Company Registration No. SC196676 (Scotland)
FAIR ISLE ELECTRICITY COMPANY LIMITED
UNAUDITED FINANCIAL STATEMENTS
FOR THE YEAR ENDED
31 MAY 2023
PAGES FOR FILING WITH REGISTRAR
THE A9 PARTNERSHIP LIMITED
Chartered Accountants
47 Commercial Road
Lerwick
Shetland
ZE1 0NJ
FAIR ISLE ELECTRICITY COMPANY LIMITED
CONTENTS
Page
Balance sheet
1 - 2
Notes to the financial statements
3 - 7
FAIR ISLE ELECTRICITY COMPANY LIMITED
BALANCE SHEET
- 1 -
2023
2022
Notes
£
£
£
£
Fixed assets
Tangible assets
3
2,792,941
2,931,589
Current assets
Stocks
8,765
8,281
Debtors
5
5,058
1,665
Cash at bank and in hand
84,399
96,701
98,222
106,647
Creditors: amounts falling due within one year
4
(47,678)
(59,501)
Net current assets
50,544
47,146
Total assets less current liabilities
2,843,485
2,978,735
Creditors: amounts falling due after more than one year
6
(2,783,231)
(2,922,754)
Net assets
60,254
55,981
Reserves
Capital redemption reserve
9,356
9,356
Other reserves
67,343
67,343
Income and expenditure account
(16,445)
(20,718)
Members' funds
60,254
55,981
The directors of the company have elected not to include a copy of the income and expenditure account within the financial statements.true
For the financial year ended 31 May 2023 the company was entitled to exemption from audit under section 477 of the Companies Act 2006 relating to small companies.
The directors acknowledge their responsibilities for complying with the requirements of the Companies Act 2006 with respect to accounting records and the preparation of financial statements.
The members have not required the company to obtain an audit of its financial statements for the year in question in accordance with section 476.
These financial statements have been prepared and delivered in accordance with the provisions applicable to companies subject to the small companies regime.
FAIR ISLE ELECTRICITY COMPANY LIMITED
BALANCE SHEET (CONTINUED)
- 2 -
The financial statements were approved by the board of directors and authorised for issue on 31 October 2023 and are signed on its behalf by:
Mr R Mitchell
Mrs R Stout
Director
Director
Company Registration No. SC196676
FAIR ISLE ELECTRICITY COMPANY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2023
- 3 -
1
Accounting policies
Company information
Fair Isle Electricity Company Limited is a private company limited by guarantee incorporated in Scotland. The registered office is Field, Fair Isle, Shetland Isles, ZE2 9JU.
1.1
Accounting convention
These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006 as applicable to companies subject to the small companies regime. The disclosure requirements of section 1A of FRS 102 have been applied other than where additional disclosure is required to show a true and fair view.
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 £.
The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.
1.2
Income and expenditure
Income and expenses are included in the financial statements as they become receivable or due.
1.3
Tangible fixed assets
Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.
Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:
Plant and machinery
10% straight line
Renewable energy system
4% straight line
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 surplus or deficit.
Depreciation is not chargeable on assets under construction.
1.4
Impairment of fixed assets
At each reporting period end date, the company reviews the carrying amounts of its tangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the 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 an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in surplus or deficit, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.
FAIR ISLE ELECTRICITY COMPANY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2023
1
Accounting policies
(Continued)
- 4 -
Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in surplus or deficit, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.
1.5
Stocks
Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the stocks to their present location and condition.
At each reporting date, an assessment is made for impairment. Any excess of the carrying amount of stocks over its estimated selling price less costs to complete and sell is recognised as an impairment loss in profit or loss. Reversals of impairment losses are also recognised in profit or loss.
1.6
Cash at bank and in hand
Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.
1.7
Financial instruments
The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the company's balance sheet 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 debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method 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. Financial assets classified as receivable within one year are not amortised.
Classification of financial liabilities
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.
FAIR ISLE ELECTRICITY COMPANY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2023
1
Accounting policies
(Continued)
- 5 -
Basic financial liabilities
Basic financial liabilities, including creditors, bank loans, loans from fellow group companies and preference shares that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.
Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.
Changes in the fair value of derivatives that are designated and qualify as fair value hedges are recognised in profit or loss immediately, together with any changes in the fair value of the hedged asset or liability that are attributable to the hedged risk.
1.8
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
Deferred tax
Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the company has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.
1.9
Government grants
Government grants are recognised at the fair value of the asset received or receivable when there is reasonable assurance that the grant conditions will be met and the grants will be received.
A grant that specifies performance conditions is recognised in income when the performance conditions are met. Where a grant does not specify performance conditions it is recognised in income when the proceeds are received or receivable. A grant received before the recognition criteria are satisfied is recognised as a liability.
FAIR ISLE ELECTRICITY COMPANY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2023
1
Accounting policies
(Continued)
- 6 -
Government grants relating to capital costs are treated as non current creditors and released to profit or loss over the expected useful lives of the assets concerned.
2
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2023
2022
Number
Number
Total
3
Tangible fixed assets
Plant and machinery
Renewable energy system
Total
£
£
£
Cost
At 1 June 2022
5,836
3,485,202
3,491,038
Additions
113
2,331
2,444
Disposals
(2,860)
(2,860)
At 31 May 2023
3,089
3,487,533
3,490,622
Depreciation and impairment
At 1 June 2022
3,597
555,852
559,449
Depreciation charged in the year
161
139,501
139,662
Eliminated in respect of disposals
(1,430)
(1,430)
At 31 May 2023
2,328
695,353
697,681
Carrying amount
At 31 May 2023
761
2,792,180
2,792,941
At 31 May 2022
2,239
2,929,350
2,931,589
4
Creditors: amounts falling due within one year
2023
2022
£
£
Trade creditors
1,153
701
Taxation and social security
482
Deferred income
45,366
57,148
Other creditors
13
Accruals and deferred income
1,159
1,157
47,678
59,501
FAIR ISLE ELECTRICITY COMPANY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2023
- 7 -
5
Debtors
2023
2022
Amounts falling due within one year:
£
£
Service charges due
507
635
Other debtors
4,551
1,030
5,058
1,665
6
Creditors: amounts falling due after more than one year
2023
2022
£
£
Other creditors
2,783,231
2,922,754
Grant funding received from Big Lottery Fund totalling £600,000 is secured over the leasehold subjects at Fair Isle, Shetland as registered in Land Register of Scotland.
7
Members' liability
The company is limited by guarantee, not having a share capital and consequently the liability of members is limited, subject to an undertaking by each member to contribute to the net assets or liabilities of the company on winding up such amounts as may be required not exceeding £1.