to the cash flow forecast and that further support can be agreed in the relevant timescale, the Directors have a reasonable expectation that the company can continue to meet its liabilities as they fall due, for a period of at least 12 months from the date of approval of this report.
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is credited or charged to profit or loss.
Basic financial assets, including trade and other receivables, cash and bank balances are initially recognised at transaction price
Financial assets are derecognised when substantially all the risks and rewards of the ownership of the asset are transferred to another party.
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.
Basic financial liabilities, including trade and other payables, bank loans and loans from fellow Group companies are initially recognised at transaction price. Debt is initially stated at the amount of the net proceeds after deduction of issue costs. The carrying amount is increased by the finance cost in respect of the accounting year and reduced by payments made in the year.
Financial liabilities are derecognised when the liability is extinguished, that is when the contractual obligation is discharged, cancelled or expires.
Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.
In the application of the company’s accounting policies, which are described above, the directors are required to make judgements, 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 year in which the estimate is revised if the revision affects only that year, or in the year of the revision and future years if the revision affects both current and future years
The following are the critical judgements that the director made in the process of applying the company's accounting policies and that have had the most significant effect on amounts recognised in the financial statements.
An estimation is required as to the valuation of the land at the Willington site. The directors obtained third party valuations to substantiate the value being held. In completing the impairment review, the directors have satisfied themselves that the estimates made are reasonable.
In order to assess whether it is appropriate for the company to be reported as a going concern, the directors apply judgement, having considered the business activities, the company's principal risks and uncertainties, cash flow projections and external factors. In arriving at this judgement there are a large number of assumptions and estimates involved in calculating these future cash flow projections and the prospect of securing the additional support that will be required.
The average monthly number of persons (including directors) employed by the company during the year was:
The Company owes interest of £3,200,000 (2022: £3,200,000) on loans received and this amount is included in amounts owed to Group companies of £22,104,000 (2022: £22,051,000) within other creditors. Amounts owed to Group companies are unsecured and bear no interest as they are mostly with companies that are in administration.
On 31 May 2016 Calon Energy Limited drew on an existing facility in place with Beal Bank. The facilities agreement provided debt to purchase the Willington C Power Station site. The shares in Willington Power Limited and the asset purchased were provided as security for the facilities.
In accordance with section 33 of FRS 102 ‘Related party disclosures’, the Company is exempt from disclosing transactions with entities that are part of the Group or investees of the Group qualifying as related parties, as it is a wholly-owned subsidiary of a parent, Calon Energy Limited.
The immediate parent of the Company is Calon Energy Limited, a company incorporated in England and Wales, which owns 100% of the ordinary share capital.
Calon Energy Limited is regarded as the Group’s ultimate parent company and controlling party. On 24 June 2020 Calon Energy Limited entered administration and therefore there is no requirement to file consolidated financial statements for Calon Energy Limited.